10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

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

for the quarterly period ended June 30, 2023 or 

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

Commission file number 001-07283

REGAL REXNORD CORPORATION

(Exact name of registrant as specified in its charter)

Wisconsin	39-0875718
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

200 State Street, Beloit, Wisconsin 53511

(Address of principal executive office)

(608) 364-8800

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	RRX	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 check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit 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 Rule 12b-2 of the Exchange Act). Yes ☐ No  ☒

On August 1, 2023 the registrant had outstanding 66,311,371 shares of common stock, $0.01 par value per share.

REGAL REXNORD CORPORATION

INDEX

		Page
PART I — FINANCIAL INFORMATION
Item 1 —	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Statements of Income	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Equity	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	11
	1. Basis of Presentation	11
	2. Other Financial Information	12
	3. Acquisitions and Divestitures	14
	4. Accumulated Other Comprehensive Income (Loss)	18
	5. Goodwill and Intangible Assets	19
	6. Segment Information	20
	7. Debt and Bank Credit Facilities	23
	8. Retirement Plans	25
	9. Shareholders' Equity	26
	10. Income Taxes	26
	11. Earnings Per Share	27
	12. Contingencies	27
	13. Derivative Financial Instruments	29
	14. Fair Value	34
	15. Restructuring Activities	35
Item 2 —	Management's Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3 —	Quantitative and Qualitative Disclosures about Market Risk	44
Item 4 —	Controls and Procedures	46
PART II — OTHER INFORMATION
Item 1 —	Legal Proceedings	46
Item 1A —	Risk Factors	46
Item 2 —	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 5 —	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	47
Item 6 —	Exhibits	48
Signatures		49

2

CAUTIONARY STATEMENT

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company’s current estimates, expectations and projections about the Company’s future results, performance, prospects and opportunities. Such forward-looking statements may include, among other things, statements about the acquisition of Altra Industrial Motion Corp. (“Altra”), the benefits and synergies of the acquisition of Altra (the "Altra Transaction"), future opportunities for the Company and any other statements regarding the Company’s future operations, anticipated economic activity, business levels, credit ratings, future earnings, planned activities, anticipated growth, market opportunities, strategies, competition and other expectations and estimates for future periods. Forward-looking statements include statements that are not historical facts and can be identified by forward-looking words such as “anticipate,” “believe,” “confident,” “estimate,” “expect,” “intend,” “plan,” “may,” “will,” “project,” “forecast,” “would,” “could,” “should,” and similar expressions. These forward-looking statements are based upon information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company's performance, prospects, or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Important factors that could cause actual results to differ materially from the results referred to in the forward-looking statements the Company makes in this report include:

•the Company’s substantial indebtedness as a result of the Altra Transaction and the effects of such indebtedness on the Company’s financial flexibility after the Altra Transaction;

•the Company’s ability to achieve its objectives on reducing its indebtedness on the desired timeline;

•dependence on key suppliers and the potential effects of supply disruptions;

•fluctuations in commodity prices and raw material costs;

•any unforeseen changes to or the effects on liabilities, future capital expenditures, revenue, expenses, synergies, indebtedness, financial condition, losses and future prospects;

•the possibility that the Company may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the Altra Transaction and the merger with the Rexnord Process & Motion Control business (the "Rexnord PMC business") within the expected time-frames or at all and to successfully integrate Altra and the Rexnord PMC business;

•expected or targeted future financial and operating performance and results;

•operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) being greater than expected following the Altra Transaction or the Company's merger with the Rexnord PMC business;

•the Company's ability to retain key executives and employees;

•the continued financial and operational impacts of and uncertainties relating to the COVID-19 pandemic on customers and suppliers and the geographies in which they operate;

•uncertainties regarding the ability to execute restructuring plans within expected costs and timing;

•challenges to the tax treatment that was elected with respect to the merger with the Rexnord PMC business and related transactions;

•requirements to abide by potentially significant restrictions with respect to the tax treatment of the merger with the Rexnord PMC business which could limit the Company’s ability to undertake certain corporate actions that otherwise could be advantageous;

•actions taken by competitors and their ability to effectively compete in the increasingly competitive global electric motor, drives and controls, power generation and power transmission industries;

•the ability to develop new products based on technological innovation, such as the Internet of Things, and marketplace acceptance of new and existing products, including products related to technology not yet adopted or utilized in geographic locations in which the Company does business;

•dependence on significant customers;

•seasonal impact on sales of products into HVAC systems and other residential applications;

3

•risks associated with climate change and uncertainty regarding our ability to deliver on our climate commitments and/or to meet related investor, customer and other third party expectations relating to our sustainability efforts;

•risks associated with global manufacturing, including those associated with public health crises and political, societal or economic instability, including instability caused by the conflict between Russia and Ukraine;

•issues and costs arising from the integration of acquired companies and businesses and the timing and impact of purchase accounting adjustments;

•prolonged declines in one or more markets, such as heating, ventilation, air conditioning, refrigeration, power generation, oil and gas, unit material handling, water heating and aerospace;

•economic changes in global markets, such as reduced demand for products, currency exchange rates, inflation rates, interest rates, banking crises, recession, government policies, including policy changes affecting taxation, trade, tariffs, immigration, customs, border actions and the like, and other external factors that the Company cannot control;

•product liability, asbestos and other litigation, or claims by end users, government agencies or others that products or customers' applications failed to perform as anticipated, particularly in high volume applications or where such failures are alleged to be the cause of property or casualty claims;

•unanticipated liabilities of acquired businesses;

•unanticipated adverse effects or liabilities from business exits or divestitures, including in connection with our evaluation of strategic alternatives for the global motors and generators portion of our Industrial Systems operating segment;

•the Company's ability to identify and execute on future M&A opportunities, including significant M&A transactions;

•the impact of any such M&A transactions on the Company's results, operations and financial condition, including the impact from costs to execute and finance any such transactions;

•unanticipated costs or expenses that may be incurred related to product warranty issues;

•infringement of intellectual property by third parties, challenges to intellectual property and claims of infringement on third party technologies;

•effects on earnings of any significant impairment of goodwill;

•losses from failures, breaches, attacks or disclosures involving information technology infrastructure and data;

•costs and unanticipated liabilities arising from rapidly evolving data privacy laws and regulations;

•cyclical downturns affecting the global market for capital goods;

•and other risks and uncertainties including, but not limited, to those described in the Company's Annual Report on Form 10-K on file with the Securities and Exchange Commission (the "SEC") and from time to time in other filed reports including the Company's Quarterly Reports on Form 10-Q. For a more detailed description of the risk factors associated with the Company, please refer to Part I - Item 1A - Risk Factors in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 on file with the SEC and subsequent SEC filings.

Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this report are made only as of the date of this report, and the Company undertakes no obligation to update any forward-looking information contained in this report to reflect subsequent events or circumstances. 

4

PART I—FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

REGAL REXNORD CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in Millions, Except Per Share Data)

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net Sales	$	1,768.6	$	1,349.4	$	2,992.7	$	2,647.9
Cost of Sales	1,204.8		915.9		2,030.8		1,792.5
Gross Profit	563.8		433.5		961.9		855.4
Operating Expenses	412.2		238.6		741.4		490.6
Income from Operations	151.6		194.9		220.5		364.8
Interest Expense	116.4		13.4		211.8		22.4
Interest Income	(5.1)		(0.8)		(37.0)		(1.9)
Other Income, Net	(2.8)		(1.5)		(4.2)		(2.8)
Income before Taxes	43.1		183.8		49.9		347.1
Provision for Income Taxes	9.9		40.6		22.2		76.8
Net Income	33.2		143.2		27.7		270.3
Less: Net Income Attributable to Noncontrolling Interests	1.1		1.2		1.5		2.7
Net Income Attributable to Regal Rexnord Corporation	$	32.1	$	142.0	$	26.2	$	267.6
Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	0.48	$	2.13	$	0.40	$	3.99
Assuming Dilution	$	0.48	$	2.12	$	0.39	$	3.96
Weighted Average Number of Shares Outstanding:
Basic	66.3		66.8		66.2		67.1
Assuming Dilution	66.6		67.1		66.6		67.5

See Accompanying Notes to Condensed Consolidated Financial Statements

5

REGAL REXNORD CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollars in Millions)

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net Income	$	33.2	$	143.2	$	27.7	$	270.3
Other Comprehensive Income (Loss) Net of Tax:
Foreign Currency Translation Adjustments	(30.5)		(120.8)		4.0		(121.2)
Hedging Activities:
Increase (Decrease) in Fair Value of Hedging Activities, Net of Tax Effects of $1.2 million and $(10.5) million for the Three Months Ended June 30, 2023 and June 30, 2022 and $6.5 million and $(2.2) million for the Six Months Ended June 30, 2023 and June 30, 2022, Respectively	3.7		(32.9)		20.5		(6.8)
Reclassification of Losses (Gains) included in Net Income, Net of Tax Effects of $(0.2) million and $(1.5) million for the Three Months Ended June 30, 2023 and June 30, 2022 and $0.2 million and $(3.5) million for the Six Months Ended June 30, 2023 and June 30, 2022, Respectively	(0.5)		(5.3)		0.8		(11.3)
Pension and Post Retirement Plans:
Reclassification Adjustments for Pension and Post Retirement Benefits included in Net Income, Net of Tax Effects of $(0.2) million and $0.1 million for the Three Months Ended June 30, 2023 and June 30, 2022 and $(0.3) million and $0.1 million for the Six Months Ended June 30, 2023 and June 30, 2022, Respectively	(0.4)		0.1		(0.8)		0.3
Other Comprehensive (Loss) Income	(27.7)		(158.9)		24.5		(139.0)
Comprehensive Income (Loss)	5.5		(15.7)		52.2		131.3
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests	(0.1)		(1.1)		0.6		0.8
Comprehensive Income (Loss) Attributable to Regal Rexnord Corporation	$	5.6	$	(14.6)	$	51.6	$	130.5

See Accompanying Notes to Condensed Consolidated Financial Statements

6

REGAL REXNORD CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in Millions, Except Per Share Data)

	June 30, 2023		December 31, 2022
ASSETS
Current Assets:
Cash and Cash Equivalents	$	659.6	$	688.5
Trade Receivables, Less Allowances of $26.4 million and $30.9 million in 2023 and 2022, Respectively	1,013.9		797.4
Inventories	1,576.1		1,336.9
Prepaid Expenses and Other Current Assets	224.3		150.9
Deferred Financing Fees	—		17.0
Assets Held for Sale	1.1		9.8
Total Current Assets	3,475.0		3,000.5
Net Property, Plant and Equipment	1,204.8		807.0
Operating Lease Assets	188.0		110.9
Goodwill	6,618.9		4,018.8
Intangible Assets, Net of Amortization	4,239.7		2,229.9
Deferred Income Tax Benefits	50.4		43.9
Other Noncurrent Assets	81.0		57.9
Total Assets	$	15,857.8	$	10,268.9
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable	$	678.5	$	497.7
Dividends Payable	23.2		23.2
Accrued Compensation and Employee Benefits	183.1		141.1
Accrued Interest	91.9		5.2
Other Accrued Expenses	292.7		274.8
Current Operating Lease Liabilities	39.1		26.4
Current Maturities of Long-Term Debt	72.6		33.8
Total Current Liabilities	1,381.1		1,002.2
Long-Term Debt	6,609.7		1,989.7
Deferred Income Taxes	1,083.2		591.9
Pension and Other Post Retirement Benefits	112.9		97.6
Noncurrent Operating Lease Liabilities	145.1		88.1
Other Noncurrent Liabilities	88.9		76.8
Contingencies (see Note 12 - Contingencies)
Equity:
Regal Rexnord Corporation Shareholders' Equity:
Common Stock, $0.01 par value, 100.0 million Shares Authorized, 66.3 million and 66.2 million Shares Issued and Outstanding for 2023 and 2022, Respectively	0.7		0.7
Additional Paid-In Capital	4,626.5		4,609.6
Retained Earnings	2,109.8		2,130.0
Accumulated Other Comprehensive Loss	(326.7)		(352.1)
Total Regal Rexnord Corporation Shareholders' Equity	6,410.3		6,388.2
Noncontrolling Interests	26.6		34.4
Total Equity	6,436.9		6,422.6
Total Liabilities and Equity	$	15,857.8	$	10,268.9

See Accompanying Notes to Condensed Consolidated Financial Statements.

7

REGAL REXNORD CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in Millions, Except Per Share Data)

	Three Months Ended
	Common Stock $0.01 Par Value		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Equity
March 31, 2023	$	0.7	$	4,619.2	$	2,100.9	$	(300.2)	$	35.1	$	6,455.7
Net Income	—		—		32.1		—		1.1		33.2
Other Comprehensive Loss	—		—		—		(26.5)		(1.2)		(27.7)
Dividends Declared ($0.35 Per Share)	—		—		(23.2)						(23.2)
Stock Options Exercised	—		(0.7)		—		—				(0.7)
Replacement Equity-Based Awards Granted	—		(6.5)		—		—				(6.5)
Share-Based Compensation	—		14.5		—		—				14.5
Dividends Declared to Noncontrolling Interests	—		—		—		—		(8.4)		(8.4)
June 30, 2023	$	0.7	$	4,626.5	$	2,109.8	$	(326.7)	$	26.6	$	6,436.9
March 31, 2022	$	0.7	$	4,631.1	$	1,927.5	$	(175.6)	$	40.1	$	6,423.8
Net Income	—		—		142.0		—		1.2		143.2
Other Comprehensive Loss	—		—		—		(156.6)		(2.3)		(158.9)
Dividends Declared ($0.35 Per Share)	—		—		(23.2)		—		—		(23.2)
Stock Options Exercised	—		(4.3)		—		—		—		(4.3)
Stock Repurchase	—		(20.1)		(49.7)		—		—		(69.8)
Share-Based Compensation	—		4.9		—		—		—		4.9
June 30, 2022	$	0.7	$	4,611.6	$	1,996.6	$	(332.2)	$	39.0	$	6,315.7

See Accompanying Notes to Condensed Consolidated Financial Statements.

8

REGAL REXNORD CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in Millions, Except Per Share Data)

	Six Months Ended
	Common Stock $0.01 Par Value		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Equity
December 31, 2022	$	0.7	$	4,609.6	$	2,130.0	$	(352.1)	$	34.4	$	6,422.6
Net Income	—		—		26.2		—		1.5		27.7
Other Comprehensive Income (Loss)	—		—		—		25.4		(0.9)		24.5
Dividends Declared ($0.70 Per Share)	—		—		(46.4)		—		—		(46.4)
Stock Options Exercised	—		(8.2)		—		—		—		(8.2)
Replacement Equity-Based Awards Granted	—		4.6		—		—		—		4.6
Share-Based Compensation	—		20.5		—		—		—		20.5
Dividends Declared to Noncontrolling Interests	—		—		—		—		(8.4)		(8.4)
June 30, 2023	$	0.7	$	4,626.5	$	2,109.8	$	(326.7)	$	26.6	$	6,436.9
January 1, 2022	0.7		4,651.8		1,912.6		(195.1)		38.2		6,408.2
Net Income	—		—		267.6		—		2.7		270.3
Other Comprehensive Loss	—		—		—		(137.1)		(1.9)		(139.0)
Dividends Declared ($0.68 Per Share)	—		—		(45.3)		—		—		(45.3)
Stock Options Exercised	—		(5.7)		—		—		—		(5.7)
Stock Repurchase	—		(45.7)		(138.3)		—		—		(184.0)
Share-Based Compensation	—		11.2		—		—		—		11.2
June 30, 2022	$	0.7	$	4,611.6	$	1,996.6	$	(332.2)	$	39.0	$	6,315.7

See Accompanying Notes to Condensed Consolidated Financial Statements.

9

REGAL REXNORD CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Millions)

	Six Months Ended
	June 30, 2023		June 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	27.7	$	270.3
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities (Net of Acquisitions and Divestitures):
Depreciation	77.8		62.5
Amortization	135.7		93.8
Noncash Lease Expense	19.7		20.6
Share-Based Compensation Expense	36.2		11.2
Financing Fee Expense	26.9		1.4
Benefit from Deferred Income Taxes	(54.2)		(41.0)
Other Non-Cash Changes	5.7		(1.7)
Change in Operating Assets and Liabilities, Net of Acquisitions and Divestitures
Receivables	42.4		(90.2)
Inventories	154.7		(222.8)
Accounts Payable	(4.3)		(17.5)
Other Assets and Liabilities	(141.0)		18.3
Net Cash Provided by Operating Activities	327.3		104.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant and Equipment	(63.5)		(32.6)
Proceeds Received from Sales of Property, Plant and Equipment	6.1		5.5
Business Acquisitions, Net of Cash Acquired	(4,870.2)		(35.0)
Net Cash Used in Investing Activities	(4,927.6)		(62.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings Under Revolving Credit Facility	1,412.3		1,521.5
Repayments Under Revolving Credit Facility	(1,726.3)		(1,698.2)
Proceeds from Short-Term Borrowings	29.1		6.0
Repayments of Short-Term Borrowings	(32.8)		(8.0)
Proceeds from Long-Term Borrowings	5,532.9		1,536.8
Repayments of Long-Term Borrowings	(536.5)		(1,108.4)
Dividends Paid to Shareholders	(46.4)		(44.3)
Shares Surrendered for Taxes	(9.2)		(8.1)
Proceeds from the Exercise of Stock Options	1.5		3.4
Repurchase of Common Stock	—		(184.0)
Distributions to Noncontrolling Interests	(8.4)		—
Financing Fees Paid	(51.1)		(6.5)
Net Cash Provided By Financing Activities	4,565.1		10.2
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	6.3		(23.3)
Net (Decrease) Increase in Cash and Cash Equivalents	(28.9)		29.7
Cash and Cash Equivalents at Beginning of Period	688.5		672.8
Cash and Cash Equivalents at End of Period	$	659.6	$	702.5
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid For:
Interest	$	99.5	$	20.0
Income taxes	$	116.9	$	96.7

See Accompanying Notes to Condensed Consolidated Financial Statements.

10

REGAL REXNORD CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

(Unaudited)

(Dollars in Millions Except Per Share Data, Unless Otherwise Noted)

1. BASIS OF PRESENTATION

The accompanying (a) Condensed Consolidated Balance Sheet of Regal Rexnord Corporation (the “Company”), as of December 31, 2022, which has been derived from audited Consolidated Financial Statements, and (b) unaudited interim Condensed Consolidated Financial Statements as of June 30, 2023 and for the three and six months ended June 30, 2023 and June 30, 2022, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on February 24, 2023.

In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made. Except as otherwise discussed, such adjustments consist of only those of a normal recurring nature. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2023.

The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Financial Statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. The Company uses estimates in accounting for, among other items, allowance for credit losses; excess and obsolete inventory; share-based compensation; acquisitions; product warranty obligations; pension and post retirement assets and liabilities; derivative fair values; goodwill and other asset impairments; health care reserves; rebates and incentives; litigation claims and contingencies, including environmental matters; and income taxes. The Company accounts for changes to estimates and assumptions when warranted by factually based experience.

Effective during the first quarter of 2023, in conjunction with the Altra Transaction (as defined in Note 3 - Acquisitions and Divestitures), the Company realigned its four operating segments with the change to its management structure and operating model following the Altra Transaction. The new operating and reportable segments are: Industrial Powertrain Solutions (IPS), Power Efficiency Solutions (PES), Automation & Motion Control (AMC) and Industrial Systems. Prior period financial information has been reclassified to reflect these new reportable segments. See Note 6 - Segment Information for further information. The results of operations of Altra for the period from the acquisition date to March 31, 2023 were immaterial and are reflected in the Company’s results for the quarter ended June 30, 2023.

Reclassifications

Certain prior year amounts have been reclassified in the Condensed Consolidated Statements of Cash Flows to conform to the presentation used for the six months ended June 30, 2023. Depreciation and Amortization were reclassified from Depreciation and Amortization and presented individually in the Condensed Consolidated Statements of Cash Flows. Benefit from Deferred Income Taxes, Receivables, Inventories, Accounts Payable, and Other Assets and Liabilities were reclassified from Change in Operating Assets and Liabilities and presented individually in the Condensed Consolidated Statements of Cash Flows.

New Accounting Standards Adopted in 2023

In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations. The ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted this new accounting guidance during the first quarter of 2023. See Note 2 - Other Financial Information.

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2. OTHER FINANCIAL INFORMATION

Revenue Recognition

The Company recognizes revenue from the sale of electric motors, electrical motion controls, power generation, automation and power transmission products and components, factory automation sub-systems, industrial powertrain solutions, air moving products and specialty electrical components and systems. The Company recognizes revenue when control of the product passes to the customer or the service is provided and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.

The following tables presents the Company’s revenues disaggregated by geographical region:

	Three Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	491.0	$	359.2	$	310.2	$	69.8	$	1,230.2
Asia	51.9		44.9		26.6		40.8		164.2
Europe	120.7		41.8		107.1		15.5		285.1
Rest-of-World	35.1		14.2		29.2		10.6		89.1
Total	$	698.7	$	460.1	$	473.1	$	136.7	$	1,768.6
June 30, 2022	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	295.7	$	465.0	$	148.2	$	75.6	$	984.5
Asia	33.1		54.6		5.3		37.6		130.6
Europe	62.7		48.0		40.2		13.3		164.2
Rest-of-World	30.6		27.8		0.4		11.3		70.1
Total	$	422.1	$	595.4	$	194.1	$	137.8	$	1,349.4

	Six Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	784.2	$	726.6	$	452.0	$	143.5	$	2,106.3
Asia	68.4		88.7		28.0		77.5		262.6
Europe	173.5		84.5		150.9		31.1		440.0
Rest-of-World	87.0		29.8		45.4		21.6		183.8
Total	$	1,113.1	$	929.6	$	676.3	$	273.7	$	2,992.7
June 30, 2022	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	586.0	$	909.4	$	280.3	$	144.1	$	1,919.8
Asia	64.3		105.0		8.5		77.0		254.8
Europe	120.3		94.3		80.7		25.6		320.9
Rest-of-World	67.8		53.9		8.9		21.8		152.4
Total	$	838.4	$	1,162.6	$	378.4	$	268.5	$	2,647.9

Trade Receivables

The Company's policy for estimating the allowance for credit losses on trade receivables considers several factors including historical write-off experience, overall customer credit quality in relation to general economic and market conditions, and specific customer account analyses to estimate expected credit losses. The specific customer account analysis considers such items as credit worthiness, payment history, and historical bad debt experience. Trade receivables are written off after

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exhaustive collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in Operating Expenses.

Inventories

The following table presents approximate percentage distribution between major classes of inventories:

	June 30, 2023	December 31, 2022
Raw Material and Work in Process	66.2%	57.0%
Finished Goods and Purchased Parts	33.8%	43.0%

Inventories are stated at the lower of cost or net realizable value. All inventory is valued using the FIFO cost method.

Property, Plant, and Equipment

The following table presents property, plant, and equipment by major classification:

	Useful Life in Years	June 30, 2023		December 31, 2022
Land and Improvements		$	157.6	$	103.4
Buildings and Improvements	3 - 50	531.9		401.7
Machinery and Equipment	3 - 15	1,387.0		1,111.3
Property, Plant and Equipment		2,076.5		1,616.4
Less: Accumulated Depreciation		(871.7)		(809.4)
Net Property, Plant and Equipment		$	1,204.8	$	807.0

Supplier Finance Program

The Company's supplier finance program with Bank of America (the "Bank") offers the Company's designated suppliers the option to receive payments of outstanding invoices in advance of the invoice maturity dates at a discount. The Company's payment obligation to the Bank remains subject to the respective supplier's invoice maturity date. The Bank acts as a payment agent, making payments on invoices the Company confirms are valid. The supplier finance program is offered for open account transactions only and may be terminated by either the Company or the Bank upon 15 days notice. The Company has not pledged any assets under this program. The Company has not incurred any subscription, service or other fees related to the Company's supplier finance program. The Company's outstanding obligations under the supplier finance program, which are classified within Accounts Payable, were $73.1 million and $69.9 million as of June 30, 2023 and December 31, 2022, respectively.

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3. ACQUISITIONS AND DIVESTITURES

Altra Transaction

On October 26, 2022, the Company entered into an Agreement and Plan of Merger (the “Altra Merger Agreement”) by and among the Company, Altra Industrial Motion Corp., a Delaware corporation (“Altra”), and Aspen Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”). On March 27, 2023, in accordance with the terms and conditions of the Altra Merger Agreement, Merger Sub merged with (the "Altra Merger") and into Altra, with Altra surviving the Altra Merger as a wholly owned subsidiary of the Company (the “Altra Transaction”).

Pursuant to the Altra Merger Agreement, at the effective time of the Altra Merger (the “Effective Time”), each of Altra’s issued and outstanding shares of common stock, par value $0.001 per share (“Altra Common Stock”) (other than (i) any shares held by either the Company, Altra or Merger Sub, (ii) shares owned by any direct or indirect wholly owned subsidiary of Altra or the Company, (iii) shares for which appraisal rights had been properly demanded according to Section 262 of the Delaware General Corporation Law and (iv) restricted shares of Altra Common Stock granted under Altra’s 2014 Omnibus Incentive Plan and subject to forfeiture conditions) were converted into $62.00 in cash, without interest (the “Altra Merger Consideration”). The Altra Merger Agreement generally provided that (1) each vested Altra stock option outstanding immediately prior to the Effective Time was canceled and converted into a cash payment equal to the intrinsic value of such option based on the Altra Merger Consideration, (2) each unvested Altra stock option outstanding, immediately prior to the Effective Time, was converted into an award of stock options with respect to the Company's common stock, par value $0.01 per share ("Common Stock") with an intrinsic value equivalent to the intrinsic value of the Altra stock option based on the Altra Merger Consideration, (3) each unvested Altra restricted stock unit outstanding, as of the Effective Time, that was subject solely to time-based vesting conditions was converted into an award of restricted stock units with respect to Common Stock with an equivalent value based on the Altra Merger Consideration on substantially similar terms and conditions, (4) each unvested award of Altra restricted shares was converted into an award of cash of equivalent value based on the Altra Merger Consideration on substantially similar terms and conditions, (5) each unvested Altra restricted stock unit outstanding, as of the Effective Time, that was subject to performance-based vesting conditions was converted into an award of time-based restricted stock with an equivalent value based on the Altra Merger Consideration on substantially similar terms and conditions (with performance goals being deemed satisfied at specified levels) and (6) each vested Altra restricted stock unit outstanding as of Effective Time was converted into the right to receive a cash payment based on the Altra Merger Consideration.

The Company's management determined that the Company is the accounting acquirer in the Altra Transaction based on the facts and circumstances noted within this section and other relevant factors. As such, the Company applied the acquisition method of accounting to the identifiable assets and liabilities of Altra, which have been measured at estimated fair value as of the date of the business combination.

The preliminary purchase price for the acquisition of Altra was approximately $5.1 billion, subject to the finalization of purchase accounting.

The preliminary purchase price of Altra consisted of the following:

	As of June 30, 2023
Cash paid for outstanding Altra Common Stock(1)	$	4,051.0
Stock based compensation(2)	23.1
Payment of Altra debt(3)	1,061.0
Pre-existing relationships(4)	(0.5)
Preliminary purchase price	$	5,134.6

(1) Cash paid for the common stock component of the preliminary purchase price was based on 65.3 million shares of outstanding Altra Common Stock as of March 27, 2023 at $62.00 per share, in accordance with the Altra Merger Agreement.

(2) Represents fair value of replacement equity-based awards and Company common stock issued in settlement of other Altra share based awards. The portion of the fair value attributable to pre-acquisition service was recorded as part of the consideration transferred in the Altra Transaction of which $17.3 million was paid in cash during the second quarter of 2023.

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(3) Cash paid by the Company to settle (a) the term loan facility, (b) the revolving credit facility and (c) 95.28% of the 6.125% senior notes due 2026 of Stevens Holding Company, Inc., a wholly owned subsidiary of Altra (the "Altra Notes"). $18.1 million of the Altra Notes remained outstanding following the closing of the Altra Transaction. See Note 7 - Debt and Bank Credit Facilities for more information.

(4) Represents effective settlement of outstanding payables and receivables between the Company and Altra. No gain or loss was recognized on this settlement

Purchase Price Allocation

Altra’s assets and liabilities were measured at estimated fair values at March 27, 2023, primarily using Level 3 inputs. Estimates of fair value represent management’s best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions, royalty rates and customer attrition rates and others. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates expected as of the acquisition date.

Due to the timing of the Altra Transaction and the nature of the net assets acquired, as of June 30, 2023, the valuation process to determine the fair values is not complete and further adjustments are expected in fiscal year 2023. The Company has estimated the preliminary fair value of net assets acquired based on information currently available and will continue to adjust those estimates as additional information becomes available, including the refinement of valuation assumptions. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price allocation adjustments will be recorded during the measurement period, but no later than one year from the date of the acquisition. The Company will reflect measurement period adjustments in the period in which the adjustments are determined.

The preliminary fair value and subsequent measurement period adjustments of the assets acquired and liabilities assumed were as follows:

	As Reported as of March 31, 2023		Measurement period adjustments		As of June 30, 2023
Cash and Cash Equivalents	$	259.1	$	—	$	259.1
Trade Receivables	258.1		(0.1)		258.0
Inventories	436.4		(48.8)		387.6
Prepaid Expenses and Other Current Assets	33.0		—		33.0
Property, Plant and Equipment	411.8		2.8		414.6
Intangible Assets	2,224.0		(82.0)		2,142.0
Deferred Income Tax Benefits	0.7		1.3		2.0
Operating Lease Assets	42.3		4.5		46.8
Other Noncurrent Assets	21.6		0.2		21.8
Accounts Payable	(183.2)		—		(183.2)
Accrued Compensation and Benefits	(66.1)		—		(66.1)
Other Accrued Expenses(1)	(145.7)		0.6		(145.1)
Current Operating Lease Liabilities	(12.5)		0.2		(12.3)
Current Maturities of Long-Term Debt	(0.4)		—		(0.4)
Long-Term Debt	(25.3)		—		(25.3)
Deferred Income Taxes	(560.7)		25.0		(535.7)
Pension and Other Post Retirement Benefits	(19.8)		—		(19.8)
Noncurrent Operating Lease Liabilities	(29.7)		0.7		(29.0)
Other Noncurrent Liabilities	(8.3)		—		(8.3)
Total Identifiable Net Assets	2,635.3		(95.6)		2,539.7
Goodwill	2,499.3		$	95.6	$	2,594.9
Preliminary purchase price	$	5,134.6	$	—	$	5,134.6

1) Includes $60.1 million related to Altra Transaction costs paid by the Company at the closing of the Altra Transaction.

Summary of Significant Fair Value Methods

The methods used to determine the fair value of significant identifiable assets and liabilities included in the allocation of purchase price are discussed below.

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Inventories

Acquired inventory was comprised of finished goods, work in process and raw materials. The fair value of finished goods was calculated as the estimated selling price, adjusted for costs of the selling effort and a reasonable profit allowance relating to the selling effort. The fair value of work in process inventory was primarily calculated as the estimated selling price, adjusted for estimated costs to complete the manufacturing, estimated costs of the selling effort, as well as a reasonable profit margin on the remaining manufacturing and selling effort. The fair value of raw materials and supplies was determined based on replacement cost which approximates historical carrying value.

Property, Plant and Equipment

The preliminary fair value of Property, Plant, and Equipment was determined using either the cost approach, which relies on an estimate of replacement costs of the new assets and estimated accrued depreciation, or the market approach.

Identifiable Intangible Assets

The preliminary fair value and weighted average useful life of the identifiable intangible assets are as follows:

	Fair Value		Weighted Average Useful Life (Years)
Customer Relationships(1)	$	1,710.0	14.0
Trademarks(2)	330.0		10.0
Technology(3)	102.0		13.0
Total Identifiable Intangible Assets	$	2,142.0

(1) The fair value of Customer Relationships was valued using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from Altra's existing customer base.

(2) The Altra Trademarks were valued using the relief from royalty method, which considers both the market approach and the income approach.

(3) The Altra Technology was valued using the relief from royalty method, which considers both the market approach and the income approach.

The intangible assets related to definite-lived customer relationships, trademarks and technology are amortized over their estimated useful lives.

Leases, including right-of-use ("ROU") assets and lease liabilities

Lease liabilities were measured as of the effective date of the acquisition at the present value of future minimum lease payments over the remaining lease term and the incremental borrowing rate of the Company as if the acquired leases were new leases as of the acquisition date. ROU assets recorded within “Operating Lease Assets” are equal to the amount of the lease liability at the acquisition date adjusted for any off-market terms of the lease. The remaining lease term was based on the remaining term at the acquisition date plus any renewal or extension options that the Company is reasonably certain will be exercised.

Deferred Income Tax Assets and Liabilities

The acquisition was structured as a merger, and therefore the Company assumed the historical tax basis of Altra’s assets and liabilities. The deferred income tax assets and liabilities include the expected future federal, state, and foreign tax consequences associated with temporary differences between the fair values of the assets acquired and liabilities assumed and the respective tax bases. Tax rates utilized in calculating deferred income taxes generally represent the enacted statutory tax rates at the effective date of the acquisition in the jurisdictions in which legal title of the underlying asset or liability resides. See Note 10 - Income Taxes for further information related to income taxes.

Other Assets Acquired and Liabilities Assumed (excluding Goodwill)

The Company utilized the carrying values, net of allowances, to value accounts receivable and accounts payable as well as other current assets and liabilities, as it was determined that carrying values represented the fair value of those items at the acquisition date. Accounts receivable reflect the best estimate at the acquisition date of the contractual cash flows expected to be collected.

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Goodwill

The excess of the consideration for the acquisition over the fair value of net assets acquired was recorded as goodwill. The goodwill is attributable to expected synergies and expanded market opportunities from combining the Company’s operations with those of Altra. The goodwill created in the acquisition is not expected to be deductible for tax purposes.

Transaction Costs

The Company incurred transaction-related costs in connection with the Altra Transaction of approximately $9.5 million and $75.0 million during the three and six months ended June 30, 2023, respectively, which include legal and professional services and certain employee compensation costs, including severance, that were recognized as Operating expenses in the Company's Condensed Consolidated Statements of Income. There were no transaction-related costs in connection with the Altra Transaction recognized during the three and six months ended June 30, 2022. During the year ended December 31, 2022 the Company incurred $14.7 million of costs related to the Altra Transaction.

The Company also incurred $15.7 million of share-based compensation expense during the first quarter of 2023 related to the accelerated vesting of awards for certain former Altra employees. See Note 9 – Shareholders' Equity for additional information.

In connection with the Altra Transaction, the Company incurred additional costs due to the entry into certain financing arrangements. Such financing arrangements are described in Note 7 – Debt and Bank Credit Facilities.

Unaudited Pro Forma Information

The following unaudited supplemental pro forma financial information presents the Company's financial results for the three and six months ended June 30, 2023 and June 30, 2022, respectively, as if the Altra Transaction had occurred on January 2, 2022, the first day of the Company's fiscal year ended December 31, 2022. The pro forma financial information includes, where applicable, adjustments for: (i) additional amortization expense that would have been recognized related to the acquired intangible assets, (ii) additional interest expense on transaction related borrowings less interest income earned on the investment of proceeds from borrowings prior to the close of the Altra Transaction, (iii) additional depreciation expense that would have been recognized related to the acquired property, plant, and equipment, (iv) transaction costs and other one-time non-recurring costs, including share-based compensation expense related to the accelerated vesting of awards for certain former Altra employees, which reduced expenses by $9.5 million and $90.7 million for the three and six months ended June 30, 2023, respectively, and increased expenses by $8.6 million and $108.7 million for the three and six months ended June 30, 2022, respectively, (v) additional cost of sales related to the inventory valuation adjustment which reduced expenses by $44.1 million for the three and six months ended June 30, 2023, respectively, and increased expenses by $7.4 million and $51.5 million for the three and six months ended June 30, 2022, respectively, and (vi) the estimated income tax effect on the pro forma adjustments.

The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the Altra Transaction been completed as of the date indicated or the results that may be obtained in the future.

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net Sales	$	1,768.6	$	1,847.5	$	3,443.8	$	3,657.7
Net Income Attributable to Regal Rexnord Corporation	$	77.2	$	69.8	$	127.8	$	13.7
Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	1.16	$	1.05	$	1.93	$	0.20
Assuming Dilution	$	1.16	$	1.04	$	1.92	$	0.20

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4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustments, hedging activities and pension and post-retirement benefit adjustments are included in Accumulated Other Comprehensive Income (Loss) ("AOCI"), a component of Total Equity.

The following tables present changes in AOCI by component for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended
June 30, 2023	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	35.4	$	(13.7)	$	(321.9)	$	(300.2)
Other Comprehensive Income (Loss) before Reclassifications	4.9		—		(29.3)		(24.4)
Tax Impact	(1.2)		—		—		(1.2)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(0.7)		(0.6)		—		(1.3)
Tax Impact	0.2		0.2		—		0.4
Net Current Period Other Comprehensive Income (Loss)	3.2		(0.4)		(29.3)		(26.5)
Ending Balance	$	38.6	$	(14.1)	$	(351.2)	$	(326.7)
June 30, 2022	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	41.1	$	(13.9)	$	(202.8)	$	(175.6)
Other Comprehensive (Loss) Income before Reclassifications	(43.4)		0.3		(118.8)		(161.9)
Tax Impact	10.5		—		—		10.5
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(6.8)		0.2		—		(6.6)
Tax Impact	1.5		(0.1)				1.4
Net Current Period Other Comprehensive (Loss) Income	(38.2)		0.4		(118.8)		(156.6)
Ending Balance	$	2.9	$	(13.5)	$	(321.6)	$	(332.2)

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	Six Months Ended
June 30, 2023	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	17.3	$	(13.3)	$	(356.1)	$	(352.1)
Other Comprehensive Income before Reclassifications	27.0		—		4.9		31.9
Tax Impact	(6.5)		—		—		(6.5)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	1.0		(1.1)		—		(0.1)
Tax Impact	(0.2)		0.3		—		0.1
Net Current Period Other Comprehensive Income (Loss)	21.3		(0.8)		4.9		25.4
Ending Balance	$	38.6	$	(14.1)	$	(351.2)	$	(326.7)
June 30, 2022	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning balance	$	21.0	$	(14.3)	$	(201.8)	$	(195.1)
Other Comprehensive (Loss) Income before Reclassifications	(9.0)		0.5		(119.8)		(128.3)
Tax Impact	2.2		—		—		2.2
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(14.8)		0.4		—		(14.4)
Tax Impact	3.5		(0.1)		—		3.4
Net Current Period Other Comprehensive (Loss) Income	(18.1)		0.8		(119.8)		(137.1)
Ending Balance	$	2.9	$	(13.5)	$	(321.6)	$	(332.2)

The Condensed Consolidated Statements of Income line items affected by the hedging activities reclassified from AOCI in the tables above are disclosed in Note 13 - Derivative Financial Instruments.

The reclassification amounts for pension and post-retirement benefit adjustments in the tables above are part of net periodic benefit costs recorded in Other Income, Net (see also Note 8 - Retirement Plans).

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

As required, the Company performs an annual impairment test of goodwill as of the end of the October fiscal month or more frequently if events or circumstances change that would more likely than not reduce the fair value of its reporting units below their carrying value.

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The following table presents changes to goodwill during the six months ended June 30, 2023:

	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
Balance as of December 31, 2022	$	4,018.8	$	2,290.0	$	752.3	$	865.0	$	111.5
Acquisitions	2,594.9		1,423.5		—		1,171.4		—
Translation Adjustments	5.2		7.8		0.3		(3.1)		0.2
Balance as of June 30, 2023	$	6,618.9	$	3,721.3	$	752.6	$	2,033.3	$	111.7
Cumulative Goodwill Impairment Charges	$	328.7	$	18.1	$	200.4	$	5.1	$	105.1

Intangible Assets

The following table presents intangible assets including those acquired in the Altra Transaction (see Note 3 - Acquisitions and Divestitures for more information):

		June 30, 2023						December 31, 2022
	Weighted Average Amortization Period (Years)	Gross Value		Accumulated Amortization		Net Carrying Amount		Gross Value		Accumulated Amortization		Net Carrying Amount
Customer Relationships	15	$	4,055.1	$	648.9	$	3,406.2	$	2,321.4	$	532.0	$	1,789.4
Technology	13	311.5		98.5		213.0		246.2		125.0		121.2
Trademarks	10	714.4		93.9		620.5		392.7		73.4		319.3
Total Intangibles		$	5,081.0	$	841.3	$	4,239.7	$	2,960.3	$	730.4	$	2,229.9

Amortization expense recorded for the three and six months ended June 30, 2023 was $89.4 million and $135.7 million, respectively. Amortization expense recorded for the three and six months ended June 30, 2022 was $46.5 million and $93.8 million, respectively. Amortization expense for fiscal year 2023 is estimated to be $312.1 million.

The following table presents future estimated annual amortization expense for intangible assets:

Year	Estimated Amortization
2024	$	349.9
2025	347.9
2026	344.4
2027	343.7
2028	343.7

6. SEGMENT INFORMATION

Effective during the first quarter of 2023, the Company realigned its four operating segments taking into account the change to its management structure and operating model following completion of the Altra Transaction. All prior periods have been recast to reflect the current segment presentation. The Company is comprised of four operating segments: Industrial Powertrain Solutions (IPS), Power Efficiency Solutions (PES), Automation & Motion Control (AMC) and Industrial Systems.

IPS consists of the majority of the Company's previous Motion Control Solutions (MCS) segment, excluding the conveying and aerospace business units, plus Altra's Power Transmission Technologies segment. The IPS segment designs, produces and services mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes and

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gear motors, clutches, brakes, special components products and industrial powertrain components and solutions serving a broad range of markets including food and beverage, bulk handling, eCommerce/warehouse distribution, energy, agricultural machinery, turf & garden and general industrial.

PES consists of the Company's previous Climate Solutions and Commercial Systems segments. The PES segment designs and produces fractional to approximately 5 horsepower AC and DC motors, electronic variable speed controls, fans, and blowers for commercial applications and small motors, electronic variable speed controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, dewatering, agriculture, and general commercial equipment.

AMC consists of the Company's previous MCS aerospace and conveying business units, Altra's Automation & Specialty segment and the Thomson Power Systems business that was previously in the Company's Industrial Systems segment. The AMC segment designs, produces and services conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors and motion control products, automation transfer switches, switchgear for industrial applications and automation systems that enable and control the transition of rotary motion to linear motion. These products are used in advanced material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food & beverage processing and other applications.

Industrial Systems consists of the Company's previous Industrial Systems segment excluding the Thomson Power Systems business. The Industrial Systems segment designs and produces integral motors, alternators for industrial applications, along with aftermarket parts and kits to support such products. These products serve markets including agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment.

The Company evaluates performance based on the segment's income from operations. Corporate costs have been allocated to each segment based on the net sales of each segment. The reported external net sales of each segment are from external customers.

The following sets forth certain financial information attributable to the Company's operating segments, recast as described above, for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Eliminations		Total
External Sales	$	698.7	$	460.1	$	473.1	$	136.7	$	—	$	1,768.6
Intersegment Sales	4.4		3.5		5.9		0.7		(14.5)		—
Total Sales	703.1		463.6		479.0		137.4		(14.5)		1,768.6
Gross Profit	224.4		133.8		176.2		29.4		—		563.8
Operating Expenses	184.2		74.0		127.6		26.4		—		412.2
Total Operating Expenses	184.2		74.0		127.6		26.4		—		412.2
Income from Operations	40.2		59.8		48.6		3.0		—		151.6
Depreciation and Amortization	74.4		11.8		47.6		3.2		—		137.0
Capital Expenditures	19.7		8.4		14.3		2.4		—		44.8
June 30, 2022
External Sales	$	422.1	$	595.4	$	194.1	$	137.8	$	—	$	1,349.4
Intersegment Sales	1.8		2.2		1.7		0.5		(6.2)		—
Total Sales	423.9		597.6		195.8		138.3		(6.2)		1,349.4
Gross Profit	167.7		156.7		70.6		38.5		—		433.5
Operating Expenses	98.9		70.7		48.4		20.6		—		238.6
Total Operating Expenses	98.9		70.7		48.4		20.6		—		238.6
Income from Operations	68.8		86.0		22.2		17.9		—		194.9
Depreciation and Amortization	44.1		11.8		18.9		3.6		—		78.4
Capital Expenditures	5.0		9.8		1.7		2.7		—		19.2

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	Six Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Eliminations		Total
External Sales	$	1,113.1	$	929.6	$	676.3	$	273.7	$	—	$	2,992.7
Intersegment Sales	7.9		7.7		11.1		1.4		(28.1)		—
Total Sales	1,121.0		937.3		687.4		275.1		(28.1)		2,992.7
Gross Profit	401.8		251.5		251.6		57.0		—		961.9
Operating Expenses	335.7		146.3		208.2		51.2		—		741.4
Total Operating Expenses	335.7		146.3		208.2		51.2		—		741.4
Income from Operations	66.1		105.2		43.4		5.8		—		220.5
Depreciation and Amortization	116.0		23.5		67.3		6.7		—		213.5
Capital Expenditures	25.1		17.1		17.4		3.9		—		63.5
June 30, 2022
External Sales	$	838.4	$	1,162.6	$	378.4	$	268.5	$	—	$	2,647.9
Intersegment Sales	3.4		5.1		5.1		1.0		(14.6)		—
Total Sales	841.8		1,167.7		383.5		269.5		(14.6)		2,647.9
Gross Profit	322.0		334.2		133.6		65.6		—		855.4
Operating Expenses	206.9		143.8		99.1		40.8		—		490.6
Total Operating Expenses	206.9		143.8		99.1		40.8		—		490.6
Income from Operations	115.1		190.4		34.5		24.8		—		364.8
Depreciation and Amortization	86.7		23.9		38.6		7.1		—		156.3
Capital Expenditures	7.5		17.7		3.3		4.1		—		32.6

The following table presents identifiable assets information attributable to the Company's operating segments, recast as described above, as of June 30, 2023 and December 31, 2022:

	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
Identifiable Assets as of June 30, 2023	$	8,139.0	$	2,055.2	$	4,980.8	$	682.8	$	15,857.8
Identifiable Assets as of December 31, 2022	5,028.5		2,234.1		2,202.2		804.1		10,268.9

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7. DEBT AND BANK CREDIT FACILITIES

The following table presents the Company’s indebtedness as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
Senior Notes	$	4,700.0	$	—
Term Facility	1,341.5		536.3
Private Placement Notes	—		500.0
Land Term Facility	486.8		486.8
Multicurrency Revolving Facility	115.0		429.0
Altra Notes	18.1		—
Other	79.6		76.7
Less: Debt Issuance Costs	(58.7)		(5.3)
Total	6,682.3		2,023.5
Less: Current Maturities	72.6		33.8
Long-Term Debt	$	6,609.7	$	1,989.7

The below discussion of the Company’s indebtedness should be read in conjunction with the Note 7 – Debt and Bank Credit Facilities in the Company’s 2022 Annual Report on Form 10-K filed on February 24, 2023.

Credit Agreement

On March 28, 2022, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. as Administrative Agent and the lenders named therein, which was subsequently amended on November 17, 2022 (the "First Amendment") and November 30, 2022 (the "Assumption Agreement"), which in combination provide for, among other things:

i.an unsecured term loan facility in the initial principal amount of up to $550.0 million, maturing on March 28, 2027, which was upsized by $840.0 million on March 27, 2023 in connection with the Altra Transaction (the "Term Facility");

ii.an unsecured term loan facility in the initial principal amount of $486.8 million, under which the Company's subsidiary Land Newco, Inc. remains the sole borrower, maturing on March 28, 2027 (the "Land Term Facility"); and

iii.an unsecured revolving loan in the initial principal amount of up to $1,000.0 million, maturing on March 28, 2027, which was upsized by $570.0 million on March 27, 2023 in connection with the Altra Transaction (the "Multicurrency Revolving Facility").

Borrowings under the Credit Agreement bear interest at floating rates based upon indices determined by the currency of the borrowing (SOFR or an alternative base rate for US Dollar borrowings) or at an alternative base rate, in each case, plus an applicable margin. The weighted average interest rate on the Term Facility for the three months ended June 30, 2023 and June 30, 2022 was 7.1% and 2.1%, respectively. The weighted average interest rate on the Term Facility for the six months ended June 30, 2023 and June 30, 2022 was 6.8% and 1.7%, respectively. The weighted average interest rate on the Land Term Facility for the three months ended June 30, 2023 and June 30, 2022 was 7.1% and 2.1%, respectively. The weighted average interest rate on the Land Term Facility for the six months ended June 30, 2023 and June 30, 2022 was 6.5% and 1.7%, respectively.

The Term Facility requires quarterly amortization at 5.0% per annum, unless previously prepaid. Per the terms of the Credit Agreement, prepayments can be made without penalty and be applied to the next payment due. The Land Term Facility has no required amortization.

As of June 30, 2023, the Company had no standby letters of credit issued under the Multicurrency Revolving Facility, and $1,455.0 million of available borrowing capacity. For the three months ended June 30, 2023 and June 30, 2022 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $425.2 million and $730.0 million, respectively, and the weighted average interest rate was 6.7% and 2.1%, respectively. For the six months ended June 30, 2023 and June 30, 2022 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $464.7 million and $765.2 million, respectively, and the weighted average interest rate was 6.4% and 1.7%, respectively. The Company paid a non-use fee of 0.3% as of June 30, 2023 on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.

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Private Placement Notes

On April 7, 2022, the Company entered into a Note Purchase Agreement for the issuance and sale of $500.0 million aggregate principal amount of 3.90% senior notes due April 7, 2032 (the "Private Placement Notes"). Following the issuance of the Senior Notes discussed below, on January 27, 2023, the Company repaid the Private Placement Notes in full with no make-whole payments.

Bridge Facility

In connection with the Altra Transaction, on October 26, 2022, the Company entered into a commitment letter pursuant to which JPMorgan Chase Bank, N.A. committed to provide the Company approximately $5,500.0 million in aggregate principal amount of senior bridge loans under a 364-day senior unsecured bridge term loan facility (the “Bridge Facility”) to, among other things, fund, in part, the Altra Transaction. The Bridge Facility was terminated upon issuance of the Senior Notes in January 2023. The Company paid $27.5 million in Bridge Facility fees in fiscal 2022, of which $10.5 million were recognized in Interest Expense in the fourth quarter of 2022 and zero and $17.0 million were recognized in Interest Expense during the three and six months ended June 30, 2023, respectively.

Senior Notes

On January 24, 2023, the Company issued $1,100.0 million aggregate principal amount of its 6.05% senior notes due 2026 (the “2026 Senior Notes”), $1,250.0 million aggregate principal amount of its 6.05% senior notes due 2028 (the “2028 Senior Notes”), $1,100.0 million aggregate principal amount of its 6.30% senior notes due 2030 (the “2030 Senior Notes”) and $1,250.0 million aggregate principal amount of its 6.40% senior notes due 2033 (the “2033 Senior Notes” and, together with the 2026 Senior Notes, 2028 Senior Notes and 2030 Senior Notes, collectively, the “Senior Notes”). The 2026 Senior Notes are scheduled to mature on February 15, 2026, the 2028 Senior Notes are scheduled to mature on April 15, 2028, the 2030 Senior Notes are scheduled to mature on February 15, 2030, and the 2033 Senior Notes are scheduled to mature on April 15, 2033.

The rate of interest on each series of the Senior Notes is subject to an increase of up to 2.00% in the event of certain downgrades in the debt rating of the Senior Notes. Interest on the 2026 Senior Notes and the 2030 Senior Notes will be payable semi-annually on February 15 and August 15 of each year, beginning on August 15, 2023. Interest on the 2028 Senior Notes and the 2033 Senior Notes will be payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2023.

The Senior Notes were issued and sold in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933 and persons outside the United States in accordance with Regulation S under the Securities Act. Pursuant to a registration rights agreement, the Company will exchange the Senior Notes with registered notes with terms substantially identical to the Senior Notes within 540 days from the date of issuance.

The Company received $4,647.0 million in net proceeds from the sale of the Senior Notes, after deducting the initial purchasers’ discounts and estimated offering expenses. The Company used a portion of the net proceeds to repay the Company’s outstanding Private Placement Notes and used the remaining net proceeds, together with the incremental term loan commitments under the Term Facility and cash on hand, to fund the consideration for the Altra Transaction, repay certain of Altra’s outstanding indebtedness, and pay certain fees and expenses.

Prior to the consummation of the Altra Transaction, the Company used a portion of the proceeds to repay the outstanding borrowings under the Multicurrency Revolving Facility in January 2023 and invested the remaining net proceeds of approximately $3.6 billion in interest bearing accounts. The Company recognized zero and $29.4 million in Interest Income during the three and six months ended June 30, 2023, respectively.

Altra Notes

On March 27, 2023, in connection with the Altra Transaction, the Company assumed $18.1 million aggregate principal amount of 6.125% senior notes due 2026 (the “Altra Notes”). The Company purchased 95.28% of the outstanding Altra Notes for total consideration of $382.7 million. See Note 3 – Acquisitions and Divestitures for more information.

The Altra Notes will mature on October 1, 2026. The Altra Notes may be redeemed at the option of the issuer on or after October 1, 2023. The Notes are guaranteed on a senior unsecured basis by certain of the Company's domestic subsidiaries.

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Compliance with Financial Covenants

The Credit Agreement, Senior Notes, and Altra Notes require the Company to meet specified financial ratios and to satisfy certain financial condition tests. The Company was in compliance with all financial covenants contained in the Credit Agreement as of June 30, 2023.

Other Notes Payable

These amounts consist of finance leases as well as certain long-term fixed rate term loans entered into by subsidiaries in Europe that are generally secured by the local property, plant and equipment. The weighted average interest rate on other notes payable for the three months ended June 30, 2023 and June 30, 2022 were 4.9% and 5.1%, respectively. The weighted average interest rate on other notes payable for the six months ended June 30, 2023 and June 30, 2022 were 4.9% and 5.1%, respectively.

Other Disclosures

Based on rates for instruments with comparable maturities and credit quality, which are classified as Level 2 inputs (see also Note 14 - Fair Value), the approximate fair value of the Company's total debt was $6,662.3 million and $1,926.6 million as of June 30, 2023 and December 31, 2022, respectively.

Maturities of long-term debt outstanding as of June 30, 2023, excluding debt issuance costs, are as follows:

Year	Amount of Maturity
2023	$	36.7
2024	73.3
2025	73.5
2026	1,191.6
2027	1,704.3
Thereafter	3,661.6
Total	$	6,741.0

8. RETIREMENT PLANS

The following table presents the Company’s net periodic benefit cost (income) components:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service Cost	$	0.6	$	0.5	$	0.9	$	0.8
Interest Cost	5.7		3.5		11.3		7.1
Expected Return on Plan Assets	(6.7)		(5.2)		(13.4)		(10.3)
Amortization of Prior Service Cost and Net Actuarial Loss	(0.6)		0.2		(1.1)		0.4
Net Periodic Benefit Income	$	(1.0)	$	(1.0)	$	(2.3)	$	(2.0)

The service cost component is included in Cost of Sales and Operating Expenses. All other components of net periodic benefit costs are included in Other Income, Net on the Company's Condensed Consolidated Statements of Income.

For the three months ended June 30, 2023 and June 30, 2022, the Company contributed $2.0 million and $1.3 million, respectively, to post retirement plans. For the six months ended June 30, 2023 and June 30, 2022, the Company contributed $3.5 million and $3.0 million, respectively. The Company expects to make total contributions of $6.5 million in 2023. The Company contributed a total of $8.3 million in fiscal 2022.

For the three months ended June 30, 2023 and June 30, 2022, the Company contributed $11.3 million and $6.4 million, respectively, to defined contribution plans. For the six months ended June 30, 2023 and June 30, 2022, the Company contributed $17.5 million and $12.3 million, respectively.

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In connection with the Altra Transaction, $30.5 million of plan benefit obligations and $13.8 million of plan assets included in the Altra business were transferred to the Company on March 27, 2023.

9. SHAREHOLDERS’ EQUITY

Share-Based Compensation

The Company recognized approximately $14.5 million and $4.9 million in share-based compensation expense for the three months ended June 30, 2023 and June 30, 2022, respectively, and approximately $36.2 million and $11.2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The $36.2 million includes $15.7 million related to the accelerated vesting of awards for certain former Altra employees. The total income tax benefit recognized in the Condensed Consolidated Statements of Income for share-based compensation expense was $2.5 million and $1.2 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $3.7 million and $2.7 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The Company recognizes compensation expense on grants of share-based compensation awards on a straight-line basis over the vesting period of each award.

During the six months ended June 30, 2023, the Company granted the following share-based incentive awards:

Award Type	Number of Awards	Weighted Average Grant-Date Fair Value
Options and SARs1	147,174	$	54.96
Restricted Stock Awards1	31,605	$	134.57
Restricted Stock Units1	254,428	$	141.90
Performance Share Units	58,945	$	235.77

1 Certain outstanding equity-based awards held by employees of Altra that related to shares of Altra Common Stock were replaced by equity-based awards of the Company Common Stock with substantially similar terms and conditions. These awards include 32,419 options with a weighted-average grant date fair value of $57.64, 20,114 restricted stock awards with a weighted-average grant date fair value of $138.11 and 161,414 restricted stock units with a weighted-average grant date fair value of $135.50 issued as replacement awards for Altra unvested awards outstanding at close of the Altra Transaction on March 27, 2023.

10. INCOME TAXES

The effective tax rate for the three months ended June 30, 2023 was 22.9% versus 22.1% for the three months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2023 and June 30, 2022 was 44.5% and 22.1%, respectively. The effective tax rate for the three months ended June 30, 2023 was higher than the same period in the prior year primarily driven by costs associated with the Altra acquisition. The effective tax rate for the six months ended June 30, 2023 was higher than the same period in the prior year primarily driven by non-deductible transaction costs associated with the Altra Transaction and withholding taxes resulting from foreign cash repatriation.

As of June 30, 2023 and December 31, 2022, the Company had approximately $9.1 million and $5.7 million of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. The Company had approximately $1.1 million and $1.2 million of accrued interest as of June 30, 2023 and December 31, 2022, respectively.

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11. EARNINGS PER SHARE

Diluted earnings per share is calculated based upon earnings applicable to common shares divided by the weighted-average number of common shares outstanding during the period adjusted for the effect of other dilutive securities. The amount of the anti-dilutive shares were 0.5 million and 0.4 million for the three months ended June 30, 2023 and June 30, 2022, respectively. The amount of the anti-dilutive shares were 0.4 million and 0.2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The following table reconciles the basic and diluted shares used in earnings per share calculations for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended		Six Months Ended
	June 30, 2023	June 30, 2022	June 30, 2023	June 30, 2022
Denominator for Basic Earnings Per Share	66.3	66.8	66.2	67.1
Effect of Dilutive Securities	0.3	0.3	0.4	0.4
Denominator for Diluted Earnings Per Share	66.6	67.1	66.6	67.5

12. CONTINGENCIES

One of the Company's subsidiaries that it acquired in 2007 is subject to numerous claims filed in various jurisdictions relating to certain sub-fractional motors that were primarily manufactured through 2004 and that were included as components of residential and commercial ventilation units manufactured and sold in high volumes by a third party. These ventilation units are subject to product safety requirements and other potential regulation of their performance by government agencies such as the US Consumer Product Safety Commission (“CPSC”). The claims generally allege that the ventilation units were the cause of fires. The Company has recorded an estimated liability for incurred claims. Based on the current facts, the Company cannot assure that these claims, individually or in the aggregate, will not have a material adverse effect on its subsidiary's financial condition. The Company's subsidiary cannot reasonably predict the outcome of these claims, the nature or extent of any CPSC or other remedial actions, if any, that the Company's subsidiary may need to undertake with respect to motors that remain in the field, or the costs that may be incurred, some of which could be significant.

As a result of the Company's acquisition of the Rexnord PMC business, it is entitled to indemnification from third parties to agreements with the Rexnord PMC business against certain contingent liabilities of the Rexnord PMC business, including certain pre-closing environmental liabilities.

The Company believes that, pursuant to the transaction documents related to the Rexnord PMC business' acquisition of the Stearns business from Invensys plc ("Invensys"), Invensys (now known as Schneider Electric) is obligated to defend and indemnify us 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 $900.0 million. In the event that the Company is unable to recover from Invensys with respect to the matters below, it may be entitled to indemnification from Zurn Water Solutions Corporation (formerly known as Rexnord Corporation) ("Zurn"), subject to certain limitations. The following paragraphs summarize the most significant actions and proceedings:

•In 2002, the Company's subsidiary, 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 at the Site, allegedly including but not limited to a release or threatened release on or from Rexnord Industries' property. 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. The soil excavation work and transporting and disposing of the excavated material was completed in October 2020. An AS/SVE system construction was completed in February 2022 and is anticipated to operate for three years. All previously pending property damage and personal injury lawsuits against Rexnord Industries related to the Site have been settled or dismissed. Pursuant to its indemnity obligation, Invensys continues to defend Rexnord Industries 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. This

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indemnification right would not protect Rexnord Industries against liabilities related to environmental conditions that were unknown to Invensys at the time of the acquisition of the Stearns business from Invensys.

•Multiple lawsuits (with approximately 404 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 Rexnord PMC business' Stearns brand of brakes and clutches 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 Rexnord PMC business' 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 Rexnord PMC business' insurance providers have paid 100% of the costs related to the Prager asbestos matters. We believe that the combination of the Company's insurance coverage and the Invensys indemnity obligations will cover any future costs of these matters.

In connection with the Company's acquisition of the Rexnord PMC business, transaction documents related to the Rexnord PMC business’ acquisition of The Falk Corporation from Hamilton Sundstrand Corporation were assigned to Rexnord Industries, and provide Rexnord Industries with indemnification against certain product related asbestos exposure liabilities. The Company believes that, pursuant to such indemnity obligations, Hamilton Sundstrand is obligated to defend and indemnify Rexnord Industries with respect to 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:

•Rexnord Industries 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 The Falk Corporation. The ultimate outcome of these lawsuits cannot presently be determined. Hamilton Sundstrand is defending Rexnord Industries in these lawsuits pursuant to its indemnity obligations and has paid 100% of the costs to date.

The Company is, from time to time, party to litigation and other legal or regulatory proceedings that arise in the normal course of its business operations and the outcomes of which are subject to significant uncertainty, including product warranty and liability claims, contract disputes and environmental, asbestos, intellectual property, employment and other litigation matters. The Company's products are used in a variety of industrial, commercial and residential applications that subject the Company to claims that the use of its products is alleged to have resulted in injury or other damage. Many of these matters will only be resolved when one or more future events occur or fail to occur. Management conducts regular reviews, including updates from legal counsel, to assess the need for accounting recognition or disclosure of these contingencies, and such assessment inherently involves an exercise in judgment. The Company accrues for exposures in amounts that it believes are adequate, and the Company does not believe that the outcome of any such lawsuit individually or collectively will have a material effect on the Company's financial position, its results of operations or its cash flows.

The Company recognizes the cost associated with its standard warranty on its products at the time of sale. The amount recognized is based on historical experience. The following table presents a reconciliation of the changes in accrued warranty costs for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Beginning Balance	$	41.5	$	23.4	$	28.8	$	23.0
Less: Payments	(6.9)		(7.7)		(10.3)		(13.3)
Provisions	3.8		8.0		10.0		14.0
Acquisitions	—		—		9.8		—
Translation Adjustments	0.9		(0.3)		1.0		(0.3)
Ending Balance	$	39.3	$	23.4	$	39.3	$	23.4

These liabilities are included in Other Accrued Expenses and Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets.

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13. DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are commodity price risk, currency exchange risk, and interest rate risk. Forward contracts on certain commodities are entered into to manage the price risk associated with forecasted purchases of materials used in the Company's manufacturing process. Forward contracts on certain currencies are entered into to manage forecasted cash flows in certain foreign currencies. Interest rate swaps are utilized to manage interest rate risk associated with the Company's floating rate borrowings.

The Company is exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including its commodity hedging transactions, foreign currency exchange contracts and interest rate swap agreements. Exposure to counterparty credit risk is managed by limiting counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. The Company does not obtain collateral or other security to support financial instruments subject to credit risk. The Company does not anticipate non-performance by its counterparties, but cannot provide assurances.

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. The Company designates commodity forward contracts as cash flow hedges of forecasted purchases of commodities, currency forward contracts as cash flow hedges of forecasted foreign currency cash flows and interest rate swaps as cash flow hedges of forecasted SOFR-based interest payments. There were no significant collateral deposits on derivative financial instruments as of June 30, 2023 or June 30, 2022.

The effective portion of the gain or loss on the derivative is reported as a component of AOCI and reclassified into the same line within the Condensed Consolidated Statement of Income as the earnings effect of the hedged item in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or changes in market value of derivatives not designated as hedges are recognized in current earnings.

As of June 30, 2023 and December 31, 2022, the Company had $17.8 million and $11.9 million, respectively, net of tax, of derivative gains on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings.

The Company had the following currency forward contracts outstanding (notional amounts expressed in terms of the dollar value of the hedged currency with maturities extending through November 2024):

	June 30, 2023		December 31, 2022
Chinese Renminbi	$	229.3	$	173.8
Mexican Peso	176.3		215.2
Euro	298.9		159.6
Indian Rupee	49.2		33.1
Australian Dollar	3.0		—
Swedish Krona	6.9		—
British Pound	12.8		2.1
Czech Koruna	1.6		—

The Company had the following commodity forward contracts outstanding (with maturities extending through December 2024) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item):

	June 30, 2023		December 31, 2022
Copper	$	53.0	$	89.4
Aluminum	2.2		4.0

The Company entered into two receive variable/pay-fixed forward starting non-amortizing interest rate swaps in June 2020, with a total notional amount of $250.0 million, which were subsequently terminated in March 2022. The cash proceeds of $16.2 million received to settle the terminated swaps is being recognized as a reduction of interest expense via the effective interest rate method through July 2025 when the terminated swaps were scheduled to expire. The Company entered into two additional receive variable/pay-fixed forward starting non-amortizing interest rate swaps in May 2022, with a total notional amount of $250.0 million. These swaps will expire in March 2027.

Fair values of derivative instruments as of June 30, 2023 and December 31, 2022 were:

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	June 30, 2023
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	9.9	$	—	$	—
Currency Contracts	23.2		2.1		4.1		0.3
Commodity Contracts	0.8		—		3.9		0.3
Not Designated as Hedging Instruments:
Currency Contracts	0.3		—		0.7		—
Commodity Contracts	—		—		0.2		—
Total Derivatives	$	24.3	$	12.0	$	8.9	$	0.6

	December 31, 2022
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	7.9	$	—	$	—
Currency Contracts	12.3		0.9		4.8		—
Commodity Contracts	0.9		0.3		10.2		—
Not Designated as Hedging Instruments:
Currency Contracts	0.7		—		—		—
Commodity Contracts	—		—		0.4		—
Total Derivatives	$	13.9	$	9.1	$	15.4	$	—

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Derivatives Designated as Cash Flow Hedging Instruments

The effect of derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income were:

	Three Months Ended
	June 30, 2023								June 30, 2022
	Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total		Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$	(5.3)	$	4.4	$	5.8	$	4.9	$	(35.6)	$	(6.0)	$	(1.8)	$	(43.4)
Amounts Reclassified from Other Comprehensive Income (Loss):
(Loss) Gain Recognized in Cost of Sales	(2.8)		2.0		—		(0.8)		4.4		2.4		—		6.8
Gain Recognized in Interest Expense	—		—		1.5		1.5		—		—		—		—
	Six Months Ended
	June 30, 2023								June 30, 2022
	Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total		Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$	0.2	$	24.7	$	2.1	$	27.0	$	(22.2)	$	4.4	$	8.8	$	(9.0)
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales	—		—		—		—		—		0.1		—		0.1
(Loss) Gain Recognized in Cost of Sales	(7.8)		4.0		—		(3.8)		9.6		5.4		—		15.0
Gain (Loss) Recognized in Interest Expense	—		—		2.8		2.8		—		—		(0.3)		(0.3)

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Derivatives Not Designated as Cash Flow Hedging Instruments:

The effect of derivative instruments not designated as cash flow hedges on the Condensed Consolidated Statements of Income were:

	Three Months Ended
	June 30, 2023				June 30, 2022
	Commodity Forwards		Currency Forwards		Commodity Forwards		Currency Forwards
Loss recognized in Cost of Sales	$	(0.1)	$	—	$	(1.2)	$	—
(Loss) Gain recognized in Operating Expenses	—		(10.6)		—		3.5
	Six Months Ended
	June 30, 2023				June 30, 2022
	Commodity Forwards		Currency Forwards		Commodity Forwards		Currency Forwards
Gain (Loss) recognized in Cost of Sales	$	0.1	$	—	$	(0.6)	$	—
(Loss) Gain recognized in Operating Expenses	—		(12.5)		—		5.0

The AOCI balance related to hedging activities consists of a $38.6 million gain net of tax as of June 30, 2023 which includes $25.4 million of net current deferred gains expected to be reclassified to the Consolidated Statement of Comprehensive Income in the next twelve months. There were no gains or losses reclassified from AOCI to earnings based on the probability that the forecasted transaction would not occur.

The Company's commodity and currency derivative contracts are subject to master netting agreements with the respective counterparties which allow the Company to net settle transactions with a single net amount payable by one party to another party. The Company has elected to present the derivative assets and derivative liabilities on the Condensed Consolidated Balance Sheets on a gross basis as of June 30, 2023 and December 31, 2022.

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The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements:

	June 30, 2023
	Gross Amounts as Presented in the Condensed Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	23.5	$	(2.7)	$	20.8
Derivative Commodity Contracts	0.8		(0.7)		0.1
Other Noncurrent Assets:
Derivative Currency Contracts	2.1		(0.1)		2.0
Other Accrued Expenses:
Derivative Currency Contracts	4.8		(2.7)		2.1
Derivative Commodity Contracts	4.1		(1.1)		3.0
Other Noncurrent Liabilities:
Derivative Currency Contracts	0.3		(0.1)		0.2
Derivative Commodity Contracts	0.3		—		0.3

	December 31, 2022
	Gross Amounts as Presented in the Condensed Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	13.0	$	(2.5)	$	10.5
Derivative Commodity Contracts	0.9		(0.9)		—
Other Noncurrent Assets:
Derivative Currency Contracts	0.9		—		0.9
Derivative Commodity Contracts	0.3		—		0.3
Other Accrued Expenses:
Derivative Currency Contracts	4.8		(2.5)		2.3
Derivative Commodity Contracts	10.6		(0.9)		9.7

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14. FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or
	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
	Inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

The Company uses the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The fair values of cash equivalents and short-term deposits approximate their carrying values as of June 30, 2023 and December 31, 2022, due to the short period of time to maturity and are classified using Level 1 inputs. The fair values of trade receivables and accounts payable approximate the carrying values due to the short period of time to maturity. See Note 7 - Debt and Bank Credit Facilities for disclosure of the approximate fair value of the Company's debt as of June 30, 2023 and December 31, 2022.

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022		Classification
Assets:
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	23.5	$	13.0	Level 2
Derivative Commodity Contracts	0.8		0.9		Level 2
Other Noncurrent Assets:
Assets Held in Rabbi Trust	13.0		6.4		Level 1
Derivative Currency Contracts	2.1		0.9		Level 2
Derivative Commodity Contracts	—		0.3		Level 2
Interest Rate Swap	9.9		7.9		Level 2
Liabilities:
Other Accrued Expenses:
Derivative Currency Contracts	4.8		4.8		Level 2
Derivative Commodity Contracts	4.1		10.6		Level 2
Other Noncurrent Liabilities:
Derivative Currency Contracts	0.3		—		Level 2
Derivative Commodity Contracts	0.3		—		Level 2

Level 1 fair value measurements for assets held in a Rabbi Trust are unadjusted quoted prices.

Level 2 fair value measurements for derivative assets and liabilities are measured using quoted prices in active markets for similar assets and liabilities. Interest rate swaps are valued based on the discounted cash flows using the SOFR forward yield curve for an instrument with similar contractual terms. Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. Commodity forwards are valued based on observable market transactions of forward commodity prices. Debt instruments are valued based on quoted prices in active markets for instruments with similar contractual terms.

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15. RESTRUCTURING ACTIVITIES

The Company incurred restructuring and restructuring-related costs on projects during the three and six months ended June 30, 2023 and June 30, 2022. The Company has initiated restructuring plans to achieve cost synergies from procurement, distribution efficiencies, footprint rationalization and other general cost savings measures. Restructuring costs include employee termination and plant relocation costs. Restructuring-related costs also include costs directly associated with actions resulting from the Company's simplification initiatives, such as asset write-downs or accelerated depreciation due to shortened useful lives in connection with site closures, discretionary employment benefit costs and other facility rationalization costs. Restructuring costs for employee termination expenses are generally recognized when the severance liability is determined to be probable of being paid and reasonably estimable while plant relocation costs and related costs are generally required to be expensed as incurred.

The following table presents a reconciliation of provisions and payments for the restructuring projects for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Beginning Balance	$	10.1	$	14.5	$	15.1	$	5.0
Acquisition(1)	—		—		0.2		—
Provision	14.0		(1.0)		19.0		15.8
Less: Payments/ Other	5.8		7.1		16.0		14.4
Ending Balance	$	18.3	$	6.4	$	18.3	$	6.4

(1) Excludes $12.4 million of severance related to the Altra Transaction, which was paid in the second quarter 2023.

The following table presents a reconciliation of restructuring and restructuring-related costs for restructuring projects for the three and six months ended June 30, 2023 and June 30, 2022, respectively:

	Three Months Ended
	June 30, 2023						June 30, 2022
Restructuring Costs:	Cost of Sales		Operating Expenses		Total		Cost of Sales		Operating Expenses		Total
Employee Termination Expenses	$	7.4	$	2.3	$	9.7	$	1.4	$	(1.0)	$	0.4
Facility Related Costs	2.1		0.2		2.3		(2.0)		0.1		(1.9)
Other Expenses	1.9		0.1		2.0		0.1		0.4		0.5
Total Restructuring Costs	$	11.4	$	2.6	$	14.0	$	(0.5)	$	(0.5)	$	(1.0)
	Six Months Ended
	June 30, 2023						June 30, 2022
Restructuring Costs:	Cost of Sales		Operating Expenses		Total		Cost of Sales		Operating Expenses		Total
Employee Termination Expenses	$	9.7	$	2.9	$	12.6	$	6.2	$	2.6	$	8.8
Facility Related Costs	3.0		0.2		3.2		6.0		0.5		6.5
Other Expenses	3.1		0.1		3.2		0.1		0.4		0.5
Total Restructuring Costs	$	15.8	$	3.2	$	19.0	$	12.3	$	3.5	$	15.8

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The following table presents the allocation of restructuring and restructuring-related costs by segment for the three and six months ended June 30, 2023 and June 30, 2022:

Restructuring Costs - Three Months Ended	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
June 30, 2023	$	14.0	$	2.0	$	10.5	$	1.0	$	0.5
June 30, 2022	$	(1.0)	$	(4.9)	$	0.7	$	3.0	$	0.2
Restructuring Costs - Six Months Ended	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
June 30, 2023	$	19.0	$	1.6	$	15.2	$	1.5	$	0.7
June 30, 2022	$	15.8	$	9.4	$	1.7	$	4.5	$	0.2

The Company's current restructuring activities are expected to continue through 2023. The Company expects to record aggregate future charges of approximately $53 million during the second half of 2023. The Company continues to evaluate operating efficiencies and anticipates incurring additional costs in future periods in connection with these activities.

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

(Dollars In Millions Except Per Share Data, Unless Otherwise Noted)

Overview

Regal Rexnord Corporation (NYSE: RRX) (“we,” “us,” “our” or the “Company”) is a global leader in the engineering and manufacturing of factory automation sub-systems, industrial powertrain solutions, automation and mechanical power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems, serving customers around the world. Through longstanding technology leadership and an intentional focus on producing more energy-efficient products and systems, we help create a better tomorrow – for our customers and for the planet. We are headquartered in Beloit, Wisconsin and have manufacturing, sales and service facilities worldwide.

Our company is comprised of four operating segments: Industrial Powertrain Solutions (IPS), Power Efficiency Solutions (PES), Automation & Motion Control (AMC) and Industrial Systems. Effective during the first quarter of 2023, in conjunction with the Altra Transaction (as defined in Note 3 - Acquisitions and Divestitures), we realigned our four operating segments with the change to our management structure and operating model. See Note 6 - Segment Information of the Notes to the Condensed Consolidated Financial Statements for further information.

A description of our four operating segments is as follows:

•IPS consists of the majority of our previous Motion Control Solutions (MCS) segment, excluding the conveying and aerospace business units, plus Altra's Power Transmission Technologies segment. The IPS segment designs, produces and services mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes and gear motors, clutches, brakes, special components products and industrial powertrain components and solutions serving a broad range of markets including food and beverage, bulk handling, eCommerce/warehouse distribution, energy, agriculture machinery, turf & garden and general industrial.

•PES consists of our previous Climate Solutions and Commercial Systems segments. The PES segment designs and produces fractional to approximately 5 horsepower AC and DC motors, electronic variable speed controls, fans, and blowers for commercial applications and small motors, electronic variable speed controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, dewatering, agriculture, and general commercial equipment

•AMC consists of our previous MCS aerospace and conveying business units, Altra's Automation & Specialty segment and the Thomson Power Systems business that was previously in our Industrial Systems segment. The AMC segment designs, produces and services conveyor products, conveying automation subsystems, aerospace components, rotary

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precision motion solutions, high-efficiency miniature motors and motion control products, automatic transfer switches, switchgear for industrial applications and automation systems that enable and control the transition of rotary motion to linear motion. These products are used in advanced material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food & beverage processing and other applications.

•Industrial Systems consists of our previous Industrial Systems segment excluding the Thomson Power Systems business. The Industrial Systems segment designs and produces integral motors, alternators for industrial applications, along with aftermarket parts and kits to support such products. These products serve markets including agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment.

As previously disclosed, we are considering a full range of strategic alternatives for the Industrial Systems operating segment, which may result in potential non-cash impairment charges or losses if the business were to be divested. As of the date of this filing, our strategic review remains underway, and may or may not result in a decision to divest this portion of our business.

Components of Profit and Loss

Net Sales. We sell our products to a variety of manufacturers, distributors and end users. Our customers consist of a large cross-section of businesses, ranging from Fortune 100 companies to small businesses. A number of our products are sold to Original Equipment Manufacturers ("OEMs"), who incorporate our products, such as electric motors, into products they manufacture, and many of our products are built to the requirements of our customers. The majority of our sales derive from direct sales to customers by sales personnel employed by the Company, however, a significant portion of our sales are derived from sales made by manufacturer’s representatives, who are paid exclusively on commission. Our product sales are made via purchase order, long-term contract, and, in some instances, one-time purchases. Many of our products have broad customer bases, with levels of revenue concentration by customer varying widely across our business units.

Our level of net sales for any given period is dependent upon a number of factors, including (i) the demand for our products and for the products in which our products are components; (ii) the strength of the economy generally and the end markets in which we compete; (iii) our customers’ perceptions of our product quality at any given time; (iv) our quote, lead and delivery times; (v) the selling price of our products; (vi) inventory levels in the channels through which our products are sold; and (vii) the weather. As a result, our total revenue has tended to experience quarterly variations and our total revenue for any particular quarter may not be indicative of future results.

We use the term “organic sales" to refer to sales from existing operations excluding (i) sales from acquired businesses recorded prior to the first anniversary of the acquisition (“Acquisition Sales”), (ii) less the amount of sales attributable to any businesses divested/to be exited, and (iii) the impact of foreign currency translation. The impact of foreign currency translation is determined by translating the respective period’s organic sales using the same currency exchange rates that were in effect during the prior year periods. We use the term “organic sales growth” to refer to the increase in our sales between periods that is attributable to organic sales. We use the term “acquisition growth” to refer to the increase in our sales between periods that is attributable to Acquisition Sales. Organic sales, organic sales growth and acquisition growth are non-GAAP measures. See reconciliation for these measures to GAAP net sales in Non-GAAP Measures below.

Gross Profit. Our gross profit is impacted by our levels of net sales and cost of sales. Our cost of sales consists of costs for, among other things (i) raw materials, including copper, steel and aluminum; (ii) components such as castings, bars, tools, bearings and electronics; (iii) wages and related personnel expenses for fabrication, assembly and logistics personnel; (iv) manufacturing facilities, including depreciation on our manufacturing facilities and equipment, insurance and utilities; and (v) shipping. The majority of our cost of sales consists of raw materials and components. The price we pay for commodities and components can be subject to commodity price fluctuations. We attempt to mitigate this through fixed-price agreements with suppliers and our hedging strategies. When we experience commodity price increases, we have tended to announce price increase to our customers who purchase via purchase order, with such increases generally taking effect a period of time after the public announcements. For those sales we make under long-term contracts, we tend to include material price formulas that specify quarterly or semi-annual price adjustments based on a variety of factors, including commodity prices.

Outside of general economic cyclicality, our business units experience different levels of variation in gross profit from quarter to quarter based on factors specific to each business. For example, a portion of our PES segment manufactures products that are used in air conditioning applications. As a result, our sales for that business tend to be lower in the first and fourth quarters and higher in the second and third quarters. In contrast, a portion of our PES segment, IPS segment, AMC segment and Industrial

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Systems segment and have a broad customer base and a variety of applications, thereby helping to mitigate large quarter-to-quarter fluctuations outside of general economic conditions.

Operating Expenses. Our operating expenses consist primarily of (i) general and administrative expenses; (ii) sales and marketing expenses; (iii) general engineering and research and development expenses; and (iv) handling costs incurred in conjunction with distribution activities. Personnel related costs are our largest operating expense.

Our general and administrative expenses consist primarily of costs for (i) salaries, benefits and other personnel expenses related to our executive, finance, human resource, information technology, legal and operations functions; (ii) occupancy expenses; (iii) technology related costs; (iv) depreciation and amortization; and (v) corporate-related travel. The majority of our general and administrative costs are for salaries and related personnel expenses. These costs can vary by business given the location of our different manufacturing operations.

Our sales and marketing expenses consist primarily of costs for (i) salaries, benefits and other personnel expenses related to our sales and marketing function; (ii) internal and external sales commissions and bonuses; (iii) travel, lodging and other out-of-pocket expenses associated with our selling efforts; and (iv) other related overhead.

Our general engineering and research and development expenses consist primarily of costs for (i) salaries, benefits and other personnel expenses; (ii) the design and development of new energy efficiency products and enhancements; (iii) quality assurance and testing; and (iv) other related overhead. Our research and development efforts tend to be targeted toward developing new products that would allow us to maintain or gain additional market share, whether in new or existing applications. In particular, a large driver of our research and development efforts in those three segments is energy efficiency, which generally means using less electrical power to produce more mechanical power.

Income from Operations. Our income from operations consists of the segment gross profit less the segment operating expenses. In addition, there are shared operating costs that cover corporate, engineering and IT expenses that are consistently allocated to the operating segments and are included in the segment operating expenses. Income from operations is a key metric used to measure year-over-year improvement of the segments.

Altra Transaction

On March 27, 2023, in accordance with the terms and conditions of the Altra Merger Agreement, by and among us, Altra, and Merger Sub, pursuant to the satisfaction of specified conditions, Merger Sub merged with and into Altra, with Altra surviving the Altra Merger as our wholly owned subsidiary. See Note 3 - Acquisitions and Divestitures of the Notes to the Condensed Consolidated Financial Statements for further information regarding the Altra Transaction.

In connection with the Altra Transaction, we entered into certain financing arrangements, which are described below under “Liquidity and Capital Resources”.

2023 Outlook

We continue to expect a low single digit percentage decline in organic sales and earnings per share for fiscal 2023. We expect benefits from merger and acquisition synergies, improving new product mix, ongoing 80/20 initiatives and various productivity initiatives to be more than offset by headwinds from lower volumes, material and non-material inflation, strategic growth investments, a higher tax rate, higher net interest expense and higher depreciation expense.

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Results of Operations

	Three Months Ended						Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Net Sales:
Industrial Powertrain Solutions	$	698.7		$	422.1		$	1,113.1		$	838.4
Power Efficiency Solutions	460.1			595.4			929.6			1,162.6
Automation & Motion Control	473.1			194.1			676.3			378.4
Industrial Systems	136.7			137.8			273.7			268.5
Consolidated	$	1,768.6		$	1,349.4		$	2,992.7		$	2,647.9
Gross Profit as a Percent of Net Sales:
Industrial Powertrain Solutions	32.1		%	39.7		%	36.1		%	38.4		%
Power Efficiency Solutions	29.1		%	26.3		%	27.1		%	28.7		%
Automation & Motion Control	37.2		%	36.4		%	37.2		%	35.3		%
Industrial Systems	21.5		%	27.9		%	20.8		%	24.4		%
Consolidated	31.9		%	32.1		%	32.1		%	32.3		%
Operating Expenses as a Percent of Net Sales:
Industrial Powertrain Solutions	26.4		%	23.4		%	30.2		%	24.7		%
Power Efficiency Solutions	16.1		%	11.9		%	15.7		%	12.4		%
Automation & Motion Control	27.0		%	24.9		%	30.8		%	26.2		%
Industrial Systems	19.3		%	14.9		%	18.7		%	15.2		%
Consolidated	23.3		%	17.7		%	24.8		%	18.5		%
Income from Operations as a Percent of Net Sales:
Industrial Powertrain Solutions	5.8		%	16.3		%	5.9		%	13.7		%
Power Efficiency Solutions	13.0		%	14.4		%	11.3		%	16.4		%
Automation & Motion Control	10.3		%	11.4		%	6.4		%	9.1		%
Industrial Systems	2.2		%	13.0		%	2.1		%	9.2		%
Consolidated	8.6		%	14.4		%	7.4		%	13.8		%
Income from Operations	$	151.6		$	194.9		$	220.5		$	364.8
Interest Expense	116.4			13.4			211.8			22.4
Interest Income	(5.1)			(0.8)			(37.0)			(1.9)
Other Income, Net	(2.8)			(1.5)			(4.2)			(2.8)
Income before Taxes	43.1			183.8			49.9			347.1
Provision for Income Taxes	9.9			40.6			22.2			76.8
Net Income	33.2			143.2			27.7			270.3
Less: Net Income Attributable to Noncontrolling Interests	1.1			1.2			1.5			2.7
Net Income Attributable to Regal Rexnord Corporation	$	32.1		$	142.0		$	26.2		$	267.6

    

Three Months Ended June 30, 2023 Compared to June 30, 2022

Net sales increased $419.2 million or 31.1% for the second quarter 2023 compared to the second quarter 2022. The increase consisted of acquisition growth of 40.9%, offset by negative organic sales of 9.1% and negative foreign currency translation of 0.7%. The increase was primarily driven by the acquisition of Altra partially offset by lower net sales within the Power Efficiency Solutions segment. Gross profit increased $130.3 million or 30.1% for the second quarter 2023 as compared to the second quarter 2022. The increase in gross profit was driven by the acquisition of Altra partially offset by lower gross profit

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within the Power Efficiency Solutions and Industrial Systems segments and higher restructuring costs. Total operating expenses for the second quarter 2023 increased $173.6 million or 72.8% as compared to the second quarter 2022 primarily due to the acquisition of Altra, including transaction costs, and higher restructuring costs partially offset by higher derivative gains.

Industrial Powertrain Solutions segment net sales for the second quarter 2023 were $698.7 million, an increase of $276.6 million or 65.5% as compared to the second quarter 2022. The increase consisted of acquisition growth of 67.3% partially offset by negative organic sales of 1.4% and negative foreign currency translation of 0.4%. The increase was primarily driven by the acquisition of Altra. Gross profit increased $56.7 million or 33.8% as compared to the second quarter 2022. The increased gross profit was primarily driven by the acquisition of Altra partially offset by higher restructuring costs. Total operating expenses for the second quarter 2023 increased $85.3 million or 86.2% as compared to the second quarter 2022 primarily due to the acquisition of Altra, including transaction costs, and higher employee compensation and restructuring costs.

Power Efficiency Solutions segment net sales for the second quarter 2023 were $460.1 million, a decrease of $135.3 million or 22.7% as compared to the second quarter 2022. The decrease consisted of negative organic sales of 22.2% and negative foreign currency translation of 0.6%. The decrease was primarily driven by lower volumes primarily resulting from slowing market demand in the North America pool pump, residential and light commercial HVAC and general industrial market. Gross profit decreased $22.9 million or 14.6% as compared to the second quarter 2022. The decrease in gross profit was primarily driven by lower volumes, higher restructuring costs and labor inflation partially offset by lower freight costs and improved product mix. Total operating expenses for the second quarter 2023 increased by $3.3 million or 4.7% as compared to the second quarter 2022 primarily due to favorable foreign exchange gains in 2022.

Automation & Motion Control segment net sales were $473.1 million, an increase of $279.0 million or 143.7% as compared to the second quarter 2022. The increase consisted of acquisition growth of 137.7% and positive organic sales of 6.9%, offset by negative foreign currency translation of 0.8%. The increase was primarily due to the acquisition of Altra and price increases and share gains in aerospace and conveying. Gross profit increased $105.6 million or 149.6% compared to the second quarter 2022. The increase in gross profit was primarily driven by the acquisition of Altra and higher price realization partially offset by lower restructuring costs. Total operating expenses for the second quarter 2023 increased by $79.2 million or 163.6% as compared to the second quarter 2022 primarily due to the acquisition of Altra, including transaction costs.

Industrial Systems segment net sales for the second quarter 2023 were $136.7 million, a decrease of $1.1 million or 0.8% compared to second quarter 2022 . The decrease consisted of negative foreign currency translation of 2.0%, partially offset by positive organic sales of 1.2%. The decrease was primarily driven by decrease in demand for motors in North America and slowly recovering China markets partially offset by growth for motors in Europe and the Middle East and strength in global industrial generators. Gross profit for the second quarter 2023 decreased $9.1 million or 23.6%. The decrease was driven by foreign exchange losses. Total operating expenses for the second quarter 2023 increased $5.8 million as compared to the second quarter 2022 primarily due to increased employee compensation, commissions and foreign exchange losses.

Six Months Ended June 30, 2023 Compared to June 30, 2022

Net sales increased $344.8 million or 13.0% for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase consisted of acquisition growth of 20.8%, offset by negative organic sales of 6.6% and negative foreign currency translation of 1.2%. The increase was primarily driven by the acquisition of Altra and price increases, partially offset by lower net sales within the Power Efficiency Solutions segment. Gross profit increased $106.5 million or 12.5% for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022. The increase in gross profit was driven by the acquisition of Altra, higher price realization and lower freight costs partially offset by lower gross profit within the Power Efficiency Solutions and Industrial Systems segments and higher restructuring costs. Total operating expenses for the six months ended June 30, 2023 increased $250.8 million or 51.1% as compared to the six months ended June 30, 2022 primarily due to the acquisition of Altra, including transaction costs, and higher employee compensation costs.

Industrial Powertrain Solutions segment net sales for the six months ended June 30, 2023 were $1,113.1 million, an increase of $274.7 million or 32.8% as compared to the six months ended June 30, 2022. The increase consisted of acquisition growth of 33.9%, offset by negative foreign currency translation of 1.1% and negative organic sales of 0.1%. The increase was primarily driven by the acquisition of Altra. Gross profit increased $79.8 million or 24.8% as compared to the six months ended June 30, 2022. The increased gross profit was primarily driven by the acquisition of Altra and lower freight and restructuring costs. Total operating expenses for the six months ended June 30, 2023 increased $128.8 million or 62.3% as compared to the six months ended June 30, 2022 primarily due to the acquisition of Altra, including transaction costs, and higher employee compensation costs.

Power Efficiency Solutions segment net sales for the six months ended June 30, 2023 were $929.6 million, a decrease of $233.0 million or 20.0% as compared to the six months ended June 30, 2022. The decrease consisted of negative organic sales of 19.1% and negative foreign currency translation of 0.9%. The decrease was primarily driven by lower volumes resulting from

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slowing market demand in the North America pool pump, residential and light commercial HVAC and general industrial markets. Gross profit decreased $82.7 million or 24.7% as compared to the six months ended June 30, 2022. The decrease in gross profit was primarily driven by lower volume, higher restructuring costs and labor inflation partially offset by lower freight costs and improved product mix. Total operating expenses for the six months ended June 30, 2023 increased $2.5 million or 1.7% as compared to the six months ended June 30, 2022 primarily due to favorable foreign exchange rates in 2022.

Automation & Motion Control segment net sales were $676.3 million, an increase of $297.9 million or 78.7% as compared to the six months ended June 30, 2022. The increase consisted of acquisition growth of 70.6% and positive organic sales of 9.2%, offset by negative foreign currency translation of 1.1%. The increase was primarily due to the acquisition of Altra and price increases and share gains in aerospace and conveying. Gross profit increased $118.0 million or 88.3% compared to the six months ended June 30, 2022. The increase in gross profit was primarily driven by the acquisition of Altra, higher price realization and lower restructuring costs. Total operating expenses for the six months ended June 30, 2023 increased $109.1 million as compared to the six months ended June 30, 2022 primarily due to the acquisition of Altra, including transaction costs, and higher employee compensation costs.

Industrial Systems segment net sales for the six months ended June 30, 2023 were $273.7 million, an increase of $5.2 million or 1.9% compared to six months ended June 30, 2022 net sales of $268.5 million. The increase consisted of positive organic sales of 4.5% partially offset by negative foreign currency translation of 2.6%. The increase was primarily driven by strength in demand for generators in North America and global industrial motors, partially offset by softening of the North America motors market. Gross profit for the six months ended June 30, 2023 decreased $8.6 million or 13.1%. The decrease was driven foreign exchange losses, partially offset by price realization. Total operating expenses for the six months ended June 30, 2023 increased $10.4 million as compared to the six months ended June 30, 2022 primarily due to increased employee compensation, commissions and foreign exchange losses.

The effective tax rate for the three months ended June 30, 2023 was 22.9% versus 22.1% for the three months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2023 was 44.5% versus 22.1% for the six months ended June 30, 2022. The effective tax rate for the three months ended June 30, 2023 was higher than the same period in the prior year primarily driven by costs associated with the Altra Transaction. The effective tax rate for the six months ended June 30, 2023 was higher than the same period in the prior year primarily driven by non-deductible transaction costs associated with the Altra Transaction and withholding taxes resulting from the cash repatriation of foreign earnings.

Non-GAAP Measures

We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). As noted above, in this Quarterly Report on Form 10-K, we also disclose organic sales, organic sales growth and acquisition growth, which are considered non-GAAP financial measures. We use the term "organic sales growth" to refer to its increase in sales between periods that is attributable to sales. "Organic sales" refers to GAAP sales from existing operations excluding any sales from acquired businesses recorded prior to the first anniversary of the acquisition and excluding any sales from business divested/to be exited recorded prior to the first anniversary of the exit and excluding the impact of foreign currency translation. The impact of foreign currency translation is determined by translating the respective period's organic sales using the currency exchange rates that were in effect during the prior year periods. We reconcile these non-GAAP measures in the table below to GAAP net sales. We believe that these non-GAAP financial measures are useful measures for providing investors with additional information regarding our results of operations and for helping investors understand and compare our operating results across accounting periods and compared to our peers. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for the Company's results of operations prepared and presented in accordance with GAAP.

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	Industrial Powertrain Solutions			Power Efficiency Solutions			Automation & Motion Control			Industrial Systems			Total
Net Sales for Three Months Ended June 30, 2023	$	698.7		$	460.1		$	473.1		$	136.7		$	1,768.6
Net Sales from Businesses Acquired	(284.1)			—			(267.3)			—			(551.4)
Impact from Foreign Currency Exchange Rates	1.5			3.3			1.6			2.7			9.1
Organic Sales for Three Months Ended June 30, 2023	$	416.1		$	463.4		$	207.4		$	139.4		$	1,226.3
Organic Sales Growth for Three Months Ended June 30, 2023	(1.4)		%	(22.2)		%	6.9		%	1.2		%	(9.1)		%
Acquisition Growth for Three Months ended June 30, 2023	67.3		%	—		%	137.7		%	—		%	40.9		%
Impact from Foreign Currency Exchange Rates	(0.4)		%	(0.6)		%	(0.8)		%	(2.0)		%	(0.7)		%
Net Sales for Three Months Ended June 30, 2022	$	422.1		$	595.4		$	194.1		$	137.8		$	1,349.4

	Industrial Powertrain Solutions			Power Efficiency Solutions			Automation & Motion Control			Industrial Systems			Total
Net Sales for Six Months Ended June 30, 2023	$	1,113.1		$	929.6		$	676.3		$	273.7		$	2,992.7
Net Sales from Businesses Acquired	(284.1)			—			(267.3)			—			(551.4)
Impact from Foreign Currency Exchange Rates	8.9			10.9			4.2			6.9			30.9
Organic Sales for Six Months Ended June 30, 2023	$	837.9		$	940.5		$	413.2		$	280.6		$	2,472.2
Organic Sales Growth for Six Months Ended June 30, 2023	(0.1)		%	(19.1)		%	9.2		%	4.5		%	(6.6)		%
Acquisition Growth for Six Months ended March 31, 2023	33.9		%	—		%	70.6		%	—		%	20.8		%
Impact from Foreign Currency Exchange Rates	(1.1)		%	(0.9)		%	(1.1)		%	(2.6)		%	(1.2)		%
Net Sales for Six Months Ended June 30, 2022	$	838.4		$	1,162.6		$	378.4		$	268.5		$	2,647.9

Liquidity and Capital Resources

General

Our principal source of liquidity is cash flow provided by operating activities. In addition to operating income, other significant factors affecting our cash flow include working capital levels, capital expenditures, dividends, share repurchases, acquisitions and divestitures, availability of debt financing and the ability to attract long-term capital at acceptable terms.

Cash flow provided by operating activities was $327.3 million for the six months ended June 30, 2023, a $222.4 million increase from the six months ended June 30, 2022. This increase was driven primarily by improvements in cash flows related to working capital, partially offset by payments for certain acquisition costs and lower net income excluding the impact of non-cash adjustments.

Cash flow used in investing activities was $4,927.6 million for the six months ended June 30, 2023 as compared to cash flow used in investing activities of $62.1 million for the six months ended June 30, 2022. The change was driven primarily by $4,870.2 million of cash paid for Altra in the current year and higher capital additions.

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In fiscal 2023, we anticipate capital spending for property, plant and equipment to be approximately $170 million. We believe that our present manufacturing facilities will be sufficient to provide adequate capacity for our operations for the second half of fiscal 2023. We anticipate funding fiscal 2023 capital spending with operating cash flows.

Cash flow provided by financing activities was $4,565.1 million for the six months ended June 30, 2023, compared to $10.2 million provided by financing activities for the six months ended June 30, 2022. We had net debt borrowings of $4,678.7 million during the six months ended June 30, 2023, compared to net debt borrowings of $249.7 million during the six months ended June 30, 2022. The increase was primarily driven by the $4.7 billion of Senior Notes issued in January 2023 and $840.0 million upsize of the unsecured term loan facility in March 2023, partially offset by the repayment of the $500.0 million of Private Placement Notes in January 2023. There were no share repurchases for the six months ended June 30, 2023, compared to $184.0 million shares repurchases for the six months ended June 30, 2022. There were $46.4 million of dividends paid for the six months ended June 30, 2023, compared to $44.3 million of dividends in the prior year. There were $51.1 million in financing fees paid for the six months ended June 30, 2023, compared to $6.5 million of fees in the prior year. There were $8.4 million of distributions paid to noncontrolling interests for the six months ended June 30, 2023 compared to zero for the six months ended June 30, 2022.

Our working capital was $2,093.9 million (inclusive of assets and liabilities assumed from the Altra Transaction) as of June 30, 2023, compared to $1,998.3 million as of December 31, 2022. As of June 30, 2023 and December 31, 2022, our current ratio (which is the ratio of our current assets to current liabilities) was 2.5:1 and 3.0:1, respectively. Our working capital increased primarily as a result of assets and liabilities assumed as part of the Altra Transaction.

The following table presents selected financial information and statistics as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
Cash and Cash Equivalents	$	659.6	$	688.5
Trade Receivables, Net	1,013.9		797.4
Inventories	1,576.1		1,336.9
Working Capital	2,093.9		1,998.3
Current Ratio	2.5:1		3.0:1

As of June 30, 2023, $631.3 million of our cash was held by foreign subsidiaries and could be used in our domestic operations if necessary. We anticipate being able to support our liquidity and operating needs largely through cash generated from operations and the available capacity under the revolver. We regularly assess our cash needs and the available sources to fund these needs which includes repatriation of foreign earnings which may be subject to withholding taxes. Under current law, we do not expect restrictions or taxes on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition or the results of operations for the foreseeable future. As of June 30, 2023, we have repatriated approximately $550.0 million of foreign cash in fiscal 2023 to support the repayment of debt. We are continuing to evaluate opportunities to repatriate additional foreign cash in the second half of fiscal 2023.

We will, from time to time, maintain excess cash balances which may be used to (i) fund operations, (ii) repay outstanding debt, (iii) fund acquisitions, (iv) pay dividends, (v) make investments in new product development programs, (vi) repurchase our common stock, or (vii) fund other corporate objectives.

Financing Agreement

During the six months ended June 30, 2023, the Company made the following updates to its financing agreements primarily in connection with the Altra Transaction:

•Issued Senior Notes on January 24, 2023 and received $4,647.0 million in net proceeds

•Incurred additional term loans under the Term Facility of $840.0 million on March 27, 2023

•Increased the commitments under the Multicurrency Revolving Facility by $570.0 million on March 27, 2023

•Assumed the Altra Notes of $18.1 million

•Repaid in full the Private Placement Notes of $500.0 million

The Company will incur significant incremental interest expense as a result of the debt issuances above. The Company plans to use cash generated from operations to fund its interest obligations and reduce the principal balance of its debt over time.

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As of June 30, 2023, the Company had no standby letters of credit issued under the Multicurrency Revolver Facility, and $1,455.0 million of available borrowing capacity. For the three months ended June 30, 2023 and June 30, 2022 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $425.2 million and $730.0 million, respectively, and the weighted average interest rate was 6.7% and 2.1%, respectively. For the six months ended June 30, 2023 and June 30, 2022 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $464.7 million and $765.2 million, respectively, and the weighted average interest rate was 6.4% and 1.7%, respectively. The Company pays a non-use fee on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.

See Note 7 - Debt and Bank Credit Facilities and Note 3 – Acquisitions and Divestitures for more information.

Critical Accounting Estimates

Our critical accounting policies and estimates, which are discussed in our Annual Report on Form 10-K for the year ended December 31, 2022, have not materially changed since that report was filed.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk relating to our operations due to changes in interest rates, foreign currency exchange rates and commodity prices of purchased raw materials. We manage the exposure to these risks through a combination of normal operating and financing activities and derivative financial instruments such as interest rate swaps, commodity cash flow hedges and foreign currency forward exchange contracts. All hedging transactions are authorized and executed pursuant to clearly defined policies and procedures, which prohibit the use of financial instruments for speculative purposes.

Generally, hedges are recorded on the balance sheet at fair value and are accounted for as cash flow hedges, with changes in fair value recorded in Accumulated Other comprehensive Income (Loss) (“AOCI”) in each accounting period. An ineffective portion of the hedges change in fair value, if any, is recorded in earnings in the period of change.

Interest Rate Risk

We are exposed to interest rate risk on certain of our outstanding debt obligations used to finance our operations and acquisitions. Loans under the Credit Agreement bear interest at variable rates plus a margin, based on our consolidated net leverage ratio. As of June 30, 2023, excluding the impact of interest rate swaps, we had $4,797.7 million of fixed rate debt and $1,943.3 million of variable rate debt. We utilize interest rate swaps to manage fluctuations in cash flows resulting from exposure to interest rate risk on forecasted variable rate interest payments.

We have floating rate borrowings, which expose us to variability in interest payments due to changes in interest rates. A hypothetical 10% change in our weighted average borrowing rate on outstanding variable rate debt as of June 30, 2023 would result in a $13.7 million change in after-tax annualized earnings. We entered into two forward starting pay fixed/receive floating non-amortizing interest rate swaps in June 2020, with a total notional amount of $250.0 million to manage fluctuations in cash flows from interest rate risk related to floating rate interest. These swaps were terminated in March 2022 upon closing the Credit Agreement. The cash proceeds of $16.2 million received to settle the terminated swaps is being recognized into interest expense via the effective interest rate method through July 2025 when the terminated swaps were scheduled to expire. We also entered into two forward starting pay fixed/receive floating non-amortizing interest rate swaps in May 2022, with a total notional amount of $250.0 million to manage fluctuations in cash flows from interest rate risk related to floating rate interest. Upon inception, the swaps were designated as a cash flow hedges against forecasted interest payments with gains and losses, net of tax, measured on an ongoing basis, recorded in AOCI.

Details regarding the instruments as of June 30, 2023 are as follows:

Instrument	Notional Amount	Maturity	Rate Paid	Rate Received	Fair Value
Swap	$250.0	March 2027	3.0%	SOFR (3 Month)	$	9.9

As of June 30, 2023 and December 31, 2022, a $9.9 million and $7.9 million interest rate swap asset was included in Other Noncurrent Assets, respectively. There was an unrealized gain of $16.4 million (a $8.8 million gain on the terminated swaps and a $7.6 million gain on the active swaps) and $17.0 million, net of tax, as of June 30, 2023 and December 31, 2022, respectively, that was recorded in AOCI for the effective portion of the hedges.

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Foreign Currency Risk

We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances of foreign subsidiaries, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. Our objective is to minimize our exposure to these risks through a combination of normal operating activities and the utilization of foreign currency exchange contracts to manage our exposure on the forecasted transactions denominated in currencies other than the applicable functional currency. Contracts are executed with credit worthy banks and are denominated in currencies of major industrial countries. We do not hedge our exposure to the translation of reported results of foreign subsidiaries from local currency to United States dollars.

As of June 30, 2023, derivative currency assets (liabilities) of $23.5 million, $2.1 million, $(4.8) million and $(0.3) million are recorded in Prepaid Expenses and Other Current Assets, Other Noncurrent Assets, Other Accrued Expenses and Other Noncurrent Liabilities, respectively. As of December 31, 2022, derivative currency assets (liabilities) of $13.0 million, $0.9 million and $(4.8) million, are recorded in Prepaid Expenses and Other Current Assets, Other Noncurrent Assets and Other Accrued Expenses, respectively. The unrealized gains on the effective portions of the hedges of $15.9 million net of tax, and $6.3 million net of tax, as of June 30, 2023 and December 31, 2022 respectively, were recorded in AOCI. As of June 30, 2023 and December 31, 2022, we had $11.5 million and $5.3 million, respectively, net of tax, of currency gains on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings.

The following table quantifies the outstanding foreign exchange contracts intended to hedge non-US dollar denominated receivables and payables and the corresponding impact on the value of these instruments assuming a hypothetical 10% appreciation/depreciation of their counter currency on June 30, 2023:

					Gain (Loss) From
Currency	Notional Amount		Fair Value		10% Appreciation of Counter Currency		10% Depreciation of Counter Currency
Chinese Renminbi	$	229.3	$	(4.7)	$	22.9	$	(22.9)
Mexican Peso	176.3		24.9		17.6		(17.6)
Euro	298.9		0.1		29.9		(29.9)
Indian Rupee	49.2		0.1		4.9		(4.9)
Australian Dollar	3.0		—		0.3		(0.3)
Swedish Krona	6.9		0.1		0.7		(0.7)
British Pound	12.8		—		1.3		(1.3)
Czech Koruna	1.6		—		0.2		(0.2)

Gains and losses indicated in the sensitivity analysis would be offset by gains and losses on the underlying forecasted non-US dollar denominated cash flows.

Commodity Price Risk

We periodically enter into commodity hedging transactions to reduce the impact of changing prices for certain commodities such as copper and aluminum based upon forecasted purchases of such commodities. The contract terms of commodity hedge instruments generally mirror those of the hedged item, providing a high degree of risk reduction and correlation.

Derivative commodity assets (liabilities) of $0.8 million, $(4.1) million and $(0.3) million were recorded in Prepaid Expenses and Other Current Assets, Other Accrued Expenses and Other Noncurrent Liabilities as of June 30, 2023. Derivative commodity assets (liabilities) of $0.9 million, $0.3 million and $(10.6) million were recorded in Prepaid Expenses and Other Current Assets, Other Noncurrent Assets and Other Accrued Expenses, respectively as of December 31, 2022. The unrealized loss on the effective portion of the hedges of $2.6 million net of tax and the unrealized loss on the effective portion of the hedges of $6.9 million net of tax, as of June 30, 2023 and December 31, 2022, respectively, was recorded in AOCI. As of June 30, 2023, we had $2.5 million, net of tax, of derivative commodity losses on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings. As of December 31, 2022, there was an additional $4.4 million, net of tax, derivative commodity loss on closed hedge instruments in AOCI that were realized in earnings when the hedged items impacted earnings.

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The following table quantifies the outstanding commodity contracts intended to hedge raw material commodity prices and the corresponding impact on the value of these instruments assuming a hypothetical 10% appreciation/depreciation of their prices on June 30, 2023:

					Gain (Loss) From
Commodity	Notional Amount		Fair Value		10% Appreciation of Commodity Prices		10% Depreciation of Commodity Prices
Copper	$	53.0	$	(3.2)	$	5.3	$	(5.3)
Aluminum	2.2		(0.4)		0.2		(0.2)

Gains and losses indicated in the sensitivity analysis would be offset by the actual prices of the commodities.

The net AOCI hedging component balance consists of $38.6 million of gains as of June 30, 2023 which includes $25.4 million of net current deferred gains that are expected to be realized in the next twelve months. The gain/loss reclassified from AOCI into earnings on such derivatives will be recognized in the same period in which the related item affects earnings.

Counterparty Risk

We are exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including our interest rate swap agreements, foreign currency exchange contracts and commodity hedging transactions. We manage exposure to counterparty credit risk by limiting our counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. We do not obtain collateral or other security to support financial instruments subject to credit risk. We do not anticipate non-performance by our counterparties, but cannot provide assurances.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures were effective to ensure that (a) information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and (b) information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As discussed above, on March 27, 2023, we completed the Altra Transaction. As part of our ongoing integration of Altra, we continue to incorporate our controls and procedures into Altra operations and to expand our company-wide controls to reflect the risks inherent in an acquisition of this size and complexity.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material changes in the legal matters described in Part I, Item 3 in our Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated herein by reference. See also Note 12 - Contingencies for more information.

ITEM 1A. RISK FACTORS

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Our business and financial results are subject to numerous risks and uncertainties. These risks and uncertainties have not changed materially from those reported in Part I, Item 1A - Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated herein by reference. For additional information regarding risks and uncertainties facing the Company, please also see the information provided under the header "Cautionary Statement" contained in this Quarterly Report on Form 10-Q.

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

Under our equity incentive plans, participants may pay the exercise price or satisfy all or a portion of the federal, state and local withholding tax obligations arising in connection with plan awards by electing to (a) have the Company withhold shares of common stock otherwise issuable under the award, (b) tender back shares received in connection with such award or (c) deliver other previously owned shares of common stock, in each case having a value equal to the exercise price or the amount to be withheld. During the quarter ended June 30, 2023, we did not acquire any shares in connection with transactions pursuant to equity incentive plans.

At a meeting of the Board of Directors on October 26, 2021, the Company's Board of Directors approved the authorization to purchase up to $500.0 million of shares under the Company's share repurchase program. The new authorization has no expiration date. There were no repurchases of common stock during the current quarter. The maximum value of shares of our common stock available to be purchased as of June 30, 2023 is $195.0 million.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

On May 10, 2023, a member of the Board of Directors, Curtis Stoelting entered into a “Rule 10b5-1 trading arrangement” as such term is defined in Item 408(a) of Regulation S-K (the “Plan”). The Plan will be effective as of August 14, 2023 and it will remain in effect indefinitely or until such time as Mr. Stoelting elects to terminate the Plan. Subject to a certain share price and other terms and conditions, the Plan directs Mr. Stoelting’s designated broker to sell a maximum number of 4,500 shares under the Plan. No other director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

47

ITEM 6. EXHIBITS

Exhibit Number	Exhibit Description
10.1	Regal Rexnord Corporation 2023 Omnibus Incentive Plan, effective April 25, 2023 [Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on April 28, 2023].
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
101.INS	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.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).

48

SIGNATURES

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

	REGAL REXNORD CORPORATION (Registrant)
	/s/ Robert J. Rehard
	Robert J. Rehard Executive Vice President Chief Financial Officer (Principal Financial Officer)
Date: August 4, 2023

	REGAL REXNORD CORPORATION (Registrant)
	/s/ Alexander P. Scarpelli
	Alexander P. Scarpelli Vice President Chief Accounting Officer (Principal Accounting Officer)
Date: August 4, 2023

49

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Louis V. Pinkham, certify that:

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

2 Based on my knowledge, this 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 report;

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

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

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

/s/ Louis V. Pinkham

Louis V. Pinkham
Chief Executive Officer

Date: August 4, 2023

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Robert J. Rehard, certify that:

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

2 Based on my knowledge, this 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 report;

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

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

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

/s/ Robert J. Rehard

Robert J. Rehard
Executive Vice President
Chief Financial Officer
(Principal Financial Officer)

Date: August 4, 2023

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS of the

Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350

Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Regal Rexnord Corporation (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the three and six months ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Louis V. Pinkham

Louis V. Pinkham

Chief Executive Officer

/s/ Robert J. Rehard

Robert J. Rehard

Executive Vice President
Chief Financial Officer
(Principal Financial Officer)

Date: August 4, 2023

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2023	Aug. 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-07283
Entity Registrant Name	REGAL REXNORD CORP
Entity Incorporation, State or Country Code	WI
Entity Tax Identification Number	39-0875718
Entity Address, Address Line One	200 State Street
Entity Address, City or Town	Beloit
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53511
City Area Code	608
Local Phone Number	364-8800
Title of 12(b) Security	Common Stock
Trading Symbol	RRX
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		66,311,371
Entity Central Index Key	0000082811
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net Sales	$ 1,768.6	$ 1,349.4	$ 2,992.7	$ 2,647.9
Cost of Sales	1,204.8	915.9	2,030.8	1,792.5
Gross Profit	563.8	433.5	961.9	855.4
Operating Expenses	412.2	238.6	741.4	490.6
Income from Operations	151.6	194.9	220.5	364.8
Interest Expense	116.4	13.4	211.8	22.4
Interest Income	(5.1)	(0.8)	(37.0)	(1.9)
Other Income, Net	(2.8)	(1.5)	(4.2)	(2.8)
Income before Taxes	43.1	183.8	49.9	347.1
Provision for Income Taxes	9.9	40.6	22.2	76.8
Net Income	33.2	143.2	27.7	270.3
Less: Net Income Attributable to Noncontrolling Interests	1.1	1.2	1.5	2.7
Net Income Attributable to Regal Rexnord Corporation	$ 32.1	$ 142.0	$ 26.2	$ 267.6
Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic (in dollars per share)	$ 0.48	$ 2.13	$ 0.40	$ 3.99
Assuming dilution (in dollars per share)	$ 0.48	$ 2.12	$ 0.39	$ 3.96
Weighted Average Number of Shares Outstanding:
Basic (in shares)	66.3	66.8	66.2	67.1
Assuming dilution (in shares)	66.6	67.1	66.6	67.5

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net Income	$ 33.2	$ 143.2	$ 27.7	$ 270.3
Other Comprehensive Income (Loss) Net of Tax:
Foreign Currency Translation Adjustments	(30.5)	(120.8)	4.0	(121.2)
Hedging Activities:
Increase (Decrease) in Fair Value of Hedging Activities, Net of Tax Effects of $1.2 million and $(10.5) million for the Three Months Ended June 30, 2023 and June 30, 2022 and $6.5 million and $(2.2) million for the Six Months Ended June 30, 2023 and June 30, 2022, Respectively	3.7	(32.9)	20.5	(6.8)
Reclassification of Losses (Gains) included in Net Income, Net of Tax Effects of $(0.2) million and $(1.5) million for the Three Months Ended June 30, 2023 and June 30, 2022 and $0.2 million and $(3.5) million for the Six Months Ended June 30, 2023 and June 30, 2022, Respectively	(0.5)	(5.3)	0.8	(11.3)
Pension and Post Retirement Plans:
Reclassification Adjustments for Pension and Post Retirement Benefits included in Net Income, Net of Tax Effects of $(0.2) million and $0.1 million for the Three Months Ended June 30, 2023 and June 30, 2022 and $(0.3) million and $0.1 million for the Six Months Ended June 30, 2023 and June 30, 2022, Respectively	(0.4)	0.1	(0.8)	0.3
Other Comprehensive (Loss) Income	(27.7)	(158.9)	24.5	(139.0)
Comprehensive Income (Loss)	5.5	(15.7)	52.2	131.3
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests	(0.1)	(1.1)	0.6	0.8
Comprehensive Income (Loss) Attributable to Regal Rexnord Corporation	$ 5.6	$ (14.6)	$ 51.6	$ 130.5

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Increase (decrease) in fair value of hedging activities, tax effects	$ 1.2	$ (10.5)	$ 6.5	$ (2.2)
Reclassification of losses (gains) included in net income, tax effects	(0.2)	(1.5)	0.2	(3.5)
Reclassification adjustments for pension and post retirement benefits included in net income, tax effects	$ (0.2)	$ 0.1	$ (0.3)	$ 0.1

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and Cash Equivalents	$ 659.6	$ 688.5
Trade Receivables, Less Allowances of $26.4 million and $30.9 million in 2023 and 2022, Respectively	1,013.9	797.4
Inventories	1,576.1	1,336.9
Prepaid Expenses and Other Current Assets	224.3	150.9
Deferred Financing Fees	0.0	17.0
Assets Held for Sale	1.1	9.8
Total Current Assets	3,475.0	3,000.5
Net Property, Plant and Equipment	1,204.8	807.0
Operating Lease Assets	188.0	110.9
Goodwill	6,618.9	4,018.8
Intangible Assets, Net of Amortization	4,239.7	2,229.9
Deferred Income Tax Benefits	50.4	43.9
Other Noncurrent Assets	81.0	57.9
Total Assets	15,857.8	10,268.9
Current Liabilities:
Accounts Payable	678.5	497.7
Dividends Payable	23.2	23.2
Accrued Compensation and Employee Benefits	183.1	141.1
Accrued Interest	91.9	5.2
Other Accrued Expenses	292.7	274.8
Current Operating Lease Liabilities	39.1	26.4
Current Maturities of Long-Term Debt	72.6	33.8
Total Current Liabilities	1,381.1	1,002.2
Long-Term Debt	6,609.7	1,989.7
Deferred Income Taxes	1,083.2	591.9
Pension and Other Post Retirement Benefits	112.9	97.6
Noncurrent Operating Lease Liabilities	145.1	88.1
Other Noncurrent Liabilities	88.9	76.8
Contingencies (see Note 12 - Contingencies)
Regal Rexnord Corporation Shareholders' Equity:
Common Stock, $0.01 par value, 100.0 million Shares Authorized, 66.3 million and 66.2 million Shares Issued and Outstanding for 2023 and 2022, Respectively	0.7	0.7
Additional Paid-In Capital	4,626.5	4,609.6
Retained Earnings	2,109.8	2,130.0
Accumulated Other Comprehensive Loss	(326.7)	(352.1)
Total Regal Rexnord Corporation Shareholders' Equity	6,410.3	6,388.2
Noncontrolling Interests	26.6	34.4
Total Equity	6,436.9	6,422.6
Total Liabilities and Equity	$ 15,857.8	$ 10,268.9

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 26.4	$ 30.9
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100.0	100.0
Common stock, shares issued (in shares)	66.3	66.2
Common stock, shares outstanding (in shares)	66.3	66.2

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions	Total	Common Stock $0.01 Par Value	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests
Beginning balance at Jan. 01, 2022	$ 6,408.2	$ 0.7	$ 4,651.8	$ 1,912.6	$ (195.1)	$ 38.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	270.3			267.6		2.7
Other Comprehensive (Loss) Income	(139.0)				(137.1)	(1.9)
Dividends declared	(45.3)			(45.3)
Stock Options Exercised	(5.7)		(5.7)
Stock Repurchase	(184.0)		(45.7)	(138.3)
Share-Based Compensation	11.2		11.2
Ending balance at Jun. 30, 2022	6,315.7	0.7	4,611.6	1,996.6	(332.2)	39.0
Beginning balance at Mar. 31, 2022	6,423.8	0.7	4,631.1	1,927.5	(175.6)	40.1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	143.2			142.0		1.2
Other Comprehensive (Loss) Income	(158.9)				(156.6)	(2.3)
Dividends declared	(23.2)			(23.2)
Stock Options Exercised	(4.3)		(4.3)
Stock Repurchase	(69.8)		(20.1)	(49.7)
Share-Based Compensation	4.9		4.9
Ending balance at Jun. 30, 2022	6,315.7	0.7	4,611.6	1,996.6	(332.2)	39.0
Beginning balance at Dec. 31, 2022	6,422.6	0.7	4,609.6	2,130.0	(352.1)	34.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	27.7			26.2		1.5
Other Comprehensive (Loss) Income	24.5				25.4	(0.9)
Dividends declared	(46.4)			(46.4)
Stock Options Exercised	(8.2)		(8.2)
Replacement Equity-Based Awards Granted	4.6		4.6
Share-Based Compensation	20.5		20.5
Dividends Declared to Noncontrolling Interests	(8.4)					(8.4)
Ending balance at Jun. 30, 2023	6,436.9	0.7	4,626.5	2,109.8	(326.7)	26.6
Beginning balance at Mar. 31, 2023	6,455.7	0.7	4,619.2	2,100.9	(300.2)	35.1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	33.2			32.1		1.1
Other Comprehensive (Loss) Income	(27.7)				(26.5)	(1.2)
Dividends declared	(23.2)			(23.2)
Stock Options Exercised	(0.7)		(0.7)
Replacement Equity-Based Awards Granted	(6.5)		(6.5)
Share-Based Compensation	14.5		14.5
Dividends Declared to Noncontrolling Interests	(8.4)					(8.4)
Ending balance at Jun. 30, 2023	$ 6,436.9	$ 0.7	$ 4,626.5	$ 2,109.8	$ (326.7)	$ 26.6

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]
Common stock, par value (in dollars per share)	$ 0.01		$ 0.01
Dividends declared, per share (in dollars per share)	$ 0.35	$ 0.35	$ 0.70	$ 0.68

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 27.7	$ 270.3
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities (Net of Acquisitions and Divestitures):
Depreciation	77.8	62.5
Amortization	135.7	93.8
Noncash Lease Expense	19.7	20.6
Share-Based Compensation Expense	36.2	11.2
Financing Fee Expense	26.9	1.4
Benefit from Deferred Income Taxes	(54.2)	(41.0)
Other Non-Cash Changes	5.7	(1.7)
Change in Operating Assets and Liabilities, Net of Acquisitions and Divestitures
Receivables	42.4	(90.2)
Inventories	154.7	(222.8)
Accounts Payable	(4.3)	(17.5)
Other Assets and Liabilities	(141.0)	18.3
Net Cash Provided by Operating Activities	327.3	104.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant and Equipment	(63.5)	(32.6)
Proceeds Received from Sales of Property, Plant and Equipment	6.1	5.5
Business Acquisitions, Net of Cash Acquired	(4,870.2)	(35.0)
Net Cash Used in Investing Activities	(4,927.6)	(62.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings Under Revolving Credit Facility	1,412.3	1,521.5
Repayments Under Revolving Credit Facility	(1,726.3)	(1,698.2)
Proceeds from Short-Term Borrowings	29.1	6.0
Repayments of Short-Term Borrowings	(32.8)	(8.0)
Proceeds from Long-Term Borrowings	5,532.9	1,536.8
Repayments of Long-Term Borrowings	(536.5)	(1,108.4)
Dividends Paid to Shareholders	(46.4)	(44.3)
Shares Surrendered for Taxes	(9.2)	(8.1)
Proceeds from the Exercise of Stock Options	1.5	3.4
Repurchase of Common Stock	0.0	(184.0)
Distributions to Noncontrolling Interests	(8.4)	0.0
Financing Fees Paid	(51.1)	(6.5)
Net Cash Provided By Financing Activities	4,565.1	10.2
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	6.3	(23.3)
Net (Decrease) Increase in Cash and Cash Equivalents	(28.9)	29.7
Cash and Cash Equivalents at Beginning of Period	688.5	672.8
Cash and Cash Equivalents at End of Period	659.6	702.5
Cash Paid For:
Interest	99.5	20.0
Income taxes	$ 116.9	$ 96.7

XML

BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying (a) Condensed Consolidated Balance Sheet of Regal Rexnord Corporation (the “Company”), as of December 31, 2022, which has been derived from audited Consolidated Financial Statements, and (b) unaudited interim Condensed Consolidated Financial Statements as of June 30, 2023 and for the three and six months ended June 30, 2023 and June 30, 2022, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on February 24, 2023.

In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made. Except as otherwise discussed, such adjustments consist of only those of a normal recurring nature. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2023.

The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Financial Statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. The Company uses estimates in accounting for, among other items, allowance for credit losses; excess and obsolete inventory; share-based compensation; acquisitions; product warranty obligations; pension and post retirement assets and liabilities; derivative fair values; goodwill and other asset impairments; health care reserves; rebates and incentives; litigation claims and contingencies, including environmental matters; and income taxes. The Company accounts for changes to estimates and assumptions when warranted by factually based experience.

Effective during the first quarter of 2023, in conjunction with the Altra Transaction (as defined in Note 3 - Acquisitions and Divestitures), the Company realigned its four operating segments with the change to its management structure and operating model following the Altra Transaction. The new operating and reportable segments are: Industrial Powertrain Solutions (IPS), Power Efficiency Solutions (PES), Automation & Motion Control (AMC) and Industrial Systems. Prior period financial information has been reclassified to reflect these new reportable segments. See Note 6 - Segment Information for further information. The results of operations of Altra for the period from the acquisition date to March 31, 2023 were immaterial and are reflected in the Company’s results for the quarter ended June 30, 2023.

Reclassifications

Certain prior year amounts have been reclassified in the Condensed Consolidated Statements of Cash Flows to conform to the presentation used for the six months ended June 30, 2023. Depreciation and Amortization were reclassified from Depreciation and Amortization and presented individually in the Condensed Consolidated Statements of Cash Flows. Benefit from Deferred Income Taxes, Receivables, Inventories, Accounts Payable, and Other Assets and Liabilities were reclassified from Change in Operating Assets and Liabilities and presented individually in the Condensed Consolidated Statements of Cash Flows.

New Accounting Standards Adopted in 2023

In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations. The ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted this new accounting guidance during the first quarter of 2023. See Note 2 - Other Financial Information.

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OTHER FINANCIAL INFORMATION

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

OTHER FINANCIAL INFORMATION

OTHER FINANCIAL INFORMATION

Revenue Recognition

The Company recognizes revenue from the sale of electric motors, electrical motion controls, power generation, automation and power transmission products and components, factory automation sub-systems, industrial powertrain solutions, air moving products and specialty electrical components and systems. The Company recognizes revenue when control of the product passes to the customer or the service is provided and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.

The following tables presents the Company’s revenues disaggregated by geographical region:

	Three Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	491.0	$	359.2	$	310.2	$	69.8	$	1,230.2
Asia	51.9		44.9		26.6		40.8		164.2
Europe	120.7		41.8		107.1		15.5		285.1
Rest-of-World	35.1		14.2		29.2		10.6		89.1
Total	$	698.7	$	460.1	$	473.1	$	136.7	$	1,768.6
June 30, 2022	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	295.7	$	465.0	$	148.2	$	75.6	$	984.5
Asia	33.1		54.6		5.3		37.6		130.6
Europe	62.7		48.0		40.2		13.3		164.2
Rest-of-World	30.6		27.8		0.4		11.3		70.1
Total	$	422.1	$	595.4	$	194.1	$	137.8	$	1,349.4

	Six Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	784.2	$	726.6	$	452.0	$	143.5	$	2,106.3
Asia	68.4		88.7		28.0		77.5		262.6
Europe	173.5		84.5		150.9		31.1		440.0
Rest-of-World	87.0		29.8		45.4		21.6		183.8
Total	$	1,113.1	$	929.6	$	676.3	$	273.7	$	2,992.7
June 30, 2022	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	586.0	$	909.4	$	280.3	$	144.1	$	1,919.8
Asia	64.3		105.0		8.5		77.0		254.8
Europe	120.3		94.3		80.7		25.6		320.9
Rest-of-World	67.8		53.9		8.9		21.8		152.4
Total	$	838.4	$	1,162.6	$	378.4	$	268.5	$	2,647.9

Trade Receivables

The Company's policy for estimating the allowance for credit losses on trade receivables considers several factors including historical write-off experience, overall customer credit quality in relation to general economic and market conditions, and specific customer account analyses to estimate expected credit losses. The specific customer account analysis considers such items as credit worthiness, payment history, and historical bad debt experience. Trade receivables are written off after

exhaustive collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in Operating Expenses.

Inventories

The following table presents approximate percentage distribution between major classes of inventories:

	June 30, 2023	December 31, 2022
Raw Material and Work in Process	66.2%	57.0%
Finished Goods and Purchased Parts	33.8%	43.0%

Inventories are stated at the lower of cost or net realizable value. All inventory is valued using the FIFO cost method.

Property, Plant, and Equipment

The following table presents property, plant, and equipment by major classification:

	Useful Life in Years	June 30, 2023		December 31, 2022
Land and Improvements		$	157.6	$	103.4
Buildings and Improvements	3 - 50	531.9		401.7
Machinery and Equipment	3 - 15	1,387.0		1,111.3
Property, Plant and Equipment		2,076.5		1,616.4
Less: Accumulated Depreciation		(871.7)		(809.4)
Net Property, Plant and Equipment		$	1,204.8	$	807.0

Supplier Finance Program

The Company's supplier finance program with Bank of America (the "Bank") offers the Company's designated suppliers the option to receive payments of outstanding invoices in advance of the invoice maturity dates at a discount. The Company's payment obligation to the Bank remains subject to the respective supplier's invoice maturity date. The Bank acts as a payment agent, making payments on invoices the Company confirms are valid. The supplier finance program is offered for open account transactions only and may be terminated by either the Company or the Bank upon 15 days notice. The Company has not pledged any assets under this program. The Company has not incurred any subscription, service or other fees related to the Company's supplier finance program. The Company's outstanding obligations under the supplier finance program, which are classified within Accounts Payable, were $73.1 million and $69.9 million as of June 30, 2023 and December 31, 2022, respectively.

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ACQUISITIONS AND DIVESTITURES

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS AND DIVESTITURES

DIVESTITURES

Altra Transaction

On October 26, 2022, the Company entered into an Agreement and Plan of Merger (the “Altra Merger Agreement”) by and among the Company, Altra Industrial Motion Corp., a Delaware corporation (“Altra”), and Aspen Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”). On March 27, 2023, in accordance with the terms and conditions of the Altra Merger Agreement, Merger Sub merged with (the "Altra Merger") and into Altra, with Altra surviving the Altra Merger as a wholly owned subsidiary of the Company (the “Altra Transaction”).

Pursuant to the Altra Merger Agreement, at the effective time of the Altra Merger (the “Effective Time”), each of Altra’s issued and outstanding shares of common stock, par value $0.001 per share (“Altra Common Stock”) (other than (i) any shares held by either the Company, Altra or Merger Sub, (ii) shares owned by any direct or indirect wholly owned subsidiary of Altra or the Company, (iii) shares for which appraisal rights had been properly demanded according to Section 262 of the Delaware General Corporation Law and (iv) restricted shares of Altra Common Stock granted under Altra’s 2014 Omnibus Incentive Plan and subject to forfeiture conditions) were converted into $62.00 in cash, without interest (the “Altra Merger Consideration”). The Altra Merger Agreement generally provided that (1) each vested Altra stock option outstanding immediately prior to the Effective Time was canceled and converted into a cash payment equal to the intrinsic value of such option based on the Altra Merger Consideration, (2) each unvested Altra stock option outstanding, immediately prior to the Effective Time, was converted into an award of stock options with respect to the Company's common stock, par value $0.01 per share ("Common Stock") with an intrinsic value equivalent to the intrinsic value of the Altra stock option based on the Altra Merger Consideration, (3) each unvested Altra restricted stock unit outstanding, as of the Effective Time, that was subject solely to time-based vesting conditions was converted into an award of restricted stock units with respect to Common Stock with an equivalent value based on the Altra Merger Consideration on substantially similar terms and conditions, (4) each unvested award of Altra restricted shares was converted into an award of cash of equivalent value based on the Altra Merger Consideration on substantially similar terms and conditions, (5) each unvested Altra restricted stock unit outstanding, as of the Effective Time, that was subject to performance-based vesting conditions was converted into an award of time-based restricted stock with an equivalent value based on the Altra Merger Consideration on substantially similar terms and conditions (with performance goals being deemed satisfied at specified levels) and (6) each vested Altra restricted stock unit outstanding as of Effective Time was converted into the right to receive a cash payment based on the Altra Merger Consideration.

The Company's management determined that the Company is the accounting acquirer in the Altra Transaction based on the facts and circumstances noted within this section and other relevant factors. As such, the Company applied the acquisition method of accounting to the identifiable assets and liabilities of Altra, which have been measured at estimated fair value as of the date of the business combination.

The preliminary purchase price for the acquisition of Altra was approximately $5.1 billion, subject to the finalization of purchase accounting.

The preliminary purchase price of Altra consisted of the following:

	As of June 30, 2023
Cash paid for outstanding Altra Common Stock(1)	$	4,051.0
Stock based compensation(2)	23.1
Payment of Altra debt(3)	1,061.0
Pre-existing relationships(4)	(0.5)
Preliminary purchase price	$	5,134.6

(1) Cash paid for the common stock component of the preliminary purchase price was based on 65.3 million shares of outstanding Altra Common Stock as of March 27, 2023 at $62.00 per share, in accordance with the Altra Merger Agreement.

(2) Represents fair value of replacement equity-based awards and Company common stock issued in settlement of other Altra share based awards. The portion of the fair value attributable to pre-acquisition service was recorded as part of the consideration transferred in the Altra Transaction of which $17.3 million was paid in cash during the second quarter of 2023.

(3) Cash paid by the Company to settle (a) the term loan facility, (b) the revolving credit facility and (c) 95.28% of the 6.125% senior notes due 2026 of Stevens Holding Company, Inc., a wholly owned subsidiary of Altra (the "Altra Notes"). $18.1 million of the Altra Notes remained outstanding following the closing of the Altra Transaction. See Note 7 - Debt and Bank Credit Facilities for more information.

(4) Represents effective settlement of outstanding payables and receivables between the Company and Altra. No gain or loss was recognized on this settlement

Purchase Price Allocation

Altra’s assets and liabilities were measured at estimated fair values at March 27, 2023, primarily using Level 3 inputs. Estimates of fair value represent management’s best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions, royalty rates and customer attrition rates and others. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates expected as of the acquisition date.

Due to the timing of the Altra Transaction and the nature of the net assets acquired, as of June 30, 2023, the valuation process to determine the fair values is not complete and further adjustments are expected in fiscal year 2023. The Company has estimated the preliminary fair value of net assets acquired based on information currently available and will continue to adjust those estimates as additional information becomes available, including the refinement of valuation assumptions. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price allocation adjustments will be recorded during the measurement period, but no later than one year from the date of the acquisition. The Company will reflect measurement period adjustments in the period in which the adjustments are determined.

The preliminary fair value and subsequent measurement period adjustments of the assets acquired and liabilities assumed were as follows:

	As Reported as of March 31, 2023		Measurement period adjustments		As of June 30, 2023
Cash and Cash Equivalents	$	259.1	$	—	$	259.1
Trade Receivables	258.1		(0.1)		258.0
Inventories	436.4		(48.8)		387.6
Prepaid Expenses and Other Current Assets	33.0		—		33.0
Property, Plant and Equipment	411.8		2.8		414.6
Intangible Assets	2,224.0		(82.0)		2,142.0
Deferred Income Tax Benefits	0.7		1.3		2.0
Operating Lease Assets	42.3		4.5		46.8
Other Noncurrent Assets	21.6		0.2		21.8
Accounts Payable	(183.2)		—		(183.2)
Accrued Compensation and Benefits	(66.1)		—		(66.1)
Other Accrued Expenses(1)	(145.7)		0.6		(145.1)
Current Operating Lease Liabilities	(12.5)		0.2		(12.3)
Current Maturities of Long-Term Debt	(0.4)		—		(0.4)
Long-Term Debt	(25.3)		—		(25.3)
Deferred Income Taxes	(560.7)		25.0		(535.7)
Pension and Other Post Retirement Benefits	(19.8)		—		(19.8)
Noncurrent Operating Lease Liabilities	(29.7)		0.7		(29.0)
Other Noncurrent Liabilities	(8.3)		—		(8.3)
Total Identifiable Net Assets	2,635.3		(95.6)		2,539.7
Goodwill	2,499.3		$	95.6	$	2,594.9
Preliminary purchase price	$	5,134.6	$	—	$	5,134.6

1) Includes $60.1 million related to Altra Transaction costs paid by the Company at the closing of the Altra Transaction.

Summary of Significant Fair Value Methods

The methods used to determine the fair value of significant identifiable assets and liabilities included in the allocation of purchase price are discussed below.

Inventories

Acquired inventory was comprised of finished goods, work in process and raw materials. The fair value of finished goods was calculated as the estimated selling price, adjusted for costs of the selling effort and a reasonable profit allowance relating to the selling effort. The fair value of work in process inventory was primarily calculated as the estimated selling price, adjusted for estimated costs to complete the manufacturing, estimated costs of the selling effort, as well as a reasonable profit margin on the remaining manufacturing and selling effort. The fair value of raw materials and supplies was determined based on replacement cost which approximates historical carrying value.

Property, Plant and Equipment

The preliminary fair value of Property, Plant, and Equipment was determined using either the cost approach, which relies on an estimate of replacement costs of the new assets and estimated accrued depreciation, or the market approach.

Identifiable Intangible Assets

The preliminary fair value and weighted average useful life of the identifiable intangible assets are as follows:

	Fair Value		Weighted Average Useful Life (Years)
Customer Relationships(1)	$	1,710.0	14.0
Trademarks(2)	330.0		10.0
Technology(3)	102.0		13.0
Total Identifiable Intangible Assets	$	2,142.0

(1) The fair value of Customer Relationships was valued using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from Altra's existing customer base.

(2) The Altra Trademarks were valued using the relief from royalty method, which considers both the market approach and the income approach.

(3) The Altra Technology was valued using the relief from royalty method, which considers both the market approach and the income approach.

The intangible assets related to definite-lived customer relationships, trademarks and technology are amortized over their estimated useful lives.

Leases, including right-of-use ("ROU") assets and lease liabilities

Lease liabilities were measured as of the effective date of the acquisition at the present value of future minimum lease payments over the remaining lease term and the incremental borrowing rate of the Company as if the acquired leases were new leases as of the acquisition date. ROU assets recorded within “Operating Lease Assets” are equal to the amount of the lease liability at the acquisition date adjusted for any off-market terms of the lease. The remaining lease term was based on the remaining term at the acquisition date plus any renewal or extension options that the Company is reasonably certain will be exercised.

Deferred Income Tax Assets and Liabilities

The acquisition was structured as a merger, and therefore the Company assumed the historical tax basis of Altra’s assets and liabilities. The deferred income tax assets and liabilities include the expected future federal, state, and foreign tax consequences associated with temporary differences between the fair values of the assets acquired and liabilities assumed and the respective tax bases. Tax rates utilized in calculating deferred income taxes generally represent the enacted statutory tax rates at the effective date of the acquisition in the jurisdictions in which legal title of the underlying asset or liability resides. See Note 10 - Income Taxes for further information related to income taxes.

Other Assets Acquired and Liabilities Assumed (excluding Goodwill)

The Company utilized the carrying values, net of allowances, to value accounts receivable and accounts payable as well as other current assets and liabilities, as it was determined that carrying values represented the fair value of those items at the acquisition date. Accounts receivable reflect the best estimate at the acquisition date of the contractual cash flows expected to be collected.

Goodwill

The excess of the consideration for the acquisition over the fair value of net assets acquired was recorded as goodwill. The goodwill is attributable to expected synergies and expanded market opportunities from combining the Company’s operations with those of Altra. The goodwill created in the acquisition is not expected to be deductible for tax purposes.

Transaction Costs

The Company incurred transaction-related costs in connection with the Altra Transaction of approximately $9.5 million and $75.0 million during the three and six months ended June 30, 2023, respectively, which include legal and professional services and certain employee compensation costs, including severance, that were recognized as Operating expenses in the Company's Condensed Consolidated Statements of Income. There were no transaction-related costs in connection with the Altra Transaction recognized during the three and six months ended June 30, 2022. During the year ended December 31, 2022 the Company incurred $14.7 million of costs related to the Altra Transaction.

The Company also incurred $15.7 million of share-based compensation expense during the first quarter of 2023 related to the accelerated vesting of awards for certain former Altra employees. See Note 9 – Shareholders' Equity for additional information.

In connection with the Altra Transaction, the Company incurred additional costs due to the entry into certain financing arrangements. Such financing arrangements are described in Note 7 – Debt and Bank Credit Facilities.

Unaudited Pro Forma Information

The following unaudited supplemental pro forma financial information presents the Company's financial results for the three and six months ended June 30, 2023 and June 30, 2022, respectively, as if the Altra Transaction had occurred on January 2, 2022, the first day of the Company's fiscal year ended December 31, 2022. The pro forma financial information includes, where applicable, adjustments for: (i) additional amortization expense that would have been recognized related to the acquired intangible assets, (ii) additional interest expense on transaction related borrowings less interest income earned on the investment of proceeds from borrowings prior to the close of the Altra Transaction, (iii) additional depreciation expense that would have been recognized related to the acquired property, plant, and equipment, (iv) transaction costs and other one-time non-recurring costs, including share-based compensation expense related to the accelerated vesting of awards for certain former Altra employees, which reduced expenses by $9.5 million and $90.7 million for the three and six months ended June 30, 2023, respectively, and increased expenses by $8.6 million and $108.7 million for the three and six months ended June 30, 2022, respectively, (v) additional cost of sales related to the inventory valuation adjustment which reduced expenses by $44.1 million for the three and six months ended June 30, 2023, respectively, and increased expenses by $7.4 million and $51.5 million for the three and six months ended June 30, 2022, respectively, and (vi) the estimated income tax effect on the pro forma adjustments.

The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the Altra Transaction been completed as of the date indicated or the results that may be obtained in the future.

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net Sales	$	1,768.6	$	1,847.5	$	3,443.8	$	3,657.7
Net Income Attributable to Regal Rexnord Corporation	$	77.2	$	69.8	$	127.8	$	13.7
Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	1.16	$	1.05	$	1.93	$	0.20
Assuming Dilution	$	1.16	$	1.04	$	1.92	$	0.20

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustments, hedging activities and pension and post-retirement benefit adjustments are included in Accumulated Other Comprehensive Income (Loss) ("AOCI"), a component of Total Equity.

The following tables present changes in AOCI by component for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended
June 30, 2023	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	35.4	$	(13.7)	$	(321.9)	$	(300.2)
Other Comprehensive Income (Loss) before Reclassifications	4.9		—		(29.3)		(24.4)
Tax Impact	(1.2)		—		—		(1.2)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(0.7)		(0.6)		—		(1.3)
Tax Impact	0.2		0.2		—		0.4
Net Current Period Other Comprehensive Income (Loss)	3.2		(0.4)		(29.3)		(26.5)
Ending Balance	$	38.6	$	(14.1)	$	(351.2)	$	(326.7)
June 30, 2022	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	41.1	$	(13.9)	$	(202.8)	$	(175.6)
Other Comprehensive (Loss) Income before Reclassifications	(43.4)		0.3		(118.8)		(161.9)
Tax Impact	10.5		—		—		10.5
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(6.8)		0.2		—		(6.6)
Tax Impact	1.5		(0.1)				1.4
Net Current Period Other Comprehensive (Loss) Income	(38.2)		0.4		(118.8)		(156.6)
Ending Balance	$	2.9	$	(13.5)	$	(321.6)	$	(332.2)

	Six Months Ended
June 30, 2023	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	17.3	$	(13.3)	$	(356.1)	$	(352.1)
Other Comprehensive Income before Reclassifications	27.0		—		4.9		31.9
Tax Impact	(6.5)		—		—		(6.5)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	1.0		(1.1)		—		(0.1)
Tax Impact	(0.2)		0.3		—		0.1
Net Current Period Other Comprehensive Income (Loss)	21.3		(0.8)		4.9		25.4
Ending Balance	$	38.6	$	(14.1)	$	(351.2)	$	(326.7)
June 30, 2022	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning balance	$	21.0	$	(14.3)	$	(201.8)	$	(195.1)
Other Comprehensive (Loss) Income before Reclassifications	(9.0)		0.5		(119.8)		(128.3)
Tax Impact	2.2		—		—		2.2
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(14.8)		0.4		—		(14.4)
Tax Impact	3.5		(0.1)		—		3.4
Net Current Period Other Comprehensive (Loss) Income	(18.1)		0.8		(119.8)		(137.1)
Ending Balance	$	2.9	$	(13.5)	$	(321.6)	$	(332.2)

The Condensed Consolidated Statements of Income line items affected by the hedging activities reclassified from AOCI in the tables above are disclosed in Note 13 - Derivative Financial Instruments.

The reclassification amounts for pension and post-retirement benefit adjustments in the tables above are part of net periodic benefit costs recorded in Other Income, Net (see also Note 8 - Retirement Plans).

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GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Goodwill

As required, the Company performs an annual impairment test of goodwill as of the end of the October fiscal month or more frequently if events or circumstances change that would more likely than not reduce the fair value of its reporting units below their carrying value.

The following table presents changes to goodwill during the six months ended June 30, 2023:

	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
Balance as of December 31, 2022	$	4,018.8	$	2,290.0	$	752.3	$	865.0	$	111.5
Acquisitions	2,594.9		1,423.5		—		1,171.4		—
Translation Adjustments	5.2		7.8		0.3		(3.1)		0.2
Balance as of June 30, 2023	$	6,618.9	$	3,721.3	$	752.6	$	2,033.3	$	111.7
Cumulative Goodwill Impairment Charges	$	328.7	$	18.1	$	200.4	$	5.1	$	105.1

Intangible Assets

The following table presents intangible assets including those acquired in the Altra Transaction (see Note 3 - Acquisitions and Divestitures for more information):

		June 30, 2023						December 31, 2022
	Weighted Average Amortization Period (Years)	Gross Value		Accumulated Amortization		Net Carrying Amount		Gross Value		Accumulated Amortization		Net Carrying Amount
Customer Relationships	15	$	4,055.1	$	648.9	$	3,406.2	$	2,321.4	$	532.0	$	1,789.4
Technology	13	311.5		98.5		213.0		246.2		125.0		121.2
Trademarks	10	714.4		93.9		620.5		392.7		73.4		319.3
Total Intangibles		$	5,081.0	$	841.3	$	4,239.7	$	2,960.3	$	730.4	$	2,229.9

Amortization expense recorded for the three and six months ended June 30, 2023 was $89.4 million and $135.7 million, respectively. Amortization expense recorded for the three and six months ended June 30, 2022 was $46.5 million and $93.8 million, respectively. Amortization expense for fiscal year 2023 is estimated to be $312.1 million.

The following table presents future estimated annual amortization expense for intangible assets:

Year	Estimated Amortization
2024	$	349.9
2025	347.9
2026	344.4
2027	343.7
2028	343.7

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Effective during the first quarter of 2023, the Company realigned its four operating segments taking into account the change to its management structure and operating model following completion of the Altra Transaction. All prior periods have been recast to reflect the current segment presentation. The Company is comprised of four operating segments: Industrial Powertrain Solutions (IPS), Power Efficiency Solutions (PES), Automation & Motion Control (AMC) and Industrial Systems.

IPS consists of the majority of the Company's previous Motion Control Solutions (MCS) segment, excluding the conveying and aerospace business units, plus Altra's Power Transmission Technologies segment. The IPS segment designs, produces and services mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes and

gear motors, clutches, brakes, special components products and industrial powertrain components and solutions serving a broad range of markets including food and beverage, bulk handling, eCommerce/warehouse distribution, energy, agricultural machinery, turf & garden and general industrial.

PES consists of the Company's previous Climate Solutions and Commercial Systems segments. The PES segment designs and produces fractional to approximately 5 horsepower AC and DC motors, electronic variable speed controls, fans, and blowers for commercial applications and small motors, electronic variable speed controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, dewatering, agriculture, and general commercial equipment.

AMC consists of the Company's previous MCS aerospace and conveying business units, Altra's Automation & Specialty segment and the Thomson Power Systems business that was previously in the Company's Industrial Systems segment. The AMC segment designs, produces and services conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors and motion control products, automation transfer switches, switchgear for industrial applications and automation systems that enable and control the transition of rotary motion to linear motion. These products are used in advanced material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food & beverage processing and other applications.

Industrial Systems consists of the Company's previous Industrial Systems segment excluding the Thomson Power Systems business. The Industrial Systems segment designs and produces integral motors, alternators for industrial applications, along with aftermarket parts and kits to support such products. These products serve markets including agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment.

The Company evaluates performance based on the segment's income from operations. Corporate costs have been allocated to each segment based on the net sales of each segment. The reported external net sales of each segment are from external customers.

The following sets forth certain financial information attributable to the Company's operating segments, recast as described above, for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Eliminations		Total
External Sales	$	698.7	$	460.1	$	473.1	$	136.7	$	—	$	1,768.6
Intersegment Sales	4.4		3.5		5.9		0.7		(14.5)		—
Total Sales	703.1		463.6		479.0		137.4		(14.5)		1,768.6
Gross Profit	224.4		133.8		176.2		29.4		—		563.8
Operating Expenses	184.2		74.0		127.6		26.4		—		412.2
Total Operating Expenses	184.2		74.0		127.6		26.4		—		412.2
Income from Operations	40.2		59.8		48.6		3.0		—		151.6
Depreciation and Amortization	74.4		11.8		47.6		3.2		—		137.0
Capital Expenditures	19.7		8.4		14.3		2.4		—		44.8
June 30, 2022
External Sales	$	422.1	$	595.4	$	194.1	$	137.8	$	—	$	1,349.4
Intersegment Sales	1.8		2.2		1.7		0.5		(6.2)		—
Total Sales	423.9		597.6		195.8		138.3		(6.2)		1,349.4
Gross Profit	167.7		156.7		70.6		38.5		—		433.5
Operating Expenses	98.9		70.7		48.4		20.6		—		238.6
Total Operating Expenses	98.9		70.7		48.4		20.6		—		238.6
Income from Operations	68.8		86.0		22.2		17.9		—		194.9
Depreciation and Amortization	44.1		11.8		18.9		3.6		—		78.4
Capital Expenditures	5.0		9.8		1.7		2.7		—		19.2

	Six Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Eliminations		Total
External Sales	$	1,113.1	$	929.6	$	676.3	$	273.7	$	—	$	2,992.7
Intersegment Sales	7.9		7.7		11.1		1.4		(28.1)		—
Total Sales	1,121.0		937.3		687.4		275.1		(28.1)		2,992.7
Gross Profit	401.8		251.5		251.6		57.0		—		961.9
Operating Expenses	335.7		146.3		208.2		51.2		—		741.4
Total Operating Expenses	335.7		146.3		208.2		51.2		—		741.4
Income from Operations	66.1		105.2		43.4		5.8		—		220.5
Depreciation and Amortization	116.0		23.5		67.3		6.7		—		213.5
Capital Expenditures	25.1		17.1		17.4		3.9		—		63.5
June 30, 2022
External Sales	$	838.4	$	1,162.6	$	378.4	$	268.5	$	—	$	2,647.9
Intersegment Sales	3.4		5.1		5.1		1.0		(14.6)		—
Total Sales	841.8		1,167.7		383.5		269.5		(14.6)		2,647.9
Gross Profit	322.0		334.2		133.6		65.6		—		855.4
Operating Expenses	206.9		143.8		99.1		40.8		—		490.6
Total Operating Expenses	206.9		143.8		99.1		40.8		—		490.6
Income from Operations	115.1		190.4		34.5		24.8		—		364.8
Depreciation and Amortization	86.7		23.9		38.6		7.1		—		156.3
Capital Expenditures	7.5		17.7		3.3		4.1		—		32.6

The following table presents identifiable assets information attributable to the Company's operating segments, recast as described above, as of June 30, 2023 and December 31, 2022:

	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
Identifiable Assets as of June 30, 2023	$	8,139.0	$	2,055.2	$	4,980.8	$	682.8	$	15,857.8
Identifiable Assets as of December 31, 2022	5,028.5		2,234.1		2,202.2		804.1		10,268.9

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DEBT AND BANK CREDIT FACILITIES

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

DEBT AND BANK CREDIT FACILITIES

DEBT AND BANK CREDIT FACILITIES

The following table presents the Company’s indebtedness as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
Senior Notes	$	4,700.0	$	—
Term Facility	1,341.5		536.3
Private Placement Notes	—		500.0
Land Term Facility	486.8		486.8
Multicurrency Revolving Facility	115.0		429.0
Altra Notes	18.1		—
Other	79.6		76.7
Less: Debt Issuance Costs	(58.7)		(5.3)
Total	6,682.3		2,023.5
Less: Current Maturities	72.6		33.8
Long-Term Debt	$	6,609.7	$	1,989.7

The below discussion of the Company’s indebtedness should be read in conjunction with the Note 7 – Debt and Bank Credit Facilities in the Company’s 2022 Annual Report on Form 10-K filed on February 24, 2023.

Credit Agreement

On March 28, 2022, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. as Administrative Agent and the lenders named therein, which was subsequently amended on November 17, 2022 (the "First Amendment") and November 30, 2022 (the "Assumption Agreement"), which in combination provide for, among other things:

i.an unsecured term loan facility in the initial principal amount of up to $550.0 million, maturing on March 28, 2027, which was upsized by $840.0 million on March 27, 2023 in connection with the Altra Transaction (the "Term Facility");

ii.an unsecured term loan facility in the initial principal amount of $486.8 million, under which the Company's subsidiary Land Newco, Inc. remains the sole borrower, maturing on March 28, 2027 (the "Land Term Facility"); and

iii.an unsecured revolving loan in the initial principal amount of up to $1,000.0 million, maturing on March 28, 2027, which was upsized by $570.0 million on March 27, 2023 in connection with the Altra Transaction (the "Multicurrency Revolving Facility").

Borrowings under the Credit Agreement bear interest at floating rates based upon indices determined by the currency of the borrowing (SOFR or an alternative base rate for US Dollar borrowings) or at an alternative base rate, in each case, plus an applicable margin. The weighted average interest rate on the Term Facility for the three months ended June 30, 2023 and June 30, 2022 was 7.1% and 2.1%, respectively. The weighted average interest rate on the Term Facility for the six months ended June 30, 2023 and June 30, 2022 was 6.8% and 1.7%, respectively. The weighted average interest rate on the Land Term Facility for the three months ended June 30, 2023 and June 30, 2022 was 7.1% and 2.1%, respectively. The weighted average interest rate on the Land Term Facility for the six months ended June 30, 2023 and June 30, 2022 was 6.5% and 1.7%, respectively.

The Term Facility requires quarterly amortization at 5.0% per annum, unless previously prepaid. Per the terms of the Credit Agreement, prepayments can be made without penalty and be applied to the next payment due. The Land Term Facility has no required amortization.

As of June 30, 2023, the Company had no standby letters of credit issued under the Multicurrency Revolving Facility, and $1,455.0 million of available borrowing capacity. For the three months ended June 30, 2023 and June 30, 2022 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $425.2 million and $730.0 million, respectively, and the weighted average interest rate was 6.7% and 2.1%, respectively. For the six months ended June 30, 2023 and June 30, 2022 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $464.7 million and $765.2 million, respectively, and the weighted average interest rate was 6.4% and 1.7%, respectively. The Company paid a non-use fee of 0.3% as of June 30, 2023 on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.

Private Placement Notes

On April 7, 2022, the Company entered into a Note Purchase Agreement for the issuance and sale of $500.0 million aggregate principal amount of 3.90% senior notes due April 7, 2032 (the "Private Placement Notes"). Following the issuance of the Senior Notes discussed below, on January 27, 2023, the Company repaid the Private Placement Notes in full with no make-whole payments.

Bridge Facility

In connection with the Altra Transaction, on October 26, 2022, the Company entered into a commitment letter pursuant to which JPMorgan Chase Bank, N.A. committed to provide the Company approximately $5,500.0 million in aggregate principal amount of senior bridge loans under a 364-day senior unsecured bridge term loan facility (the “Bridge Facility”) to, among other things, fund, in part, the Altra Transaction. The Bridge Facility was terminated upon issuance of the Senior Notes in January 2023. The Company paid $27.5 million in Bridge Facility fees in fiscal 2022, of which $10.5 million were recognized in Interest Expense in the fourth quarter of 2022 and zero and $17.0 million were recognized in Interest Expense during the three and six months ended June 30, 2023, respectively.

Senior Notes

On January 24, 2023, the Company issued $1,100.0 million aggregate principal amount of its 6.05% senior notes due 2026 (the “2026 Senior Notes”), $1,250.0 million aggregate principal amount of its 6.05% senior notes due 2028 (the “2028 Senior Notes”), $1,100.0 million aggregate principal amount of its 6.30% senior notes due 2030 (the “2030 Senior Notes”) and $1,250.0 million aggregate principal amount of its 6.40% senior notes due 2033 (the “2033 Senior Notes” and, together with the 2026 Senior Notes, 2028 Senior Notes and 2030 Senior Notes, collectively, the “Senior Notes”). The 2026 Senior Notes are scheduled to mature on February 15, 2026, the 2028 Senior Notes are scheduled to mature on April 15, 2028, the 2030 Senior Notes are scheduled to mature on February 15, 2030, and the 2033 Senior Notes are scheduled to mature on April 15, 2033.

The rate of interest on each series of the Senior Notes is subject to an increase of up to 2.00% in the event of certain downgrades in the debt rating of the Senior Notes. Interest on the 2026 Senior Notes and the 2030 Senior Notes will be payable semi-annually on February 15 and August 15 of each year, beginning on August 15, 2023. Interest on the 2028 Senior Notes and the 2033 Senior Notes will be payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2023.

The Senior Notes were issued and sold in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933 and persons outside the United States in accordance with Regulation S under the Securities Act. Pursuant to a registration rights agreement, the Company will exchange the Senior Notes with registered notes with terms substantially identical to the Senior Notes within 540 days from the date of issuance.

The Company received $4,647.0 million in net proceeds from the sale of the Senior Notes, after deducting the initial purchasers’ discounts and estimated offering expenses. The Company used a portion of the net proceeds to repay the Company’s outstanding Private Placement Notes and used the remaining net proceeds, together with the incremental term loan commitments under the Term Facility and cash on hand, to fund the consideration for the Altra Transaction, repay certain of Altra’s outstanding indebtedness, and pay certain fees and expenses.

Prior to the consummation of the Altra Transaction, the Company used a portion of the proceeds to repay the outstanding borrowings under the Multicurrency Revolving Facility in January 2023 and invested the remaining net proceeds of approximately $3.6 billion in interest bearing accounts. The Company recognized zero and $29.4 million in Interest Income during the three and six months ended June 30, 2023, respectively.

Altra Notes

On March 27, 2023, in connection with the Altra Transaction, the Company assumed $18.1 million aggregate principal amount of 6.125% senior notes due 2026 (the “Altra Notes”). The Company purchased 95.28% of the outstanding Altra Notes for total consideration of $382.7 million. See Note 3 – Acquisitions and Divestitures for more information.

The Altra Notes will mature on October 1, 2026. The Altra Notes may be redeemed at the option of the issuer on or after October 1, 2023. The Notes are guaranteed on a senior unsecured basis by certain of the Company's domestic subsidiaries.

Compliance with Financial Covenants

The Credit Agreement, Senior Notes, and Altra Notes require the Company to meet specified financial ratios and to satisfy certain financial condition tests. The Company was in compliance with all financial covenants contained in the Credit Agreement as of June 30, 2023.

Other Notes Payable

These amounts consist of finance leases as well as certain long-term fixed rate term loans entered into by subsidiaries in Europe that are generally secured by the local property, plant and equipment. The weighted average interest rate on other notes payable for the three months ended June 30, 2023 and June 30, 2022 were 4.9% and 5.1%, respectively. The weighted average interest rate on other notes payable for the six months ended June 30, 2023 and June 30, 2022 were 4.9% and 5.1%, respectively.

Other Disclosures

Based on rates for instruments with comparable maturities and credit quality, which are classified as Level 2 inputs (see also Note 14 - Fair Value), the approximate fair value of the Company's total debt was $6,662.3 million and $1,926.6 million as of June 30, 2023 and December 31, 2022, respectively.

Maturities of long-term debt outstanding as of June 30, 2023, excluding debt issuance costs, are as follows:

Year	Amount of Maturity
2023	$	36.7
2024	73.3
2025	73.5
2026	1,191.6
2027	1,704.3
Thereafter	3,661.6
Total	$	6,741.0

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RETIREMENT PLANS

6 Months Ended

Jun. 30, 2023

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

RETIREMENT PLANS

RETIREMENT PLANS

The following table presents the Company’s net periodic benefit cost (income) components:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service Cost	$	0.6	$	0.5	$	0.9	$	0.8
Interest Cost	5.7		3.5		11.3		7.1
Expected Return on Plan Assets	(6.7)		(5.2)		(13.4)		(10.3)
Amortization of Prior Service Cost and Net Actuarial Loss	(0.6)		0.2		(1.1)		0.4
Net Periodic Benefit Income	$	(1.0)	$	(1.0)	$	(2.3)	$	(2.0)

The service cost component is included in Cost of Sales and Operating Expenses. All other components of net periodic benefit costs are included in Other Income, Net on the Company's Condensed Consolidated Statements of Income.

For the three months ended June 30, 2023 and June 30, 2022, the Company contributed $2.0 million and $1.3 million, respectively, to post retirement plans. For the six months ended June 30, 2023 and June 30, 2022, the Company contributed $3.5 million and $3.0 million, respectively. The Company expects to make total contributions of $6.5 million in 2023. The Company contributed a total of $8.3 million in fiscal 2022.

For the three months ended June 30, 2023 and June 30, 2022, the Company contributed $11.3 million and $6.4 million, respectively, to defined contribution plans. For the six months ended June 30, 2023 and June 30, 2022, the Company contributed $17.5 million and $12.3 million, respectively.

In connection with the Altra Transaction, $30.5 million of plan benefit obligations and $13.8 million of plan assets included in the Altra business were transferred to the Company on March 27, 2023.

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SHAREHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

SHAREHOLDERS’ EQUITY

Share-Based Compensation

The Company recognized approximately $14.5 million and $4.9 million in share-based compensation expense for the three months ended June 30, 2023 and June 30, 2022, respectively, and approximately $36.2 million and $11.2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The $36.2 million includes $15.7 million related to the accelerated vesting of awards for certain former Altra employees. The total income tax benefit recognized in the Condensed Consolidated Statements of Income for share-based compensation expense was $2.5 million and $1.2 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $3.7 million and $2.7 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The Company recognizes compensation expense on grants of share-based compensation awards on a straight-line basis over the vesting period of each award.

During the six months ended June 30, 2023, the Company granted the following share-based incentive awards:

Award Type	Number of Awards	Weighted Average Grant-Date Fair Value
Options and SARs1	147,174	$	54.96
Restricted Stock Awards1	31,605	$	134.57
Restricted Stock Units1	254,428	$	141.90
Performance Share Units	58,945	$	235.77

1 Certain outstanding equity-based awards held by employees of Altra that related to shares of Altra Common Stock were replaced by equity-based awards of the Company Common Stock with substantially similar terms and conditions. These awards include 32,419 options with a weighted-average grant date fair value of $57.64, 20,114 restricted stock awards with a weighted-average grant date fair value of $138.11 and 161,414 restricted stock units with a weighted-average grant date fair value of $135.50 issued as replacement awards for Altra unvested awards outstanding at close of the Altra Transaction on March 27, 2023.

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INCOME TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The effective tax rate for the three months ended June 30, 2023 was 22.9% versus 22.1% for the three months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2023 and June 30, 2022 was 44.5% and 22.1%, respectively. The effective tax rate for the three months ended June 30, 2023 was higher than the same period in the prior year primarily driven by costs associated with the Altra acquisition. The effective tax rate for the six months ended June 30, 2023 was higher than the same period in the prior year primarily driven by non-deductible transaction costs associated with the Altra Transaction and withholding taxes resulting from foreign cash repatriation.

As of June 30, 2023 and December 31, 2022, the Company had approximately $9.1 million and $5.7 million of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. The Company had approximately $1.1 million and $1.2 million of accrued interest as of June 30, 2023 and December 31, 2022, respectively.

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Diluted earnings per share is calculated based upon earnings applicable to common shares divided by the weighted-average number of common shares outstanding during the period adjusted for the effect of other dilutive securities. The amount of the anti-dilutive shares were 0.5 million and 0.4 million for the three months ended June 30, 2023 and June 30, 2022, respectively. The amount of the anti-dilutive shares were 0.4 million and 0.2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The following table reconciles the basic and diluted shares used in earnings per share calculations for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended		Six Months Ended
	June 30, 2023	June 30, 2022	June 30, 2023	June 30, 2022
Denominator for Basic Earnings Per Share	66.3	66.8	66.2	67.1
Effect of Dilutive Securities	0.3	0.3	0.4	0.4
Denominator for Diluted Earnings Per Share	66.6	67.1	66.6	67.5

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CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

One of the Company's subsidiaries that it acquired in 2007 is subject to numerous claims filed in various jurisdictions relating to certain sub-fractional motors that were primarily manufactured through 2004 and that were included as components of residential and commercial ventilation units manufactured and sold in high volumes by a third party. These ventilation units are subject to product safety requirements and other potential regulation of their performance by government agencies such as the US Consumer Product Safety Commission (“CPSC”). The claims generally allege that the ventilation units were the cause of fires. The Company has recorded an estimated liability for incurred claims. Based on the current facts, the Company cannot assure that these claims, individually or in the aggregate, will not have a material adverse effect on its subsidiary's financial condition. The Company's subsidiary cannot reasonably predict the outcome of these claims, the nature or extent of any CPSC or other remedial actions, if any, that the Company's subsidiary may need to undertake with respect to motors that remain in the field, or the costs that may be incurred, some of which could be significant.

As a result of the Company's acquisition of the Rexnord PMC business, it is entitled to indemnification from third parties to agreements with the Rexnord PMC business against certain contingent liabilities of the Rexnord PMC business, including certain pre-closing environmental liabilities.

The Company believes that, pursuant to the transaction documents related to the Rexnord PMC business' acquisition of the Stearns business from Invensys plc ("Invensys"), Invensys (now known as Schneider Electric) is obligated to defend and indemnify us 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 $900.0 million. In the event that the Company is unable to recover from Invensys with respect to the matters below, it may be entitled to indemnification from Zurn Water Solutions Corporation (formerly known as Rexnord Corporation) ("Zurn"), subject to certain limitations. The following paragraphs summarize the most significant actions and proceedings:

•In 2002, the Company's subsidiary, 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 at the Site, allegedly including but not limited to a release or threatened release on or from Rexnord Industries' property. 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. The soil excavation work and transporting and disposing of the excavated material was completed in October 2020. An AS/SVE system construction was completed in February 2022 and is anticipated to operate for three years. All previously pending property damage and personal injury lawsuits against Rexnord Industries related to the Site have been settled or dismissed. Pursuant to its indemnity obligation, Invensys continues to defend Rexnord Industries 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. This

indemnification right would not protect Rexnord Industries against liabilities related to environmental conditions that were unknown to Invensys at the time of the acquisition of the Stearns business from Invensys.

•Multiple lawsuits (with approximately 404 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 Rexnord PMC business' Stearns brand of brakes and clutches 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 Rexnord PMC business' 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 Rexnord PMC business' insurance providers have paid 100% of the costs related to the Prager asbestos matters. We believe that the combination of the Company's insurance coverage and the Invensys indemnity obligations will cover any future costs of these matters.

In connection with the Company's acquisition of the Rexnord PMC business, transaction documents related to the Rexnord PMC business’ acquisition of The Falk Corporation from Hamilton Sundstrand Corporation were assigned to Rexnord Industries, and provide Rexnord Industries with indemnification against certain product related asbestos exposure liabilities. The Company believes that, pursuant to such indemnity obligations, Hamilton Sundstrand is obligated to defend and indemnify Rexnord Industries with respect to 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:

•Rexnord Industries 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 The Falk Corporation. The ultimate outcome of these lawsuits cannot presently be determined. Hamilton Sundstrand is defending Rexnord Industries in these lawsuits pursuant to its indemnity obligations and has paid 100% of the costs to date.

The Company is, from time to time, party to litigation and other legal or regulatory proceedings that arise in the normal course of its business operations and the outcomes of which are subject to significant uncertainty, including product warranty and liability claims, contract disputes and environmental, asbestos, intellectual property, employment and other litigation matters. The Company's products are used in a variety of industrial, commercial and residential applications that subject the Company to claims that the use of its products is alleged to have resulted in injury or other damage. Many of these matters will only be resolved when one or more future events occur or fail to occur. Management conducts regular reviews, including updates from legal counsel, to assess the need for accounting recognition or disclosure of these contingencies, and such assessment inherently involves an exercise in judgment. The Company accrues for exposures in amounts that it believes are adequate, and the Company does not believe that the outcome of any such lawsuit individually or collectively will have a material effect on the Company's financial position, its results of operations or its cash flows.

The Company recognizes the cost associated with its standard warranty on its products at the time of sale. The amount recognized is based on historical experience. The following table presents a reconciliation of the changes in accrued warranty costs for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Beginning Balance	$	41.5	$	23.4	$	28.8	$	23.0
Less: Payments	(6.9)		(7.7)		(10.3)		(13.3)
Provisions	3.8		8.0		10.0		14.0
Acquisitions	—		—		9.8		—
Translation Adjustments	0.9		(0.3)		1.0		(0.3)
Ending Balance	$	39.3	$	23.4	$	39.3	$	23.4

These liabilities are included in Other Accrued Expenses and Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets.

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DERIVATIVE FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are commodity price risk, currency exchange risk, and interest rate risk. Forward contracts on certain commodities are entered into to manage the price risk associated with forecasted purchases of materials used in the Company's manufacturing process. Forward contracts on certain currencies are entered into to manage forecasted cash flows in certain foreign currencies. Interest rate swaps are utilized to manage interest rate risk associated with the Company's floating rate borrowings.

The Company is exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including its commodity hedging transactions, foreign currency exchange contracts and interest rate swap agreements. Exposure to counterparty credit risk is managed by limiting counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. The Company does not obtain collateral or other security to support financial instruments subject to credit risk. The Company does not anticipate non-performance by its counterparties, but cannot provide assurances.

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. The Company designates commodity forward contracts as cash flow hedges of forecasted purchases of commodities, currency forward contracts as cash flow hedges of forecasted foreign currency cash flows and interest rate swaps as cash flow hedges of forecasted SOFR-based interest payments. There were no significant collateral deposits on derivative financial instruments as of June 30, 2023 or June 30, 2022.

The effective portion of the gain or loss on the derivative is reported as a component of AOCI and reclassified into the same line within the Condensed Consolidated Statement of Income as the earnings effect of the hedged item in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or changes in market value of derivatives not designated as hedges are recognized in current earnings.

As of June 30, 2023 and December 31, 2022, the Company had $17.8 million and $11.9 million, respectively, net of tax, of derivative gains on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings.

The Company had the following currency forward contracts outstanding (notional amounts expressed in terms of the dollar value of the hedged currency with maturities extending through November 2024):

	June 30, 2023		December 31, 2022
Chinese Renminbi	$	229.3	$	173.8
Mexican Peso	176.3		215.2
Euro	298.9		159.6
Indian Rupee	49.2		33.1
Australian Dollar	3.0		—
Swedish Krona	6.9		—
British Pound	12.8		2.1
Czech Koruna	1.6		—

The Company had the following commodity forward contracts outstanding (with maturities extending through December 2024) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item):

	June 30, 2023		December 31, 2022
Copper	$	53.0	$	89.4
Aluminum	2.2		4.0

The Company entered into two receive variable/pay-fixed forward starting non-amortizing interest rate swaps in June 2020, with a total notional amount of $250.0 million, which were subsequently terminated in March 2022. The cash proceeds of $16.2 million received to settle the terminated swaps is being recognized as a reduction of interest expense via the effective interest rate method through July 2025 when the terminated swaps were scheduled to expire. The Company entered into two additional receive variable/pay-fixed forward starting non-amortizing interest rate swaps in May 2022, with a total notional amount of $250.0 million. These swaps will expire in March 2027.

Fair values of derivative instruments as of June 30, 2023 and December 31, 2022 were:

	June 30, 2023
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	9.9	$	—	$	—
Currency Contracts	23.2		2.1		4.1		0.3
Commodity Contracts	0.8		—		3.9		0.3
Not Designated as Hedging Instruments:
Currency Contracts	0.3		—		0.7		—
Commodity Contracts	—		—		0.2		—
Total Derivatives	$	24.3	$	12.0	$	8.9	$	0.6

	December 31, 2022
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	7.9	$	—	$	—
Currency Contracts	12.3		0.9		4.8		—
Commodity Contracts	0.9		0.3		10.2		—
Not Designated as Hedging Instruments:
Currency Contracts	0.7		—		—		—
Commodity Contracts	—		—		0.4		—
Total Derivatives	$	13.9	$	9.1	$	15.4	$	—

Derivatives Designated as Cash Flow Hedging Instruments

The effect of derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income were:

	Three Months Ended
	June 30, 2023								June 30, 2022
	Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total		Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$	(5.3)	$	4.4	$	5.8	$	4.9	$	(35.6)	$	(6.0)	$	(1.8)	$	(43.4)
Amounts Reclassified from Other Comprehensive Income (Loss):
(Loss) Gain Recognized in Cost of Sales	(2.8)		2.0		—		(0.8)		4.4		2.4		—		6.8
Gain Recognized in Interest Expense	—		—		1.5		1.5		—		—		—		—
	Six Months Ended
	June 30, 2023								June 30, 2022
	Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total		Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$	0.2	$	24.7	$	2.1	$	27.0	$	(22.2)	$	4.4	$	8.8	$	(9.0)
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales	—		—		—		—		—		0.1		—		0.1
(Loss) Gain Recognized in Cost of Sales	(7.8)		4.0		—		(3.8)		9.6		5.4		—		15.0
Gain (Loss) Recognized in Interest Expense	—		—		2.8		2.8		—		—		(0.3)		(0.3)

Derivatives Not Designated as Cash Flow Hedging Instruments:

The effect of derivative instruments not designated as cash flow hedges on the Condensed Consolidated Statements of Income were:

	Three Months Ended
	June 30, 2023				June 30, 2022
	Commodity Forwards		Currency Forwards		Commodity Forwards		Currency Forwards
Loss recognized in Cost of Sales	$	(0.1)	$	—	$	(1.2)	$	—
(Loss) Gain recognized in Operating Expenses	—		(10.6)		—		3.5
	Six Months Ended
	June 30, 2023				June 30, 2022
	Commodity Forwards		Currency Forwards		Commodity Forwards		Currency Forwards
Gain (Loss) recognized in Cost of Sales	$	0.1	$	—	$	(0.6)	$	—
(Loss) Gain recognized in Operating Expenses	—		(12.5)		—		5.0

The AOCI balance related to hedging activities consists of a $38.6 million gain net of tax as of June 30, 2023 which includes $25.4 million of net current deferred gains expected to be reclassified to the Consolidated Statement of Comprehensive Income in the next twelve months. There were no gains or losses reclassified from AOCI to earnings based on the probability that the forecasted transaction would not occur.

The Company's commodity and currency derivative contracts are subject to master netting agreements with the respective counterparties which allow the Company to net settle transactions with a single net amount payable by one party to another party. The Company has elected to present the derivative assets and derivative liabilities on the Condensed Consolidated Balance Sheets on a gross basis as of June 30, 2023 and December 31, 2022.

The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements:

	June 30, 2023
	Gross Amounts as Presented in the Condensed Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	23.5	$	(2.7)	$	20.8
Derivative Commodity Contracts	0.8		(0.7)		0.1
Other Noncurrent Assets:
Derivative Currency Contracts	2.1		(0.1)		2.0
Other Accrued Expenses:
Derivative Currency Contracts	4.8		(2.7)		2.1
Derivative Commodity Contracts	4.1		(1.1)		3.0
Other Noncurrent Liabilities:
Derivative Currency Contracts	0.3		(0.1)		0.2
Derivative Commodity Contracts	0.3		—		0.3

	December 31, 2022
	Gross Amounts as Presented in the Condensed Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	13.0	$	(2.5)	$	10.5
Derivative Commodity Contracts	0.9		(0.9)		—
Other Noncurrent Assets:
Derivative Currency Contracts	0.9		—		0.9
Derivative Commodity Contracts	0.3		—		0.3
Other Accrued Expenses:
Derivative Currency Contracts	4.8		(2.5)		2.3
Derivative Commodity Contracts	10.6		(0.9)		9.7

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FAIR VALUE

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE

FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or
	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
	Inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

The Company uses the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The fair values of cash equivalents and short-term deposits approximate their carrying values as of June 30, 2023 and December 31, 2022, due to the short period of time to maturity and are classified using Level 1 inputs. The fair values of trade receivables and accounts payable approximate the carrying values due to the short period of time to maturity. See Note 7 - Debt and Bank Credit Facilities for disclosure of the approximate fair value of the Company's debt as of June 30, 2023 and December 31, 2022.

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022		Classification
Assets:
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	23.5	$	13.0	Level 2
Derivative Commodity Contracts	0.8		0.9		Level 2
Other Noncurrent Assets:
Assets Held in Rabbi Trust	13.0		6.4		Level 1
Derivative Currency Contracts	2.1		0.9		Level 2
Derivative Commodity Contracts	—		0.3		Level 2
Interest Rate Swap	9.9		7.9		Level 2
Liabilities:
Other Accrued Expenses:
Derivative Currency Contracts	4.8		4.8		Level 2
Derivative Commodity Contracts	4.1		10.6		Level 2
Other Noncurrent Liabilities:
Derivative Currency Contracts	0.3		—		Level 2
Derivative Commodity Contracts	0.3		—		Level 2

Level 1 fair value measurements for assets held in a Rabbi Trust are unadjusted quoted prices.

Level 2 fair value measurements for derivative assets and liabilities are measured using quoted prices in active markets for similar assets and liabilities. Interest rate swaps are valued based on the discounted cash flows using the SOFR forward yield curve for an instrument with similar contractual terms. Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. Commodity forwards are valued based on observable market transactions of forward commodity prices. Debt instruments are valued based on quoted prices in active markets for instruments with similar contractual terms.

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RESTRUCTURING ACTIVITIES

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

RESTRUCTURING ACTIVITIES

RESTRUCTURING ACTIVITIES

The Company incurred restructuring and restructuring-related costs on projects during the three and six months ended June 30, 2023 and June 30, 2022. The Company has initiated restructuring plans to achieve cost synergies from procurement, distribution efficiencies, footprint rationalization and other general cost savings measures. Restructuring costs include employee termination and plant relocation costs. Restructuring-related costs also include costs directly associated with actions resulting from the Company's simplification initiatives, such as asset write-downs or accelerated depreciation due to shortened useful lives in connection with site closures, discretionary employment benefit costs and other facility rationalization costs. Restructuring costs for employee termination expenses are generally recognized when the severance liability is determined to be probable of being paid and reasonably estimable while plant relocation costs and related costs are generally required to be expensed as incurred.

The following table presents a reconciliation of provisions and payments for the restructuring projects for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Beginning Balance	$	10.1	$	14.5	$	15.1	$	5.0
Acquisition(1)	—		—		0.2		—
Provision	14.0		(1.0)		19.0		15.8
Less: Payments/ Other	5.8		7.1		16.0		14.4
Ending Balance	$	18.3	$	6.4	$	18.3	$	6.4

(1) Excludes $12.4 million of severance related to the Altra Transaction, which was paid in the second quarter 2023.

The following table presents a reconciliation of restructuring and restructuring-related costs for restructuring projects for the three and six months ended June 30, 2023 and June 30, 2022, respectively:

	Three Months Ended
	June 30, 2023						June 30, 2022
Restructuring Costs:	Cost of Sales		Operating Expenses		Total		Cost of Sales		Operating Expenses		Total
Employee Termination Expenses	$	7.4	$	2.3	$	9.7	$	1.4	$	(1.0)	$	0.4
Facility Related Costs	2.1		0.2		2.3		(2.0)		0.1		(1.9)
Other Expenses	1.9		0.1		2.0		0.1		0.4		0.5
Total Restructuring Costs	$	11.4	$	2.6	$	14.0	$	(0.5)	$	(0.5)	$	(1.0)
	Six Months Ended
	June 30, 2023						June 30, 2022
Restructuring Costs:	Cost of Sales		Operating Expenses		Total		Cost of Sales		Operating Expenses		Total
Employee Termination Expenses	$	9.7	$	2.9	$	12.6	$	6.2	$	2.6	$	8.8
Facility Related Costs	3.0		0.2		3.2		6.0		0.5		6.5
Other Expenses	3.1		0.1		3.2		0.1		0.4		0.5
Total Restructuring Costs	$	15.8	$	3.2	$	19.0	$	12.3	$	3.5	$	15.8

The following table presents the allocation of restructuring and restructuring-related costs by segment for the three and six months ended June 30, 2023 and June 30, 2022:

Restructuring Costs - Three Months Ended	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
June 30, 2023	$	14.0	$	2.0	$	10.5	$	1.0	$	0.5
June 30, 2022	$	(1.0)	$	(4.9)	$	0.7	$	3.0	$	0.2
Restructuring Costs - Six Months Ended	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
June 30, 2023	$	19.0	$	1.6	$	15.2	$	1.5	$	0.7
June 30, 2022	$	15.8	$	9.4	$	1.7	$	4.5	$	0.2

The Company's current restructuring activities are expected to continue through 2023. The Company expects to record aggregate future charges of approximately $53 million during the second half of 2023. The Company continues to evaluate operating efficiencies and anticipates incurring additional costs in future periods in connection with these activities.

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Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss) Attributable to Parent	$ 32.1	$ 142.0	$ 26.2	$ 267.6

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Insider Trading Arrangements	3 Months Ended	6 Months Ended
	Jun. 30, 2023 shares	Jun. 30, 2023 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Curtis Stoelting [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On May 10, 2023, a member of the Board of Directors, Curtis Stoelting entered into a “Rule 10b5-1 trading arrangement” as such term is defined in Item 408(a) of Regulation S-K (the “Plan”). The Plan will be effective as of August 14, 2023 and it will remain in effect indefinitely or until such time as Mr. Stoelting elects to terminate the Plan. Subject to a certain share price and other terms and conditions, the Plan directs Mr. Stoelting’s designated broker to sell a maximum number of 4,500 shares under the Plan.
Name	Curtis Stoelting
Title	member of the Board of Directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	May 10, 2023
Aggregate Available	4,500	4,500

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BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reclassifications	ReclassificationsCertain prior year amounts have been reclassified in the Condensed Consolidated Statements of Cash Flows to conform to the presentation used for the six months ended June 30, 2023. Depreciation and Amortization were reclassified from Depreciation and Amortization and presented individually in the Condensed Consolidated Statements of Cash Flows. Benefit from Deferred Income Taxes, Receivables, Inventories, Accounts Payable, and Other Assets and Liabilities were reclassified from Change in Operating Assets and Liabilities and presented individually in the Condensed Consolidated Statements of Cash Flows.
New Accounting Standards Adopted	New Accounting Standards Adopted in 2023In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations. The ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted this new accounting guidance during the first quarter of 2023.

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OTHER FINANCIAL INFORMATION (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Disaggregation of Revenue

The following tables presents the Company’s revenues disaggregated by geographical region:

	Three Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	491.0	$	359.2	$	310.2	$	69.8	$	1,230.2
Asia	51.9		44.9		26.6		40.8		164.2
Europe	120.7		41.8		107.1		15.5		285.1
Rest-of-World	35.1		14.2		29.2		10.6		89.1
Total	$	698.7	$	460.1	$	473.1	$	136.7	$	1,768.6
June 30, 2022	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	295.7	$	465.0	$	148.2	$	75.6	$	984.5
Asia	33.1		54.6		5.3		37.6		130.6
Europe	62.7		48.0		40.2		13.3		164.2
Rest-of-World	30.6		27.8		0.4		11.3		70.1
Total	$	422.1	$	595.4	$	194.1	$	137.8	$	1,349.4

	Six Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	784.2	$	726.6	$	452.0	$	143.5	$	2,106.3
Asia	68.4		88.7		28.0		77.5		262.6
Europe	173.5		84.5		150.9		31.1		440.0
Rest-of-World	87.0		29.8		45.4		21.6		183.8
Total	$	1,113.1	$	929.6	$	676.3	$	273.7	$	2,992.7
June 30, 2022	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
North America	$	586.0	$	909.4	$	280.3	$	144.1	$	1,919.8
Asia	64.3		105.0		8.5		77.0		254.8
Europe	120.3		94.3		80.7		25.6		320.9
Rest-of-World	67.8		53.9		8.9		21.8		152.4
Total	$	838.4	$	1,162.6	$	378.4	$	268.5	$	2,647.9

Schedule of Percentage Distribution between Major Classes of Inventory

The following table presents approximate percentage distribution between major classes of inventories:

	June 30, 2023	December 31, 2022
Raw Material and Work in Process	66.2%	57.0%
Finished Goods and Purchased Parts	33.8%	43.0%

Schedule of Property, Plant, and Equipment by Major Classification

The following table presents property, plant, and equipment by major classification:

	Useful Life in Years	June 30, 2023		December 31, 2022
Land and Improvements		$	157.6	$	103.4
Buildings and Improvements	3 - 50	531.9		401.7
Machinery and Equipment	3 - 15	1,387.0		1,111.3
Property, Plant and Equipment		2,076.5		1,616.4
Less: Accumulated Depreciation		(871.7)		(809.4)
Net Property, Plant and Equipment		$	1,204.8	$	807.0

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ACQUISITIONS AND DIVESTITURES (Tables)

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions

The preliminary purchase price of Altra consisted of the following:

	As of June 30, 2023
Cash paid for outstanding Altra Common Stock(1)	$	4,051.0
Stock based compensation(2)	23.1
Payment of Altra debt(3)	1,061.0
Pre-existing relationships(4)	(0.5)
Preliminary purchase price	$	5,134.6

(1) Cash paid for the common stock component of the preliminary purchase price was based on 65.3 million shares of outstanding Altra Common Stock as of March 27, 2023 at $62.00 per share, in accordance with the Altra Merger Agreement.

(2) Represents fair value of replacement equity-based awards and Company common stock issued in settlement of other Altra share based awards. The portion of the fair value attributable to pre-acquisition service was recorded as part of the consideration transferred in the Altra Transaction of which $17.3 million was paid in cash during the second quarter of 2023.

(3) Cash paid by the Company to settle (a) the term loan facility, (b) the revolving credit facility and (c) 95.28% of the 6.125% senior notes due 2026 of Stevens Holding Company, Inc., a wholly owned subsidiary of Altra (the "Altra Notes"). $18.1 million of the Altra Notes remained outstanding following the closing of the Altra Transaction. See Note 7 - Debt and Bank Credit Facilities for more information.

(4) Represents effective settlement of outstanding payables and receivables between the Company and Altra. No gain or loss was recognized on this settlement

Schedule of Assets Acquired and Liabilities Assumed

The preliminary fair value and subsequent measurement period adjustments of the assets acquired and liabilities assumed were as follows:

	As Reported as of March 31, 2023		Measurement period adjustments		As of June 30, 2023
Cash and Cash Equivalents	$	259.1	$	—	$	259.1
Trade Receivables	258.1		(0.1)		258.0
Inventories	436.4		(48.8)		387.6
Prepaid Expenses and Other Current Assets	33.0		—		33.0
Property, Plant and Equipment	411.8		2.8		414.6
Intangible Assets	2,224.0		(82.0)		2,142.0
Deferred Income Tax Benefits	0.7		1.3		2.0
Operating Lease Assets	42.3		4.5		46.8
Other Noncurrent Assets	21.6		0.2		21.8
Accounts Payable	(183.2)		—		(183.2)
Accrued Compensation and Benefits	(66.1)		—		(66.1)
Other Accrued Expenses(1)	(145.7)		0.6		(145.1)
Current Operating Lease Liabilities	(12.5)		0.2		(12.3)
Current Maturities of Long-Term Debt	(0.4)		—		(0.4)
Long-Term Debt	(25.3)		—		(25.3)
Deferred Income Taxes	(560.7)		25.0		(535.7)
Pension and Other Post Retirement Benefits	(19.8)		—		(19.8)
Noncurrent Operating Lease Liabilities	(29.7)		0.7		(29.0)
Other Noncurrent Liabilities	(8.3)		—		(8.3)
Total Identifiable Net Assets	2,635.3		(95.6)		2,539.7
Goodwill	2,499.3		$	95.6	$	2,594.9
Preliminary purchase price	$	5,134.6	$	—	$	5,134.6

1) Includes $60.1 million related to Altra Transaction costs paid by the Company at the closing of the Altra Transaction.

Schedule of Fair Value and Weighted Average Useful Life of Identifiable Intangible Assets

The preliminary fair value and weighted average useful life of the identifiable intangible assets are as follows:

	Fair Value		Weighted Average Useful Life (Years)
Customer Relationships(1)	$	1,710.0	14.0
Trademarks(2)	330.0		10.0
Technology(3)	102.0		13.0
Total Identifiable Intangible Assets	$	2,142.0

(1) The fair value of Customer Relationships was valued using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from Altra's existing customer base.

(2) The Altra Trademarks were valued using the relief from royalty method, which considers both the market approach and the income approach.

(3) The Altra Technology was valued using the relief from royalty method, which considers both the market approach and the income approach.

Schedule of Pro Forma Information

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net Sales	$	1,768.6	$	1,847.5	$	3,443.8	$	3,657.7
Net Income Attributable to Regal Rexnord Corporation	$	77.2	$	69.8	$	127.8	$	13.7
Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	1.16	$	1.05	$	1.93	$	0.20
Assuming Dilution	$	1.16	$	1.04	$	1.92	$	0.20

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Changes In Accumulated Other Comprehensive Income (Loss) By Component, Net Of Tax

The following tables present changes in AOCI by component for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended
June 30, 2023	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	35.4	$	(13.7)	$	(321.9)	$	(300.2)
Other Comprehensive Income (Loss) before Reclassifications	4.9		—		(29.3)		(24.4)
Tax Impact	(1.2)		—		—		(1.2)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(0.7)		(0.6)		—		(1.3)
Tax Impact	0.2		0.2		—		0.4
Net Current Period Other Comprehensive Income (Loss)	3.2		(0.4)		(29.3)		(26.5)
Ending Balance	$	38.6	$	(14.1)	$	(351.2)	$	(326.7)
June 30, 2022	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	41.1	$	(13.9)	$	(202.8)	$	(175.6)
Other Comprehensive (Loss) Income before Reclassifications	(43.4)		0.3		(118.8)		(161.9)
Tax Impact	10.5		—		—		10.5
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(6.8)		0.2		—		(6.6)
Tax Impact	1.5		(0.1)				1.4
Net Current Period Other Comprehensive (Loss) Income	(38.2)		0.4		(118.8)		(156.6)
Ending Balance	$	2.9	$	(13.5)	$	(321.6)	$	(332.2)

	Six Months Ended
June 30, 2023	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning Balance	$	17.3	$	(13.3)	$	(356.1)	$	(352.1)
Other Comprehensive Income before Reclassifications	27.0		—		4.9		31.9
Tax Impact	(6.5)		—		—		(6.5)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	1.0		(1.1)		—		(0.1)
Tax Impact	(0.2)		0.3		—		0.1
Net Current Period Other Comprehensive Income (Loss)	21.3		(0.8)		4.9		25.4
Ending Balance	$	38.6	$	(14.1)	$	(351.2)	$	(326.7)
June 30, 2022	Hedging Activities		Pension and Post Retirement Benefit Adjustments		Foreign Currency Translation Adjustments		Total
Beginning balance	$	21.0	$	(14.3)	$	(201.8)	$	(195.1)
Other Comprehensive (Loss) Income before Reclassifications	(9.0)		0.5		(119.8)		(128.3)
Tax Impact	2.2		—		—		2.2
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(14.8)		0.4		—		(14.4)
Tax Impact	3.5		(0.1)		—		3.4
Net Current Period Other Comprehensive (Loss) Income	(18.1)		0.8		(119.8)		(137.1)
Ending Balance	$	2.9	$	(13.5)	$	(321.6)	$	(332.2)

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GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes to Goodwill

The following table presents changes to goodwill during the six months ended June 30, 2023:

	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
Balance as of December 31, 2022	$	4,018.8	$	2,290.0	$	752.3	$	865.0	$	111.5
Acquisitions	2,594.9		1,423.5		—		1,171.4		—
Translation Adjustments	5.2		7.8		0.3		(3.1)		0.2
Balance as of June 30, 2023	$	6,618.9	$	3,721.3	$	752.6	$	2,033.3	$	111.7
Cumulative Goodwill Impairment Charges	$	328.7	$	18.1	$	200.4	$	5.1	$	105.1

Schedule of Finite-Lived Intangible Assets

The following table presents intangible assets including those acquired in the Altra Transaction (see Note 3 - Acquisitions and Divestitures for more information):

		June 30, 2023						December 31, 2022
	Weighted Average Amortization Period (Years)	Gross Value		Accumulated Amortization		Net Carrying Amount		Gross Value		Accumulated Amortization		Net Carrying Amount
Customer Relationships	15	$	4,055.1	$	648.9	$	3,406.2	$	2,321.4	$	532.0	$	1,789.4
Technology	13	311.5		98.5		213.0		246.2		125.0		121.2
Trademarks	10	714.4		93.9		620.5		392.7		73.4		319.3
Total Intangibles		$	5,081.0	$	841.3	$	4,239.7	$	2,960.3	$	730.4	$	2,229.9

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table presents future estimated annual amortization expense for intangible assets:

Year	Estimated Amortization
2024	$	349.9
2025	347.9
2026	344.4
2027	343.7
2028	343.7

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule Of Reportable Segments

The following sets forth certain financial information attributable to the Company's operating segments, recast as described above, for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Eliminations		Total
External Sales	$	698.7	$	460.1	$	473.1	$	136.7	$	—	$	1,768.6
Intersegment Sales	4.4		3.5		5.9		0.7		(14.5)		—
Total Sales	703.1		463.6		479.0		137.4		(14.5)		1,768.6
Gross Profit	224.4		133.8		176.2		29.4		—		563.8
Operating Expenses	184.2		74.0		127.6		26.4		—		412.2
Total Operating Expenses	184.2		74.0		127.6		26.4		—		412.2
Income from Operations	40.2		59.8		48.6		3.0		—		151.6
Depreciation and Amortization	74.4		11.8		47.6		3.2		—		137.0
Capital Expenditures	19.7		8.4		14.3		2.4		—		44.8
June 30, 2022
External Sales	$	422.1	$	595.4	$	194.1	$	137.8	$	—	$	1,349.4
Intersegment Sales	1.8		2.2		1.7		0.5		(6.2)		—
Total Sales	423.9		597.6		195.8		138.3		(6.2)		1,349.4
Gross Profit	167.7		156.7		70.6		38.5		—		433.5
Operating Expenses	98.9		70.7		48.4		20.6		—		238.6
Total Operating Expenses	98.9		70.7		48.4		20.6		—		238.6
Income from Operations	68.8		86.0		22.2		17.9		—		194.9
Depreciation and Amortization	44.1		11.8		18.9		3.6		—		78.4
Capital Expenditures	5.0		9.8		1.7		2.7		—		19.2

	Six Months Ended
June 30, 2023	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Eliminations		Total
External Sales	$	1,113.1	$	929.6	$	676.3	$	273.7	$	—	$	2,992.7
Intersegment Sales	7.9		7.7		11.1		1.4		(28.1)		—
Total Sales	1,121.0		937.3		687.4		275.1		(28.1)		2,992.7
Gross Profit	401.8		251.5		251.6		57.0		—		961.9
Operating Expenses	335.7		146.3		208.2		51.2		—		741.4
Total Operating Expenses	335.7		146.3		208.2		51.2		—		741.4
Income from Operations	66.1		105.2		43.4		5.8		—		220.5
Depreciation and Amortization	116.0		23.5		67.3		6.7		—		213.5
Capital Expenditures	25.1		17.1		17.4		3.9		—		63.5
June 30, 2022
External Sales	$	838.4	$	1,162.6	$	378.4	$	268.5	$	—	$	2,647.9
Intersegment Sales	3.4		5.1		5.1		1.0		(14.6)		—
Total Sales	841.8		1,167.7		383.5		269.5		(14.6)		2,647.9
Gross Profit	322.0		334.2		133.6		65.6		—		855.4
Operating Expenses	206.9		143.8		99.1		40.8		—		490.6
Total Operating Expenses	206.9		143.8		99.1		40.8		—		490.6
Income from Operations	115.1		190.4		34.5		24.8		—		364.8
Depreciation and Amortization	86.7		23.9		38.6		7.1		—		156.3
Capital Expenditures	7.5		17.7		3.3		4.1		—		32.6

The following table presents identifiable assets information attributable to the Company's operating segments, recast as described above, as of June 30, 2023 and December 31, 2022:

	Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems		Total
Identifiable Assets as of June 30, 2023	$	8,139.0	$	2,055.2	$	4,980.8	$	682.8	$	15,857.8
Identifiable Assets as of December 31, 2022	5,028.5		2,234.1		2,202.2		804.1		10,268.9

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DEBT AND BANK CREDIT FACILITIES (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Indebtedness

The following table presents the Company’s indebtedness as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
Senior Notes	$	4,700.0	$	—
Term Facility	1,341.5		536.3
Private Placement Notes	—		500.0
Land Term Facility	486.8		486.8
Multicurrency Revolving Facility	115.0		429.0
Altra Notes	18.1		—
Other	79.6		76.7
Less: Debt Issuance Costs	(58.7)		(5.3)
Total	6,682.3		2,023.5
Less: Current Maturities	72.6		33.8
Long-Term Debt	$	6,609.7	$	1,989.7

Schedule of Maturities of Long-Term Debt

Maturities of long-term debt outstanding as of June 30, 2023, excluding debt issuance costs, are as follows:

Year	Amount of Maturity
2023	$	36.7
2024	73.3
2025	73.5
2026	1,191.6
2027	1,704.3
Thereafter	3,661.6
Total	$	6,741.0

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RETIREMENT PLANS (Tables)

6 Months Ended

Jun. 30, 2023

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Schedule of Net Periodic Defined Benefit Pension Cost (Income)

The following table presents the Company’s net periodic benefit cost (income) components:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service Cost	$	0.6	$	0.5	$	0.9	$	0.8
Interest Cost	5.7		3.5		11.3		7.1
Expected Return on Plan Assets	(6.7)		(5.2)		(13.4)		(10.3)
Amortization of Prior Service Cost and Net Actuarial Loss	(0.6)		0.2		(1.1)		0.4
Net Periodic Benefit Income	$	(1.0)	$	(1.0)	$	(2.3)	$	(2.0)

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SHAREHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award

During the six months ended June 30, 2023, the Company granted the following share-based incentive awards:

Award Type	Number of Awards	Weighted Average Grant-Date Fair Value
Options and SARs1	147,174	$	54.96
Restricted Stock Awards1	31,605	$	134.57
Restricted Stock Units1	254,428	$	141.90
Performance Share Units	58,945	$	235.77

1 Certain outstanding equity-based awards held by employees of Altra that related to shares of Altra Common Stock were replaced by equity-based awards of the Company Common Stock with substantially similar terms and conditions. These awards include 32,419 options with a weighted-average grant date fair value of $57.64, 20,114 restricted stock awards with a weighted-average grant date fair value of $138.11 and 161,414 restricted stock units with a weighted-average grant date fair value of $135.50 issued as replacement awards for Altra unvested awards outstanding at close of the Altra Transaction on March 27, 2023.

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule Of Reconciliation Of Basic And Diluted Shares Used in EPS

The following table reconciles the basic and diluted shares used in earnings per share calculations for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended		Six Months Ended
	June 30, 2023	June 30, 2022	June 30, 2023	June 30, 2022
Denominator for Basic Earnings Per Share	66.3	66.8	66.2	67.1
Effect of Dilutive Securities	0.3	0.3	0.4	0.4
Denominator for Diluted Earnings Per Share	66.6	67.1	66.6	67.5

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CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Accrued Warranty Costs

The following table presents a reconciliation of the changes in accrued warranty costs for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Beginning Balance	$	41.5	$	23.4	$	28.8	$	23.0
Less: Payments	(6.9)		(7.7)		(10.3)		(13.3)
Provisions	3.8		8.0		10.0		14.0
Acquisitions	—		—		9.8		—
Translation Adjustments	0.9		(0.3)		1.0		(0.3)
Ending Balance	$	39.3	$	23.4	$	39.3	$	23.4

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Forward Contracts

The Company had the following currency forward contracts outstanding (notional amounts expressed in terms of the dollar value of the hedged currency with maturities extending through November 2024):

	June 30, 2023		December 31, 2022
Chinese Renminbi	$	229.3	$	173.8
Mexican Peso	176.3		215.2
Euro	298.9		159.6
Indian Rupee	49.2		33.1
Australian Dollar	3.0		—
Swedish Krona	6.9		—
British Pound	12.8		2.1
Czech Koruna	1.6		—

The Company had the following commodity forward contracts outstanding (with maturities extending through December 2024) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item):

	June 30, 2023		December 31, 2022
Copper	$	53.0	$	89.4
Aluminum	2.2		4.0

Schedule of Fair Values of Derivative Instruments

Fair values of derivative instruments as of June 30, 2023 and December 31, 2022 were:

	June 30, 2023
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	9.9	$	—	$	—
Currency Contracts	23.2		2.1		4.1		0.3
Commodity Contracts	0.8		—		3.9		0.3
Not Designated as Hedging Instruments:
Currency Contracts	0.3		—		0.7		—
Commodity Contracts	—		—		0.2		—
Total Derivatives	$	24.3	$	12.0	$	8.9	$	0.6

	December 31, 2022
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	7.9	$	—	$	—
Currency Contracts	12.3		0.9		4.8		—
Commodity Contracts	0.9		0.3		10.2		—
Not Designated as Hedging Instruments:
Currency Contracts	0.7		—		—		—
Commodity Contracts	—		—		0.4		—
Total Derivatives	$	13.9	$	9.1	$	15.4	$	—

Schedule of Cash Flow Hedging Instruments

Derivatives Designated as Cash Flow Hedging Instruments

The effect of derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income were:

	Three Months Ended
	June 30, 2023								June 30, 2022
	Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total		Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$	(5.3)	$	4.4	$	5.8	$	4.9	$	(35.6)	$	(6.0)	$	(1.8)	$	(43.4)
Amounts Reclassified from Other Comprehensive Income (Loss):
(Loss) Gain Recognized in Cost of Sales	(2.8)		2.0		—		(0.8)		4.4		2.4		—		6.8
Gain Recognized in Interest Expense	—		—		1.5		1.5		—		—		—		—
	Six Months Ended
	June 30, 2023								June 30, 2022
	Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total		Commodity Forwards		Currency Forwards		Interest Rate Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$	0.2	$	24.7	$	2.1	$	27.0	$	(22.2)	$	4.4	$	8.8	$	(9.0)
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales	—		—		—		—		—		0.1		—		0.1
(Loss) Gain Recognized in Cost of Sales	(7.8)		4.0		—		(3.8)		9.6		5.4		—		15.0
Gain (Loss) Recognized in Interest Expense	—		—		2.8		2.8		—		—		(0.3)		(0.3)

Derivatives Not Designated as Cash Flow Hedging Instruments:

The effect of derivative instruments not designated as cash flow hedges on the Condensed Consolidated Statements of Income were:

	Three Months Ended
	June 30, 2023				June 30, 2022
	Commodity Forwards		Currency Forwards		Commodity Forwards		Currency Forwards
Loss recognized in Cost of Sales	$	(0.1)	$	—	$	(1.2)	$	—
(Loss) Gain recognized in Operating Expenses	—		(10.6)		—		3.5
	Six Months Ended
	June 30, 2023				June 30, 2022
	Commodity Forwards		Currency Forwards		Commodity Forwards		Currency Forwards
Gain (Loss) recognized in Cost of Sales	$	0.1	$	—	$	(0.6)	$	—
(Loss) Gain recognized in Operating Expenses	—		(12.5)		—		5.0

Schedule of Derivatives Under Enforceable Master Netting Agreements

The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements:

	June 30, 2023
	Gross Amounts as Presented in the Condensed Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	23.5	$	(2.7)	$	20.8
Derivative Commodity Contracts	0.8		(0.7)		0.1
Other Noncurrent Assets:
Derivative Currency Contracts	2.1		(0.1)		2.0
Other Accrued Expenses:
Derivative Currency Contracts	4.8		(2.7)		2.1
Derivative Commodity Contracts	4.1		(1.1)		3.0
Other Noncurrent Liabilities:
Derivative Currency Contracts	0.3		(0.1)		0.2
Derivative Commodity Contracts	0.3		—		0.3

	December 31, 2022
	Gross Amounts as Presented in the Condensed Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	13.0	$	(2.5)	$	10.5
Derivative Commodity Contracts	0.9		(0.9)		—
Other Noncurrent Assets:
Derivative Currency Contracts	0.9		—		0.9
Derivative Commodity Contracts	0.3		—		0.3
Other Accrued Expenses:
Derivative Currency Contracts	4.8		(2.5)		2.3
Derivative Commodity Contracts	10.6		(0.9)		9.7

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FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule Of Financial Assets And Liabilities At Fair Value

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022		Classification
Assets:
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	23.5	$	13.0	Level 2
Derivative Commodity Contracts	0.8		0.9		Level 2
Other Noncurrent Assets:
Assets Held in Rabbi Trust	13.0		6.4		Level 1
Derivative Currency Contracts	2.1		0.9		Level 2
Derivative Commodity Contracts	—		0.3		Level 2
Interest Rate Swap	9.9		7.9		Level 2
Liabilities:
Other Accrued Expenses:
Derivative Currency Contracts	4.8		4.8		Level 2
Derivative Commodity Contracts	4.1		10.6		Level 2
Other Noncurrent Liabilities:
Derivative Currency Contracts	0.3		—		Level 2
Derivative Commodity Contracts	0.3		—		Level 2

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RESTRUCTURING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

Schedule Of Restructuring Reserve

The following table presents a reconciliation of provisions and payments for the restructuring projects for the three and six months ended June 30, 2023 and June 30, 2022:

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Beginning Balance	$	10.1	$	14.5	$	15.1	$	5.0
Acquisition(1)	—		—		0.2		—
Provision	14.0		(1.0)		19.0		15.8
Less: Payments/ Other	5.8		7.1		16.0		14.4
Ending Balance	$	18.3	$	6.4	$	18.3	$	6.4

(1) Excludes $12.4 million of severance related to the Altra Transaction, which was paid in the second quarter 2023.

Schedule of Reconciliation Of Expenses By Type

The following table presents a reconciliation of restructuring and restructuring-related costs for restructuring projects for the three and six months ended June 30, 2023 and June 30, 2022, respectively:

	Three Months Ended
	June 30, 2023						June 30, 2022
Restructuring Costs:	Cost of Sales		Operating Expenses		Total		Cost of Sales		Operating Expenses		Total
Employee Termination Expenses	$	7.4	$	2.3	$	9.7	$	1.4	$	(1.0)	$	0.4
Facility Related Costs	2.1		0.2		2.3		(2.0)		0.1		(1.9)
Other Expenses	1.9		0.1		2.0		0.1		0.4		0.5
Total Restructuring Costs	$	11.4	$	2.6	$	14.0	$	(0.5)	$	(0.5)	$	(1.0)
	Six Months Ended
	June 30, 2023						June 30, 2022
Restructuring Costs:	Cost of Sales		Operating Expenses		Total		Cost of Sales		Operating Expenses		Total
Employee Termination Expenses	$	9.7	$	2.9	$	12.6	$	6.2	$	2.6	$	8.8
Facility Related Costs	3.0		0.2		3.2		6.0		0.5		6.5
Other Expenses	3.1		0.1		3.2		0.1		0.4		0.5
Total Restructuring Costs	$	15.8	$	3.2	$	19.0	$	12.3	$	3.5	$	15.8

The following table presents the allocation of restructuring and restructuring-related costs by segment for the three and six months ended June 30, 2023 and June 30, 2022:

Restructuring Costs - Three Months Ended	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
June 30, 2023	$	14.0	$	2.0	$	10.5	$	1.0	$	0.5
June 30, 2022	$	(1.0)	$	(4.9)	$	0.7	$	3.0	$	0.2
Restructuring Costs - Six Months Ended	Total		Industrial Powertrain Solutions		Power Efficiency Solutions		Automation & Motion Control		Industrial Systems
June 30, 2023	$	19.0	$	1.6	$	15.2	$	1.5	$	0.7
June 30, 2022	$	15.8	$	9.4	$	1.7	$	4.5	$	0.2

XML

BASIS OF PRESENTATION (Details) - segment	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	4	4

XML

OTHER FINANCIAL INFORMATION (Disaggregation of Revenue) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Net Sales	$ 1,768.6	$ 1,349.4	$ 2,992.7	$ 2,647.9
Industrial Powertrain Solutions
Disaggregation of Revenue [Line Items]
Net Sales	698.7	422.1	1,113.1	838.4
Power Efficiency Solutions
Disaggregation of Revenue [Line Items]
Net Sales	460.1	595.4	929.6	1,162.6
Automation & Motion Control
Disaggregation of Revenue [Line Items]
Net Sales	473.1	194.1	676.3	378.4
Industrial Systems
Disaggregation of Revenue [Line Items]
Net Sales	136.7	137.8	273.7	268.5
North America
Disaggregation of Revenue [Line Items]
Net Sales	1,230.2	984.5	2,106.3	1,919.8
North America | Industrial Powertrain Solutions
Disaggregation of Revenue [Line Items]
Net Sales	491.0	295.7	784.2	586.0
North America | Power Efficiency Solutions
Disaggregation of Revenue [Line Items]
Net Sales	359.2	465.0	726.6	909.4
North America | Automation & Motion Control
Disaggregation of Revenue [Line Items]
Net Sales	310.2	148.2	452.0	280.3
North America | Industrial Systems
Disaggregation of Revenue [Line Items]
Net Sales	69.8	75.6	143.5	144.1
Asia
Disaggregation of Revenue [Line Items]
Net Sales	164.2	130.6	262.6	254.8
Asia | Industrial Powertrain Solutions
Disaggregation of Revenue [Line Items]
Net Sales	51.9	33.1	68.4	64.3
Asia | Power Efficiency Solutions
Disaggregation of Revenue [Line Items]
Net Sales	44.9	54.6	88.7	105.0
Asia | Automation & Motion Control
Disaggregation of Revenue [Line Items]
Net Sales	26.6	5.3	28.0	8.5
Asia | Industrial Systems
Disaggregation of Revenue [Line Items]
Net Sales	40.8	37.6	77.5	77.0
Europe
Disaggregation of Revenue [Line Items]
Net Sales	285.1	164.2	440.0	320.9
Europe | Industrial Powertrain Solutions
Disaggregation of Revenue [Line Items]
Net Sales	120.7	62.7	173.5	120.3
Europe | Power Efficiency Solutions
Disaggregation of Revenue [Line Items]
Net Sales	41.8	48.0	84.5	94.3
Europe | Automation & Motion Control
Disaggregation of Revenue [Line Items]
Net Sales	107.1	40.2	150.9	80.7
Europe | Industrial Systems
Disaggregation of Revenue [Line Items]
Net Sales	15.5	13.3	31.1	25.6
Rest-of-World
Disaggregation of Revenue [Line Items]
Net Sales	89.1	70.1	183.8	152.4
Rest-of-World | Industrial Powertrain Solutions
Disaggregation of Revenue [Line Items]
Net Sales	35.1	30.6	87.0	67.8
Rest-of-World | Power Efficiency Solutions
Disaggregation of Revenue [Line Items]
Net Sales	14.2	27.8	29.8	53.9
Rest-of-World | Automation & Motion Control
Disaggregation of Revenue [Line Items]
Net Sales	29.2	0.4	45.4	8.9
Rest-of-World | Industrial Systems
Disaggregation of Revenue [Line Items]
Net Sales	$ 10.6	$ 11.3	$ 21.6	$ 21.8

XML

OTHER FINANCIAL INFORMATION (Percentage Distribution Between Major Classes of Inventory) (Details) - Inventory Concentration Risk - Inventories	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2023
Raw Material and Work in Process
Inventory [Line Items]
Percentage of total inventory (in percent)	57.00%	66.20%
Finished Goods and Purchased Parts
Inventory [Line Items]
Percentage of total inventory (in percent)	43.00%	33.80%

XML

OTHER FINANCIAL INFORMATION (Property, Plant, And Equipment By Major Classification) (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	$ 2,076.5	$ 1,616.4
Less: Accumulated Depreciation	(871.7)	(809.4)
Net Property, Plant and Equipment	1,204.8	807.0
Land and Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	157.6	103.4
Buildings and Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	$ 531.9	401.7
Buildings and Improvements | Minimum
Property, Plant and Equipment [Line Items]
Useful Life in Years	3 years
Buildings and Improvements | Maximum
Property, Plant and Equipment [Line Items]
Useful Life in Years	50 years
Machinery and Equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	$ 1,387.0	$ 1,111.3
Machinery and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful Life in Years	3 years
Machinery and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful Life in Years	15 years

XML

OTHER FINANCIAL INFORMATION (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supplier financing obligations	$ 73.1	$ 69.9
Timing period	15 days

XML

ACQUISITIONS AND DIVESTITURES (Narrative) (Details) - USD ($)		3 Months Ended			6 Months Ended		12 Months Ended
	Mar. 27, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)		$ 0.01			$ 0.01		$ 0.01
Share-based payment arrangement, accelerated cost					$ 15,700,000
Altra Merger Agreement
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.01			$ 0.01
Share price (in dollars per share)	$ 62.00
Preliminary purchase price	$ 5,100,000,000				$ 5,134,600,000
Payment of Altra transaction expenses		$ 9,500,000		$ 0	75,000,000	$ 0	$ 14,700,000
Share-based payment arrangement, accelerated cost			$ 15,700,000
Altra Merger Agreement | Acquisition-related Costs
Business Acquisition [Line Items]
Revenues		9,500,000		8,600,000	90,700,000	108,700,000
Altra Merger Agreement | Fair Value Adjustment to Inventory
Business Acquisition [Line Items]
Revenues		$ 44,100,000		$ 7,400,000	$ 44,100,000	$ 51,500,000

XML

ACQUISITIONS AND DIVESTITURES (Preliminary Purchase Price) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
	Mar. 27, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jan. 24, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Stock based compensation		$ 14.5	$ 4.9	$ 36.2	$ 11.2
Common stock, shares outstanding (in shares)		66.3		66.3			66.2
Long-term debt		$ 6,682.3		$ 6,682.3			$ 2,023.5
Senior Notes Due 2026 | Senior Notes
Business Acquisition [Line Items]
Debt instrument interest rate (in percent)						6.05%
Altra Merger Agreement
Business Acquisition [Line Items]
Cash payment		$ 17.3		4,051.0
Stock based compensation				23.1
Payment of Altra debt				1,061.0
Pre-existing relationships				(0.5)
Preliminary purchase price	$ 5,100.0			$ 5,134.6
Share price (in dollars per share)	$ 62.00
Altra Merger Agreement | Senior Notes Due 2026 | Senior Notes
Business Acquisition [Line Items]
Percentage of debt outstanding		95.28%		95.28%
Debt instrument interest rate (in percent)		6.125%		6.125%
Long-term debt		$ 18.1		$ 18.1
Altra Merger Agreement | Altra Industrial Motion Corp
Business Acquisition [Line Items]
Common stock, shares outstanding (in shares)	65.3

XML

ACQUISITIONS AND DIVESTITURES (Fair Values of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill	$ 6,618.9		$ 4,018.8
Altra Merger Agreement
Business Acquisition [Line Items]
Cash and Cash Equivalents	259.1
Trade Receivables	258.0
Inventories	387.6
Prepaid Expenses and Other Current Assets	33.0
Property, Plant and Equipment	414.6
Intangible Assets	2,142.0
Deferred Income Tax Benefits	2.0
Operating Lease Assets	46.8
Other Noncurrent Assets	21.8
Accounts Payable	(183.2)
Accrued Compensation and Benefits	(66.1)
Other accrued expenses	(145.1)
Current Operating Lease Liabilities	(12.3)
Current Maturities of Long-Term Debt	(0.4)
Long-Term Debt	(25.3)
Deferred Income Taxes	(535.7)
Pension and Other Post Retirement Benefits	(19.8)
Noncurrent Operating Lease Liabilities	(29.0)
Other Noncurrent Liabilities	(8.3)
Total Identifiable Net Assets	2,539.7
Goodwill	2,594.9
Preliminary purchase price	5,134.6
Transaction costs	60.1
Altra Merger Agreement | As Originally Reported
Business Acquisition [Line Items]
Cash and Cash Equivalents		$ 259.1
Trade Receivables		258.1
Inventories		436.4
Prepaid Expenses and Other Current Assets		33.0
Property, Plant and Equipment		411.8
Intangible Assets		2,224.0
Deferred Income Tax Benefits		0.7
Operating Lease Assets		42.3
Other Noncurrent Assets		21.6
Accounts Payable		(183.2)
Accrued Compensation and Benefits		(66.1)
Other accrued expenses		(145.7)
Current Operating Lease Liabilities		(12.5)
Current Maturities of Long-Term Debt		(0.4)
Long-Term Debt		(25.3)
Deferred Income Taxes		(560.7)
Pension and Other Post Retirement Benefits		(19.8)
Noncurrent Operating Lease Liabilities		(29.7)
Other Noncurrent Liabilities		(8.3)
Total Identifiable Net Assets		2,635.3
Goodwill		2,499.3
Preliminary purchase price		$ 5,134.6
Altra Merger Agreement | Effect of Change
Business Acquisition [Line Items]
Trade Receivables	(0.1)
Inventories	(48.8)
Property, Plant and Equipment	2.8
Intangible Assets	(82.0)
Deferred Income Tax Benefits	1.3
Operating Lease Assets	4.5
Other Noncurrent Assets	0.2
Other accrued expenses	0.6
Current Operating Lease Liabilities	0.2
Deferred Income Taxes	25.0
Noncurrent Operating Lease Liabilities	0.7
Total Identifiable Net Assets	(95.6)
Goodwill	$ 95.6

XML

ACQUISITIONS AND DIVESTITURES (Fair Value and Weighted Average Useful Life of Identifiable Intangible Assets) (Details) - Altra Merger Agreement $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 2,142.0
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 1,710.0
Weighted Average Useful Life (Years)	14 years
Trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 330.0
Weighted Average Useful Life (Years)	10 years
Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 102.0
Weighted Average Useful Life (Years)	13 years

XML

ACQUISITIONS AND DIVESTITURES (Pro Forma Information) (Details) - Altra Merger Agreement - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Net Sales	$ 1,768.6	$ 1,847.5	$ 3,443.8	$ 3,657.7
Net Income Attributable to Regal Rexnord Corporation	$ 77.2	$ 69.8	$ 127.8	$ 13.7
Basic (in dollars per share)	$ 1.16	$ 1.05	$ 1.93	$ 0.20
Diluted (in dollars per share)	$ 1.16	$ 1.04	$ 1.92	$ 0.20

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 6,455.7	$ 6,423.8	$ 6,422.6	$ 6,408.2
Other Comprehensive Income (Loss) before Reclassifications	(24.4)	(161.9)	31.9	(128.3)
Tax Impact	(1.2)	10.5	(6.5)	2.2
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(1.3)	(6.6)	(0.1)	(14.4)
Tax Impact	0.4	1.4	0.1	3.4
Net Current Period Other Comprehensive Income (Loss)	(26.5)	(156.6)	25.4	(137.1)
Ending balance	6,436.9	6,315.7	6,436.9	6,315.7
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(300.2)	(175.6)	(352.1)	(195.1)
Ending balance	(326.7)	(332.2)	(326.7)	(332.2)
Hedging Activities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	35.4	41.1	17.3	21.0
Other Comprehensive Income (Loss) before Reclassifications	4.9	(43.4)	27.0	(9.0)
Tax Impact	(1.2)	10.5	(6.5)	2.2
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(0.7)	(6.8)	1.0	(14.8)
Tax Impact	0.2	1.5	(0.2)	3.5
Net Current Period Other Comprehensive Income (Loss)	3.2	(38.2)	21.3	(18.1)
Ending balance	38.6	2.9	38.6	2.9
Pension and Post Retirement Benefit Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(13.7)	(13.9)	(13.3)	(14.3)
Other Comprehensive Income (Loss) before Reclassifications	0.0	0.3	0.0	0.5
Tax Impact	0.0	0.0	0.0	0.0
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(0.6)	0.2	(1.1)	0.4
Tax Impact	0.2	(0.1)	0.3	(0.1)
Net Current Period Other Comprehensive Income (Loss)	(0.4)	0.4	(0.8)	0.8
Ending balance	(14.1)	(13.5)	(14.1)	(13.5)
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(321.9)	(202.8)	(356.1)	(201.8)
Other Comprehensive Income (Loss) before Reclassifications	(29.3)	(118.8)	4.9	(119.8)
Tax Impact	0.0	0.0	0.0	0.0
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	0.0	0.0	0.0	0.0
Tax Impact	0.0		0.0	0.0
Net Current Period Other Comprehensive Income (Loss)	(29.3)	(118.8)	4.9	(119.8)
Ending balance	$ (351.2)	$ (321.6)	$ (351.2)	$ (321.6)

XML

GOODWILL AND INTANGIBLE ASSETS (Schedule Of Changes To Goodwill) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 4,018.8
Acquisitions	2,594.9
Translation Adjustments	5.2
Ending balance	6,618.9
Cumulative Goodwill Impairment Charges	328.7
Industrial Powertrain Solutions
Goodwill [Roll Forward]
Beginning balance	2,290.0
Acquisitions	1,423.5
Translation Adjustments	7.8
Ending balance	3,721.3
Cumulative Goodwill Impairment Charges	18.1
Power Efficiency Solutions
Goodwill [Roll Forward]
Beginning balance	752.3
Acquisitions	0.0
Translation Adjustments	0.3
Ending balance	752.6
Cumulative Goodwill Impairment Charges	200.4
Automation & Motion Control
Goodwill [Roll Forward]
Beginning balance	865.0
Acquisitions	1,171.4
Translation Adjustments	(3.1)
Ending balance	2,033.3
Cumulative Goodwill Impairment Charges	5.1
Industrial Systems
Goodwill [Roll Forward]
Beginning balance	111.5
Acquisitions	0.0
Translation Adjustments	0.2
Ending balance	111.7
Cumulative Goodwill Impairment Charges	$ 105.1

XML

GOODWILL AND INTANGIBLE ASSETS (Schedule Of Intangible Assets) (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Value	$ 5,081.0	$ 2,960.3
Accumulated Amortization	841.3	730.4
Net Carrying Amount	$ 4,239.7	2,229.9
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	15 years
Gross Value	$ 4,055.1	2,321.4
Accumulated Amortization	648.9	532.0
Net Carrying Amount	$ 3,406.2	1,789.4
Technology
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	13 years
Gross Value	$ 311.5	246.2
Accumulated Amortization	98.5	125.0
Net Carrying Amount	$ 213.0	121.2
Trademarks
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	10 years
Gross Value	$ 714.4	392.7
Accumulated Amortization	93.9	73.4
Net Carrying Amount	$ 620.5	$ 319.3

XML

GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 89.4	$ 46.5	$ 135.7	$ 93.8
Estimated amortization expense remainder of year	$ 312.1		$ 312.1

XML

GOODWILL AND INTANGIBLE ASSETS (Schedule Of Estimated Amortization) (Details) $ in Millions	Jun. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 349.9
2025	347.9
2026	344.4
2027	343.7
2028	$ 343.7

XML

SEGMENT INFORMATION (Details) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2023 USD ($)	Mar. 31, 2023 segment	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) segment	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments | segment		4		4
Total Sales	$ 1,768.6		$ 1,349.4	$ 2,992.7	$ 2,647.9
Gross Profit	563.8		433.5	961.9	855.4
Operating Expenses	412.2		238.6	741.4	490.6
Total Operating Expenses	412.2		238.6	741.4	490.6
Income from Operations	151.6		194.9	220.5	364.8
Depreciation and Amortization	137.0		78.4	213.5	156.3
Capital Expenditures	44.8		19.2	63.5	32.6
Assets	15,857.8			15,857.8		$ 10,268.9
Industrial Powertrain Solutions
Segment Reporting Information [Line Items]
Total Sales	698.7		422.1	1,113.1	838.4
Assets	8,139.0			8,139.0		5,028.5
Power Efficiency Solutions
Segment Reporting Information [Line Items]
Total Sales	460.1		595.4	929.6	1,162.6
Assets	2,055.2			2,055.2		2,234.1
Automation & Motion Control
Segment Reporting Information [Line Items]
Total Sales	473.1		194.1	676.3	378.4
Assets	4,980.8			4,980.8		2,202.2
Industrial Systems
Segment Reporting Information [Line Items]
Total Sales	136.7		137.8	273.7	268.5
Assets	682.8			682.8		$ 804.1
Intersegment Eliminations
Segment Reporting Information [Line Items]
Total Sales	14.5		6.2	28.1	14.6
Intersegment Eliminations | Industrial Powertrain Solutions
Segment Reporting Information [Line Items]
Total Sales	(4.4)		(1.8)	(7.9)	(3.4)
Intersegment Eliminations | Power Efficiency Solutions
Segment Reporting Information [Line Items]
Total Sales	(3.5)		(2.2)	(7.7)	(5.1)
Intersegment Eliminations | Automation & Motion Control
Segment Reporting Information [Line Items]
Total Sales	(5.9)		(1.7)	(11.1)	(5.1)
Intersegment Eliminations | Industrial Systems
Segment Reporting Information [Line Items]
Total Sales	(0.7)		(0.5)	(1.4)	(1.0)
Operating Segments | Industrial Powertrain Solutions
Segment Reporting Information [Line Items]
Total Sales	703.1		423.9	1,121.0	841.8
Gross Profit	224.4		167.7	401.8	322.0
Operating Expenses	184.2		98.9	335.7	206.9
Total Operating Expenses	184.2		98.9	335.7	206.9
Income from Operations	40.2		68.8	66.1	115.1
Depreciation and Amortization	74.4		44.1	116.0	86.7
Capital Expenditures	19.7		5.0	25.1	7.5
Operating Segments | Power Efficiency Solutions
Segment Reporting Information [Line Items]
Total Sales	463.6		597.6	937.3	1,167.7
Gross Profit	133.8		156.7	251.5	334.2
Operating Expenses	74.0		70.7	146.3	143.8
Total Operating Expenses	74.0		70.7	146.3	143.8
Income from Operations	59.8		86.0	105.2	190.4
Depreciation and Amortization	11.8		11.8	23.5	23.9
Capital Expenditures	8.4		9.8	17.1	17.7
Operating Segments | Automation & Motion Control
Segment Reporting Information [Line Items]
Total Sales	479.0		195.8	687.4	383.5
Gross Profit	176.2		70.6	251.6	133.6
Operating Expenses	127.6		48.4	208.2	99.1
Total Operating Expenses	127.6		48.4	208.2	99.1
Income from Operations	48.6		22.2	43.4	34.5
Depreciation and Amortization	47.6		18.9	67.3	38.6
Capital Expenditures	14.3		1.7	17.4	3.3
Operating Segments | Industrial Systems
Segment Reporting Information [Line Items]
Total Sales	137.4		138.3	275.1	269.5
Gross Profit	29.4		38.5	57.0	65.6
Operating Expenses	26.4		20.6	51.2	40.8
Total Operating Expenses	26.4		20.6	51.2	40.8
Income from Operations	3.0		17.9	5.8	24.8
Depreciation and Amortization	3.2		3.6	6.7	7.1
Capital Expenditures	$ 2.4		$ 2.7	$ 3.9	$ 4.1

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DEBT AND BANK CREDIT FACILITIES (Schedule Of Indebtedness) (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022	Mar. 28, 2022
Debt Instrument [Line Items]
Long-term debt, gross	$ 6,741.0
Less: Debt Issuance Costs	(58.7)	$ (5.3)
Total	6,682.3	2,023.5
Less: Current Maturities	72.6	33.8
Long-Term Debt	6,609.7	1,989.7
Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	4,700.0	0.0
Senior Notes | Altra Notes
Debt Instrument [Line Items]
Long-term debt, gross	18.1	0.0
Line of Credit | Term Facility
Debt Instrument [Line Items]
Long-term debt, gross	1,341.5	536.3
Line of Credit | Land Term Facility
Debt Instrument [Line Items]
Long-term debt, gross	486.8	486.8	$ 486.8
Line of Credit | Multicurrency Revolving Facility
Debt Instrument [Line Items]
Long-term debt, gross	115.0	429.0
Private Placement Notes
Debt Instrument [Line Items]
Long-term debt, gross	0.0	500.0
Other
Debt Instrument [Line Items]
Long-term debt, gross	$ 79.6	$ 76.7

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DEBT AND BANK CREDIT FACILITIES (Narrative) (Details) - USD ($)				3 Months Ended			6 Months Ended		12 Months Ended
	Mar. 27, 2023	Jan. 24, 2023	Oct. 26, 2022	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Apr. 07, 2022	Mar. 28, 2022
Debt Instrument [Line Items]
Long-term debt, gross				$ 6,741,000,000			$ 6,741,000,000
Long-term debt				6,682,300,000	$ 2,023,500,000		6,682,300,000		$ 2,023,500,000
Fair value of debt				6,662,300,000	1,926,600,000		6,662,300,000		1,926,600,000
Bridge Loan
Debt Instrument [Line Items]
Principal amount			$ 5,500,000,000
Debt instrument term			364 days
Debt fees paid									27,500,000
Interest expense				0	10,500,000		17,000,000
Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity											$ 570,000,000
Private Placement Notes
Debt Instrument [Line Items]
Long-term debt, gross				0	500,000,000.0		0		500,000,000.0
Principal amount										$ 500,000,000
Debt instrument interest rate (in percent)										3.90%
Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross				4,700,000,000	0		4,700,000,000		0
Possible increase in interest rate (in percent)		2.00%
Proceeds from senior notes		$ 4,647,000,000
Interest bearing deposits		3,600,000,000
Interest income				$ 0			$ 29,400,000
Senior Notes | Senior Notes Due 2026
Debt Instrument [Line Items]
Principal amount		$ 1,100,000,000
Debt instrument interest rate (in percent)		6.05%
Long-Term Debt, Term		540 days
Senior Notes | Senior Notes Due 2026 | Altra Merger Agreement
Debt Instrument [Line Items]
Debt instrument interest rate (in percent)				6.125%			6.125%
Long-term debt				$ 18,100,000			$ 18,100,000
Percentage of debt outstanding				95.28%			95.28%
Debt assumed	$ 382,700,000
Senior Notes | Senior Notes Due 2028
Debt Instrument [Line Items]
Principal amount		$ 1,250,000,000
Debt instrument interest rate (in percent)		6.05%
Senior Notes | Senior Notes Due 2030
Debt Instrument [Line Items]
Principal amount		$ 1,100,000,000
Debt instrument interest rate (in percent)		6.30%
Senior Notes | Senior Notes Due 2033
Debt Instrument [Line Items]
Principal amount		$ 1,250,000,000
Debt instrument interest rate (in percent)		6.40%
Other
Debt Instrument [Line Items]
Long-term debt, gross				$ 79,600,000	76,700,000		$ 79,600,000		76,700,000
Weighted average interest rate (in percent)				4.90%		5.10%	4.90%	5.10%
Term Facility
Debt Instrument [Line Items]
Amortization rate per annum (in percent)							5.00%
Term Facility | Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity											550,000,000
Additional borrowing capacity											840,000,000
Long-term debt, gross				$ 1,341,500,000	536,300,000		$ 1,341,500,000		536,300,000
Weighted average interest rate, over time				7.10%		2.10%	6.80%	1.70%
Land Term Facility | Line of Credit
Debt Instrument [Line Items]
Long-term debt, gross				$ 486,800,000	486,800,000		$ 486,800,000		486,800,000		486,800,000
Weighted average interest rate (in percent)				7.10%		2.10%	6.50%	1.70%
Multicurrency Revolving Facility | Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity											$ 1,000,000,000
Long-term debt, gross				$ 115,000,000.0	$ 429,000,000.0		$ 115,000,000.0		$ 429,000,000.0
Weighted average interest rate, over time				6.70%		2.10%	6.40%	1.70%
Available borrowing capacity				$ 1,455,000,000			$ 1,455,000,000
Average daily balance				425,200,000		$ 730,000,000	$ 464,700,000	$ 765,200,000
Non-use fee, percentage							0.30%
Multicurrency Revolving Facility | Letter of Credit
Debt Instrument [Line Items]
Long-term line of credit				$ 0			$ 0

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DEBT AND BANK CREDIT FACILITIES (Maturities Of Long-Term Debt) (Details) $ in Millions	Jun. 30, 2023 USD ($)
Debt Disclosure [Abstract]
2023	$ 36.7
2024	73.3
2025	73.5
2026	1,191.6
2027	1,704.3
Thereafter	3,661.6
Total	$ 6,741.0

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RETIREMENT PLANS (Schedule Of Net Periodic Defined Benefit Pension Cost) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]
Service Cost	$ 0.6	$ 0.5	$ 0.9	$ 0.8
Interest Cost	5.7	3.5	11.3	7.1
Expected Return on Plan Assets	(6.7)	(5.2)	(13.4)	(10.3)
Amortization of Prior Service Cost and Net Actuarial Loss	(0.6)	0.2	(1.1)	0.4
Net Periodic Benefit Income	$ (1.0)	$ (1.0)	$ (2.3)	$ (2.0)

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RETIREMENT PLANS (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Defined Contribution Plan Disclosure [Line Items]
Contributions			$ 3.5	$ 3.0
Altra Merger Agreement
Defined Contribution Plan Disclosure [Line Items]
Benefit obligations	$ 30.5		30.5
Plan assets	13.8		13.8
Other Postretirement Benefits Plan
Defined Contribution Plan Disclosure [Line Items]
Contributions	2.0	$ 1.3			$ 8.3
Expected contributions	6.5		6.5
Pension Plan
Defined Contribution Plan Disclosure [Line Items]
Contributions	$ 11.3	$ 6.4	$ 17.5	$ 12.3

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SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Stockholders' Equity Note [Abstract]
Compensation expense	$ 14.5	$ 4.9	$ 36.2	$ 11.2
Share-based payment arrangement, accelerated cost			15.7
Excess income tax benefit recognized related to share-based compensation	$ 2.5	$ 1.2	$ 3.7	$ 2.7

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SHAREHOLDERS' EQUITY (Summary Of Share-Based Incentive Plan Grant Activity For Options and SAR's) (Details)	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Options and SARs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares) | shares	147,174
Options granted, weighted average exercise price (in dollars per share) | $ / shares	$ 54.96
Options and SARs | Employees Of Altra
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares) | shares	32,419
Options granted, weighted average exercise price (in dollars per share) | $ / shares	$ 57.64
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards other than options granted (in shares) | shares	31,605
Awards other than options granted, weighted average fair value at grant date (in dollars per share) | $ / shares	$ 134.57
Restricted Stock Awards | Employees Of Altra
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards other than options granted (in shares) | shares	20,114
Awards other than options granted, weighted average fair value at grant date (in dollars per share) | $ / shares	$ 138.11
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards other than options granted (in shares) | shares	254,428
Awards other than options granted, weighted average fair value at grant date (in dollars per share) | $ / shares	$ 141.90
Restricted Stock Units | Employees Of Altra
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards other than options granted (in shares) | shares	161,414
Awards other than options granted, weighted average fair value at grant date (in dollars per share) | $ / shares	$ 135.50
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards other than options granted (in shares) | shares	58,945
Awards other than options granted, weighted average fair value at grant date (in dollars per share) | $ / shares	$ 235.77

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	22.90%	22.10%	44.50%	22.10%
Unrecognized tax benefits	$ 9.1		$ 9.1		$ 5.7
Accrued interest	$ 1.1		$ 1.1		$ 1.2

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EARNINGS PER SHARE (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Shares excluded from the calculation of the effect of dilutive securities (in shares)	0.5	0.4	0.4	0.2
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Denominator for basic earnings per share (in shares)	66.3	66.8	66.2	67.1
Effect of dilutive securities (in shares)	0.3	0.3	0.4	0.4
Denominator for diluted earnings per share (in shares)	66.6	67.1	66.6	67.5

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CONTINGENCIES (Narrative) (Details) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($) claimant subsidiary	Jan. 01, 2022
Commitments and Contingencies Disclosure [Abstract]
Number of subsidiaries involved in litigation | subsidiary	1
Long-term purchase commitment | $	$ 900.0
Loss contingency, full amount paid	100.00%	100.00%
Loss contingency, claims settled and dismissed, number | claimant	404

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CONTINGENCIES (Changes in Accrued Warranty) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning Balance	$ 41.5	$ 23.4	$ 28.8	$ 23.0
Less: Payments	(6.9)	(7.7)	(10.3)	(13.3)
Provisions	3.8	8.0	10.0	14.0
Acquisitions	0.0	0.0	9.8	0.0
Translation Adjustments	0.9	(0.3)	1.0	(0.3)
Ending Balance	$ 39.3	$ 23.4	$ 39.3	$ 23.4

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DERIVATIVE FINANCIAL INSTRUMENTS (Narrative) (Details)	1 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	May 31, 2022 USD ($) derivative_instrument	Jun. 30, 2020 USD ($) derivative_instrument
Derivative [Line Items]
Derivative gains, net of tax		$ 17,800,000	$ 11,900,000
Net AOCI hedging component		38,600,000
Net current deferred gain expected to be realized in the next twelve months		$ 25,400,000
Forward Contracts
Derivative [Line Items]
Number of derivative instruments | derivative_instrument				2	2
Notional amount of instrument				$ 250,000,000	$ 250,000,000
Proceeds from derivative instrument	$ 16,200,000

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DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Notional Amounts Of Forward Contracts) (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022	May 31, 2022	Jun. 30, 2020
Forward Contracts
Derivative [Line Items]
Notional amount of instrument			$ 250,000,000	$ 250,000,000
Forward Contracts | Chinese Renminbi
Derivative [Line Items]
Notional amount of instrument	$ 229,300,000	$ 173,800,000
Forward Contracts | Mexican Peso
Derivative [Line Items]
Notional amount of instrument	176,300,000	215,200,000
Forward Contracts | Euro
Derivative [Line Items]
Notional amount of instrument	298,900,000	159,600,000
Forward Contracts | Indian Rupee
Derivative [Line Items]
Notional amount of instrument	49,200,000	33,100,000
Forward Contracts | Australian Dollar
Derivative [Line Items]
Notional amount of instrument	3,000,000.0	0
Forward Contracts | Swedish Krona
Derivative [Line Items]
Notional amount of instrument	6,900,000	0
Forward Contracts | British Pound
Derivative [Line Items]
Notional amount of instrument	12,800,000	2,100,000
Forward Contracts | Czech Koruna
Derivative [Line Items]
Notional amount of instrument	1,600,000	0
Commodity Contracts | Copper
Derivative [Line Items]
Notional amount of instrument	53,000,000.0	89,400,000
Commodity Contracts | Aluminum
Derivative [Line Items]
Notional amount of instrument	$ 2,200,000	$ 4,000,000.0

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DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Fair Values Of Derivative Instruments) (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Currency Contracts
Derivative [Line Items]
Derivative liability	$ 0.3
Commodity Contracts
Derivative [Line Items]
Derivative liability	0.3
Prepaid Expenses and Other Current Assets
Derivative [Line Items]
Derivative asset	24.3	$ 13.9
Other Noncurrent Assets
Derivative [Line Items]
Derivative asset	12.0	9.1
Other Accrued Expenses
Derivative [Line Items]
Derivative liability	8.9	15.4
Other Noncurrent Liabilities
Derivative [Line Items]
Derivative liability	0.6	0.0
Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Interest Rate Swap Contracts
Derivative [Line Items]
Derivative asset	0.0	0.0
Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Currency Contracts
Derivative [Line Items]
Derivative asset	23.2	12.3
Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Commodity Contracts
Derivative [Line Items]
Derivative asset	0.8	0.9
Designated as Hedging Instruments: | Other Noncurrent Assets | Interest Rate Swap Contracts
Derivative [Line Items]
Derivative asset	9.9	7.9
Designated as Hedging Instruments: | Other Noncurrent Assets | Currency Contracts
Derivative [Line Items]
Derivative asset	2.1	0.9
Designated as Hedging Instruments: | Other Noncurrent Assets | Commodity Contracts
Derivative [Line Items]
Derivative asset	0.0	0.3
Designated as Hedging Instruments: | Other Accrued Expenses | Interest Rate Swap Contracts
Derivative [Line Items]
Derivative liability	0.0	0.0
Designated as Hedging Instruments: | Other Accrued Expenses | Currency Contracts
Derivative [Line Items]
Derivative liability	4.1	4.8
Designated as Hedging Instruments: | Other Accrued Expenses | Commodity Contracts
Derivative [Line Items]
Derivative liability	3.9	10.2
Designated as Hedging Instruments: | Other Noncurrent Liabilities | Interest Rate Swap Contracts
Derivative [Line Items]
Derivative liability	0.0	0.0
Designated as Hedging Instruments: | Other Noncurrent Liabilities | Currency Contracts
Derivative [Line Items]
Derivative liability	0.3	0.0
Designated as Hedging Instruments: | Other Noncurrent Liabilities | Commodity Contracts
Derivative [Line Items]
Derivative liability	0.3	0.0
Not Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Currency Contracts
Derivative [Line Items]
Derivative asset	0.3	0.7
Not Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Commodity Contracts
Derivative [Line Items]
Derivative asset	0.0	0.0
Not Designated as Hedging Instruments: | Other Noncurrent Assets | Currency Contracts
Derivative [Line Items]
Derivative asset	0.0	0.0
Not Designated as Hedging Instruments: | Other Noncurrent Assets | Commodity Contracts
Derivative [Line Items]
Derivative asset	0.0	0.0
Not Designated as Hedging Instruments: | Other Accrued Expenses | Currency Contracts
Derivative [Line Items]
Derivative liability	0.7	0.0
Not Designated as Hedging Instruments: | Other Accrued Expenses | Commodity Contracts
Derivative [Line Items]
Derivative liability	0.2	0.4
Not Designated as Hedging Instruments: | Other Noncurrent Liabilities | Currency Contracts
Derivative [Line Items]
Derivative liability	0.0	0.0
Not Designated as Hedging Instruments: | Other Noncurrent Liabilities | Commodity Contracts
Derivative [Line Items]
Derivative liability	$ 0.0	$ 0.0

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DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Cash Flow Hedging Instruments) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Derivative [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income (Loss)			$ 17.8		$ 11.9
Cash Flow Hedging | Designated as Hedging Instruments:
Derivative [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$ 4.9	$ (43.4)	27.0	$ (9.0)
Cash Flow Hedging | Designated as Hedging Instruments: | Net Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)			0.0	0.1
Cash Flow Hedging | Designated as Hedging Instruments: | Cost of Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	(0.8)	6.8	(3.8)	15.0
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Expense
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	1.5	0.0	2.8	(0.3)
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards
Derivative [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	(5.3)	(35.6)	0.2	(22.2)
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards | Net Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)			0.0	0.0
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards | Cost of Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	(2.8)	4.4	(7.8)	9.6
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards | Interest Expense
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	0.0	0.0	0.0	0.0
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards
Derivative [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	4.4	(6.0)	24.7	4.4
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards | Net Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)			0.0	0.1
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards | Cost of Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	2.0	2.4	4.0	5.4
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards | Interest Expense
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	0.0	0.0	0.0	0.0
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps
Derivative [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income (Loss)	5.8	(1.8)	2.1	8.8
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps | Net Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)			0.0	0.0
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps | Cost of Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	0.0	0.0	0.0	0.0
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps | Interest Expense
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	1.5	0.0	2.8	(0.3)
Cash Flow Hedging | Not Designated as Hedging Instruments: | Commodity Forwards | Cost of Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	(0.1)	(1.2)	0.1	(0.6)
Cash Flow Hedging | Not Designated as Hedging Instruments: | Commodity Forwards | Operating Expenses
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	0.0	0.0	0.0	0.0
Cash Flow Hedging | Not Designated as Hedging Instruments: | Currency Forwards | Cost of Sales
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	0.0	0.0	0.0	0.0
Cash Flow Hedging | Not Designated as Hedging Instruments: | Currency Forwards | Operating Expenses
Derivative [Line Items]
Amounts reclassified from other comprehensive income (loss)	$ (10.6)	$ 3.5	$ (12.5)	$ 5.0

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DERIVATIVE FINANCIAL INSTRUMENTS (Offsetting) (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Currency Contracts
Offsetting Derivative Assets [Abstract]
Derivative Asset, Current	$ 23.5	$ 13.0
Derivative Contract Amounts Subject to Right of Offset	(2.7)	(2.5)
Derivative Asset, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election, Current	20.8	10.5
Derivative Asset, Noncurrent	2.1	0.9
Derivative Contract Amounts Subject to Right of Offset	(0.1)	0.0
Derivative Asset, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election, Noncurrent	2.0	0.9
Offsetting Derivative Liabilities [Abstract]
Derivative Liability, Current	4.8	4.8
Derivative Contract Amounts Subject to Right of Offset	(2.7)	(2.5)
Derivative Liability, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election, Current	2.1	2.3
Derivative liability	0.3
Derivative Contract Amounts Subject to Right of Offset	(0.1)
Derivative liability, derivative contracts as presented on a net basis	0.2
Commodity Contracts
Offsetting Derivative Assets [Abstract]
Derivative Asset, Current	0.8	0.9
Derivative Contract Amounts Subject to Right of Offset	(0.7)	(0.9)
Derivative Asset, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election, Current	0.1	0.0
Derivative Asset, Noncurrent		0.3
Derivative Contract Amounts Subject to Right of Offset		0.0
Derivative Asset, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election, Noncurrent		0.3
Offsetting Derivative Liabilities [Abstract]
Derivative Liability, Current	4.1	10.6
Derivative Contract Amounts Subject to Right of Offset	(1.1)	(0.9)
Derivative Liability, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election, Current	3.0	$ 9.7
Derivative liability	0.3
Derivative Contract Amounts Subject to Right of Offset	0.0
Derivative liability, derivative contracts as presented on a net basis	$ 0.3

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FAIR VALUE (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset, statement of financial position [Extensible Enumeration]		Other Assets, Noncurrent
Prepaid Expenses and Other Current Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	$ 24.3	$ 13.9
Other Noncurrent Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	12.0	9.1
Other Accrued Expenses
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	8.9	15.4
Other Noncurrent Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	0.6	0.0
Derivative Currency Contracts | Level 2 | Prepaid Expenses and Other Current Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	23.5	13.0
Derivative Currency Contracts | Level 2 | Other Noncurrent Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	2.1	0.9
Derivative Currency Contracts | Level 2 | Other Accrued Expenses
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	4.8	4.8
Derivative Currency Contracts | Level 2 | Other Noncurrent Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	0.3	0.0
Derivative Commodity Contracts | Level 2 | Prepaid Expenses and Other Current Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	0.8	0.9
Derivative Commodity Contracts | Level 2 | Other Noncurrent Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	0.0	0.3
Derivative Commodity Contracts | Level 2 | Other Accrued Expenses
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	4.1	10.6
Derivative Commodity Contracts | Level 2 | Other Noncurrent Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	$ 0.3	0.0
Assets Held in Rabbi Trust
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset, statement of financial position [Extensible Enumeration]	Other Assets, Noncurrent
Assets Held in Rabbi Trust | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	$ 13.0	$ 6.4
Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset, statement of financial position [Extensible Enumeration]	Other Assets, Noncurrent	Other Assets, Noncurrent
Interest Rate Swap | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	$ 9.9	$ 7.9

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RESTRUCTURING ACTIVITIES (Schedule Of Restructuring Reserve) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 10.1	$ 14.5	$ 15.1	$ 5.0
Acquisition	0.0	0.0	0.2	0.0
Provision	14.0	(1.0)	19.0	15.8
Less: Payments/ Other	5.8	7.1	16.0	14.4
Ending Balance	18.3	$ 6.4	$ 18.3	$ 6.4
Altra Merger Agreement
Restructuring Reserve [Roll Forward]
Severance costs	$ 12.4

XML

RESTRUCTURING ACTIVITIES (Reconciliation Of Expenses By Type) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 14.0	$ (1.0)	$ 19.0	$ 15.8
Total restructuring and restructuring-related costs	14.0	(1.0)	19.0	15.8
Industrial Powertrain Solutions
Restructuring Cost and Reserve [Line Items]
Total restructuring and restructuring-related costs	2.0	(4.9)	1.6	9.4
Power Efficiency Solutions
Restructuring Cost and Reserve [Line Items]
Total restructuring and restructuring-related costs	10.5	0.7	15.2	1.7
Automation & Motion Control
Restructuring Cost and Reserve [Line Items]
Total restructuring and restructuring-related costs	1.0	3.0	1.5	4.5
Industrial Systems
Restructuring Cost and Reserve [Line Items]
Total restructuring and restructuring-related costs	0.5	0.2	0.7	0.2
Employee Termination Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	9.7	0.4	12.6	8.8
Facility Related Costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	2.3	(1.9)	3.2	6.5
Other Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	2.0	0.5	3.2	0.5
Cost of Sales
Restructuring Cost and Reserve [Line Items]
Restructuring costs	11.4	(0.5)	15.8	12.3
Cost of Sales | Employee Termination Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	7.4	1.4	9.7	6.2
Cost of Sales | Facility Related Costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	2.1	(2.0)	3.0	6.0
Cost of Sales | Other Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	1.9	0.1	3.1	0.1
Operating Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	2.6	(0.5)	3.2	3.5
Operating Expenses | Employee Termination Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	2.3	(1.0)	2.9	2.6
Operating Expenses | Facility Related Costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	0.2	0.1	0.2	0.5
Operating Expenses | Other Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 0.1	$ 0.4	$ 0.1	$ 0.4

XML

RESTRUCTURING ACTIVITIES (Narrative) (Details) $ in Millions	Jun. 30, 2023 USD ($)
Restructuring and Related Activities [Abstract]
Expected future restructuring charges	$ 53