REGAL REXNORD CORP

Previous wording

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 an 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 financial measures. See reconciliation of these measures to GAAP net sales in the section entitled "Non-GAAP Measures" below.

Current wording

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 an acquisition (“Acquisition Sales”), (ii) 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 financial measures. See reconciliation of these measures to GAAP net sales in the section entitled "Non-GAAP Measures" below.

Previous wording

Net sales for the second quarter 2025 were $1,496.1 million, a decrease of $51.5 million, or 3.3%, compared to the second quarter of 2024. The decrease consisted of a negative impact from divestitures of 2.7% and an organic sales decline of 1.2%, partially offset by a positive foreign currency translation impact of 0.6%. The decrease from divestitures was primarily due to a reduction of $39.0 million from the divestiture of the industrial motors and generators business. The decrease in organic sales of $17.7 million was driven by a $30.1 million decrease within IPS and a $14.3 million decrease within AMC, partially offset by a $26.7 million increase within PES. Gross profit for the second quarter 2025 was $564.7 million, a decrease of $6.3 million or 1.1% compared to the second quarter 2024 primarily due to a $14.6 million decrease within AMC and a $10.1 million decrease from the divestiture of the industrial motors and generators business, partially offset by an increase of $9.9 million within IPS and an increase of $8.5 million within PES. Total operating expenses for the second quarter 2025 were $382.4 million, an increase of $5.3 million or 1.4% as compared to the second quarter 2024. Interest expense for the second quarter 2025 was $85.3 million, a decrease of $16.4 million or 16.1% as compared to the second quarter 2024, primarily driven by a reduction in outstanding debt.

Current wording

Net sales for the third quarter of 2025 were $1,497.0 million, an increase of $19.6 million or 1.3% compared to the third quarter of 2024. The increase consisted of a positive foreign currency translation impact of 0.9% and an organic sales increase of 0.7%, partially offset by a negative impact from divestitures of 0.3%. The increase in organic sales of $10.2 million was driven by a $10.6 million increase within IPS and a $3.5 million increase within PES, partially offset by a $3.9 million decrease within AMC. Gross profit for the third quarter of 2025 was $554.2 million, a decrease of $2.1 million, or 0.4%, compared to the third quarter of 2024, primarily due to a $7.8 million decrease within AMC, partially offset by a $6.0 million increase within IPS. Total operating expenses for the third quarter of 2025 of $379.8 million were relatively consistent with the third quarter of 2024. Interest expense for the third quarter of 2025 was $87.0 million, a decrease of $11.0 million or 11.2% compared to the third quarter of 2024, primarily driven by a reduction in outstanding debt.

Previous wording

PES net sales for the second quarter 2025 were $435.2 million, an increase of $24.3 million or 5.9% as compared to the second quarter 2024. The increase consisted of organic sales growth of 6.5% and positive foreign currency translation of 0.2%, partially offset by the impact from divestitures of 0.8%. The increase in organic sales reflects growth in the residential and commercial HVAC markets. Gross profit for the second quarter 2025 was $129.7 million, an increase of $8.5 million or 7.0% as compared to the second quarter 2024 driven by higher volume and lower restructuring and related expenses of $5.8 million. Total operating expenses for the second quarter of 2025 were $70.2 million, a decrease of $5.9 million, or 7.8% as compared to the second quarter of 2024.

Current wording

PES net sales for the third quarter of 2025 were $432.7 million, an increase of $1.1 million or 0.3% compared to the third quarter of 2024. The increase consisted of organic sales growth of 0.8% and a positive foreign currency translation impact of 0.5%, partially offset by a negative impact from divestitures of 1.0%. The $3.5 million increase in organic sales reflects growth in the pool and commercial HVAC markets. Gross profit for the third quarter of 2025 was relatively consistent with the third quarter of 2024. Total operating expenses for the third quarter of 2025 were relatively consistent with the third quarter of 2024.

Previous wording

Net sales decreased $181.1 million or 5.9% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease consisted of a negative impact from divestitures of 5.3%, a negative foreign currency translation impact of 0.4% and an organic sales decline of 0.2%. The decrease from divestitures was primarily due to a reduction of $157.8 million from the divestiture of the industrial motors and generators business. The organic sales decline was due to lower organic sales of $51.9 million within IPS and $12.7 million within AMC,partially offset by an increase of $57.4 million within PES. Gross profit decreased $31.8 million, or 2.8%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily driven $39.2 million due to the divestiture of the industrial motors and generators business and a $16.4 million decrease within AMC, partially offset by an increase of $21.2 million within PES. Total operating expenses for the six months ended June 30, 2025 decreased $46.0 million or 5.8% as compared to the six months ended June 30, 2024, primarily driven by $38.9 million from the divestiture of the industrial motors and generators businesses and a $7.6 million decrease within PES. Interest expense for the six months ended June 30, 2025 was $175.5 million, a decrease of $31.6 million or 15.3% as compared to the six months ended June 30, 2024, primarily driven by a reduction in outstanding debt.

Current wording

Net sales decreased $161.5 million or 3.5% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease primarily consisted of a negative impact from divestitures of 3.7%, partially offset by a positive foreign currency translation impact of 0.1% and an organic sales increase of 0.1%. The decrease from divestitures was primarily due to a reduction of $157.8 million from the divestiture of the industrial motors and generators business. The increase in organic sales of $3.1 million was driven by a $60.9 million increase within PES, partially offset by a $41.2 million decrease within IPS and a $16.6 million decrease within AMC. Gross profit decreased $33.9 million or 2.0% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily driven by a $39.2 million impact from divesting the industrial motors and generators business and a $24.2 million decrease within AMC, partially offset by an increase of $20.9 million within PES and an increase of $8.6 million within IPS. Total operating expenses for the nine months ended September 30, 2025 decreased $48.3 million or 4.1% compared to the nine months ended September 30, 2024, primarily driven by a $38.9 million impact from divesting the industrial motors and generators businesses and a $14.8 million decrease within PES. Interest expense for the nine months ended September 30, 2025 was $262.5 million, a decrease of $42.6 million or 14.0% compared to the nine months ended September 30, 2024, primarily driven by a reduction in outstanding debt.

Previous wording

AMC net sales were $807.4 million, a decrease of $15.0 million, or 1.8%, as compared to the six months ended June 30, 2024. The decrease consisted of an organic sales decline of 1.5% and a negative foreign currency translation impact of 0.3%. The $12.7 million decrease in organic sales was primarily driven by headwinds related to temporary challenges sourcing rare earth magnets, which impacted shipments of certain higher margin products into the defense and medical markets, and project timing in the data center market, partially offset by growth in the aerospace and discrete automation markets. Gross profit decreased $16.4 million, or 5.0%, compared to the six months ended June 30, 2024, primarily driven by lower volume and sales mix. Total operating expenses for the six months ended June 30, 2025 are relatively consistent with the six months ended June 30, 2024.

Current wording

AMC net sales for the nine months ended September 30, 2025 were $1,209.4 million, a decrease of $14.6 million or 1.2%, compared to the nine months ended September 30, 2024. The decrease consisted of an organic sales decline of 1.4%, partially offset by a positive foreign currency translation impact of 0.2%. The $16.6 million decrease in organic sales was primarily driven by project timing in our data center business, headwinds in the general industrial and medical end markets, and persistent challenges sourcing rare earth magnets, particularly for products serving the medical and defense markets, partially offset by growth in the aerospace and discrete automation markets. Gross profit decreased $24.2 million or 5.0% compared to the nine months ended September 30, 2024, primarily driven by lower volume and sales mix headwinds. Total operating expenses for the nine months ended September 30, 2025 are relatively consistent with the nine months ended September 30, 2024.

Previous wording

IPS net sales for the six months ended June 30, 2025 were $1,262.5 million, a decrease of $56.4 million, or 4.3%, as compared to the six months ended June 30, 2024. The decrease consisted of an organic sales decline of 3.9% and a negative foreign currency translation impact of 0.4%. The $51.9 million decrease in organic sales was driven by large project timing in the metals and mining market and weakness in general industrial markets. Gross profit for the six months ended June 30, 2025 was relatively consistent with the six months ended June 30, 2024. Total operating expenses for the six months ended June 30, 2025 were relatively consistent with the six months ended June 30, 2024.

Current wording

IPS net sales for the nine months ended September 30, 2025 were $1,924.8 million, a decrease of $38.3 million or 2.0%, compared to the nine months ended September 30, 2024. The decrease primarily consisted of an organic sales decline of 2.1%, partially offset by a positive foreign currency translation impact of 0.1%. The $41.2 million decrease in organic sales was primarily driven by project timing in the metals and mining markets and weakness in general industrial markets. Gross profit increased $8.6 million or 1.1% compared to the nine months ended September 30, 2024 primarily driven by synergies, partially offset by lower volume and sales mix headwinds. Total operating expenses for the nine months ended September 30, 2025 were relatively consistent with the nine months ended September 30, 2024.

Previous wording

PES net sales for the six months ended June 30, 2025 were $844.3 million, an increase of $48.1 million, or 6.0%, as compared to the six months ended June 30, 2024. The increase consisted of an organic sales increase of 7.3%, partially offset by a negative impact from the divestiture of businesses of 0.9% and negative foreign currency translation impact of 0.4%. The $57.4 million increase in organic sales reflects growth in the residential and commercial HVAC markets. Gross profit increased $21.2 million, or 9.6%, as compared to the six months ended June 30, 2024, primarily driven by higher volume and lower restructuring and related expenses of $12.5 million. Total operating expenses for the six months ended June 30, 2025 decreased $7.6 million, or 5.2%, as compared to the six months ended June 30, 2024.

Current wording

PES net sales for the nine months ended September 30, 2025 were $1,277.0 million, an increase of $49.2 million or 4.0%, compared to the nine months ended September 30, 2024. The increase consisted of an organic sales increase of 5.0%, partially offset by the negative impact from business divestitures of 0.9% and a negative foreign currency translation impact of 0.1%. The $60.9 million increase in organic sales primarily reflects growth in the residential HVAC, pool and commercial HVAC markets. Gross profit increased $20.9 million or 5.9% as compared to the nine months ended September 30, 2024, primarily driven by higher volume and lower restructuring and related expenses of $13.8 million. Total operating expenses for the nine months ended September 30, 2025 decreased $14.8 million, or 6.7%, as compared to the nine months ended September 30, 2024 primarily driven by lower allocated expenses.

Previous wording

The effective tax rate for the three months ended June 30, 2025 was 21.3% versus 35.0% for the three months ended June 30, 2024 due to the tax effects associated with the divestiture of the industrial motors and generators businesses during the three months ended June 30, 2024.

Current wording

The effective tax rate for the nine months ended September 30, 2025 was 18.4% versus 25.4% for the nine months ended September 30, 2024 due to the tax effects associated with the divestiture of the industrial motors and generators businesses in 2024 and discrete tax benefits in 2025 associated with a tax rate reduction in Germany, partially offset by discrete tax benefits in 2024 associated with a reduction in withholding taxes.

Previous wording

As noted above, we disclose organic sales, organic sales growth and acquisition growth non-GAAP financial measures, and we reconcile these 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.

Current wording

As noted above, we disclose organic sales, organic sales growth and acquisition growth as non-GAAP financial measures, and we reconcile these 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.

Previous wording

Cash flow provided by operating activities was $625.5 million for the six months ended June 30, 2025, a $384.1 million increase from the six months ended June 30, 2024. This increase was primarily driven by cash proceeds from the sale of receivables under the Securitization Facility coupled with additional income generated in 2025. See Note 7 - Receivables Securitization for additional considerations regarding the Securitization Facility.

Current wording

Cash flow provided by operating activities was $823.0 million for the nine months ended September 30, 2025, a $426.8 million increase from the nine months ended September 30, 2024. This increase was primarily driven by cash proceeds from the sale of receivables under the Securitization Facility coupled with additional income generated in 2025. See Note 7 - Receivables Securitization for additional considerations regarding the Securitization Facility.

Previous wording

Our working capital was $1,258.7 million as of June 30, 2025, compared to $1,535.6 million as of December 31, 2024, a decrease of $276.9 million primarily due to the sale of receivables under the Securitization Facility.

Current wording

Our working capital was $1,327.9 million as of September 30, 2025, compared to $1,535.6 million as of December 31, 2024, a decrease of $207.7 million primarily due to the sale of receivables under the Securitization Facility offset by an increase in inventory.

Previous wording

Cash flow used in investing activities was $29.2 million for the six months ended June 30, 2025 as compared to cash flow provided by investing activities of $325.2 million for the six months ended June 30, 2024. The decrease was primarily driven by proceeds received from the sale of the industrial motors and generators businesses in 2024.

Current wording

Cash flow used in investing activities was $52.1 million for the nine months ended September 30, 2025 as compared to cash flow provided by investing activities of $295.9 million for the nine months ended September 30, 2024. The decrease was primarily driven by proceeds received from the sale of the industrial motors and generators businesses in 2024.

Previous wording

In 2025, we anticipate capital spending for property, plant and equipment to be approximately $120 million. We believe that our present manufacturing facilities will be sufficient to provide adequate capacity for our operations for the remainder of 2025. We anticipate funding remaining 2025 capital spending with operating cash flows.

Current wording

In 2025, we anticipate capital spending for property, plant and equipment to be approximately $105.0 million. We believe that our present manufacturing facilities will be sufficient to provide adequate capacity for our operations for the remainder of 2025. We anticipate funding remaining 2025 capital spending with operating cash flows.

Previous wording

Cash flow used in financing activities was $686.2 million for the six months ended June 30, 2025, compared to $672.5 million used in financing activities for the six months ended June 30, 2024. We made net debt repayments of $633.9 million during the six months ended June 30, 2025, compared to net debt repayments of $618.4 million during the six months ended June 30, 2024. The net debt repayments in the current year primarily reflected payments of $615.0 million on the Term Facility and $17.0 million of net payments made on the Multicurrency Revolving Facility during the six months ended June 30, 2025. The net debt payments in the prior year primarily resulted from payments of $187.5 million on the Term Facility, $356.8 million on the Land Term Facility (an unsecured term loan facility fully repaid as of December 31, 2024 under which the Company's subsidiary Land Newco, Inc. was the sole borrower), and $72.1 million net repayments made on the Multicurrency Revolving

Current wording

Cash flow used in financing activities was $784.5 million for the nine months ended September 30, 2025, compared to $860.9 million used in financing activities for the nine months ended September 30, 2024. We made net debt repayments of $708.4 million during the nine months ended September 30, 2025, compared to net debt repayments of $732.7 million during the nine months ended September 30, 2024. The net debt repayments in the current year primarily reflected payments of $665.0 million on the Term Facility and $40.0 million of net payments made on the Multicurrency Revolving Facility during the nine months ended September 30, 2025. The net debt payments in the prior year primarily resulted from payments of $273.5 million on the Term Facility, $391.8 million on the Land Term Facility (an unsecured term loan facility fully repaid as of December 31, 2024 under which the Company's subsidiary Land Newco, Inc. was the sole borrower), and $64.3 million net repayments made on the Multicurrency Revolving Facility during the nine months ended September 30, 2024. There were $69.7 million of dividends paid for the nine months ended September 30, 2025 and $69.9 million of dividends paid for the nine months ended September 30, 2024. There were no share repurchases for the nine months ended September 30, 2025. The Company repurchased and retired $50.0 million of common stock during the nine months ended September 30, 2024 to partially offset the dilutive impact of share-based compensation awards.

Previous wording

As of June 30, 2025, $311.7 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. 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, 2025, we have repatriated $357.8 million of foreign cash in 2025 to support the repayment of debt. We are continuing to evaluate opportunities to repatriate additional foreign cash in 2025.

Current wording

As of September 30, 2025, $387.5 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. 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 September 30, 2025, we have repatriated $382.7 million of foreign cash in 2025 to support the repayment of debt. We are continuing to evaluate opportunities to repatriate additional foreign cash in 2025.

Previous wording

As of June 30, 2025, the Company had $50.0 million of borrowings under the Term Facility and $23.0 million of borrowings under the Multicurrency Revolving Facility, along with $1,547.0 million of available borrowing capacity. On June 30, 2025, the Company prepaid $420 million of principal outstanding under the Term Facility with proceeds from the Securitization Facility, which was entered on June 30, 2025. The SPE received proceeds of $368.5 million for the Sold Receivables. 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.

Current wording

As of September 30, 2025, the Company had no borrowings under the Term Facility or under the Multicurrency Revolving Facility, and had $1,570.0 million of available borrowing capacity. On June 30, 2025, the Company prepaid $420.0 million of principal outstanding under the Term Facility with proceeds from the Securitization Facility, which was entered on June 30, 2025. As of September 30, 2025, we received $398.3 million of cash in exchange for Sold Receivables. 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.

Previous wording

The following table sets forth summarized income statement information of the Obligor Group for the six months ended June 30, 2025 and June 30, 2024:

Current wording

The following table sets forth summarized income statement information of the Obligor Group for the nine months ended September 30, 2025 and September 30, 2024: