REGAL REXNORD CORP

10. INCOME TAXES

The effective tax rate for the three months ended June 30, 2026 was 18.7% versus 21.3% for the three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 2026 was lower than the same period in 2025 primarily due to changes in the amount and mix of pre-tax earnings, the relative impact of permanent and discrete tax items, and benefits from tax planning strategies. The effective tax rate for the six months ended June 30, 2026 and June 30, 2025 was 17.7% and 21.3%, respectively. The effective tax rate for the six months ended June 30, 2026 was lower than the same periods in 2025 primarily due to a discrete tax benefit related to stock option exercises in the current year, changes in the amount and mix of pre-tax earnings, the relative impact of permanent and discrete tax items, and benefits from tax planning strategies.

As of June 30, 2026 and December 31, 2025, the Company had approximately $4.4 million and $4.2 million, respectively, of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized.

The Company recognizes interest and penalties related to unrecognized tax benefits in Provision for Income Taxes in the Condensed Consolidated Statements of Income. The Company had $0.5 million and $0.5 million of accrued interest as of June 30, 2026 and December 31, 2025, respectively.

The Company conducts business globally and, as a result, files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The US Internal Revenue Service is currently conducting an audit of the Company's 2022 income tax return. No material deficiencies have been assessed related to ongoing audits as of June 30, 2026.