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©2018 Regal Beloit Corporation

Regal Beloit CorporationInvestor Relations Presentation

February 2018

Chuck HinrichsVice PresidentChief Financial Officer

Robert CherryVice PresidentBusiness Development & Investor Relations

Mark GliebeChairmanChief Executive Officer

Jon SchlemmerChief Operating Officer

©2018 Regal Beloit Corporation 2

Safe Harbor Statement


Non-GAAP Financial Measures


Regal is…

A Leader in High Efficiency Motor & Power Transmission Systems− Well-positioned for global energy efficiency trend

A Strong Free Cash Flow Generator− Five-year average free cash flow 133% of adjusted net income*

Positioned to Drive Organic Growth through Innovation− Disruptive products for both residential and industrial applications

Delivering Results from Ongoing Simplification Initiative− Primed for margin improvement and transition to automation

* Non-GAAP Financial Measurement, See Appendix for Reconciliation

We Create a Better Tomorrow by Efficiently Converting Power into Motion


Regal Overview

Founded in 1955 with Headquarters inBeloit, Wisconsin

2017 Sales of $3.4B

Sales by SegmentSales by Product

Sales by Geography Production by Geography

Commercial & Industrial Systems

Power Transmission

SolutionsClimate

Solutions

Mexico

Mexico

USA & Canada

USA & Canada

Europe

AsiaAsia

EuropeROW

30%23%

47%

Small Motors

Large Motors

Gearing

Bearings

BlowersGenerators

Control SolutionsCouplings

Other

Small Motors

29% 23%

48%

8 Straight Years of Dividend Increases

Strong Brands Associated with High Efficiency Systems


Segment End Markets, Products and Brands

Power Transmission

Solutions

ClimateSolutions

®

Commercial & Industrial

Systems


Financial Snapshot

$3.3 $3.5$3.2 $3.4

2014 2015 2016 2017

Net Sales


$4.31

$5.33$4.44

$4.87

2014 2015 2016 2017

$215

$292

$377

$227

2014 2015 2016 2017

$0.84 $0.90 $0.94 $1.00

2014 2015 2016 2017

Adjusted Diluted EPS*

Dividends Paid Per ShareFree Cash Flow*

(billions)

(millions)


0%

25%

50%

75%

100%

125%

150%

175%

200%

$-

$100

$200

$300

$400

$500

2013 2014 2015 2016 2017

Free Cash Flow* % of Adj. Net Income*

Free Cash Flow % of Adj. Net Income 5-Year Average of 133% * Non-GAAP Financial Measurement, See Appendix for Reconciliation

(millions)

Consistently Generating Cash


$0.62 $0.64 $0.66 $0.70

$0.74 $0.78

$0.84 $0.90

$0.94 $1.00

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Dividend Increase of 8% Announced May 1, 2017

Dividends Paid Per Share

Returning Cash to Shareholders


Capital Allocation Priorities

Acquisitions

Targeted Transactions to Strengthen the Core and Drive Shareholder Value

Share Repurchase

Opportunistically Repurchase Shares while Maintaining Financial Flexibility

Balance Sheet Targets

Disciplined Approach to Drive Long-Term Shareholder Value

Debt/EBITDA* Ratio: 1.5 – 3.5

Capital Expenditures: 2.5% – 3.0% of Sales

Cash Dividends: 20% – 24% Payout Ratio



Enterprise Strategy

FOUNDATIONAL PERFORMANCECORE CAPABILITIES

Top QuartileCash Generation

Improving Margins

Customer Favored

Unique Culture

Innovative

Strong Operators

Drives Long Term Growth and Improved Returns

• Focus on Core

KEY ELEMENTS

• Innovate to Grow• Simplification


Enterprise Strategy – Performance Targets

Adj. Operating Margins*

200 – 250 bps

ROIC*

300 – 400 bps

Organic Sales Growth*

2% – 4% CAGR

By 2019

Strategy Drives Sustainable Improvements in Financial Performance

Free Cash Flow to Net Income*

100% – 125%



Focus On Core Businesses Where We Can Differentiate with Technology

Increase the Focus on the Distribution Channel to Drive Growth

Selectively Prune Businesses Where We Do Not Have a Clear Advantage or Scale

Management Incentivized to Deliver Organic Revenue Growth and Operating Margin Improvement

Balanced Capital Deployment Between Share Repurchases and Acquisitions

Focus on the Core

Acquisition First

Serial Acquirer

Organic First

Targeted Acquisitionsto


Innovate to Grow

Energy Efficiency Internet of ThingsDisruptive Technology

HP Range Year Markets< 1.0 2011 Furnaces

BoilersAppliances

0.5 - 1.0 2015 FurnacesAir Handlers

3.0 – 15.0 2017 Ind. FansPumps

Efficient motors use electronics Every motor can be a sensor Every motor can communicate Every motor can be programmed

Commercial Refrigeration Effective March of 2017 Requires ECM type motor

Commercial HVAC Effective July of 2018 Expecting shift to ECM

Fan Energy Rating (FER) Effective July of 2019 Expecting significant shift

to ECM

Data Analytics

Predictive Maintenance


IE3 Efficiency Industrial Motors

Fan Energy Rating (FER)

Walk in Coolers & Freezers

Comm. Ref. Equipment

Multi-Year Trend Favors High Efficiency Suppliers

Energy Efficiency Requirements Increasing

Commercial HVAC

2017 2018 2019 2020


Industry Units by Motor Type(million units)

2016 2020

High Eff

Standard

2.93.1

Sources: AHRI & Management estimates

Fan Energy Rating (FER)

New National Furnace Standard

Electrical Efficiency Requirement

High Efficiency Motor Mandate

7/1/19 Effective Date

Furnace Fan Regulation Impact

Significant Industry Mix Shift by 2020


Four Paths To Meet FER Regulation

Blower Housing

Blower Motor

Gas Modulation

Heat Exchanger

70%

82%

93%

100%

% of Volume


Full Range of FER Solutions

Best FER Solution Set

Customer Benefits Full Range of Solutions Highest Motor Efficiency

with Proven Reliability Premium Solution for Most

Difficult Applications

Regal Benefits Full Customer Engagement Est. $40-$60 Million

Incremental Sales by 2020

DEC Star® BlowerHighest Efficiency

Solution

ECM 3.0+High Efficiency

Motor

Ensite™

ECM Motor

Efficiency and Features


Disruptive Technology – DEC Star® Blower

Innovative First to Market New Technology in the Motor,

Drive, Blower Constructionand Blower Wheel

17 Patents Issued & Pending

Helps Meet Difficult FER and SEER Regulations with One Simple Upgrade

Benefits Substantial Improvement

in Energy Efficiency Less Noise Less Weight Uniform Airflow

Standard Blower DEC Star® Blower


Scaling Axial Technology

Growth Opportunities in Both Existing and New Markets for Regal

UlteMAX™

Motor & ControlDEC Star® Blower

HVAC SolutionAxial

Draft InducerAxial

Gas Pre-Mix

2011 2013 2015 2017


Disruptive Technology – UlteMAX™ Motor

Differentiated Form Factor Delivers Significant Value

Customer Benefits Compact Form Factor 50% – 75% Lower Weight Higher Efficiency

UlteMAX™

Motor & ControlStandard

Industrial Motor

Regal Benefits Significant Customer

Interest First Sales in 2017 Est. $70 Million

Incremental Sales by 2023


UlteMAX™ Motor – Industrial Applications

Innovative First to Market Revolutionary Form Factor New Technology in the Motor, Drive 8 Patents Issued and Pending

Improving Energy Efficiency with Less Weight and Lower System Cost

Benefits to Customers Substantial Improvement in

Energy Efficiency 50% - 75% Less Weight and Size

Standard Air Handling Axial Air Handling


Simplification

ERPs

Manufacturing Footprint

Design Platforms

Suppliers

Completed thru 2016

Reducing Our Costs and Making it Easy for the Customer

Planned for 2017-2019

75% of Sales on One ERP 90% of Sales on One ERP

1,845,000 sq ft Reduced15% Reduction

Another 1,100,000 sq ft Cumulative 25% Reduction

4 Major Design PlatformsConsolidated

1 Additional Design Platformto be Consolidated

~1,400 SuppliersConsolidated

~500 More Suppliersto Consolidate


Leveraging Simplification

Energy Efficiency Disruptive Technology Internet of Things

Enables

Enables

Enables

Rooftop Consolidation Automation

ERP Consolidation Digital Customer Experience

Platform Consolidation Innovation

1,845K sq ft consolidated

75%revenue on one system

4 design platforms eliminated


Key Takeaways

Regal is…

A Leader in High Efficiency Motor & Power Transmission Systems

A Strong Free Cash Flow Generator

Positioned to Drive Organic Growth through Innovation

Delivering Results from Ongoing Simplification Initiative

We Create a Better Tomorrow by Efficiently Converting Power into Motion

©2018 Regal Beloit Corporation

Thank You

Chuck HinrichsVice PresidentChief Financial Officer

Robert CherryVice PresidentBusiness Development & Investor Relations

Mark GliebeChairmanChief Executive Officer

Jon SchlemmerChief Operating Officer


Appendix Non-GAAP Reconciliations

(Dollars in Millions)FREE CASH FLOW Dec 28, 2013 Jan 3, 2015 Jan 2, 2016 Dec 31, 2016 Dec 30, 2017Net Cash Provided by Operating Activities 305.0$ 298.2$ 384.3$ 442.3$ 291.9$ Additions to Property Plant and Equipment (82.7) (83.6) (92.2) (65.2) (65.2) Grants Received for Capital Expenditures 1.6 - - - Free Cash Flow 223.9$ 214.6$ 292.1$ 377.1$ 226.7$

(Dollars in Millions)ADJUSTED NET INCOME EXCLUDING ASSET WRITE DOWNS Dec 28, 2013 Jan 3, 2015 Jan 2, 2016 Dec 31, 2016 Dec 30, 2017GAAP Net Income (Loss) Attributable to Regal Beloit Corporation 120.0$ 31.0$ 143.3$ 203.4$ 213.0$ Goodwill and Asset Impairments and Other, Net 81.0 159.5 92.7 - - Tax Effect from Goodwill and Asset Impairments and Other, Net (6.4) (12.3) (21.8) - - Adjusted Net Income 194.6$ 178.2$ 214.2$ 203.4$ 213.0$

Free Cash Flow as a Percentage of Adjusted Net Income Excluding AssetWrite Downs Attributable to Regal Beloit Corporation 115.1% 120.4% 136.4% 185.4% 106.4%

Five Year Average Free Cash Flow to Adjusted Net Income 132.7%

Twelve Months Ended

Twelve Months Ended



ADJUSTED DILUTED EARNINGS PER SHAREDec 30,

2017Dec 31,

2016

GAAP Diluted Earnings Per Share 4.74$ 4.52$

Restructuring and Related Costs 0.22 0.10

Gain on Disposal of Businesses - (0.14)

Gain on Sale of Assets (0.07) (0.04)

Provisional Benefit of the New US Tax Legislation (0.02) -

Adjusted Diluted Earnings Per Share 4.87$ 4.44$

Twelve Months Ended


Appendix Non-GAAP ReconciliationsTOTAL DEBT/ADJUSTED EBITDA(Dollars in Millions)

LTM Dec 30, 2017 Net Income Attributable to Regal Beloit Corporation 213.0$ Plus: Minority Interest 5.1 Plus: Taxes 59.1 Plus: Interest Expense 56.1 Less: Interest Income (3.2) Plus: Depreciation and Amortization 137.2 Plus: Restructuring and Related Costs 14.1 Less: Gain on Sale of Assets (3.9) Less: Gain on Disposal of Business (0.1)

Adjusted EBITDA 477.4$

Current Maturities of Debt 101.2$ Long-Term Debt 1,039.9

Total Debt 1,141.1$

Total Debt/Adjusted EBITDA 2.4



ORGANIC SALES GROWTH(Dollars in Millions)

Commercial & Industrial Systems Climate Solutions

Power Transmission Solutions Total Regal

Net Sales 1,604.3$ 990.6$ 765.4$ 3,360.3$

Net Sales from Business Divested - - 9.0 9.0

Impact from Foreign Currency Exchange Rates (2.5) (0.7) (1.6) (4.8)

Adjusted Net Sales 1,601.8$ 989.9$ 772.8$ 3,364.5$

Net Sales Twelve Months Ended Dec 31, 2016 1,530.9$ 960.0$ 733.6$ 3,224.5$

Organic Sales Growth % 4.6 % 3.1 % 5.3 % 4.3 %

Net Sales Growth % 4.8 % 3.2 % 4.3 % 4.2 %

Twelve Months Ended December 30, 2017

ADJUSTED OPERATING INCOME(Dollars in Millions) Dec 30,

2017Dec 31,

2016Dec 30,

2017Dec 31,

2016Dec 30,

2017Dec 31,

2016Dec 30,

2017Dec 31,

2016

GAAP Income from Operations 100.0$ 103.5$ 140.6$ 129.9$ 89.5$ 87.2$ 330.1$ 320.6$

Restructuring and Related Costs 10.9 2.5 2.5 2.6 0.7 1.7 14.1 6.8

Gain on Disposal of Businesses - - - - (0.1) (11.6) (0.1) (11.6)

Gain on Sale of Assets (1.1) (1.7) - - (2.8) - (3.9) (1.7)

Adjusted Income from Operations 109.8$ 104.3$ 143.1$ 132.5$ 87.3$ 77.3$ 340.2$ 314.1$

GAAP Operating Margin % 6.2 % 6.8 % 14.2 % 13.5 % 11.7 % 11.9 % 9.8 % 9.9 %

Adjusted Operating Margin % 6.8 % 6.8 % 14.4 % 13.8 % 11.4 % 10.5 % 10.1 % 9.7 %

Total Regal

Twelve Months EndedCommercial & Industrial

Systems Climate SolutionsPower Transmission

Solutions


Appendix Non-GAAP ReconciliationsRETURN ON INVESTED CAPITAL (ROIC)(Dollars in Millions) Dec 30,

2017Dec 31,

2016

Cash and Cash Equivalents (139.6)$ (284.5)$

Current Maturities of Debt 101.2 100.6$

Long-Term Debt 1,039.9 1,310.9

Total Net Debt 1,001.5$ 1,127.0$

Total Regal Beloit Corporation Shareholders' Equity 2,325.5$ 2,038.8$

Noncontrolling Interests 29.2 39.4$

Total Equity 2,354.7$ 2,078.2$

Total Invested Capital 3,356.2$ 3,205.2$

Average Total Invested Capital 3,280.7$ 3,328.5$

Adjusted Income from Operations 340.2$ 314.1$

Less: Income Tax Provision* 21.7 % 21.4 %

Adjusted Income from Operations after Tax 266.4$ 246.9$

Return on Invested Capital 8.1 % 7.4 %

*2017 Tax Rate adjusted for impact of the Tax Cuts and Jobs Act of 2017.

Twelve Months Ended


Appendix Regal Shipping Days

1Q 2Q 3Q 4Q FY

2014 63 63 63 64 253

2015 64 63 64 59 250

2016 64 64 63 60 251

2017 64 63 63 60 250

2018 63 64 63 61 251

Regal operates on a 52/53 week fiscal year ending on the Saturday closest to December 31

Fiscal Years 2015, 2016, 2017 and 2018 have 52 weeks

Fiscal Year 2014 had 53 weeks

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