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Regal Beloit Corporation Announces Fourth Quarter and Fiscal 2012 Financial Results

February 4, 2013

BELOIT, Wis., Feb. 4, 2013 /PRNewswire/ — Regal Beloit Corporation (NYSE: RBC) today reported financial results for the fourth quarter and fiscal 2012. Net sales for the fourth quarter 2012 were $715.6 million compared to $727.0 million for the fourth quarter of 2011. Diluted earnings per share for the fourth quarter 2012 were $0.70 compared to $0.80 for the fourth quarter of 2011. Net sales for fiscal 2012 were a record $3,166.9 million compared to $2,808.3 million in 2011. Diluted earnings per share for fiscal 2012 were a record $4.64 compared to $3.79 in 2011.

2012 was a record year for Regal in revenues and earnings, commented Mark Gliebe, Chairman and Chief Executive Officer. As anticipated, the fourth quarter sales environment was challenging. However, our team delivered and we achieved results consistent with our most recent guidance. Our residential HVAC business was up slightly and we experienced strong growth at Unico while sales in most of our other businesses around the world slowed in the fourth quarter. We continued our progress in achieving synergy savings, and we delivered another quarter of strong free cash flow of 175% of net income.

The table below compares adjusted diluted earnings per share* for the fourth quarter and fiscal 2012 to the same periods of the prior year.

    ADJUSTED DILUTED EARNINGS PER SHARE
    -----------------------------------
                                        First Quarter      Second Quarter     Third Quarter      Fourth Quarter     Fiscal Year
                                        -------------      --------------     -------------      --------------     -----------
    2012 GAAP Diluted
     Earnings Per
     Share                                          $1.16               $1.49             $1.29               $0.70            $4.64
    Purchase
     Accounting Costs                                0.01                   -                 -                   -             0.01
    Restructuring
     Costs                                              -                0.01              0.08                0.06             0.15
    Gain on Disposal
     of Real Estate                                 (0.02)                  -                 -                   -            (0.02)
    Prior Year Tax
     Benefit                                            -                   -             (0.05)                  -            (0.05)
                                                                                                                ---
    2012 Adjusted
     Diluted Earnings
     Per Share                                      $1.15               $1.50             $1.32               $0.76            $4.73
                                                    =====               =====             =====               =====            =====

    2011 Adjusted
     Diluted Earnings
     Per Share                                      $1.11               $1.38             $1.31               $0.93            $4.71
                                                    =====               =====             =====               =====            =====

    *This earnings release includes
     non-GAAP financial measures.
     Schedules that reconcile these
     non-GAAP financial measures
     to the most comparable GAAP
     figures are included with this
     earnings release.
    NET SALES    (Dollars in millions)
                 Three Months Ended    % Change   Year Ended        % Change
                 ------------------    --------   ----------        --------
                       Dec 29,          Dec 31,                      Dec 29,          Dec 31,
                                  2012            2011                           2012             2011
                                  ----            ----                           ----             ----
    Net Sales                   $715.6          $727.0       (1.6)%          $3,166.9         $2,808.3 12.8 %

    Net Sales by
     Segment:
    Electrical
     segment                     646.9           660.3       (2.0)%           2,870.2          2,533.3 13.3 %
    Mechanical
     segment                      68.7            66.7        3.0 %             296.7            275.0  7.9 %

Electrical segment net sales declined 2.0% in the fourth quarter. North American residential HVAC net sales increased 0.2% for the fourth quarter 2012 compared to the fourth quarter 2011. North American commercial and industrial motor net sales decreased 1.4% for the same period, adjusting for the divested business. For the fiscal year, Electrical segment net sales increased 13.3% including $537.2 million from the businesses acquired within the last 12 months (“acquired businesses”). Excluding the acquired and divested businesses, fiscal 2012 Electrical segment net sales declined 7.8% driven primarily by softer HVAC demand in the first half of 2012 and slowing commercial and industrial demand in the second half of 2012.

Mechanical segment net sales for the fourth quarter 2012 included $10.4 million from the acquired businesses. Excluding the impact of the acquired and divested businesses, Mechanical segment net sales in North America decreased 2.6%. Fiscal year 2012 Mechanical segment net sales included $42.5 million from the acquired businesses. Excluding the impact of the acquired and divested businesses, fiscal 2012 Mechanical segment net sales in North America increased by 5.4%.

Fourth quarter 2012 net sales to regions outside the United States decreased 1.5% compared to fourth quarter 2011 and represented 34.2% of total net sales. Excluding acquired businesses, the impact of foreign currency exchange rates decreased total net sales by 0.3% for the fourth quarter 2012 compared to the fourth quarter 2011 and 1.2% for fiscal 2012 compared to 2011.

In the fourth quarter 2012, sales of high efficiency products grew 13.2% and represented 21.0% of net sales. For fiscal 2012, sales of high efficiency products increased 22.1% and represented 20.3% of net sales.

             GROSS PROFIT       (Dollars in millions)
             ------------
                          Three Months Ended          Year Ended
                                Dec 29,                 Dec 31,          Dec 29,         Dec 31,
                                           2012                    2011            2012            2011
                                           ----                    ----            ----            ----
    Gross Profit                         $160.7                  $170.9          $771.0          $666.0
    As a percentage
     of net sales                         22.5 %                  23.5 %          24.3 %          23.7 %

    Gross Profit
    Electrical
     segment                             $142.4                  $155.0          $691.7          $590.9
    As a percentage
     of net sales                         22.0 %                  23.5 %          24.1 %          23.3 %
    Mechanical
     segment                              $18.3                   $15.9           $79.3           $75.1
    As a percentage
     of net sales                         26.6 %                  23.9 %          26.7 %          27.3 %

Fourth quarter 2012 gross profit included $3.6 million of restructuring expenses, reported in the Electrical segment cost of sales. Fourth quarter 2011 Electrical segment gross profit included purchase accounting inventory adjustments of $15.5 million, offset by a $15.4 million reduction in the previously disclosed warranty expense recorded in the second quarter 2011. In the Mechanical segment, fourth quarter 2012 gross profit margin improved due to the benefits realized by the restructuring efforts.

For fiscal 2012, the Electrical segment gross profit included $6.9 million of restructuring charges. Fiscal 2011 Electrical segment gross profit included $25.8 million of inventory purchase accounting adjustments and the $12.6 million previously disclosed warranty expense item. For the Mechanical segment, fiscal 2012 gross profit included $0.7 million purchase accounting adjustments from the acquired business.

                OPERATING
                 EXPENSES       (Dollars in millions)
                ---------
                          Three Months Ended          Year Ended
                          ------------------          ----------
                                Dec 29,                 Dec 31,          Dec 29,         Dec 31,
                                           2012                    2011            2012            2011
                                           ----                    ----            ----            ----
    Operating
     Expenses                            $113.6                  $112.2          $458.2          $410.3
    As a percentage
     of net sales                         15.9 %                  15.4 %          14.5 %          14.6 %

    Operating
     Expenses by
     Segment:
    Electrical
     segment                             $102.8                  $102.2          $418.0          $368.4
    As a percentage
     of net sales                         15.9 %                  15.5 %          14.6 %          14.5 %
    Mechanical
     segment                              $10.8                   $10.0           $40.2           $41.9
    As a percentage
     of net sales                         15.7 %                  15.1 %          13.5 %          15.2 %

Electrical segment operating expenses for the fourth quarter 2012 included restructuring expenses of $0.3 million. In the fourth quarter 2011, Electrical segment operating expenses included restructuring charges of $5.8 million. Mechanical segment operating expenses for the fourth quarter 2012 included an incremental $1.3 million from the acquired businesses.

Fiscal 2012 Electrical segment operating expenses included restructuring expenses of $2.7 million, and $62.1 million of incremental operating expenses from the acquired businesses. Fiscal 2011 Electrical segment operating expenses included $15.5 million of acquisition related expenses, $5.8 million of restructuring charges, and a $6.5 million gain on the divested pool and spa business. For the Mechanical segment, fiscal 2012 included $4.4 million of incremental operating expenses from the acquired business and a $1.3 million gain from the sale of surplus real estate.

                INCOME FROM
                 OPERATIONS       (Dollars in millions)
                -----------
                            Three Months Ended          Year Ended
                            ------------------          ----------
                                  Dec 29,                 Dec 31,        Dec 29,         Dec 31,
                                           2012                    2011            2012            2011
                                           ----                    ----            ----            ----
    Income from
     Operations                           $47.1                   $58.6          $312.8          $255.7
    As a percentage of
     net sales                             6.6 %                   8.1 %           9.9 %           9.1 %

    Income from
     Operations by
     Segment:
    Electrical segment                    $39.6                   $52.8          $273.7          $222.6
    As a percentage of
     net sales                             6.1 %                   8.0 %           9.5 %           8.8 %
    Mechanical segment                     $7.5                    $5.8           $39.1           $33.1
    As a percentage of
     net sales                            10.9 %                   8.8 %          13.2 %          12.1 %

In line with earlier guidance, the effective tax rate for the fourth quarter 2012 was 15.6% compared to 30.4% for the fourth quarter 2011. The decrease was driven primarily by completion of the tax integration of the EPC acquisition. For fiscal 2012 the effective tax rate was 25.8% compared to 30.2% for fiscal 2011. The decrease was driven by the completion of the tax integration of the EPC acquisition and the third quarter qualification in China for a high technology tax incentive that resulted in a retroactive benefit of $2.3 million.

Interest expense was up slightly compared to the fourth quarter 2011. Fiscal 2012 interest expense was $13.4 million greater than 2011 as a result of increased borrowings to finance the EPC acquisition.

For the fourth quarter 2012, cash provided by operating activities was $75.5 million. For fiscal 2012, net cash provided by operating activities was $351.7 million. Fiscal 2012 capital expenditures were $91.0 million including the completion of two factories in China partially offset by $8.7 million of government grants. Cash on hand at December 29, 2012 was $375.3 million an increase of $232.7 million from year end 2011 primarily resulting from the proceeds of our December 2012 common stock offering and continued strong cash flow. For the fourth quarter 2012, free cash flow represented 174.6% of net income and 137.7% of net income for fiscal 2012.

As we start 2013, we are cautiously optimistic about what we are seeing in a number of key markets. We expect diluted earnings per share for the first quarter 2013 of $1.08 to $1.16 per share. Adding back $0.04 of restructuring charges and deducting $0.02 of tax benefits, our adjusted diluted earnings per share are expected to be $1.10 to $1.18, continued Mr. Gliebe.

Regal will hold a conference call at 9:00 AM CST (10:00 AM EST) on Tuesday, February 5, 2013, to discuss the earnings release. To listen to the call and view the presentation slides via the internet, please go to http://www.regalbeloit.com/ or at: http://www.videonewswire.com/event.asp?id=91671. Individuals who would like to participate by phone should dial 800-860-2442, referencing Regal. International callers should dial 412-858-4600, referencing Regal.

A telephone replay of the call will be available through May 6, 2013, at 877-344-7529, conference ID 10023726. International callers should call 412-317-0088 using the same conference ID. A webcast replay will be available until May 6, 2013, and can be accessed at
http://www.regalbeloit.com/rbceventspresentations.htm or at
http://www.videonewswire.com/event.asp?id=91671.

Regal Beloit Corporation is a leading manufacturer of electric motors, mechanical and electrical motion controls and power generation products serving markets throughout the world. Regal Beloit is headquartered in Beloit, Wisconsin, and has manufacturing, sales and service facilities throughout the United States, Canada, Mexico, Europe and Asia. Regal Beloit’s common stock is a component of the S&P Mid Cap 400 Index and the Russell 2000 Index.

CAUTIONARY STATEMENT

The following is a cautionary statement made under the Private Securities Litigation Reform Act of 1995: With the exception of historical facts, the statements contained in this press release may be forward looking statements. Forward-looking statements represent our management’s judgment regarding future events. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “plan,” “expect,” “anticipate,” “estimate,” “believe,” or “continue” or the negative of these terms or other similar words. Actual results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors, including: actions taken by our competitors and our ability to effectively compete in the increasingly competitive global electric motor, power generation and mechanical motion control industries; our ability to develop new products based on technological innovation and the marketplace acceptance of new and existing products; fluctuations in commodity prices and raw material costs; our dependence on significant customers; issues and costs arising from the integration of acquired companies and businesses, including the timing and impact of purchase accounting adjustments; unanticipated costs or expenses we may incur related to product warranty issues; our dependence on key suppliers and the potential effects of supply disruptions; infringement of our intellectual property by third parties, challenges to our intellectual property, and claims of infringement by us of third party technologies; increases in our overall debt levels as a result of acquisitions or otherwise and our ability to repay principal and interest on our outstanding debt; product liability and other litigation, or the failure of our products to perform as anticipated, particularly in high volume applications; economic changes in global markets where we do business, such as reduced demand for the products we sell, currency exchange rates, inflation rates, interest rates, recession, foreign government policies and other external factors that we cannot control; unanticipated liabilities of acquired businesses; cyclical downturns affecting the global market for capital goods; difficulties associated with managing foreign operations; and other risks and uncertainties including but not limited to those described in Item 1A-Risk Factors of the Company’s Annual Report on Form 10-K filed on February 29, 2012 and from time to time in our reports filed with U.S. Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. The forward-looking statements included in this presentation are made only as of their respective dates, and we undertake no obligation to update these statements to reflect subsequent events or circumstances.

    CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
    Unaudited
    (Dollars in Millions, Except Cash Dividends Declared and
     Per Share Data)

                                                  Three Months Ended  Year Ended
                                                  ------------------  ----------
                                                        Dec 29,        Dec 31,        Dec 29,          Dec 31,
                                                                 2012            2011             2012             2011
                                                                 ----            ----             ----             ----
    Net Sales                                                  $715.6          $727.0         $3,166.9         $2,808.3
    Cost of Sales                                               554.9           556.1          2,395.9          2,142.3
                                                                -----           -----          -------          -------
    Gross Profit                                                160.7           170.9            771.0            666.0
    Operating Expenses                                          113.6           112.3            458.2            410.3
                                                                -----           -----            -----            -----
    Income From Operations                                       47.1            58.6            312.8            255.7
    Interest Expense                                             10.9            10.7             44.5             31.1
    Interest Income                                               0.4             0.5              1.6              1.7
                                                                  ---             ---              ---              ---
    Income Before Taxes                                          36.6            48.4            269.9            226.3
    Provision For Income Taxes                                    5.7            14.7             69.6             68.3
                                                                  ---            ----             ----             ----
    Net Income                                                   30.9            33.7            200.3            158.0
    Less: Net Income
     Attributable to
     Noncontrolling                                               1.0             0.2              4.7              5.7
       Interests, net of tax
    Net Income Attributable to
     Regal Beloit Corporation                                   $29.9           $33.5           $195.6           $152.3
                                                                =====           =====           ======           ======
    Earnings Per Share Attributable to Regal Beloit Corporation:
    Basic                                                       $0.71           $0.81            $4.68            $3.84
                                                                =====           =====            =====            =====
    Assuming Dilution                                           $0.70           $0.80            $4.64            $3.79
                                                                =====           =====            =====            =====
    Cash Dividends Declared                                     $0.19           $0.18            $0.75            $0.71
                                                                =====           =====            =====            =====
    Weighted Average Number of
     Shares Outstanding (in
     millions):
    Basic                                                        42.2            41.5             41.8             39.7
                                                                 ====            ====             ====             ====
    Assuming Dilution                                            42.5            41.9             42.1             40.1
                                                                 ====            ====             ====             ====


    SEGMENT INFORMATION
    Unaudited
     (Dollars
     in
     Millions)
                        Electrical Segment      Mechanical Segment
                        ------------------      ------------------
                             Three Months Ended
                             ------------------
                             Dec 29,                 Dec 31,          Dec 29,       Dec 31,
                                         2012                    2011          2012           2011
                                         ----                    ----          ----           ----
     Net
     Sales                             $646.9                  $660.3         $68.7          $66.7
     Income
     from
     Operations                          39.6                    52.8           7.5            5.8

                        Electrical Segment      Mechanical Segment
                        ------------------      ------------------
                               Year Ended
                               ----------
                             Dec 29,                 Dec 31,          Dec 29,       Dec 31,
                                         2012                    2011          2012           2011
                                         ----                    ----          ----           ----
     Net
     Sales                           $2,870.2                $2,533.3        $296.7         $275.0
     Income
     from
     Operations                         273.7                   222.6          39.1           33.1


    CONDENSED CONSOLIDATED BALANCE SHEETS
    Unaudited
    (Dollars in Millions)
                                          Dec 29,          Dec 31,
                                                      2012             2011
                                                      ----             ----
    ASSETS
    Current Assets:
    Cash and Cash Equivalents                       $375.3           $142.6
    Trade Receivables, less Allowances               446.0            424.2
       of $10.2 million in 2012 and $13.6
        million in 2011
    Inventories                                      557.0            575.8
    Prepaid Expenses and Other Current
     Assets                                          112.9             99.9
    Deferred Income Tax Benefits                      48.7             48.6
                                                      ----             ----
    Total Current Assets                           1,539.9          1,291.1

    Property, Plant, Equipment and
     Noncurrent Assets                             2,029.2          1,975.4
    Total Assets                                  $3,569.1         $3,266.5
                                                  ========         ========
    LIABILITIES AND  EQUITY
    Current Liabilities:
    Accounts Payable                                 251.8            249.4
    Other Accrued Expenses                           218.3            265.1
    Current Maturities of Debt                        63.8             10.0
                                                      ----             ----
    Total Current Liabilities                        533.9            524.5

    Long-Term Debt                                   754.7            909.2
    Other Noncurrent Liabilities                     284.0            256.4
    Equity:
    Total Regal Beloit Corporation
     Shareholders' Equity                          1,953.4          1,535.9
    Noncontrolling Interests                          43.1             40.5
                                                      ----             ----
    Total Equity                                   1,996.5          1,576.4
    Total Liabilities and Equity                  $3,569.1         $3,266.5
                                                  ========         ========


    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
    Unaudited
    (Dollars in
     Millions)
                                                   Three Months Ended    Year Ended
                                                   ------------------    ----------
                                                         Dec 29,           Dec 31,         Dec 29,         Dec 31,
                                                                   2012              2011            2012            2011
                                                                   ----              ----            ----            ----
    CASH FLOWS FROM
     OPERATING
     ACTIVITIES:
    Net income                                                    $30.9             $33.7          $200.3          $158.0
    Adjustments to
     reconcile net
     income and changes
     in assets and
     liabilities (net of
     acquisitions) to
     net cash provided
     by operating
     activities:
    Depreciation and
     amortization                                                  31.0              28.5           126.0            98.2
    Excess tax benefits
     from share-based
     compensation                                                  (0.5)             (0.4)           (2.2)           (1.4)
    (Gain) loss on
     disposition of
     property, net                                                 (0.7)             (0.3)           (2.4)           (5.9)
    Share-based
     compensation
     expense                                                        2.3               4.2             9.0            14.3
    Change in assets and
     liabilities                                                   12.5              23.3            21.0             2.0
                                                                   ----              ----            ----             ---
    Net cash provided by
     operating
     activities                                                    75.5              89.0           351.7           265.2

    CASH FLOWS FROM
     INVESTING
     ACTIVITIES:
    Additions to
     property, plant,
     and equipment                                                (24.9)            (13.3)          (91.0)          (57.6)
    Purchase of
     investment
     securities                                                    (8.3)                -           (13.0)              -
    Sales of investment
     securities                                                     3.2                 -             4.7            56.0
    Business
     acquisitions, net
     of cash acquired                                              (7.4)             (1.1)         (110.4)         (765.9)
    Grants received for
     capital
     expenditures                                                   1.6                 -             8.7               -
    Proceeds from sale
     of assets                                                      0.7               0.4             3.4            15.4
                                                                    ---               ---             ---            ----
    Net cash used in
     investing
     activities                                                   (35.1)            (14.0)         (197.6)         (752.1)

    CASH FLOWS FROM
     FINANCING
     ACTIVITIES:
    Net proceeds from
     sale of Common
     Stock                                                        202.9                 -           202.9               -
    Borrowings under
     revolving credit
     facility                                                      11.5              54.0           292.5           254.0
    Repayments under
     revolving credit
     facility                                                     (38.5)            (73.0)         (301.5)         (245.0)
    Proceeds from short-
     term borrowings                                                4.8               2.6            41.2            24.1
    Repayments of short-
     term borrowings                                               (8.0)             (4.8)          (40.9)          (22.1)
    Proceeds from long-
     term borrowings                                                  -                 -               -           500.0
    Payments of long-
     term debt                                                    (15.1)            (28.0)          (90.3)          (28.1)
    Dividends paid to
     shareholders                                                  (7.9)             (7.5)          (30.8)          (27.6)
    Proceeds from the
     exercise of stock
     options                                                        0.7                 -             4.2             1.9
    Excess tax benefits
     from share-based
     compensation                                                   0.5               0.4             2.2             1.4
    Financing fee paid                                                -                 -               -            (2.8)
    Distribution to non-
     controlling
     interest                                                      (2.4)                -            (2.4)              -
    Net cash provided by
     (used in) financing
     activities                                                   148.5             (56.3)           77.1           455.8

    EFFECT OF EXCHANGE
     RATES ON CASH                                                  0.6              (0.5)            1.5            (0.8)

    Net (decrease)
     increase in cash
     and cash
     equivalents                                                  189.5              18.2           232.7           (31.9)
    Cash and cash
     equivalents at
     beginning of period                                          185.8             124.4           142.6           174.5
    Cash and cash
     equivalents at end
     of period                                                   $375.3            $142.6          $375.3          $142.6
                                                                 ======            ======          ======          ======

NON-GAAP MEASURES

Unaudited
(Dollars in Millions Except Per Share Data)

We prepare financial statements in accordance with accounting principles generally accepted in the United States (GAAP). We also disclose adjusted diluted earnings per share (EPS), adjusted gross profit, adjusted gross profit as a percentage of net sales, adjusted income from operations, free cash flow and free cash flow as a percentage of net income attributable to Regal Beloit Corporation (collectively, “non-GAAP financial measures”). We use these measures in our internal performance reporting and for reports to the Board of Directors. We also periodically disclose certain of these measures in our quarterly earnings releases, on investor conference calls, and in investor presentations and similar events. We believe that these non-GAAP financial measures are useful measures for providing investors with additional insight into our operating performance. This additional information is not meant to be considered in isolation or as a substitute for our results of operations prepared and presented in accordance with GAAP. Free cash flow is defined as net cash provided by operating activities less additions to property, plant and equipment.

                       Three Months Ended   Year Ended
                       ------------------   ----------
                             Dec 29,            Dec 31,         Dec 29,        Dec 31,
                                        2012              2011            2012           2011
                                        ----              ----            ----           ----
    GAAP Gross Profit                 $160.7            $170.9          $771.0         $666.0
    Purchase
     Accounting Costs                      -              15.5             0.7           25.8
    Restructuring
     Costs                               3.6                 -             6.9              -
    Warranty Expense
     Item                                  -             (15.4)              -           12.6
    Adjusted Gross
     Profit                           $164.3            $171.0          $778.6         $704.4
                                      ======            ======          ======         ======

    Adjusted Gross
     Profit as a
     Percentage of Net
     Sales                             23.0 %            23.5 %          24.6 %         25.1 %

                       Three Months Ended     Year Ended
                       ------------------     ----------
                             Dec 29,            Dec 31,         Dec 29,         Dec 31,
                                        2012              2011            2012           2011
                                        ----              ----            ----           ----
    GAAP Income from
     Operations                        $47.1             $58.6          $312.8         $255.7
    Acquisition Costs
     and Purchase
     Accounting Costs                      -              15.5             0.7           25.8
    2Q 2011 Warranty
     Expense Item                          -             (15.4)              -           12.6
    Restructuring
     Costs                               3.9               5.8             9.6            5.8
    Gain on Disposal
     of Real Estate                        -                 -            (1.3)             -
    Gain on
     Divestiture                           -                 -               -           (6.5)
    Adjusted Income
     from Operations                   $51.0             $64.5          $321.8         $293.4
                                       =====             =====          ======         ======

                       Three Months Ended     Year Ended
                       ------------------     ----------
                             Dec 29,            Dec 31,         Dec 29,         Dec 31,
                                        2012              2011            2012           2011
                                        ----              ----            ----           ----
    GAAP Net Cash
     Provided by
     Operating
     Activities                        $75.5             $89.0          $351.7         $265.2
    Additions to
     Property Plant
     and Equipment                     (24.9)            (13.3)          (91.0)         (57.6)
    Grants Received
     for Capital
     Expenditures                        1.6                 -             8.7              -
    Free Cash Flow                     $52.2             $75.7          $269.4         $207.6
                                       =====             =====          ======         ======
    Free Cash Flow as
     a Percentage of
     Net Income
     Attributable to
     Regal Beloit                     174.6 %           226.0 %         137.7 %        136.3 %
    ADJUSTED DILUTED EARNINGS PER SHARE
    -----------------------------------
                                        First Quarter      Second Quarter     Third Quarter      Fourth Quarter      Fiscal Year
                                        -------------      --------------     -------------      --------------      -----------
    2012 GAAP Diluted
     Earnings Per
     Share                                          $1.16               $1.49             $1.29               $0.70            $4.64
    Purchase
     Accounting Costs                                0.01                   -                 -                   -             0.01
    Restructuring
     Costs                                              -                0.01              0.08                0.06             0.15
    Gain on Disposal
     of Real Estate                                 (0.02)                  -                 -                   -            (0.02)
    Prior Year Tax
     Benefit                                            -                   -             (0.05)                  -            (0.05)
    2012 Adjusted
     Diluted Earnings
     Per Share                                      $1.15               $1.50             $1.32               $0.76            $4.73
                                                    =====               =====             =====               =====            =====

                                        First Quarter      Second Quarter     Third Quarter      Fourth Quarter      Fiscal Year
                                        -------------      --------------     -------------      --------------      -----------
    2011 GAAP Diluted
     Earnings Per
     Share                                          $0.99               $0.88             $1.13               $0.80            $3.79
     Acquisition and
      Purchase
      Accounting Costs                               0.12                0.06              0.28                0.26             0.73
    Warranty Expense
     Item                                               -                0.44                 -               (0.23)            0.19
    Restructuring
     Costs                                              -                   -                 -                0.10             0.10
    Gain on
     Divestiture                                        -                   -             (0.10)                  -            (0.10)
    2011 Adjusted
     Diluted Earnings
     Per Share                                      $1.11               $1.38             $1.31               $0.93            $4.71
                                                    =====               =====             =====               =====            =====

SOURCE Regal Beloit Corporation


Source: PR Newswire