Slide 1: Regal Beloit
, = S=REGAL BELOIT
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Fonward4ooking siatemenis represent our management's judgment regarding fuiure events. in many cases, you can ideniily forward-looking statements by termi
Slide 3: Agenda
Agenda = Mark Gliebe, CEO - Opening Comments = Chuck Hinrichs, CFO — Financial Update = Jon Schlemmer, COO, repnnavionis nan = Mark Gleb ut ts 7 Questionsek whore = Close REGAL
Slide 4: Opening Comments
Opening Comments = Warranty Reserve = $28 Million Warranty Expense in 2Q 2011 = 50k Standard Motors Used in Outdoor HVAC = Caused by Inadequate Lubrication = Nota Safety Concern = Root Cause Identified and Corrected = We Will Learn from this Experience REGAL
Slide 5: Opening Comments
Opening Comments = EPC Closing Anticipated Within the Month " Record Quarter Excluding Warranty Expense = Strong Revenue Growth " Price Increases Implemented = Improving Margins —=FEGAL
Slide 6: Quarter Highlights
Quarter Highlights = Strength in Other Businesses Offsetting HVAC Headwinds = AFMC Acquisition = Closing of New Financing Arrangements at Competitive Rates = Continued Energy Efficient Product Introductions = Progress on EPC Acquisition REGAL
Slide 7: Financial Highlights
Financial Highlights Sales Growth = Sales up 16.7% in 2Q11 = $60 million from Acquired Companies = Volume and Price Gains Gross Profit $28 million incremental Warranty expenses in COGS Excluding $28 million, Gross Margin was 26.2% YTD 2011 Inflation covered by price and productivity gains Copper Cos
Slide 8: Financial Highlights
Financial Highlights Capital Expenditures = $10.8 million in 2Q11 = 2011-2012 capital expenditures increasing for two China factory relocations Other Operating Data = Depreciation and Amortization of $22 million in 2Q11 " Acquisition expenses of $3.3 million in 2Q11 related to EPC Income Tax Rate =
Slide 9: Financial Highlights
Financial Highlights New $500M Unsecured Revolving Credit Facility = Closed on June 30, 2011 = §-year maturity = No change in financial covenants = No borrowings outstanding REGAL New $500M Senior Notes = Initial closing on July 14, 2011 = Final closing in August for a total of $500 million = Unsecu
Slide 10: 3Q 2011 EPS Guidance
3Q 2011 EPS Guidance 3Q 2011 EPS Guidance of $1.11 - $1.17 « EPS Guidance Does Not Include EPC = Lower Sales Volume Primarily HVAC Related = $4.4 million Higher Interest Expense EPS ($0.07) « Higher 3Q 2011 ETR versus 2Q 2011 EPS ($0.05) = Analysts’ Consensus May Include EPC in 3Q 2011 REGAL
Slide 11: Operations Update
Operations Update = Sales Up 17% = Mechanical Sales Up 15% = North American C&l Sales Up 20% = Generator Sales Up 34% = Asia Sales Up 14% " Sales Outside the US Represent 37% of Total —=FEGAL
Slide 12: Operations Update
Operations Update = HVAC Sales Negatively Impacted by: = Weak Consumer Confidence = Cool Spring Experienced in Much of US = Reduction of Federal Tax Credit = Reversionto R22 Refrigerantin Outdoor Condensers = Productivity And Price Increases Offsetting Current Quarter Inflation REGAL "
Slide 13: Operations Update
Operations Update = Ramu Inc Acquired in April 2011 = SR Technology Offers Energy Efficient Alternative = Product Development Underway " Australian Fan and Motor Company (AFMC) Acquired in June 2011 REGAL 2
Slide 14: New Products
New Products = Exceeds NEMA Premium and European IE4 Efficiency Levels = High Torque and Increased Power Density Capability = Robust Drive Compatibility = Higher Efficiency Alternative Available for a Wide Range of Applications =SREGAL wer SyMAx" 3HP to 10 HP B
Slide 15: New Products
New Products Heavy Duty Linear Rod Pump I = Accommodates Wells Up to 12,000 Feet Deep = Alternative to Conventional Pumping Units = LRP® Technology Offers = Safety Improvements " Aesthetics = Production "Reductions in Down-hole Failures "Significant Cost Savings ——=REGAL
Slide 16: Third Quarter Outlook
Third Quarter Outlook = Strength in Commercial and Industrial and Mechanical Businesses = Continued HVAC Headwinds = Inflationary Pressure Offset by Productivity Initiatives and Pricing Actions = Excited to Finalize EPC Acquisition = Great Progress on Functional Integration Planning = Work To Do on
Slide 17: Summary
Summary = Sincerely Regret Any Inconvenience Our Customers are Experiencing = Great 2" Qtr. Excluding Warranty Expense = Businesses Other Than HVAC Performed Well « Pricing and Productivity Covered 2Q Inflation = Energy Efficient New Product Intros Continue = 3" Qtr Guidance: = HVAC Continued Weakne
Slide 18: Questions and Answers
—=FEGAL Questions and Answers
Slide 19: Thank you
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