Slide 1: Regal Beloit
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forwardJooking statements” as defined in te Private Securities Litigation Reform Act of 1998. Fonssckngssbrens eoesert cut masperents udpmentragacng le verse many ses you oo dent ‘amano soioranisb) eennotgy sh 32"%5)" Was lan” owt" ‘artaza" itrel “oe
Slide 3: Regal Beloit's Acquisition of AO Smith's Electrical Products Company (EPC)
Regal Beloit's Acquisition of AO Smith’s Electrical Products Company (EPC) @ Transaction Rationale m Transaction Overview ug Integration Update = Combination Of RBC And EPC m New Product Review u Financial Expectations een =<
Slide 4: Fundamental Reasons to Acquire EPC
Fundamental Reasons to Acquire EPC = Combined Energy Efficient Technology Provides Ability To Deliver Additional Value To Customers = Complementary Product Offerings = Commercial And Residential Hermetic Offers New Technology - 1 Strengthens Presenceln High Growth Regions CSE aac = Aucments Low Gost
Slide 5: Transaction Overview
Transaction Overview $700 Milion OF Cash 12,834,026 Shares OF RBC Stock ' Divested RBC’s U.S. Pool And Spa Business With Revenues of PSD IE ME | $25 [iiliion Fora Purchase Price of $15 Million = Certain EPC Draftinducer Designs Not Yet In Production Consideration ' Accretive In The FirstFull Year Fo
Slide 6: Integration Update
Integration Update = Organization v EPC Management Team Will Have Key Roles ¥ Combining Organization Structures = Branding ¥ Consolidating Brands Within Residential HVAC ¥ Maintaining EPC Century Brand in Distribution = Transitions and Synergies ¥ Finance, |T and Human Resources Ahead of Schedule ¥
Slide 7: Organization
Organization Business Leaders
Slide 8: Branding
Branding Gantry Sgenteq' @ marathon electric
Slide 9: Synergy Capture
‘Synergy Capture '™ Procurement Synergies Logistics Synergies Manufacturing Synergies bogn Patirm conoiaaton Revenue Synergies New ney Suing Proaus esing Products T0490 Ne
Slide 10: Integration Summary
Integration Summary * Formed Teams Back in February 2011 to Plan for the Integration and Synergy Capture + Excellent Team Work With Significant Detail * Ready to Go on IT, Finance and Human Resource Integration * Ready For First Meetings on Customers, Products, Markets * Based on Initial Findings, W
Slide 11: Pro Forma Combination — Sales by Geography
Pro Forma Combination — Sales by Geography RBC Sales by Geography RBC+ EPC Sales by Geography $2.3B +83.0B ‘Combination Greates Larger Enterprise With a Growing Global Reach
Slide 12: Pro Forma Combination — Sales by End Market
Pro Forma Combination — Sales by End Market RBC Sales by End Market RBC + EPC Sales by End Market $2.3B +$3.0B ‘Combination Maintains Diversity in End Markets
Slide 13: Pro Forma Combination — Production by Region
Pro Forma Combination — Production by Region RBC Production by Region RBC + EPC Production by Region Manufacturing and Engineering Footprint Expanding in Higher Growth, Lower CostRegions
Slide 14: New Products
New Products = EPC Motor + UNICO Drive * Screw Compressor Motor And Control For High Efficiency Commercial Chiller Systems = Combination Offers: V BestEtficiency Over A Speed Range ¥ OneSource Of Motor And Control Fora Single Point of Contact
Slide 15: New Products
New Products oO. + V.green® Variable Speed ECM Poo! Motor V- Green * Targeting Both OEMAnd Replacement =< Segments * Features: v ~20% More Efficient Than a Standard Motor Y State-of-the Art User Interface ¥ Optional Off-board Mounting ae, v Preset Programs For Out-ofthe-box Operation
Slide 16: New Products
New Products * Smaller ECM-Type Energy Efficient Motors For Lower End Applications Variable Or Fixed Speed Capabilities v Efficiency Gain/Savings Of Up To 30% ¥ Launch-@1 2012 Small ECM Type Motors
Slide 17: Record of Strong, Continuous Growth
Record of Strong, Continuous Growth = Track Record of Consistent Growth and Execution + Real Momentum with 9 Recent Acquisitions + Energy Efficiency Innovation Tailwind = Continuing to Globalize and Simplify
Slide 18: Acquisition Funding
Acquisition Funding 402011 ovata one scp EFS Interest Exp. EPS $ 150 Cash $ 600 Long Term Debt @4.74% $60 $ (0.10) $ 100 Revolving Credit Debt @ 2.0% $ 0.5 (0.01 $ 750 Total $65 sont + Equity | 2.834.026 shares of RBC Stock Increase in Fully iluted Shares 20201 39.2million 302011 40.5 million 4a2011
Slide 19: Closing and Purchase Accounting Adjustments and Tax Benefits
Closing and Purchase Accounting Adjustments and Tax Benefits Amount Timin Inventory Fair Market Value Step Up $ 22.1 301-4011 Transaction Costs $75 3011 Total One-Time Costs in 2011 $ 29.6 Higher Depreciation and Amortization $1.5 3011 $ 35 4Qtt $136 2012 NPV of Tax Benefits of Goodwill $46.3 ‘15 ye
Slide 20: EPC 2011 Guidance
EPC 2011 Guidance 30.2011 EPS $ (0.26) to $ (0.30) Includes PAA and Transaction Costs of —$(0.25) + 3Q.2011 is. Stub Period from 8/22/11 40.2011 EPS $ (0.25) to $ (0.30) Includes PAA of $ (0.25) + 4Q is seasonally the weakest quarter
Slide 21: EPC 2012 Guidance
EPC 2012 Guidance 2012 EPS $ 0.35to $0.45 + Includes Impact of Divested Business + Excludes Commodity and Currency Hedge Gains + Synergies on a Run Rate Basis Includes $13.6 million of Incremental Depreciation and Amortization Includes Interest Expense of $26 million EPS Calculated using 42.0 millio
Slide 22: Summary
Summary *Great Acquisition With a Complementary Fit *Consistent With Our Strategic Objectives *Excellent Team of Talented People *Ready to Go on Integration but a lot of Work Ahead of Us *Confident That We Can Deliver the Expected Benefits Creates a Larger, More Diversified and Well Positioned Busin
Slide 23: Q & A