REGAL REXNORD CORP

7. RECEIVABLES SECURITIZATION

On June 30, 2025, Regal Rexnord Receivables Finance LLC, a bankruptcy remote special purpose entity formed as a wholly-owned subsidiary of the Company (“SPE”), entered into aone-year $400 million accounts receivable securitization facility (the “Securitization Facility”) with PNC Bank National Association, Wells Fargo Bank, N.A., and Truist Bank (the “Purchasers”). The Securitization Facility can be renewed each year for another year with agreement between the SPE and the Purchasers. Under the Securitization Facility, certain US subsidiaries of the Company (the “Originators”) transfer their accounts receivable (the “Receivables”) to the SPE, who in turn sells certain of the Receivables (the “Sold Receivables”) to the Purchasers. The Originators will service the Receivables on behalf of the Purchasers but have no continuing involvement with the Sold Receivables.

Transfers of the Sold Receivables from the SPE to the Purchasers are accounted for as a sale of financial assets, resulting in derecognition of the Sold Receivables from the Company’s Condensed Consolidated Financial Statements. These sales are priced at the face value of the Sold Receivables less a fair market value discount, resulting in a loss on the Sold Receivables recorded in Operating Expenses in the Condensed Consolidated Statement of Income. The Sold Receivables are no longer available to satisfy creditors of any Originator in the event of bankruptcy. The SPE also retains certain Receivables as collateral to the Purchasers as a guarantee of cash collections on the Sold Receivables (the “Collateral”), which is recorded in Trade Receivables, Less Allowances in the Condensed Consolidated Balance Sheet.

The Securitization Facility is structured on a revolving basis under which the Purchasers reinvest the cash collections in the Securitization Facility and purchase additional Receivables.

As of September 30, 2025, the total value of accounts receivable sold from the SPE to the Purchasers under the Securitization Facility and derecognized from the Condensed Consolidated Balance Sheet was $398.3 million. This resulted in cash received of $398.3 million, which is reflected in Net Cash Provided by Operating Activities in the Condensed Consolidated Statement of Cash Flows. For the three and nine months ended September 30, 2025, the Company sold accounts receivable of $668.0 million and $1,036.5 million, respectively, to the Purchasers under the Securitization Facility. Cash collections for the three and nine months ended September 30, 2025 on receivables sold to the Purchasers were $638.2 million. As of September 30, 2025 unsold accounts receivable of $66.2 million were pledged by the SPE as collateral to the Purchasers.

The Company incurred charges of $5.0 million associated with the Securitization Facility for the three and nine months ended September 30, 2025, which were reflected in Operating Expenses in the Condensed Consolidated Statement of Income.