Slide 1: Regal Beloit Corporation Second Quarter 2012 Earnings Conference Call
Regal Beloit Corporation Second Quarter 2012 Earnings Conference Call August 1, 2012 Mark Gliebe Jon Schlemmer Chairman and Chief Operating Officer Chief Executive Officer Chuck Hinrichs John Perino Vee President vice Presta REGAL Chief Financial Officer Investor Relations
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forward-looking statements" as definedin the Private Securities Litigation Reform Act of 1995 Forward-looking statements represent our management's judgment regarding future events. In many cases, you can identify forward-looking statements by termin
Slide 3: Non-GAAP Financial Measures
| recat J Non-GAAP Financial Measures We prepare financial statements in accordance with accounting principles generally accepted in the United States (GAAP). We also disclose adjusted diluted earnings per share (EPS), adjusted gross profit, adjusted gross profit as a percentage of net sales, free c
Slide 4: Agenda
| recat J Agenda Opening Comments Financial Update Operations Update Summary Q&A Closing Comments Mark Gliebe Chuck Hinrichs Jon Schlemmer Mark Gliebe All Mark Gliebe p4
Slide 5: Opening Comments
| recat J Opening Comments "Record Second Quarter Sales & Earnings — Businesses Performed at High End of Expectations — Exceeded EPS Guidance «Second Quarter Highlights — Free Cash Flow of 177% of Net Income — Announced Plant & Warehouse Consolidation in North America —On Track to Exceed EPC Synergy
Slide 6: 3rd Quarter 2012 Outlook
| recat J 3" Quarter 2012 Outlook = Uncertainty in Macro-economic Environment "Softer Demand in Mid and Late Cycle Businesses =Negative Impact from Foreign Currency Translation "HVAC Growth Expected Year Over Year *Continued Unico Growth pé
Slide 7: 2nd Quarter 2012 Financial Results
| recat J 24 Quarter 2012 Financial Results = Second Quarter Results Exceeded Expectations = Sales Growth of 26.7% vs. 2Q 2011 — Continued Growth in N.A. C&l, Mechanical & Unico — Offset Headwinds in HVAC, Asia & Europe — Foreign Currency Exchange Rates Reduced Sales by 2.1% = Cost of Sales Includes
Slide 8: 2nd Quarter 2012 Financial Highlights
2nd Quarter 2012 Financial Highlights Pa a $1.50 $864 $104 1.38 see | $682 2011 2012 2011 2012 2011 2012 Revenue ($M) Adjusted Incomefrom Adjusted Diluted EPS* Operations ($M)* * Non-GAAP Financial Measurement, See Appendix for Reconciliation ps
Slide 9: Financial Performance
| recat J Financial Performance Capital Expenditures Income Tax Rate = $25 Million in 2Q 2012 = 30.5% ETR in 2Q 2012 = $110 Million Est. for FY 2012 = 30.0% ETR Est. for 2H 2012 Free Cash Flow Balance Sheet 6/30/2012 = $111 Million FCF in 2Q 2012 = Total Debt of $911 Million = 177% of Net Income — R
Slide 10: 3rd Quarter 2012 Guidance
| recat J 3' Quarter 2012 Guidance "GAAP EPS Guidance of $1.22 to $1.30 «Adjusted EPS Guidance of $1.32 to $1.40, After Adding Back $0.10 for Estimated Restructuring Costs "Expect Negative Impact of Foreign Currency Translation =Growth Expected in HVAC and Unico Partially Offsetting Weakness in Euro
Slide 11: 2nd Quarter 2012 Operations Update
| recat J 24 Quarter 2012 Operations Update = Sales & Order Strength in C&l, including EPC, N.A. Mechanical = 54% Sales Growth in Unico — Increasing Unico Production, Planning to Add Capacity — Technojar Acquisition = N.A. Mechanical up 9.1% =" HVAC Performed Better Than Expected = Sales Outside U.S
Slide 12: New China Facilities - Update
New China Facilities - Update New Hermetic Motor Plant = Taicang China = Factory Construction Complete = 85% Transition Completed New Generator Plant = Shanghai China = Factory Construction Complete = Beginning Initial Production p12
Slide 13: Energy Efficient Products
Energy Efficient Products Total Sales Energy Efficient — Products p13
Slide 14: Mariner Frame Generator
Mariner 740 Frame Generator = Designed for Marine Applications = Proven Reliability in Field = Designed for Serviceability = Strong Customer Interest p14
Slide 15: 100% Aluminum HVAC Motor
400% Aluminum HVAC Motor = 100% Aluminum Winding = Cost Advantage for Customers = Balance Between Premium & Value Products = Strengthen Position in Standard Motor Segment p15
Slide 16: EPC Synergies Update
| recat J EPC Synergies Update = Closing Four Manufacturing Plants in Juarez, Mexico — Consolidating Operations — Changes Underway, 20% Complete — Expect Completion by Mid-2013 = Consolidating Warehouses in the United States = Remain Committed to Achieving Synergies pie
Slide 17: EPC Synergy Update
REGAL Gross Synergy Run Rate - As Presented 8/23/2011 EPC Synergy Update Gross Synergy Run Rate ~ Current View feinmitensy (Finmlons) $38 $38 $35 $30 405 $20 $10 r | yr1 Yr2 Yr3 yr yr1 Yr2 Yrs yr Capital and Expense - As Presented 8/23/2011 Capital and Expense — Current View [sinmitiogs g Gin mallon
Slide 18: Summary
| recat J Summary = 2Q 2012 Record Quarter of Sales and Earnings = 2Q 2012 Generated Strong Free Cash Flow = Footprint Consolidation Timely and Delivering EPC Synergies = 3Q Guidance = Modest Growth in HVAC = Softer Conditions in C&l and Mechanical = Asia Improving Sequentially but Remains Weak = Co
Slide 19: Questions and Answers
REGAL Questions and Answers
Slide 20: Closing Comments
REGAL Closing Comments First Half 2012 = Record Sales and Earnings = Integration of Largest Acquisition Continues = Launched New Corporate Brand = Began Simplification Journey = Another Record Year for New Product Launches = Continued to Invest in Our Facilities in China = Continued to Improve on Cu
Slide 21: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations EBITDA Reconciliati Dollars in Millions Net Income Plus: Minority Interest Plus: Taxes Plus: Interest Expense Less: Interest Income Plus: Depreciation Plus: Amortization EBITDA 3Q2011 402011 102012 202012 LT™ $45.7 $33.5 $48.7 $62.7 $190.6 18 3 1.2 16 49 20.6 14.7 1
Slide 22: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations Free Cash Flow Reconciliation Dollars in Millions GAAP Net Cash Provided by Operating Activities Additions to Property Plant and Equipment Free Cash Flow Free Cash Flow as a Percentage of Net Income Attributable to Regal Beloit Adjusted Diluted EPS Reconcil GAAP Dil
Slide 23: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations Adjusted Income from Operations Dollars in Millions GAAP Income from Operations EPC Acquisition Costs 2Q 2011 Warranty Expense Item Restructuring Costs Gain on Disposal of Real Estate Adjusted Income from Operations Three MonthsEnded Six Months Ended June 30, July2,