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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<div align="left" style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<!-- xbrl,ns -->
<!-- xbrl,nx -->
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="left">
</div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>1. </b><u><b>BASIS OF PRESENTATION</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The accompanying (a) condensed consolidated balance sheet of Regal Beloit Corporation (the
“Company”) as of January 1, 2011, which has been derived from audited financial statements, and (b)
unaudited interim condensed consolidated financial statements as of April 2, 2011, have been
prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial statements prepared in
accordance with accounting principles generally accepted in the United States have been condensed
or omitted pursuant to those rules and regulations, although the Company believes that the
disclosures made are adequate to make the information not misleading.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">It is suggested that these condensed consolidated financial statements be read in conjunction with
the financial statements and the notes thereto included in the Company’s 2010 Annual Report on Form
10-K filed on March 2, 2011.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In the opinion of management, all adjustments considered necessary for a fair presentation of
financial results have been made. Except as otherwise discussed, such adjustments consist of only
those of a normal recurring nature. Operating results for the three months ended April 2, 2011 are
not necessarily indicative of the results that may be expected for the entire fiscal year ending
December 31, 2011.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company operates on a 52/53 week fiscal year ending on the Saturday closest to December 31.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 2 - rbc:OtherFinancialInformationTextBlock-->
<div align="left" style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>2. </b><u><b>OTHER FINANCIAL INFORMATION</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><b><i>Inventories</i></b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Cost for approximately 48% of the Company’s inventory is determined using the last-in, first-out
(LIFO) inventory valuation method. The approximate percentage distribution between major classes
of inventories was as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">January 1, 2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw Material and Work in Process
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>38</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">36</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished Goods and Purchased Parts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>62</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">64</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><b><i>Property, Plant and Equipment</i></b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Property, plant and equipment by major classification was as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">January 1, 2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Land and Improvements
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>66,709</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,909</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Buildings and Improvements
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>142,774</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141,128</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Machinery and Equipment
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>535,548</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">524,172</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction in Progress
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>24,751</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,644</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Property, Plant and Equipment
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>769,782</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">737,853</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: Accumulated Depreciation
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(356,237</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(341,477</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Net Property, Plant and Equipment
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>413,545</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">396,376</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - us-gaap:ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock-->
<div align="left" style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>3. <u>ACQUISITIONS</u></b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The results of operations for acquired businesses are included in the Condensed Consolidated
Financial Statements from the dates of acquisition.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On March 7, 2011, the Company acquired Hargil Dynamics Pty. Ltd. (“Hargil”) located in Sydney,
Australia. Hargil is a distributor of mechanical power transmission components and solutions.
Hargil is reported as part of the Company’s Mechanical segment.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On December 23, 2010, the Company acquired Unico, Inc. (“Unico”), located in Franksville,
Wisconsin. Unico manufactures a full range of AC and DC drives, motor controllers and other
accessories for most industrial and commercial applications. Unico has developed proprietary
technology in the fields of oil and gas recovery technology, commercial HVAC technology, test stand
automation and other applications. The purchase price of $107.3 million was paid in cash, net of
acquired debt and cash. In addition to the cash paid, the Company agreed to pay an additional
amount should certain
performance thresholds be met. At April 2, 2011, the Company has a liability recorded of $9.2
million for this consideration. Unico is reported as part of the Company’s Electrical segment.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On December 1, 2010, the Company acquired South Pacific Rewinders (“SPR”), located in Auckland, New
Zealand. SPR operates as a motor rewinder and distributor in the Pacific region. SPR is reported
as part of the Company’s Electrical segment.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On November 1, 2010, the Company acquired 55% of Elco Group B.V. (“Elco”), located in Milan, Italy.
Elco manufactures and sells motors, fans and blowers and has manufacturing facilities in Italy,
China and Brazil. The purchase price was $27.3 million, net of acquired debt and cash. The
purchase price includes $4.6 million in cash paid at closing,
$5.6 million paid during the first three months of 2011, and $17.1
million which will be paid in three semi-annual payments. Elco is
reported as part of the Company’s Electrical segment.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On September 1, 2010, the Company acquired Rotor B.V. (“Rotor”), located in Eibergen, the
Netherlands. Rotor sells standard and special electric motors to a variety of industries including
the marine industry, ship building and offshore oil and gas. In addition to the Netherlands, Rotor
also sells throughout Europe, the United Kingdom and Japan. The purchase price of $36.4 million
was paid in cash, net of acquired debt and cash. Rotor is reported as part of the Company’s
Electrical segment.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On May 4, 2010, the Company acquired Air-Con Technology (“Air-Con”), located in Mississauga,
Ontario, Canada. Air-Con is a distributor of HVACR electric motors. Air-Con is reported as part
of the Company’s Electrical segment.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On April 6, 2010, the Company acquired CMG Engineering Group Pty, Ltd. (“CMG”), located in
Melbourne, Australia. CMG manufactures and sells fractional horsepower industrial motors, blower
systems, and industrial metal products with operations in Australia, New Zealand, South Africa,
Malaysia, Singapore, the United Kingdom and the Middle East. The business also distributes
integral horsepower industrial motors, mechanical power transmission products, material handling
equipment, electrical insulation materials, magnet wire and specialty conductors in Australia and
New Zealand. The purchase price was $82.6 million, net of acquired debt and cash. The purchase
price was paid $76.5 million in cash and $6.1 million in shares of Company common stock. CMG is
reported as part of our Electrical and Mechanical segments.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><i>Pending Acquisition</i></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On December 12, 2010, the Company and A.O. Smith Corporation (NYSE: AOS) entered into an agreement
pursuant to which the Company will acquire the Electrical Products Company of A.O. Smith
Corporation. The total consideration for the transaction consists of $700 million of cash and
2,834,026 shares of Company common stock. Closing on the transaction is subject to all customary
regulatory approvals, which are still pending as of the date of this filing.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>4. </b><u><b>COMPREHENSIVE INCOME</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s consolidated comprehensive income for the three months ended April 2, 2011 and April
3, 2010, respectively, was as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ending</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>40,823</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">39,868</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other Comprehensive Income (Loss) from:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Currency Translation adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>10,753</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,426</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Changes in fair value on open hedge contracts, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,540</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,745</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Hedging activities reclassified into earnings from
accumulated other comprehensive income (loss) (“AOCI”), net
of tax
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,524</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">740</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Amortization of net prior service costs and actuarial losses
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>656</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">447</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Comprehensive income
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>51,248</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">53,226</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The amount of comprehensive income attributable to noncontrolling interests was $1.4 million
and $2.1 million for the three months ended April 2, 2011 and April 3, 2010, respectively.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Foreign currency translation adjustments, unrealized gains and losses on derivative instruments and
pension liability adjustments are included in Equity under Accumulated Other Comprehensive Income
(Loss). The components of the ending balances of Accumulated Other Comprehensive (Loss) are as
follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">January 1, 2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Translation adjustments
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,521</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,190</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Hedging activities, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,858</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,842</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pension and post retirement benefits, net of tax
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(27,076</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,732</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>9,303</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,700</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:ProductWarrantyDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>5. <u>WARRANTY COSTS</u></b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company recognizes the cost associated with its standard warranty on its products at the time
of sale. The amount recognized is based on historical experience. The following is a
reconciliation of the changes in accrued warranty costs for the three months ended April 2, 2011
and April 3, 2010 (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ending</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginning balance
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>12,831</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13,298</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deduct: Payments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,854</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,445</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Add: Provision
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,581</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,489</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Translation Adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>26</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending balance
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>12,584</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13,398</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>6. <u>BUSINESS SEGMENTS</u></b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company has two strategic businesses that are reportable segments, Mechanical and Electrical
(in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Mechanical Segment</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Electrical Segment</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ending</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ending</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Sales
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>68,365</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">50,073</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>594,290</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">457,245</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Income from Operations
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>8,607</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,425</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>55,513</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,340</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">% of Net Sales
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>12.6</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">12.8</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>9.3</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">12.3</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill at end of period
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>12,481</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>764,229</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">667,725</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>7. <u>GOODWILL AND OTHER INTANGIBLES</u></b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><b><i>Goodwill</i></b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As required, the Company performs an annual impairment test of goodwill during the fourth quarter
or more frequently if events or circumstances change that would more likely than not reduce the
fair value of its reporting units below their carrying value.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">At April 2, 2011, substantially all of the Company’s goodwill is attributable to the Electrical
segment and the Company believes that substantially all of the goodwill is deductible for tax
purposes. The following information presents changes to goodwill during the periods indicated (in
thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Electrical</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Mechanical</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Segment</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Segment</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of January 2, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">663,920</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">663,920</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Translation Adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right">3,805</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,805</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of April 3, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">667,725</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">667,725</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of January 1, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">775,371</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">763,135</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,236</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquisitions and Valuation Adjustments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,810</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,875</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">65</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Translation Adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right">3,149</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,969</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">180</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance as of April 2, 2011</b>
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>776,710</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>764,229</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>12,481</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><b><i>Intangible Assets</i></b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Intangible assets consisted of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="32%"> </td>
<td width="3%"> </td>
<td width="9%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">April 2, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1" style="border-bottom: 0px solid #000000">Useful Life </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1" style="border-bottom: 1px solid #000000">(years)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Gross Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amortization</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Gross Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amortization</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Customer Relationships
</div></td>
<td> </td>
<td align="center">3 – 17</td>
<td> </td>
<td align="left">$</td>
<td align="right">142,023</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(44,805</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">97,799</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(31,781</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Technology
</div></td>
<td> </td>
<td align="center">3 – 9</td>
<td> </td> <td> </td>
<td align="right">60,689</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,164</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">33,332</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,716</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks
</div></td>
<td> </td>
<td align="center">3 – 20</td>
<td> </td> <td> </td>
<td align="right">31,346</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,556</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">21,229</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,956</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents & Engineering Drawings
</div></td>
<td> </td>
<td align="center">10</td>
<td> </td> <td> </td>
<td align="right">16,610</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,416</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">16,610</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,755</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-Compete Agreements
</div></td>
<td> </td>
<td align="center">3 – 5</td>
<td> </td> <td> </td>
<td align="right">7,569</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,157</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,349</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,195</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">258,237</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(87,098</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">175,319</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(63,403</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Values
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">171,139</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">111,916</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center" style="font-size: 10pt; margin-top: 10pt"><b>Estimated Amortization (in millions)</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="1%"> </td>
<td width="8%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2012</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2013</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2014</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2015</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td valign="top" align="left">$</td>
<td valign="top" align="right">28.4</td>
<td valign="top"> </td>
<td> </td>
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">28.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">26.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18.7</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Amortization expense recorded for the three months ended April 2, 2011 and April 3, 2010 was $7.1
million and $4.4 million, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:LongTermDebtTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>8. </b><u><b>DEBT AND BANK CREDIT FACILITIES</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s indebtedness as of April 2, 2011 and January 1, 2011 was as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">January 1, 2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Senior notes
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>250,000</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">250,000</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Term loan
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>165,000</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">165,000</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Revolving credit facility
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,845</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>32,125</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,893</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>449,970</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">436,893</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: Current maturities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(19,190</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,637</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-current portion
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>430,780</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">428,256</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">At April 2, 2011, the Company had $250.0 million of senior notes (the “Notes”) outstanding.
The Notes were sold pursuant to a Note Purchase Agreement (the “Agreement”) by and among the
Company and the purchasers of the Notes. The Notes were issued and sold in two series: $150.0
million in Floating Rate Series 2007A Senior Notes, Tranche A, due August 23, 2014, and $100.0
million in Floating Rate Series 2007A Senior Notes, Tranche B, due August 23, 2017. The Notes bear
interest at a margin over the London Inter-Bank Offered Rate (“LIBOR”). These interest rates vary
as LIBOR varies. At April 2, 2011, the interest rate of 1.0% was based on a margin over LIBOR.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On June 16, 2008, the Company entered into a Term Loan Agreement (“Term Loan”) with certain
financial institutions, whereby the Company borrowed an aggregate principal amount of $165.0
million. The Term Loan matures in June 2013, and borrowings generally bear interest at a variable
rate equal to a margin over LIBOR. The margin varies with the ratio of the Company’s consolidated
debt to consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) as
defined in the Agreement. These interest rates also vary as LIBOR varies. At April 2, 2011, the
interest rate of 1.0% was based on a margin over LIBOR.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s $500.0 million revolving credit facility (the “Facility”) permits the Company to
borrow at interest rates based upon a margin above LIBOR, which margin varies with the ratio of
senior funded debt to EBITDA as defined in the Facility. These interest rates also vary as LIBOR
varies. The Company pays a commitment fee on the unused amount of the Facility, which also varies
with the ratio of senior funded debt to EBITDA. The Facility matures in April 2012. At April 2,
2011, the interest rate of 1.3% was based on a margin over LIBOR.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Notes, the Term Loan, and the Facility require the Company to meet specified financial ratios
and to satisfy certain financial condition tests. The Company was in
compliance with all financial debt
covenants as of April 2, 2011.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company has entered into interest rate swap agreements to manage fluctuations in cash flows
resulting from interest rate risk. (See also Note 14 of Notes to Condensed Consolidated Financial
Statements.)
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">At April 2, 2011, other notes payable of approximately $32.1 million were outstanding with a
weighted average interest rate of 5.1%.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>9. </b><u><b>PENSION PLANS</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s net periodic defined benefit pension cost is comprised of the following components
(in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ending</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>720</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">586</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,988</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,734</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,828</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,566</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost and net actuarial loss
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>918</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">612</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit expense
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,798</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,366</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The estimated net actuarial loss and prior service cost for defined benefit pension plans that
will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost
during the 2011 fiscal year is $3.3 million and $0.2 million, respectively.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In the first quarter of 2011 and 2010, the Company contributed $0.6 million and $0.5 million,
respectively, to defined benefit pension plans. The Company expects to contribute an additional
$1.6 million, for total contributions of $2.2 million in 2011. The Company contributed a total of
$4.1 million in 2010. The assumptions used in the valuation of the Company’s pension plans and in
the target investment allocation have remained the same as those disclosed in the Company’s 2010
Annual Report on Form 10-K filed on March 2, 2011.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>10. </b><u><b>SHAREHOLDERS’ EQUITY</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company recognized approximately $1.8 million and $1.4 million in share-based compensation
expense for the three month period ended April 2, 2011 and April 3, 2010, respectively. The total
excess income tax benefit recognized relating to share-based compensation for the three months
ended April 2, 2011 and April 3, 2010 was approximately $0.4 million and $0.7 million,
respectively. The Company recognizes compensation expense on grants of share-based compensation
awards on a straight-line basis over the vesting period of each award. As of April 2, 2011, total
unrecognized compensation cost related to share-based compensation awards was approximately $16.0
million, net of estimated forfeitures, which the Company expects to recognize over a weighted
average period of approximately 2.6 years.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company was authorized as of April 2, 2011 to deliver up to 5.0 million shares of common stock
upon exercise of non-qualified stock options or incentive stock options, or upon grant or in
payment of stock appreciation rights, and restricted stock. Approximately 1.8 million shares were
available for future grant or payment under the various plans at April 2, 2011.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><b><i>Share-based Incentive Awards</i></b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company uses several forms of share-based incentive awards, including non-qualified stock
options, incentive stock options, and stock appreciation rights (“SARs”). All grants are made at
prices equal to the fair market value of the stock on the grant dates, and expire ten years from
the grant date. The Company values restricted stock awards at the closing market value of its
common stock on the date of grant and restrictions generally lapse three years after the date of
grant.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">A summary of share-based awards (options and SARs) as of April 2, 2011 follows below. Forfeitures
of share-based awards were immaterial.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Wtd. Avg.</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Wtd. Avg. Remaining</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aggregate Intrinsic</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Shares</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Exercise Price</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Contractual Term (years)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value (in millions)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Number of shares:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Outstanding
</div></td>
<td> </td>
<td> </td>
<td align="right">1,420,210</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43.67</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Exercisable
</div></td>
<td> </td>
<td> </td>
<td align="right">593,560</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37.40</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22.4</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><b><i>Restricted Stock</i></b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of April 2, 2011, the Company had 181,027 shares of restricted stock outstanding with a weighted
average grant date fair value of $53.45 and a weighted average life of 1.9 years. The Company
values restricted stock awards at the closing market value of its common stock on the date of grant
and restrictions generally lapse three years after the date of the grant. In the first three
months of 2011 there were 150 shares of restricted stock vested.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>11. </b><u><b>INCOME TAXES</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The effective tax rate for the three months ended April 2, 2011 was 31.2% versus 31.7% for the
three months ended April 3, 2010. The change in the effective rates was driven by changes in the
global distribution of income.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of both April 2, 2011 and January 1, 2011, the Company had approximately $5.5 million of
unrecognized tax benefits, all of which would affect its effective tax rate if recognized. The
Company recognizes interest and penalties related to uncertain tax positions in income tax expense.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 0%">The Company or one of its subsidiaries files income tax returns in the U.S. federal
jurisdiction, and various states and foreign jurisdictions. Federal tax returns from 2007 through
2010 and various state tax returns remain subject to income tax examinations by tax authorities.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>12. </b><u><b>EARNINGS PER SHARE (EPS)</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The numerator for the calculation of basic and diluted earnings per share is Net Income
Attributable to Regal Beloit Corporation. The denominator is computed as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ending</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 2, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Denominator for basic EPS — weighted average
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>38,627</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37,446</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of dilutive securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>505</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,176</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Denominator for diluted EPS
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>39,132</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38,622</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The “Effect of dilutive securities” represents the dilution impact of equity awards and
convertible notes that were fully converted during 2010. The dilutive effect of the convertible
notes was approximately 0.8 million shares for the three months ended April 3, 2010.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">There were no options for common shares where the exercise price was above the market price at
April 2, 2011. As of April 3, 2010 options for common shares totaling 1.0 million shares were
excluded from the calculation of the effect of dilutive securities, as the effect of such options
was anti-dilutive.
</div>
<!-- Folio -->
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</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>13. </b><u><b>CONTINGENCIES</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On July 30, 2009, the Company filed a response and counterclaims to an action filed by Nordyne,
Inc. (“Nordyne”) in the U.S. District Court for the Eastern District of Missouri in which action
Nordyne is seeking a judgment declaring that neither Nordyne’s G7 furnace systems nor its iQ Drive
23-seer air conditioning systems infringe on the Company’s ECM (electronically commutated motor)
systems patents (U.S. Patent No. 5,592,058) (“the ‘058 Patent”) and/or that the ‘058 Patent is
invalid. In its response and counterclaims against Nordyne the Company is seeking a judgment that
the ‘058 Patent is valid and that Nordyne has, in fact, infringed and continues to infringe the
‘058 Patent by making, using, offering for sale and selling it’s G7 furnace systems and iQ Drive
23-seer air conditioning systems. The Company has also requested the U.S. District Court to enjoin
Nordyne and all persons working in concert with Nordyne from further infringement of the ‘058
Patent and to award us compensatory and other damages caused by such infringement. On February 2,
2011, the Court issued a claim construction order in which it held that some of the claims in the
‘058 Patent contain limitations that are indefinite and thus invalid. However, other claims of the
‘058 Patent were not affected by this ruling and remain to be litigated in the action. The Company
intends to defend its intellectual property vigorously against the claims asserted by Nordyne and
against any infringement by Nordyne or any other person. The Company does not currently believe
that the litigation will have a material effect on the Company’s financial position or its results
of operations.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">One of the Company’s subsidiaries that it acquired in 2007 is subject to numerous claims filed in
various jurisdictions relating to certain sub-fractional motors that were primarily manufactured
through 2004 and that were included as components of residential and commercial ventilation units
marketed by a third party. These claims generally allege that the ventilation units were the cause
of fires. Based on the current facts, the Company does not believe these claims, individually or
in the aggregate, will have a material adverse effect on its results of operations or financial
condition. However, the Company cannot predict the outcome of these claims, the nature or extent
of remedial actions, if any, it may need to undertake with respect to motors that remain in the
field, or the costs it may incur, some of which could be significant.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company is, from time to time, party to litigation that arises in the normal course of its
business operations, including product warranty and liability claims, contract disputes and
environmental, asbestos, employment and other litigation matters. The Company’s products are used
in a variety of industrial, commercial and residential applications that subject it to claims that
the use of its products is alleged to have resulted in injury or other damage. The Company accrues
for anticipated costs in defending against such lawsuits in amounts that the Company believes are
adequate, and the Company does not believe that the outcome of any such lawsuit will have a
material effect on the Company’s financial position or its results of operations.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>14. </b><u><b>DERIVATIVE INSTRUMENTS</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company is exposed to certain risks relating to its ongoing business operations. The primary
risks managed by using derivative instruments are commodity price risk, currency exchange, and
interest rate risk. Forward contracts on certain commodities are entered into to manage the price
risk associated with forecasted purchases of materials used in the Company’s manufacturing process.
Forward contracts on certain currencies are entered into to manage forecasted cash flows in
certain foreign currencies. Interest rate swaps are entered into to manage interest rate risk
associated with the Company’s floating rate borrowings.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company must recognize all derivative instruments as either assets or liabilities at fair value
in the statement of financial position. Accordingly, the Company designates commodity forward
contracts as cash flow hedges of forecasted purchases of commodities, currency forward contracts as
cash flow hedges of forecasted foreign currency cash flows and interest rate swaps as cash flow
hedges of forecasted LIBOR-based interest payments. There were no significant collateral
deposits on derivative financial instruments as of April 2, 2011.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><u><b><i>Cash flow hedges</i></b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">For derivative instruments that are designated and qualify as a cash flow hedge, the effective
portion of the gain or loss on the derivative is reported as a component of other comprehensive
income or loss and reclassified into earnings in the same period or periods during which the hedged
transaction affects earnings. Gains and losses on the derivative representing either hedge
ineffectiveness or changes in market value of derivatives not designated as hedges are recognized
in current earnings.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">At April 2, 2011, the Company had an additional $5.8 million, net of tax, of derivative gains on
closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact
earnings. At April 3, 2010, the Company had an additional $0.9 million, net of tax, of derivative
gains on closed hedge instruments in AOCI that was realized in earnings when the hedged items
impacted earnings.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of April 2, 2011, the Company had outstanding the following commodity forward contracts (with
maturities extending through September 2012) to hedge forecasted purchases of commodities (in
millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Notional Amount</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Copper
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">138.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Aluminum
</div></td>
<td> </td>
<td> </td>
<td align="right">3.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Zinc
</div></td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Natural Gas
</div></td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of April 2, 2011, the Company had outstanding the following currency forward contracts
(with maturities extending through December 2012) to hedge forecasted foreign currency cash flows
(in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Notional Amount</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Mexican Peso
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">92.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Indian Rupee
</div></td>
<td> </td>
<td> </td>
<td align="right">34.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Chinese Renminbi
</div></td>
<td> </td>
<td> </td>
<td align="right">8.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Australian Dollar
</div></td>
<td> </td>
<td> </td>
<td align="right">4.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Thai Baht
</div></td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of April 2, 2011, the total notional amount of the Company’s receive-variable/pay-fixed
interest rate swaps was $250.0 million (with maturities extending to August 2017).
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Fair values of derivative instruments as of April 2, 2011 and January 1, 2011 were (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">April 2, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Prepaid</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other Noncurrent</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accrued</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Hedging</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Expenses</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Assets</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Expenses</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Obligations</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Designated as hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate swap contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">9.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Commodity contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">16.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Not designated as hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Commodity contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Derivatives:
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">25.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">January 1, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Prepaid</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other Noncurrent</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accrued</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Hedging</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Expenses</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Assets</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Expenses</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Obligations</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Designated as hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate swap contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">39.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">7.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Commodity contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">24.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Not designated as hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Commodity contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Derivatives:
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">32.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">39.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The effect of derivative instruments on the condensed consolidated statements of equity and
earnings for the three months ended April 2, 2011 and April 3, 2010, was (in millions):
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>Derivatives Designated as Cash Flow Hedging Instruments</b>
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="20%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">Three Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">April 2, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Interest</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Interest</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Commodity</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Currency</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Rate</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Commodity</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Currency</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Rate</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Forwards</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Forwards</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Swaps</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Forwards</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Forwards</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Swaps</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Gain (Loss) recognized in
Other Comprehensive Income (Loss)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">5.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">7.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amounts reclassified from other
comprehensive income (loss) were:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Gain (Loss) recognized in Net Sales
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Gain (Loss) recognized in Cost of Sales
</div></td>
<td> </td>
<td> </td>
<td align="right">8.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Loss recognized in Interest Expense
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3.2</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The ineffective portion of hedging instruments recognized during the three months ended April
2, 2011 and April 3, 2010 was immaterial.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>Derivatives Not Designated as Cash Flow Hedging Instruments</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Three Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 2, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 3, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Currency Forwards</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Commodity Forwards</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Loss recognized in Cost of Sales
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The net AOCI balance of $1.9 million gain at April 2, 2011 includes $12.0 million of net current
deferred gains expected to be realized in the next twelve months.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 15 - us-gaap:FairValueMeasurementInputsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>15. </b><u><b>FAIR VALUE</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date (exit
price). The inputs used to measure fair value are classified into the following hierarchy:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="4%"> </td>
<td width="6%"> </td>
<td width="3%"> </td>
<td width="88%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">Level 1
</div></td>
<td> </td>
<td align="left" valign="top">Unadjusted quoted prices in active markets for identical assets or liabilities</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
</tr>
<tr valign="bottom">
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">Level 2
</div></td>
<td> </td>
<td align="left" valign="top">Unadjusted quoted prices in active markets for similar assets or liabilities, or</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
</tr>
<tr valign="bottom">
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top">Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
</tr>
<tr valign="bottom">
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top">Inputs other than quoted prices that are observable for the asset or liability</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
</tr>
<tr valign="bottom">
<td> </td>
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">Level 3
</div></td>
<td> </td>
<td align="left" valign="top">Unobservable inputs for the asset or liability</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company uses the best available information in measuring fair value. Financial assets and
liabilities are classified in their entirety based on the lowest level of input that is significant
to the fair value measurement. The following table sets forth the Company’s financial assets and
liabilities that were accounted for at fair value on a recurring basis as of April 2, 2011 and
January 1, 2011 (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 2, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">January 1, 2011</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Investments — Trading Securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">56.3</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Prepaid Expenses and Other Current Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Derivative Currency Contracts
</div></td>
<td> </td>
<td align="left"></td>
<td align="right">9.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.3</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Derivative Commodity Contracts
</div></td>
<td> </td>
<td align="left"></td>
<td align="right">16.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24.9</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Other Noncurrent Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Derivative Currency Contracts
</div></td>
<td> </td>
<td align="left"></td>
<td align="right">2.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.4</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Derivative Commodity Contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Other Accrued Expenses:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Derivative Currency Contracts
</div></td>
<td> </td>
<td align="left"></td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Derivative Commodity Contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Hedging Obligations:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Interest Rate Swap
</div></td>
<td> </td>
<td align="left"></td>
<td align="right">35.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39.1</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Derivative Currency Contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">(Level 2)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 16 - us-gaap:RelatedPartyTransactionsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>16. <u>RELATED PARTY TRANSACTIONS</u></b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As part of the consideration paid for the acquisition of Elco on November 1, 2010, the Company
assumed $22.3 million payable to an entity that is affiliated with our Elco Group B.V. joint
venture partner resulting from bankruptcy proceeding involving Elco. The amount is payable in four
semi-annual payments ending in 2012. During the first quarter of 2011, $5.6 million was paid by
the Company. The Company has included the current amounts in Other Accrued Expenses and the
long-term amount in Other Noncurrent Liabilities.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 17 - us-gaap:ScheduleOfSubsequentEventsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>17. </b><u><b>SUBSEQUENT EVENTS</b></u>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On April 5, 2011, the Company acquired Ramu, Inc. (“Ramu”) located in Blacksburg, Virginia. Ramu
is a motor and control technology company with a research and development team dedicated to the
development of switched reluctance motor technology.
</div>
</div>
false
--12-31
Q1
2011
2011-04-02
10-Q
0000082811
38637160
Yes
Large Accelerated Filer
2100000000
REGAL BELOIT CORPORATION
No
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