REGAL REXNORD CORP

11. INCOME TAXES

The effective tax rate for the three months ended September 30, 2026 and September 30, 2025 was 216.0% and 12.9%, respectively. The effective tax rate for the three months ended September 30, 2026 was higher than the same period in 2025 primarily due to a non-deductible goodwill impairment.

The effective tax rate for the nine months ended September 30, 2026 and September 30, 2025 was 26.9% and 18.4%, respectively. The effective tax rate for the nine months ended September 30, 2026 was higher than the same period in 2025 primarily due to the relative impact of permanent and discrete tax items, including a non-deductible goodwill impairment in the current year, partially offset by benefits from tax planning strategies.

As of September 30, 2026 and December 31, 2025, the Company had approximately $10.7 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 (Loss). The Company had $0.6 million and $0.5 million of accrued interest as of September 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 has settled an audit of the Company's 2022 income tax return during the third quarter 2026, which did not result in any material adjustments. No material deficiencies have been assessed related to ongoing audits as of September 30, 2026.