rbc-20200926
0000082811FALSE2020Q31/2us-gaap:AccountingStandardsUpdate201613Memberus-gaap:AccountingStandardsUpdate201613MemberP10YP1Y00000828112019-12-292020-09-26xbrli:shares00000828112020-10-26iso4217:USD00000828112020-06-282020-09-2600000828112019-06-302019-09-2800000828112018-12-302019-09-28iso4217:USDxbrli:shares00000828112020-09-2600000828112019-12-280000082811us-gaap:CommonStockMember2020-06-270000082811us-gaap:AdditionalPaidInCapitalMember2020-06-270000082811us-gaap:RetainedEarningsMember2020-06-270000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-270000082811us-gaap:NoncontrollingInterestMember2020-06-2700000828112020-06-270000082811us-gaap:RetainedEarningsMember2020-06-282020-09-260000082811us-gaap:NoncontrollingInterestMember2020-06-282020-09-260000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-282020-09-260000082811us-gaap:AdditionalPaidInCapitalMember2020-06-282020-09-260000082811us-gaap:CommonStockMember2020-09-260000082811us-gaap:AdditionalPaidInCapitalMember2020-09-260000082811us-gaap:RetainedEarningsMember2020-09-260000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-260000082811us-gaap:NoncontrollingInterestMember2020-09-260000082811us-gaap:CommonStockMember2019-06-290000082811us-gaap:AdditionalPaidInCapitalMember2019-06-290000082811us-gaap:RetainedEarningsMember2019-06-290000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-290000082811us-gaap:NoncontrollingInterestMember2019-06-2900000828112019-06-290000082811us-gaap:RetainedEarningsMember2019-06-302019-09-280000082811us-gaap:NoncontrollingInterestMember2019-06-302019-09-280000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-302019-09-280000082811us-gaap:AdditionalPaidInCapitalMember2019-06-302019-09-280000082811us-gaap:CommonStockMember2019-09-280000082811us-gaap:AdditionalPaidInCapitalMember2019-09-280000082811us-gaap:RetainedEarningsMember2019-09-280000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-280000082811us-gaap:NoncontrollingInterestMember2019-09-2800000828112019-09-280000082811us-gaap:CommonStockMember2019-12-280000082811us-gaap:AdditionalPaidInCapitalMember2019-12-280000082811us-gaap:RetainedEarningsMember2019-12-280000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-280000082811us-gaap:NoncontrollingInterestMember2019-12-280000082811us-gaap:RetainedEarningsMember2019-12-292020-09-260000082811us-gaap:NoncontrollingInterestMember2019-12-292020-09-260000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-292020-09-260000082811us-gaap:AdditionalPaidInCapitalMember2019-12-292020-09-2600000828112018-12-302019-12-280000082811us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-290000082811srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-280000082811us-gaap:CommonStockMember2018-12-290000082811us-gaap:AdditionalPaidInCapitalMember2018-12-290000082811us-gaap:RetainedEarningsMember2018-12-290000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-290000082811us-gaap:NoncontrollingInterestMember2018-12-2900000828112018-12-290000082811us-gaap:RetainedEarningsMember2018-12-302019-09-280000082811us-gaap:NoncontrollingInterestMember2018-12-302019-09-280000082811us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-302019-09-280000082811us-gaap:AdditionalPaidInCapitalMember2018-12-302019-09-280000082811srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-29xbrli:pure0000082811rbc:InventoryConcentrationRiskMemberus-gaap:InventoriesMemberrbc:RawMaterialandWorkinProcessMember2019-12-292020-09-260000082811rbc:InventoryConcentrationRiskMemberus-gaap:InventoriesMemberrbc:RawMaterialandWorkinProcessMember2018-12-302019-12-280000082811rbc:FinishedGoodsandPurchasedPartsMemberrbc:InventoryConcentrationRiskMemberus-gaap:InventoriesMember2019-12-292020-09-260000082811rbc:FinishedGoodsandPurchasedPartsMemberrbc:InventoryConcentrationRiskMemberus-gaap:InventoriesMember2018-12-302019-12-280000082811us-gaap:LandAndLandImprovementsMember2020-09-260000082811us-gaap:LandAndLandImprovementsMember2019-12-280000082811srt:MinimumMemberus-gaap:BuildingAndBuildingImprovementsMember2019-12-292020-09-260000082811srt:MaximumMemberus-gaap:BuildingAndBuildingImprovementsMember2019-12-292020-09-260000082811us-gaap:BuildingAndBuildingImprovementsMember2020-09-260000082811us-gaap:BuildingAndBuildingImprovementsMember2019-12-280000082811srt:MinimumMemberus-gaap:MachineryAndEquipmentMember2019-12-292020-09-260000082811srt:MaximumMemberus-gaap:MachineryAndEquipmentMember2019-12-292020-09-260000082811us-gaap:MachineryAndEquipmentMember2020-09-260000082811us-gaap:MachineryAndEquipmentMember2019-12-28rbc:segment0000082811srt:NorthAmericaMemberrbc:CommercialSystemsMember2020-06-282020-09-260000082811srt:NorthAmericaMemberrbc:IndustrialSystemsMember2020-06-282020-09-260000082811srt:NorthAmericaMemberrbc:ClimateSolutionsMember2020-06-282020-09-260000082811srt:NorthAmericaMemberrbc:PowerTransmissionSolutionsMember2020-06-282020-09-260000082811srt:NorthAmericaMember2020-06-282020-09-260000082811srt:AsiaMemberrbc:CommercialSystemsMember2020-06-282020-09-260000082811srt:AsiaMemberrbc:IndustrialSystemsMember2020-06-282020-09-260000082811srt:AsiaMemberrbc:ClimateSolutionsMember2020-06-282020-09-260000082811srt:AsiaMemberrbc:PowerTransmissionSolutionsMember2020-06-282020-09-260000082811srt:AsiaMember2020-06-282020-09-260000082811rbc:CommercialSystemsMembersrt:EuropeMember2020-06-282020-09-260000082811srt:EuropeMemberrbc:IndustrialSystemsMember2020-06-282020-09-260000082811rbc:ClimateSolutionsMembersrt:EuropeMember2020-06-282020-09-260000082811rbc:PowerTransmissionSolutionsMembersrt:EuropeMember2020-06-282020-09-260000082811srt:EuropeMember2020-06-282020-09-260000082811rbc:RestOfWorldMemberrbc:CommercialSystemsMember2020-06-282020-09-260000082811rbc:RestOfWorldMemberrbc:IndustrialSystemsMember2020-06-282020-09-260000082811rbc:RestOfWorldMemberrbc:ClimateSolutionsMember2020-06-282020-09-260000082811rbc:RestOfWorldMemberrbc:PowerTransmissionSolutionsMember2020-06-282020-09-260000082811rbc:RestOfWorldMember2020-06-282020-09-260000082811rbc:CommercialSystemsMember2020-06-282020-09-260000082811rbc:IndustrialSystemsMember2020-06-282020-09-260000082811rbc:ClimateSolutionsMember2020-06-282020-09-260000082811rbc:PowerTransmissionSolutionsMember2020-06-282020-09-260000082811srt:NorthAmericaMemberrbc:CommercialSystemsMember2019-06-302019-09-280000082811srt:NorthAmericaMemberrbc:IndustrialSystemsMember2019-06-302019-09-280000082811srt:NorthAmericaMemberrbc:ClimateSolutionsMember2019-06-302019-09-280000082811srt:NorthAmericaMemberrbc:PowerTransmissionSolutionsMember2019-06-302019-09-280000082811srt:NorthAmericaMember2019-06-302019-09-280000082811srt:AsiaMemberrbc:CommercialSystemsMember2019-06-302019-09-280000082811srt:AsiaMemberrbc:IndustrialSystemsMember2019-06-302019-09-280000082811srt:AsiaMemberrbc:ClimateSolutionsMember2019-06-302019-09-280000082811srt:AsiaMemberrbc:PowerTransmissionSolutionsMember2019-06-302019-09-280000082811srt:AsiaMember2019-06-302019-09-280000082811rbc:CommercialSystemsMembersrt:EuropeMember2019-06-302019-09-280000082811srt:EuropeMemberrbc:IndustrialSystemsMember2019-06-302019-09-280000082811rbc:ClimateSolutionsMembersrt:EuropeMember2019-06-302019-09-280000082811rbc:PowerTransmissionSolutionsMembersrt:EuropeMember2019-06-302019-09-280000082811srt:EuropeMember2019-06-302019-09-280000082811rbc:RestOfWorldMemberrbc:CommercialSystemsMember2019-06-302019-09-280000082811rbc:RestOfWorldMemberrbc:IndustrialSystemsMember2019-06-302019-09-280000082811rbc:RestOfWorldMemberrbc:ClimateSolutionsMember2019-06-302019-09-280000082811rbc:RestOfWorldMemberrbc:PowerTransmissionSolutionsMember2019-06-302019-09-280000082811rbc:RestOfWorldMember2019-06-302019-09-280000082811rbc:CommercialSystemsMember2019-06-302019-09-280000082811rbc:IndustrialSystemsMember2019-06-302019-09-280000082811rbc:ClimateSolutionsMember2019-06-302019-09-280000082811rbc:PowerTransmissionSolutionsMember2019-06-302019-09-280000082811srt:NorthAmericaMemberrbc:CommercialSystemsMember2019-12-292020-09-260000082811srt:NorthAmericaMemberrbc:IndustrialSystemsMember2019-12-292020-09-260000082811srt:NorthAmericaMemberrbc:ClimateSolutionsMember2019-12-292020-09-260000082811srt:NorthAmericaMemberrbc:PowerTransmissionSolutionsMember2019-12-292020-09-260000082811srt:NorthAmericaMember2019-12-292020-09-260000082811srt:AsiaMemberrbc:CommercialSystemsMember2019-12-292020-09-260000082811srt:AsiaMemberrbc:IndustrialSystemsMember2019-12-292020-09-260000082811srt:AsiaMemberrbc:ClimateSolutionsMember2019-12-292020-09-260000082811srt:AsiaMemberrbc:PowerTransmissionSolutionsMember2019-12-292020-09-260000082811srt:AsiaMember2019-12-292020-09-260000082811rbc:CommercialSystemsMembersrt:EuropeMember2019-12-292020-09-260000082811srt:EuropeMemberrbc:IndustrialSystemsMember2019-12-292020-09-260000082811rbc:ClimateSolutionsMembersrt:EuropeMember2019-12-292020-09-260000082811rbc:PowerTransmissionSolutionsMembersrt:EuropeMember2019-12-292020-09-260000082811srt:EuropeMember2019-12-292020-09-260000082811rbc:RestOfWorldMemberrbc:CommercialSystemsMember2019-12-292020-09-260000082811rbc:RestOfWorldMemberrbc:IndustrialSystemsMember2019-12-292020-09-260000082811rbc:RestOfWorldMemberrbc:ClimateSolutionsMember2019-12-292020-09-260000082811rbc:RestOfWorldMemberrbc:PowerTransmissionSolutionsMember2019-12-292020-09-260000082811rbc:RestOfWorldMember2019-12-292020-09-260000082811rbc:CommercialSystemsMember2019-12-292020-09-260000082811rbc:IndustrialSystemsMember2019-12-292020-09-260000082811rbc:ClimateSolutionsMember2019-12-292020-09-260000082811rbc:PowerTransmissionSolutionsMember2019-12-292020-09-260000082811srt:NorthAmericaMemberrbc:CommercialSystemsMember2018-12-302019-09-280000082811srt:NorthAmericaMemberrbc:IndustrialSystemsMember2018-12-302019-09-280000082811srt:NorthAmericaMemberrbc:ClimateSolutionsMember2018-12-302019-09-280000082811srt:NorthAmericaMemberrbc:PowerTransmissionSolutionsMember2018-12-302019-09-280000082811srt:NorthAmericaMember2018-12-302019-09-280000082811srt:AsiaMemberrbc:CommercialSystemsMember2018-12-302019-09-280000082811srt:AsiaMemberrbc:IndustrialSystemsMember2018-12-302019-09-280000082811srt:AsiaMemberrbc:ClimateSolutionsMember2018-12-302019-09-280000082811srt:AsiaMemberrbc:PowerTransmissionSolutionsMember2018-12-302019-09-280000082811srt:AsiaMember2018-12-302019-09-280000082811rbc:CommercialSystemsMembersrt:EuropeMember2018-12-302019-09-280000082811srt:EuropeMemberrbc:IndustrialSystemsMember2018-12-302019-09-280000082811rbc:ClimateSolutionsMembersrt:EuropeMember2018-12-302019-09-280000082811rbc:PowerTransmissionSolutionsMembersrt:EuropeMember2018-12-302019-09-280000082811srt:EuropeMember2018-12-302019-09-280000082811rbc:RestOfWorldMemberrbc:CommercialSystemsMember2018-12-302019-09-280000082811rbc:RestOfWorldMemberrbc:IndustrialSystemsMember2018-12-302019-09-280000082811rbc:RestOfWorldMemberrbc:ClimateSolutionsMember2018-12-302019-09-280000082811rbc:RestOfWorldMemberrbc:PowerTransmissionSolutionsMember2018-12-302019-09-280000082811rbc:RestOfWorldMember2018-12-302019-09-280000082811rbc:CommercialSystemsMember2018-12-302019-09-280000082811rbc:IndustrialSystemsMember2018-12-302019-09-280000082811rbc:ClimateSolutionsMember2018-12-302019-09-280000082811rbc:PowerTransmissionSolutionsMember2018-12-302019-09-280000082811us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMemberrbc:RegalDriveTechnologiesMember2019-12-292020-03-280000082811us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMemberrbc:RegalDriveTechnologiesMember2018-12-302019-03-300000082811us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMemberrbc:VelvetDriveMember2019-04-012019-04-010000082811us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMemberrbc:CapComMember2019-04-012019-04-010000082811us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMemberrbc:VaporRecoveryMember2019-07-012019-07-010000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-06-270000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-270000082811us-gaap:AccumulatedTranslationAdjustmentMember2020-06-270000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-06-282020-09-260000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-282020-09-260000082811us-gaap:AccumulatedTranslationAdjustmentMember2020-06-282020-09-260000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-09-260000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-09-260000082811us-gaap:AccumulatedTranslationAdjustmentMember2020-09-260000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-06-290000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-06-290000082811us-gaap:AccumulatedTranslationAdjustmentMember2019-06-290000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-06-302019-09-280000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-06-302019-09-280000082811us-gaap:AccumulatedTranslationAdjustmentMember2019-06-302019-09-280000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-09-280000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-09-280000082811us-gaap:AccumulatedTranslationAdjustmentMember2019-09-280000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-280000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-280000082811us-gaap:AccumulatedTranslationAdjustmentMember2019-12-280000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-292020-09-260000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-292020-09-260000082811us-gaap:AccumulatedTranslationAdjustmentMember2019-12-292020-09-260000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2018-12-290000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-12-290000082811us-gaap:AccumulatedTranslationAdjustmentMember2018-12-290000082811us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2018-12-302019-09-280000082811us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-12-302019-09-280000082811us-gaap:AccumulatedTranslationAdjustmentMember2018-12-302019-09-280000082811rbc:GlobalIndustrialMotorsMember2020-09-260000082811rbc:CommercialSystemsMember2019-12-280000082811rbc:IndustrialSystemsMember2019-12-280000082811rbc:ClimateSolutionsMember2019-12-280000082811rbc:PowerTransmissionSolutionsMember2019-12-280000082811rbc:CommercialSystemsMember2020-09-260000082811rbc:IndustrialSystemsMember2020-09-260000082811rbc:ClimateSolutionsMember2020-09-260000082811rbc:PowerTransmissionSolutionsMember2020-09-260000082811us-gaap:CustomerRelationshipsMember2019-12-292020-09-260000082811us-gaap:CustomerRelationshipsMember2020-09-260000082811us-gaap:CustomerRelationshipsMember2019-12-280000082811us-gaap:TechnologyBasedIntangibleAssetsMember2019-12-292020-09-260000082811us-gaap:TechnologyBasedIntangibleAssetsMember2020-09-260000082811us-gaap:TechnologyBasedIntangibleAssetsMember2019-12-280000082811us-gaap:TrademarksMember2019-12-292020-09-260000082811us-gaap:TrademarksMember2020-09-260000082811us-gaap:TrademarksMember2019-12-280000082811rbc:PatentsEngineeringDrawingsMember2019-12-292020-09-260000082811rbc:PatentsEngineeringDrawingsMember2020-09-260000082811rbc:PatentsEngineeringDrawingsMember2019-12-280000082811us-gaap:CustomerRelationshipsMember2018-12-302019-09-280000082811rbc:CommercialSystemsMemberus-gaap:IntersegmentEliminationMember2020-06-282020-09-260000082811us-gaap:IntersegmentEliminationMemberrbc:IndustrialSystemsMember2020-06-282020-09-260000082811rbc:ClimateSolutionsMemberus-gaap:IntersegmentEliminationMember2020-06-282020-09-260000082811rbc:PowerTransmissionSolutionsMemberus-gaap:IntersegmentEliminationMember2020-06-282020-09-260000082811us-gaap:IntersegmentEliminationMember2020-06-282020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:CommercialSystemsMember2020-06-282020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:IndustrialSystemsMember2020-06-282020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:ClimateSolutionsMember2020-06-282020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:PowerTransmissionSolutionsMember2020-06-282020-09-260000082811rbc:CommercialSystemsMemberus-gaap:IntersegmentEliminationMember2019-06-302019-09-280000082811us-gaap:IntersegmentEliminationMemberrbc:IndustrialSystemsMember2019-06-302019-09-280000082811rbc:ClimateSolutionsMemberus-gaap:IntersegmentEliminationMember2019-06-302019-09-280000082811rbc:PowerTransmissionSolutionsMemberus-gaap:IntersegmentEliminationMember2019-06-302019-09-280000082811us-gaap:IntersegmentEliminationMember2019-06-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:CommercialSystemsMember2019-06-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:IndustrialSystemsMember2019-06-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:ClimateSolutionsMember2019-06-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:PowerTransmissionSolutionsMember2019-06-302019-09-280000082811rbc:CommercialSystemsMemberus-gaap:IntersegmentEliminationMember2019-12-292020-09-260000082811us-gaap:IntersegmentEliminationMemberrbc:IndustrialSystemsMember2019-12-292020-09-260000082811rbc:ClimateSolutionsMemberus-gaap:IntersegmentEliminationMember2019-12-292020-09-260000082811rbc:PowerTransmissionSolutionsMemberus-gaap:IntersegmentEliminationMember2019-12-292020-09-260000082811us-gaap:IntersegmentEliminationMember2019-12-292020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:CommercialSystemsMember2019-12-292020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:IndustrialSystemsMember2019-12-292020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:ClimateSolutionsMember2019-12-292020-09-260000082811us-gaap:OperatingSegmentsMemberrbc:PowerTransmissionSolutionsMember2019-12-292020-09-260000082811rbc:CommercialSystemsMemberus-gaap:IntersegmentEliminationMember2018-12-302019-09-280000082811us-gaap:IntersegmentEliminationMemberrbc:IndustrialSystemsMember2018-12-302019-09-280000082811rbc:ClimateSolutionsMemberus-gaap:IntersegmentEliminationMember2018-12-302019-09-280000082811rbc:PowerTransmissionSolutionsMemberus-gaap:IntersegmentEliminationMember2018-12-302019-09-280000082811us-gaap:IntersegmentEliminationMember2018-12-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:CommercialSystemsMember2018-12-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:IndustrialSystemsMember2018-12-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:ClimateSolutionsMember2018-12-302019-09-280000082811us-gaap:OperatingSegmentsMemberrbc:PowerTransmissionSolutionsMember2018-12-302019-09-280000082811rbc:TermFacilityMember2020-09-260000082811rbc:TermFacilityMember2019-12-280000082811us-gaap:SeniorNotesMember2020-09-260000082811us-gaap:SeniorNotesMember2019-12-280000082811rbc:MulticurrencyRevolvingFacilityMember2020-09-260000082811rbc:MulticurrencyRevolvingFacilityMember2019-12-280000082811us-gaap:NotesPayableOtherPayablesMember2020-09-260000082811us-gaap:NotesPayableOtherPayablesMember2019-12-280000082811rbc:TermFacilityMember2018-08-272018-08-270000082811rbc:TermFacilityMember2018-08-270000082811rbc:MulticurrencyRevolvingFacilityMember2018-08-272018-08-270000082811rbc:MulticurrencyRevolvingFacilityMember2018-08-270000082811us-gaap:LetterOfCreditMember2018-08-270000082811rbc:EmersonElectricCo.Memberrbc:TermFacilityMember2020-06-282020-09-260000082811rbc:EmersonElectricCo.Memberrbc:TermFacilityMember2019-06-302019-09-280000082811rbc:EmersonElectricCo.Memberrbc:TermFacilityMember2019-12-292020-09-260000082811rbc:EmersonElectricCo.Memberrbc:TermFacilityMember2018-12-302019-09-280000082811rbc:MulticurrencyRevolvingFacilityMemberus-gaap:LineOfCreditMember2020-09-260000082811rbc:TermFacilityMemberrbc:MulticurrencyRevolvingFacilityMemberus-gaap:LetterOfCreditMember2020-09-260000082811rbc:TermFacilityMemberrbc:MulticurrencyRevolvingFacilityMember2020-09-260000082811rbc:EmersonElectricCo.Memberrbc:MulticurrencyRevolvingFacilityMemberus-gaap:LineOfCreditMember2020-06-282020-09-260000082811rbc:EmersonElectricCo.Memberrbc:MulticurrencyRevolvingFacilityMemberus-gaap:LineOfCreditMember2019-06-302019-09-280000082811rbc:EmersonElectricCo.Memberrbc:MulticurrencyRevolvingFacilityMemberus-gaap:LineOfCreditMember2019-12-292020-09-260000082811rbc:EmersonElectricCo.Memberrbc:MulticurrencyRevolvingFacilityMemberus-gaap:LineOfCreditMember2018-12-302019-09-280000082811rbc:A2011NotesMemberus-gaap:SeniorNotesMember2020-09-26rbc:tranche0000082811rbc:A2011NotesMemberus-gaap:SeniorNotesMember2019-12-292020-09-260000082811srt:MinimumMemberrbc:A2011NotesMemberus-gaap:SeniorNotesMember2019-12-292020-09-260000082811srt:MaximumMemberrbc:A2011NotesMemberus-gaap:SeniorNotesMember2019-12-292020-09-260000082811rbc:FloatingRateSeriesTwoThousandElevenSeniorNotesMatureInJulyTwoThousandTwentyOneMemberus-gaap:SeniorNotesMember2020-09-260000082811rbc:FloatingRateSeriesTwoThousandElevenSeniorNotesMatureInJulyTwoThousandTwentyThreeMemberus-gaap:SeniorNotesMember2020-09-260000082811rbc:FloatingRateSeriesTwoThousandElevenSeniorNotesMatureInJulyTwoThousandTwentyOneMembersrt:MinimumMember2020-09-260000082811rbc:FloatingRateSeriesTwoThousandElevenSeniorNotesMatureInJulyTwoThousandTwentyOneMembersrt:MaximumMember2020-09-260000082811srt:MinimumMemberrbc:FloatingRateSeriesTwoThousandElevenSeniorNotesMatureInJulyTwoThousandTwentyThreeMember2020-09-260000082811rbc:FloatingRateSeriesTwoThousandElevenSeniorNotesMatureInJulyTwoThousandTwentyThreeMembersrt:MaximumMember2020-09-26rbc:option0000082811srt:MinimumMember2020-09-260000082811srt:MaximumMember2020-09-2600000828112013-12-2800000828112018-07-2400000828112019-10-250000082811us-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2019-12-292020-09-260000082811us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:StockAppreciationRightsSARSMember2019-12-292020-09-260000082811us-gaap:StockAppreciationRightsSARSMember2019-12-292020-09-260000082811us-gaap:StockAppreciationRightsSARSMember2018-12-302019-09-280000082811us-gaap:StockAppreciationRightsSARSMember2019-12-280000082811us-gaap:StockAppreciationRightsSARSMember2018-12-302019-12-280000082811us-gaap:StockAppreciationRightsSARSMember2020-09-260000082811us-gaap:StockAppreciationRightsSARSMember2020-06-282020-09-260000082811us-gaap:RestrictedStockMember2019-12-280000082811us-gaap:RestrictedStockMember2018-12-302019-12-280000082811us-gaap:RestrictedStockMember2019-12-292020-09-260000082811us-gaap:RestrictedStockMember2020-09-260000082811us-gaap:RestrictedStockUnitsRSUMember2019-12-280000082811us-gaap:RestrictedStockUnitsRSUMember2018-12-302019-12-280000082811us-gaap:RestrictedStockUnitsRSUMember2019-12-292020-09-260000082811us-gaap:RestrictedStockUnitsRSUMember2020-09-260000082811srt:MinimumMemberus-gaap:PerformanceSharesMember2019-12-292020-09-260000082811srt:MaximumMemberus-gaap:PerformanceSharesMember2019-12-292020-09-260000082811us-gaap:PerformanceSharesMember2019-12-292020-09-260000082811us-gaap:PerformanceSharesMember2018-12-302019-09-280000082811us-gaap:PerformanceSharesMember2019-12-280000082811us-gaap:PerformanceSharesMember2018-12-302019-12-280000082811us-gaap:PerformanceSharesMember2020-09-26rbc:subsidiary0000082811rbc:CurrencyForwardContractsMembercurrency:CNY2020-09-260000082811currency:MXNrbc:CurrencyForwardContractsMember2020-09-260000082811currency:EURrbc:CurrencyForwardContractsMember2020-09-260000082811currency:INRrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:CurrencyForwardContractsMembercurrency:CAD2020-09-260000082811currency:AUDrbc:CurrencyForwardContractsMember2020-09-260000082811currency:GBPrbc:CurrencyForwardContractsMember2020-09-260000082811currency:THBrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:CopperMemberrbc:CommodityForwardContractsMember2020-09-260000082811rbc:CommodityForwardContractsMemberrbc:AluminumMember2020-09-260000082811rbc:ReceiveVariablePayFixedInterestRateSwapMember2020-09-26rbc:derivative_instrument0000082811us-gaap:ForeignExchangeForwardMember2020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811us-gaap:InterestRateSwapMemberrbc:HedgingObligationsCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2020-09-260000082811us-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:HedgingObligationsCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2020-09-260000082811us-gaap:CommodityContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811us-gaap:CommodityContractMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811us-gaap:CommodityContractMemberrbc:HedgingObligationsCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-260000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2020-09-260000082811us-gaap:OtherNoncurrentAssetsMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:HedgingObligationsCurrentMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2020-09-260000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-09-260000082811us-gaap:OtherNoncurrentAssetsMember2020-09-260000082811rbc:HedgingObligationsCurrentMember2020-09-260000082811rbc:NoncurrentHedgingObligationsMember2020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811us-gaap:InterestRateSwapMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811us-gaap:InterestRateSwapMemberrbc:HedgingObligationsCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2019-12-280000082811rbc:HedgingObligationsCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2019-12-280000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:CommodityContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811us-gaap:CommodityContractMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811us-gaap:CommodityContractMemberrbc:HedgingObligationsCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-280000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:OtherNoncurrentAssetsMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2019-12-280000082811rbc:HedgingObligationsCurrentMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2019-12-280000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:CommodityContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMember2019-12-280000082811us-gaap:CommodityContractMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:NondesignatedMember2019-12-280000082811us-gaap:CommodityContractMemberrbc:HedgingObligationsCurrentMemberus-gaap:NondesignatedMember2019-12-280000082811rbc:NoncurrentHedgingObligationsMemberus-gaap:CommodityContractMemberus-gaap:NondesignatedMember2019-12-280000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2019-12-280000082811us-gaap:OtherNoncurrentAssetsMember2019-12-280000082811rbc:HedgingObligationsCurrentMember2019-12-280000082811rbc:NoncurrentHedgingObligationsMember2019-12-280000082811rbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:SalesMemberrbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:SalesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:SalesMemberrbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:SalesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:SalesMemberrbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:SalesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:SalesMemberrbc:CommodityForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:SalesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:SalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:InterestExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2020-06-282020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-06-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:CostOfSalesMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2019-12-292020-09-260000082811rbc:CommodityForwardContractsMemberus-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:NondesignatedMemberrbc:CurrencyForwardContractsMemberus-gaap:CashFlowHedgingMember2018-12-302019-09-280000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberrbc:CurrencyForwardContractsMember2020-09-260000082811us-gaap:CommodityContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-09-260000082811us-gaap:OtherNoncurrentAssetsMemberrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:HedgingObligationsCurrentMemberrbc:CurrencyForwardContractsMember2020-09-260000082811rbc:NoncurrentHedgingObligationsMemberrbc:CurrencyForwardContractsMember2020-09-260000082811us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:CommodityContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2019-12-280000082811us-gaap:OtherNoncurrentAssetsMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:CommodityContractMemberus-gaap:OtherNoncurrentAssetsMember2019-12-280000082811rbc:HedgingObligationsCurrentMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:CommodityContractMemberrbc:HedgingObligationsCurrentMember2019-12-280000082811rbc:NoncurrentHedgingObligationsMemberrbc:CurrencyForwardContractsMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberrbc:DerivativeCurrencyContractsMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberrbc:DerivativeCurrencyContractsMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CommodityContractMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CommodityContractMember2019-12-280000082811rbc:AssetsHeldInRabbiTrustMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:FairValueInputsLevel1Member2020-09-260000082811rbc:AssetsHeldInRabbiTrustMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:FairValueInputsLevel1Member2019-12-280000082811us-gaap:FairValueInputsLevel2Memberus-gaap:OtherNoncurrentAssetsMemberrbc:DerivativeCurrencyContractsMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberus-gaap:OtherNoncurrentAssetsMemberrbc:DerivativeCurrencyContractsMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberus-gaap:OtherNoncurrentAssetsMemberus-gaap:CommodityContractMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberus-gaap:OtherNoncurrentAssetsMemberus-gaap:CommodityContractMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberrbc:HedgingObligationsCurrentMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberrbc:HedgingObligationsCurrentMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberrbc:HedgingObligationsCurrentMemberrbc:DerivativeCurrencyContractsMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberrbc:HedgingObligationsCurrentMemberrbc:DerivativeCurrencyContractsMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberrbc:HedgingObligationsCurrentMemberus-gaap:CommodityContractMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberrbc:HedgingObligationsCurrentMemberus-gaap:CommodityContractMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberrbc:NoncurrentHedgingObligationsMemberus-gaap:InterestRateSwapMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberrbc:NoncurrentHedgingObligationsMemberus-gaap:InterestRateSwapMember2019-12-280000082811us-gaap:FairValueInputsLevel2Memberrbc:NoncurrentHedgingObligationsMemberrbc:DerivativeCurrencyContractsMember2020-09-260000082811us-gaap:FairValueInputsLevel2Memberrbc:NoncurrentHedgingObligationsMemberrbc:DerivativeCurrencyContractsMember2019-12-280000082811us-gaap:EmployeeSeveranceMemberus-gaap:CostOfSalesMember2020-06-282020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:EmployeeSeveranceMember2020-06-282020-09-260000082811us-gaap:EmployeeSeveranceMember2020-06-282020-09-260000082811us-gaap:EmployeeSeveranceMemberus-gaap:CostOfSalesMember2019-06-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:EmployeeSeveranceMember2019-06-302019-09-280000082811us-gaap:EmployeeSeveranceMember2019-06-302019-09-280000082811us-gaap:FacilityClosingMemberus-gaap:CostOfSalesMember2020-06-282020-09-260000082811us-gaap:FacilityClosingMemberus-gaap:OperatingExpenseMember2020-06-282020-09-260000082811us-gaap:FacilityClosingMember2020-06-282020-09-260000082811us-gaap:FacilityClosingMemberus-gaap:CostOfSalesMember2019-06-302019-09-280000082811us-gaap:FacilityClosingMemberus-gaap:OperatingExpenseMember2019-06-302019-09-280000082811us-gaap:FacilityClosingMember2019-06-302019-09-280000082811us-gaap:OtherRestructuringMemberus-gaap:CostOfSalesMember2020-06-282020-09-260000082811us-gaap:OtherRestructuringMemberus-gaap:OperatingExpenseMember2020-06-282020-09-260000082811us-gaap:OtherRestructuringMember2020-06-282020-09-260000082811us-gaap:OtherRestructuringMemberus-gaap:CostOfSalesMember2019-06-302019-09-280000082811us-gaap:OtherRestructuringMemberus-gaap:OperatingExpenseMember2019-06-302019-09-280000082811us-gaap:OtherRestructuringMember2019-06-302019-09-280000082811us-gaap:CostOfSalesMember2020-06-282020-09-260000082811us-gaap:OperatingExpenseMember2020-06-282020-09-260000082811us-gaap:CostOfSalesMember2019-06-302019-09-280000082811us-gaap:OperatingExpenseMember2019-06-302019-09-280000082811us-gaap:EmployeeSeveranceMemberus-gaap:CostOfSalesMember2019-12-292020-09-260000082811us-gaap:OperatingExpenseMemberus-gaap:EmployeeSeveranceMember2019-12-292020-09-260000082811us-gaap:EmployeeSeveranceMember2019-12-292020-09-260000082811us-gaap:EmployeeSeveranceMemberus-gaap:CostOfSalesMember2018-12-302019-09-280000082811us-gaap:OperatingExpenseMemberus-gaap:EmployeeSeveranceMember2018-12-302019-09-280000082811us-gaap:EmployeeSeveranceMember2018-12-302019-09-280000082811us-gaap:FacilityClosingMemberus-gaap:CostOfSalesMember2019-12-292020-09-260000082811us-gaap:FacilityClosingMemberus-gaap:OperatingExpenseMember2019-12-292020-09-260000082811us-gaap:FacilityClosingMember2019-12-292020-09-260000082811us-gaap:FacilityClosingMemberus-gaap:CostOfSalesMember2018-12-302019-09-280000082811us-gaap:FacilityClosingMemberus-gaap:OperatingExpenseMember2018-12-302019-09-280000082811us-gaap:FacilityClosingMember2018-12-302019-09-280000082811us-gaap:OtherRestructuringMemberus-gaap:CostOfSalesMember2019-12-292020-09-260000082811us-gaap:OtherRestructuringMemberus-gaap:OperatingExpenseMember2019-12-292020-09-260000082811us-gaap:OtherRestructuringMember2019-12-292020-09-260000082811us-gaap:OtherRestructuringMemberus-gaap:CostOfSalesMember2018-12-302019-09-280000082811us-gaap:OtherRestructuringMemberus-gaap:OperatingExpenseMember2018-12-302019-09-280000082811us-gaap:OtherRestructuringMember2018-12-302019-09-280000082811us-gaap:CostOfSalesMember2019-12-292020-09-260000082811us-gaap:OperatingExpenseMember2019-12-292020-09-260000082811us-gaap:CostOfSalesMember2018-12-302019-09-280000082811us-gaap:OperatingExpenseMember2018-12-302019-09-280000082811us-gaap:EmployeeSeveranceMember2020-09-260000082811us-gaap:FacilityClosingMember2020-09-260000082811srt:ScenarioForecastMember2021-01-02

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 26, 2020 or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-07283

REGAL BELOIT CORPORATION
(Exact name of registrant as specified in its charter)
 
Wisconsin39-0875718
(State of other jurisdiction of
incorporation)
(IRS Employer
Identification No.)
200 State Street, Beloit, Wisconsin 53511
(Address of principal executive office)
(608) 364-8800
Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading SymbolName of each exchange on which registered
Common StockRBCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer
Accelerated Filer
Non-accelerated filer
Smaller Reporting Company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No  
On October 26, 2020 the registrant had outstanding 40,595,282 shares of common stock, $0.01 par value per share.




REGAL BELOIT CORPORATION
INDEX
 
 Page
Item 1 —
Item 2 —
Item 3 —
Item 4 —
Item 1 —
Item 1A —
Item 2 —
Item 6 —
 

2


CAUTIONARY STATEMENT

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s expectations, beliefs, current assumptions, and projections. When used in this Quarterly Report on Form 10-Q, words such as “may,” “will,” “expect,” “intend,” “estimate,” “forecast,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or similar words are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Those factors include, but are not limited to:

the continued financial and operational impacts of and uncertainties relating to the COVID-19 pandemic on us and our customers and suppliers and the geographies in which we operate;
uncertainties regarding our ability to execute our restructuring plans within expected costs and timing;
actions taken by our competitors and our ability to effectively compete in the increasingly competitive global electric motor, drives and controls, power generation and power transmission industries;
our ability to develop new products based on technological innovation, such as the Internet of Things, and marketplace acceptance of new and existing products, including products related to technology not yet adopted or utilized in certain geographic locations in which we do business;
fluctuations in commodity prices and raw material costs;
our dependence on significant customers;
risks associated with global manufacturing, including risks associated with public health crises;
issues and costs arising from the integration of acquired companies and businesses and the timing and impact of purchase accounting adjustments;
effects on earnings of any significant impairment of goodwill or intangible assets;
prolonged declines or disruption in one or more markets we serve, such as heating, ventilation, air conditioning ("HVAC"), refrigeration, power generation, oil and gas, unit material handling or water heating;
economic changes in global markets where we do business, such as reduced demand for the products we sell, currency exchange rates, inflation rates, interest rates, recession, government policies, including policy changes affecting taxation, trade, tariffs, immigration, customs, border actions and the like, and other external factors that we cannot control;
product liability and other litigation, or claims by end users, government agencies or others that our products or our customers’ applications failed to perform as anticipated, particularly in high volume applications or where such failures are alleged to be the cause of property or casualty claims;
our overall debt levels and our ability to repay principal and interest on our outstanding debt;
changes in the method of determining London Interbank Offered Rate ("LIBOR"), or the replacement of LIBOR with an alternative reference rate;
unanticipated liabilities of acquired businesses;
unanticipated adverse effects or liabilities from business exits or divestitures;
unanticipated costs or expenses we may incur related to product warranty issues;
our dependence on key suppliers and the potential effects of supply disruptions;
infringement of our intellectual property by third parties, challenges to our intellectual property and claims of infringement by us of third party technologies;
losses from failures, breaches, attacks or disclosures involving our information technology infrastructure and data;
cyclical downturns affecting the global market for capital goods; and
other risks and uncertainties including but not limited to those described in “Part I - Item 1A - Risk Factors” in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on February 26, 2020 and from time to time in other filed reports.

Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this report, and we undertake no obligation to update these statements to reflect subsequent events or circumstances. Additional information regarding these and other risks and uncertainties is included in "Part I - Item 1A - Risk Factors" in our Annual Report on Form 10-K filed with the SEC on February 26, 2020 and from time to time in other filed reports.

3


PART I—FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

REGAL BELOIT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in Millions, Except Per Share Data)
 
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Net Sales$758.2 $772.3 $2,126.5 $2,499.8 
Cost of Sales536.6 570.4 1,531.3 1,829.3 
Gross Profit221.6 201.9 595.2 670.5 
Operating Expenses131.6 128.9 385.1 416.3 
Gain (Loss) on Divestiture of Businesses 0.2 (0.1)(45.2)
Asset Impairments  4.3 10.0 
       Total Operating Expenses131.6 129.1 389.3 381.1 
Income from Operations90.0 72.8 205.9 289.4 
Other (Income) Expenses, net(1.1)0.1 (3.3)0.4 
Interest Expense9.0 13.5 31.2 40.5 
Interest Income1.3 1.5 3.8 4.0 
Income before Taxes83.4 60.7 181.8 252.5 
Provision for Income Taxes17.1 9.9 39.5 47.5 
Net Income66.3 50.8 142.3 205.0 
Less: Net Income Attributable to Noncontrolling Interests1.3 1.1 3.4 2.8 
Net Income Attributable to Regal Beloit Corporation$65.0 $49.7 $138.9 $202.2 
Earnings Per Share Attributable to Regal Beloit Corporation:
Basic$1.60 $1.20 $3.42 $4.78 
Assuming Dilution$1.60 $1.19 $3.41 $4.75 
Weighted Average Number of Shares Outstanding:
Basic40.6 41.5 40.6 42.3 
Assuming Dilution40.8 41.7 40.7 42.6 

See Accompanying Notes to Condensed Consolidated Financial Statements

4


REGAL BELOIT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in Millions)
 
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Net Income$66.3 $50.8 $142.3 $205.0 
Other Comprehensive Income (Loss) Net of Tax:
Foreign Currency Translation Adjustments36.7 (38.5)(2.8)(31.7)
Reclassification of Foreign Currency Translation Adjustments included in Net Income, Net of $0.0 Million Tax Effects for the Three Months and Nine Months Ended September 26, 2020 and September 28, 2019, Respectively
   1.6 
Hedging Activities:
Increase (Decrease) in Fair Value of Hedging Activities, Net of Tax Effects of $1.9 Million and $(1.6) Million for the Three Months Ended September 26, 2020 and September 28, 2019 and $(3.9) Million and $1.4 Million for the Nine Months Ended September 26, 2020 and September 28, 2019, Respectively
6.0 (4.9)(12.3)4.4 
Reclassification of Losses (Gains) included in Net Income, Net of Tax Effects of $2.0 Million and $(1.0) Million for the Three Months Ended September 26, 2020 and September 28, 2019 and $1.9 Million and $(1.0) Million for the Nine Months Ended September 26, 2020 and September 28, 2019, Respectively
6.2 (3.2)5.8 (3.2)
Pension and Post Retirement Plans:
Reclassification Adjustments for Pension and Post Retirement Benefits included in Net Income, Net of Tax Effects of $0.0 Million and $0.1 Million for the Three Months Ended September 26, 2020 and September 28, 2019 and $0.1 Million and $0.3 Million for the Nine Months Ended September 26, 2020 and September 28, 2019, Respectively
0.1 0.4 0.3 1.3 
Other Comprehensive Income (Loss)49.0 (46.2)(9.0)(27.6)
Comprehensive Income115.3 4.6 133.3 177.4 
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests2.2 (0.1)3.5 1.6 
Comprehensive Income Attributable to Regal Beloit Corporation$113.1 $4.7 $129.8 $175.8 
        See Accompanying Notes to Condensed Consolidated Financial Statements

5


REGAL BELOIT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Millions, Except Per Share Data)
 
September 26, 2020December 28, 2019
ASSETS
Current Assets:
Cash and Cash Equivalents$487.5 $331.4 
Trade Receivables, Less Allowances of $15.6 Million in 2020 and $9.7 Million in 2019
472.5 461.4 
Inventories677.2 678.4 
Prepaid Expenses and Other Current Assets110.4 133.7 
Assets Held for Sale5.0 2.8 
Total Current Assets1,752.6 1,607.7 
Net Property, Plant, and Equipment549.4 605.0 
Operating Lease Assets74.7 71.0 
Goodwill1,508.4 1,501.3 
Intangible Assets, Net of Amortization535.4 567.2 
Deferred Income Tax Benefits43.9 58.4 
Other Noncurrent Assets15.0 20.1 
Total Assets$4,479.4 $4,430.7 
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable$363.8 $337.0 
Dividends Payable12.2 12.2 
Current Hedging Obligations8.0 3.4 
Accrued Compensation and Employee Benefits82.1 67.3 
Other Accrued Expenses112.4 118.4 
Current Operating Lease Liabilities21.7 21.6 
Current Maturities of Long-Term Debt230.6 0.6 
Total Current Liabilities830.8 560.5 
Long-Term Debt840.2 1,136.9 
Deferred Income Taxes177.6 171.9 
Noncurrent Hedging Obligations2.3 1.2 
Pension and Other Post Retirement Benefits74.1 80.8 
Noncurrent Operating Lease Liabilities55.5 51.0 
Other Noncurrent Liabilities47.0 48.0 
Contingencies (see Note 13)
Equity:
Regal Beloit Corporation Shareholders' Equity:
Common Stock, $0.01 par value, 100.0 Million Shares Authorized, 40.6 Million and 40.8 Million Shares Issued and Outstanding for 2020 and 2019, Respectively
0.4 0.4 
Additional Paid-In Capital695.9 701.8 
Retained Earnings1,972.5 1,886.7 
Accumulated Other Comprehensive Loss(246.9)(237.8)
Total Regal Beloit Corporation Shareholders' Equity2,421.9 2,351.1 
Noncontrolling Interests30.0 29.3 
Total Equity2,451.9 2,380.4 
Total Liabilities and Equity$4,479.4 $4,430.7 
See Accompanying Notes to Condensed Consolidated Financial Statements.
6


REGAL BELOIT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(Dollars in Millions, Except Per Share Data)
 
Three Months Ended
Common Stock $0.01 Par ValueAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Noncontrolling InterestsTotal Equity
June 27, 2020$0.4 $694.0 $1,919.7 $(295.0)$27.9 $2,347.0 
Net Income— — 65.0 — 1.3 66.3 
Other Comprehensive Income— — — 48.1 0.9 49.0 
Dividends Declared ($0.30 Per Share)
— — (12.2)— — (12.2)
Stock Options Exercised— (0.8)— — — (0.8)
Share-Based Compensation— 2.7 — — — 2.7 
Dividends Declared to Noncontrolling Interests— — — — (0.1)(0.1)
September 26, 2020$0.4 $695.9 $1,972.5 $(246.9)$30.0 $2,451.9 
June 29, 2019$0.4 $750.7 $1,882.7 $(232.8)$29.4 $2,430.4 
Net Income— — 49.7 — 1.1 50.8 
Other Comprehensive Loss— — — (45.0)(1.2)(46.2)
Dividends Declared ($0.30 Per Share)
— — (12.3)— — (12.3)
Stock Options Exercised— (0.5)— — — (0.5)
Stock Repurchase— (45.0)(49.2)— — (94.2)
Share-Based Compensation— 2.6 — — — 2.6 
Dividends Declared to Noncontrolling Interests— — — — (1.5)(1.5)
September 28, 2019$0.4 $707.8 $1,870.9 $(277.8)$27.8 $2,329.1 
 
7


Nine Months Ended
Common Stock $0.01 Par ValueAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Noncontrolling InterestsTotal Equity
December 28, 2019$0.4 $701.8 $1,886.7 $(237.8)$29.3 $2,380.4 
Net Income— — 138.9 — 3.4 142.3 
Other Comprehensive Income (Loss)— — — (9.1)0.1 (9.0)
Dividends Declared ($0.90 Per Share)
— — (36.5)— — (36.5)
Stock Options Exercised— (3.0)— — — (3.0)
Stock Repurchase— (11.1)(13.9)— — (25.0)
Share-Based Compensation— 8.2 — — — 8.2 
Adoption of ASU 2016-13— — (2.7)— — (2.7)
Dividends Declared to Noncontrolling Interests— — — — (2.8)(2.8)
September 26, 2020$0.4 $695.9 $1,972.5 $(246.9)$30.0 $2,451.9 
December 29, 2018$0.4 $783.6 $1,777.9 $(251.4)$28.0 $2,338.5 
Net Income— — 202.2 — 2.8 205.0 
Other Comprehensive Loss— — — (26.4)(1.2)(27.6)
Dividends Declared ($0.88 Per Share)
— — (36.9)— — (36.9)
Stock Options Exercised— (8.0)— — — (8.0)
Stock Repurchase— (77.8)(72.3)— — (150.1)
Share-Based Compensation— 10.0 — — — 10.0 
Dividends Declared to Noncontrolling Interests— — — — (1.8)(1.8)
September 28, 2019$0.4 $707.8 $1,870.9 $(277.8)$27.8 $2,329.1 

See Accompanying Notes to Condensed Consolidated Financial Statements.
8


REGAL BELOIT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Millions)
 Nine Months Ended
September 26, 2020September 28, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income$142.3 $205.0 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities (Net of Acquisitions and Divestitures):
Depreciation and Amortization98.8 100.4 
Asset Impairments4.3 10.0 
Noncash Lease Expense18.3 20.5 
Loss on Sale or Disposition of Assets, Net2.7 1.7 
Share-Based Compensation Expense8.2 10.0 
Gain on Divestiture of Businesses(0.1)(45.2)
Change in Operating Assets and Liabilities35.4 (31.2)
Net Cash Provided by Operating Activities309.9 271.2 
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant and Equipment(29.7)(77.3)
Proceeds from Divestiture of Businesses0.3 159.6 
Proceeds from Sale of Assets7.6 1.7 
Net Cash (Used in) Provided by Investing Activities(21.8)84.0 
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings Under Revolving Credit Facility898.1 894.3 
Repayments Under Revolving Credit Facility(915.8)(977.4)
Proceeds from Short-Term Borrowings2.3 27.5 
Repayments of Short-Term Borrowings(2.3)(27.5)
Proceeds from Long-Term Borrowings0.1  
Repayments of Long-Term Borrowings(50.2)(24.2)
Dividends Paid to Shareholders(36.5)(36.6)
Shares Surrendered for Taxes(3.3)(8.0)
Proceeds from the Exercise of Stock Options0.2  
Repurchase of Common Stock(25.0)(150.1)
Distributions to Noncontrolling Interests(2.8)(1.8)
Net Cash Used in Financing Activities(135.2)(303.8)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS3.2 (7.0)
Net Increase in Cash and Cash Equivalents156.1 44.4 
Cash and Cash Equivalents at Beginning of Period331.4 248.6 
Cash and Cash Equivalents at End of Period$487.5 $293.0 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid For:
 Interest$36.2 $44.4 
 Income taxes$20.4 $31.9 

See Accompanying Notes to Condensed Consolidated Financial Statements.
9


REGAL BELOIT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2020
(Unaudited)

1. BASIS OF PRESENTATION
The accompanying (a) Condensed Consolidated Balance Sheet of Regal Beloit Corporation (the “Company”) as of December 28, 2019, which has been derived from audited Consolidated Financial Statements, and (b) unaudited interim Condensed Consolidated Financial Statements as of September 26, 2020 and for the three and nine months ended September 26, 2020 and September 28, 2019, 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 of America ("GAAP"), 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.
It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s 2019 Annual Report on Form 10-K filed on February 26, 2020.
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 and nine months ended September 26, 2020 are not necessarily indicative of the results that may be expected for the entire fiscal year ending January 2, 2021.
The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Financial Statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. The Company uses estimates in accounting for, among other items, allowance for doubtful accounts; excess and obsolete inventory; share-based compensation; acquisitions; product warranty obligations; pension and post retirement assets and liabilities; derivative fair values; goodwill and other asset impairments; health care reserves; retirement benefits; rebates and incentives; litigation claims and contingencies, including environmental matters; and income taxes. The Company accounts for changes to estimates and assumptions when warranted by factually based experience.
The Company operates on a 52/53 week fiscal year ending on the Saturday closest to December 31.
Recently Issued Accounting Standards
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20). The ASU addresses modifications to the disclosure requirements for Defined Benefit Plans. Under ASU 2018-14 the disclosure requirements that can be removed are amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, amount and timing of plan assets expected to be returned to the employer, and the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs and benefit obligations for postretirement health care benefits. Additional disclosures are required for the weighted -average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation for significant gains and losses related to the changes in the benefit obligation for the period. If a defined benefit pension plan has a projected benefit obligation greater than plan assets the projected benefit obligation and fair value of plan assets should be disclosed. This additional disclosure is also required when comparing the accumulated benefit obligation to plan assets. This ASU becomes effective for fiscal years ending after December 15, 2020 on a retrospective basis for all years presented. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance, but does not anticipate a material impact on the financial statement disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, and clarifies and amends existing guidance to improve consistent application. This ASU becomes effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.

10


Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU provides optional transition guidance, for a limited time, to companies that have contracts, hedging relationships or other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate which is expected to be discontinued because of reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions if certain criteria are met. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. In the second quarter, the Company adopted this standard prospectively and is applying those expedients that allow the Company to continue to assert that LIBOR-based interest remains probable, despite the sunset of LIBOR at the end of 2021 with no impact on the Company's Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU focuses on updates around disclosures of Level 3 fair value measurements and it presents modifications to current disclosure requirements. The additional requirements under this ASU include disclosure for the changes in unrealized gains and losses included in other comprehensive income ("OCI") held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs. The ASU is also eliminating the disclosure requirement for the amount and reason for transfers between Level 1 and Level 2 fair value measurement, valuation processes for Level 3 measurements, and policy for timing of transfers between levels of the fair value hierarchy. In addition, the ASU modifies the disclosure requirements for investments that are valued based on net asset value. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods therein. The ASU requires prospective application for only the most recent interim or annual period presented in the year of adoption for changes in unrealized gains and losses included in OCI, the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the narrative description of measurement uncertainty. The Company adopted the standard as of December 29, 2019, the beginning of fiscal 2020, with no material impact on the Company's Condensed Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326). The focus of this ASU is to require businesses to adjust their allowance for lifetime expected credit losses rather than incurred losses. It is believed that the change will result in more timely recognition of such losses. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods therein. The Company adopted the standard as of December 29, 2019, the beginning of fiscal 2020, under the modified retrospective approach. The Company recorded a $3.4 million increase in the allowance for credit losses and a $2.7 million net decrease to retained earnings as of December 29, 2019 for the cumulative effect of adopting ASU 2016-13.

2. OTHER FINANCIAL INFORMATION
Inventories
The following table presents approximate percentage distribution between major classes of inventories:
September 26, 2020December 28, 2019
Raw Material and Work in Process49%48%
Finished Goods and Purchased Parts51%52%

Inventories are stated at cost, which is not in excess of market. Cost for approximately 54% of the Company's inventory at September 26, 2020, and 53% at December 28, 2019 was determined using the last-in, first-out ("LIFO") method.
11


Property, Plant, and Equipment
The following table presents property, plant, and equipment by major classification (dollars in millions):
Useful Life in YearsSeptember 26, 2020December 28, 2019
Land and Improvements$75.3 $80.3 
Buildings and Improvements
3 - 50
285.0 305.2 
Machinery and Equipment
3 - 15
969.6 988.2 
Property, Plant and Equipment1,329.9 1,373.7 
Less: Accumulated Depreciation(780.5)(768.7)
Net Property, Plant and Equipment$549.4 $605.0 

For the nine months ended September 26, 2020, the Company recognized $4.3 million of asset impairments related to the transfer of assets to held for sale. For the nine months ended September 28, 2019, the Company recognized $5.1 million of asset impairments related to the transfer of assets to held for sale.

Revenue Recognition

The Company recognizes revenue from the sale of electric motors, electrical motion controls, power generation and power transmission products. The Company recognizes revenue when control of the product passes to the customer or the service is provided and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.
Nature of Goods and Services
The Company sells products with multiple applications as well as customized products that have a single application such as those manufactured for its OEM customers. The Company reports in four operating segments: Commercial Systems, Industrial Systems, Climate Solutions and Power Transmission Solutions. See Note 6 for a description of the different segments.
Nature of Performance Obligations
The Company’s contracts with customers typically consist of purchase orders, invoices and master supply agreements. At contract inception, across all four segments, the Company assesses the goods and services promised in its sales arrangements with customers and identifies a performance obligation for each promise to transfer to the customer a good or service that is distinct. The Company’s primary performance obligations consist of product sales and customized system/solutions.
Product:
The nature of products varies from segment to segment but across all segments, individual products are not integrated and represent separate performance obligations.
Customized system/solutions:
The Company provides customized system/solutions which consist of multiple products engineered and designed to specific customer specification, combined or integrated into one combined solution for a specific customer application. The goods are transferred to the customer and revenue is typically recognized over time as the performance obligations are satisfied.
When Performance Obligations are Satisfied
For performance obligations related to substantially all of the Company's product sales, the Company determines that the customer obtains control upon shipment and recognizes revenue accordingly. Once a product has shipped, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset. The Company considers control to have transferred upon shipment because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset.
12


For a limited number of contracts, the Company transfers control and recognizes revenue over time. The Company satisfies its performance obligations over time and the Company uses a cost-based input method to measure progress. In applying the cost-based method of revenue recognition, the Company uses actual costs incurred to date relative to the total estimated costs for the contract in conjunction with the customer's commitment to perform in determining the amount of revenue and cost to recognize. The Company has determined that the cost-based input method provides a faithful depiction of the transfer of goods to the customer.
Payment Terms
The arrangement with the customer states the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payment terms vary by customer but typically range from due upon delivery to 120 days after delivery. For contracts recognized at a point in time, revenue and billing typically occur simultaneously. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money. For contracts recognized using the cost-based input method, revenue recognized in excess of customer billings and billings in excess of revenue recognized are reviewed to determine the net asset or net liability position and classified as such on the Condensed Consolidated Balance Sheet.
Returns, Refunds, and Warranties
The Company’s contracts do not explicitly offer a “general” right of return to its customers (e.g. customers ordered excess products and return unused items). Warranties are classified as either assurance type or service type warranties. A warranty is considered an assurance type warranty if it provides the customer with assurance that the product will function as intended. A warranty that goes above and beyond ensuring basic functionality is considered a service type warranty. The Company generally only offers limited warranties which are considered to be assurance type warranties and are not accounted for as separate performance obligations. Customers generally receive repair or replacement on products that do not function to specification. Estimated product warranties are provided for specific product groups and the Company accrues for estimated future warranty cost in the period in which the sale is recognized. The Company estimates the accrual requirements based on historical warranty loss experience and the cost is included in Cost of Sales.
Volume Rebates
In some cases, the nature of the Company’s contract may give rise to variable consideration including volume based sales incentives. If the customer achieves specific sales targets, they are entitled to rebates. The Company estimates the projected amount of the rebates that will be achieved and recognizes the estimated costs as a reduction to Net Sales as revenue is recognized.
Disaggregation of Revenue
The following tables presents the Company’s revenues disaggregated by geographical region (in millions):
Three Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$156.9 $71.1 $210.7 $133.5 $572.2 
Asia35.4 35.7 9.7 7.4 88.2 
Europe8.0 6.4 7.7 20.1 42.2 
Rest-of-World18.2 25.6 5.9 5.9 55.6 
Total$218.5 $138.8 $234.0 $166.9 $758.2 
September 28, 2019Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$151.4 $78.8 $204.4 $146.3 $580.9 
Asia27.4 42.7 7.4 7.1 84.6 
Europe32.1 11.8 9.3 22.8 76.0 
Rest-of-World3.9 10.5 9.8 6.6 30.8 
Total$214.8 $143.8 $230.9 $182.8 $772.3 
13


Nine Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$412.8 $213.2 $554.1 $417.6 $1,597.7 
Asia87.7 109.1 19.3 19.8 235.9 
Europe62.0 34.3 22.8 66.2 185.3 
Rest-of-World31.3 32.4 26.1 17.8 107.6 
Total$593.8 $389.0 $622.3 $521.4 $2,126.5 
September 28, 2019Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$503.5 $238.0 $671.1 $485.8 $1,898.4 
Asia82.4 126.8 28.6 21.7 259.5 
Europe101.8 39.2 31.5 70.0 242.5 
Rest-of-World15.6 33.4 30.9 19.5 99.4 
Total$703.3 $437.4 $762.1 $597.0 $2,499.8 


3. HELD FOR SALE, DIVESTITURES AND ACQUISITIONS
Assets Held for Sale

The balances that were classified as Assets Held for Sale as of September 26, 2020 and December 28, 2019 were $5.0 million and $2.8 million, respectively, as the Company has both the intent and ability to sell these assets.

2019 Divestitures

Regal Drive Technologies

On January 7, 2019, the Company sold its Regal Drive Technologies business and received proceeds of $0.3 million in the first quarter of 2020 and $119.9 million in 2019. Regal Drive Technologies was included in the Company's Commercial Systems segment. The Company recognized a gain on sale of $0.1 million in the first quarter of 2020 and $41.0 million in 2019 in the Condensed Consolidated Statements of Income.

Velvet Drive

On April 1, 2019, the Company sold its Velvet Drive business and received proceeds of $8.9 million. This business was included in the Company's Power Transmissions Solutions segment. The Company recognized a loss on sale of $0.5 million in the Condensed Consolidated Statements of Income.

CapCom

On April 1, 2019, the Company sold its CapCom business and received proceeds of $9.9 million. This business was included in the Company's Climate Solutions segment. The Company recognized a gain on sale of $6.0 million in the Condensed Consolidated Statements of Income.

Vapor Recovery

On July 1, 2019, the Company sold its Vapor Recovery business and received proceeds of $19.2 million. The business was included in the Company's Commercial Systems segment. The Company recognized a loss on sale of $1.9 million in the Condensed Consolidated Statements of Income.

14


4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustments, hedging activities and pension and post retirement benefit adjustments are included in Accumulated Other Comprehensive Income (Loss) ("AOCI") a component of Total Equity.
The following tables present changes in AOCI by component for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months Ended
September 26, 2020Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$(10.7)$(30.5)$(253.8)$(295.0)
Other Comprehensive Income (Loss) before Reclassifications7.9 (0.1)35.9 43.7 
Tax Impact(1.9)  (1.9)
Amounts Reclassified from Accumulated Other Comprehensive Income8.2 0.1  8.3 
Tax Impact(2.0)  (2.0)
Net Current Period Other Comprehensive Income12.2  35.9 48.1 
Ending Balance$1.5 $(30.5)$(217.9)$(246.9)
September 28, 2019Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$3.9 $(37.5)$(199.2)$(232.8)
Other Comprehensive Income (Loss) before Reclassifications(6.5)0.1 (37.4)(43.8)
Tax Impact1.6   1.6 
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)(4.2)0.5  (3.7)
Tax Impact1.0 (0.1) 0.9 
Net Current Period Other Comprehensive Income (Loss)(8.1)0.5 (37.4)(45.0)
Ending Balance$(4.2)$(37.0)$(236.6)$(277.8)
15


Nine Months Ended
September 26, 2020Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$8.0 $(31.0)$(214.8)$(237.8)
Other Comprehensive Income (Loss) before Reclassifications(16.2)0.2 (3.1)(19.1)
Tax Impact3.9   3.9 
Amounts Reclassified from Accumulated Other Comprehensive Income7.7 0.4  8.1 
Tax Impact(1.9)(0.1) (2.0)
Net Current Period Other Comprehensive Income (Loss)(6.5)0.5 (3.1)(9.1)
Ending Balance$1.5 $(30.5)$(217.9)$(246.9)
September 28, 2019Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning balance$(5.4)$(38.2)$(207.8)$(251.4)
Other Comprehensive Income (Loss) before Reclassifications5.8 (0.1)(30.4)(24.7)
Tax Impact(1.4)  (1.4)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)(4.2)1.6 1.6 (1.0)
Tax Impact1.0 (0.3) 0.7 
Net Current Period Other Comprehensive Income (Loss)1.2 1.2 (28.8)(26.4)
Ending Balance$(4.2)$(37.0)$(236.6)$(277.8)
The Condensed Consolidated Statements of Income line items affected by the hedging activities reclassified from AOCI in the tables above are disclosed in Note 14.
The reclassification amounts for pension and post retirement benefit adjustments in the tables above are part of net periodic benefit costs recorded in Other (Income) Expenses, net (see also Note 8).


5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

As required, the Company performs an annual impairment test of goodwill as of the end of the October fiscal month 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.

In the fourth quarter 2019, in conjunction with the Company's annual goodwill impairment test, the Company concluded that the excess fair value over carrying value for the global industrial motors, commercial air moving and power switch reporting units were less than 10 percent. In the third quarter 2020, the Company performed an interim impairment analysis for the global industrial motors reporting unit triggered by events primarily driven by the economic uncertainty caused by COVID-19. The excess fair value over carrying value continues to be less than 10 percent for the global industrial motors reporting unit.

The Company developed assumptions for the potential impact of COVID-19 given the uncertainty related to supply and demand disruptions on operating results for the global industrial motors reporting unit.

16


While the Company is committed to the strategic actions necessary to realize the long-term forecasted revenues and EBITDA margins a worsening economic outlook could result in future impairment charges.

A lack of recovery or further deterioration in market conditions, a sustained trend of weaker than expected financial performance or a lack of recovery or further decline in the Company's market capitalization, among other factors, as a result of the COVID-19 pandemic could result in an impairment charge in future periods which could have a material adverse effect on the Company's financial statements.

The global industrial motors reporting unit had goodwill of $123.8 million as of September 26, 2020.

The following table presents changes to goodwill during the nine months ended September 26, 2020 (in millions):
TotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
Balance as of December 28, 2019$1,501.3 $426.6 $170.8 $331.2 $572.7 
Translation Adjustments7.1 (0.6)1.3 (1.2)7.6 
Balance as of September 26, 2020$1,508.4 $426.0 $172.1 $330.0 $580.3 
Cumulative Goodwill Impairment Charges$285.2 $183.2 $61.6 $17.2 $23.2 
Intangible Assets
The following table presents intangible assets (in millions):
 September 26, 2020December 28, 2019
 Weighted Average Amortization Period (Years)Gross ValueAccumulated AmortizationGross ValueAccumulated Amortization
Amortizable Intangible Assets:
  Customer Relationships17$698.5 $334.4 $692.1 $302.4 
  Technology14144.7 105.4 144.0 99.0 
  Trademarks1436.5 26.6 35.9 25.0 
  Patent and Engineering Drawings516.6 16.6 16.6 16.6 
896.3 483.0 888.6 443.0 
Non-Amortizable Trade Name122.1 — 121.6 — 
$1,018.4 $483.0 $1,010.2 $443.0 
Intangible Assets, Net of Amortization$535.4 $567.2 

Amortization expense recorded for the three and nine months ended September 26, 2020 was $11.9 million and $36.3 million, respectively. Amortization expense recorded for the three and nine months ended September 28, 2019 was $12.6 million and $38.0 million, respectively. Amortization expense for fiscal year 2020 is estimated to be $48.0 million. There was no impairment of intangible assets during the three and nine months ended September 26, 2020. For the nine months ended September 28, 2019, the Company recognized $4.9 million of customer relationships intangible asset impairments related to the transfer of assets to held for sale.
17


The following table presents future estimated annual amortization for intangible assets (in millions):
 YearEstimated Amortization
2021$43.0 
202241.2 
202341.2 
202440.6 
202538.5 


6. SEGMENT INFORMATION

The Company is comprised of four operating segments: Commercial Systems, Industrial Systems, Climate Solutions and Power Transmission Solutions.

Commercial Systems segment produces fractional to approximately 5 horsepower AC and DC motors, electronic variable speed controls, fans, and blowers for commercial applications. These products serve markets including commercial building ventilation and HVAC, pool and spa, irrigation, dewatering, agriculture, and general commercial equipment.

Industrial Systems segment produces integral motors, generators, alternators and switchgear for industrial applications, along with aftermarket parts and kits to support such products. These products serve markets including agriculture, marine, mining, oil and gas, food and beverage, data centers, healthcare, prime and standby power, and general industrial equipment.

Climate Solutions segment produces small motors, electronic variable speed controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters and commercial refrigeration.

Power Transmission Solutions segment produces, sells and services belt and chain drives, helical and worm gearing, mounted and unmounted bearings, couplings, modular plastic belts, conveying chains and components, hydraulic pump drives, large open gearing and specialty mechanical products serving markets including beverage, bulk handling, metals, special machinery, energy, aerospace and general industrial.

The Company evaluates performance based on the segment's income from operations. Corporate costs have been allocated to each segment based on the net sales of each segment. The reported external net sales of each segment are from external customers.
18


The following sets forth certain financial information attributable to the Company's operating segments for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsEliminationsTotal
External Sales$218.5 $138.8 $234.0 $166.9 $— $758.2 
Intersegment Sales14.5 7.4 4.6 0.6 (27.1)— 
 Total Sales233.0 146.2 238.6 167.5 (27.1)758.2 
Gross Profit61.4 31.2 69.1 59.9 — 221.6 
Operating Expenses36.1 24.6 29.9 41.0 — 131.6 
Total Operating Expenses36.1 24.6 29.9 41.0 — 131.6 
Income from Operations25.3 6.6 39.2 18.9 — 90.0 
Depreciation and Amortization7.9 6.0 5.0 14.0 — 32.9 
Capital Expenditures3.2 1.7 1.8 2.6 — 9.3 
September 28, 2019
External Sales$214.8 $143.8 $230.9 $182.8 $— $772.3 
Intersegment Sales10.8 8.0 4.2 1.2 (24.2)— 
 Total Sales225.6 151.8 235.1 184.0 (24.2)772.3 
Gross Profit53.5 23.7 64.2 60.5 — 201.9 
Operating Expenses36.8 26.0 26.5 39.6 — 128.9 
Loss on Divestitures0.1  0.1  — 0.2 
Total Operating Expenses36.9 26.0 26.6 39.6 — 129.1 
Income (Loss) from Operations16.6 (2.3)37.6 20.9 — 72.8 
Depreciation and Amortization8.3 6.5 5.1 14.0 — 33.9 
Capital Expenditures6.8 4.2 6.8 3.3 — 21.1 
19


Nine Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsEliminationsTotal
External Sales$593.8 $389.0 $622.3 $521.4 $— $2,126.5 
Intersegment Sales43.2 23.2 13.0 1.9 (81.3)— 
  Total Sales637.0 412.2 635.3 523.3 (81.3)2,126.5 
Gross Profit154.5 78.7 175.9 186.1 — 595.2 
Operating Expenses107.8 69.2 85.9 122.2 — 385.1 
Gain on Divestiture of Businesses(0.1)   — (0.1)
Asset Impairments2.8 0.2 1.3  — 4.3 
Total Operating Expenses110.5 69.4 87.2 122.2 — 389.3 
Income from Operations44.0 9.3 88.7 63.9 — 205.9 
Depreciation and Amortization24.5 17.9 14.7 41.7 — 98.8 
Capital Expenditures8.5 6.0 8.0 7.2 — 29.7 
September 28, 2019
External Sales$703.3 $437.4 $762.1 $597.0 $— $2,499.8 
Intersegment Sales34.7 27.8 13.1 3.3 (78.9)— 
  Total Sales738.0 465.2 775.2 600.3 (78.9)2,499.8 
Gross Profit184.3 75.3 209.7 201.2 — 670.5 
Operating Expenses121.8 82.2 86.2 126.1 — 416.3 
(Gain) Loss on Divestiture of Businesses(39.4)0.1 (6.0)0.1 — (45.2)
Asset Impairments6.7 0.9 1.3 1.1 — 10.0 
Total Operating Expenses89.1 83.2 81.5 127.3 — 381.1 
Income (Loss) from Operations95.2 (7.9)128.2 73.9 — 289.4 
Depreciation and Amortization26.1 18.2 14.5 41.6 — 100.4 
Capital Expenditures24.2 18.1 19.4 15.6 — 77.3 

The following table presents identifiable assets information attributable to the Company's operating segments as of September 26, 2020 and December 28, 2019 (in millions):
Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
Identifiable Assets as of September 26, 2020$1,258.2 $826.1 $876.4 $1,518.7 $4,479.4 
Identifiable Assets as of December 28, 2019$1,198.5 $802.8 $878.3 $1,551.1 $4,430.7 

20


7. DEBT AND BANK CREDIT FACILITIES

The following table presents the Company’s indebtedness as of September 26, 2020 and December 28, 2019 (in millions):
September 26, 2020December 28, 2019
Term Facility$670.0 $720.0 
Senior Notes400.0 400.0 
Multicurrency Revolving Facility 17.7 
Other4.3 4.5 
Less: Debt Issuance Costs(3.5)(4.7)
Total1,070.8 1,137.5 
Less: Current Maturities230.6 0.6 
Long-Term Debt$840.2 $1,136.9 
Credit Agreement
On August 27, 2018 the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders named therein, providing for a (i) 5-year unsecured term loan facility in the principal amount of $900.0 million (the “Term Facility”) and (ii) a 5-year unsecured multicurrency revolving facility in the principal amount of $500.0 million (the “Multicurrency Revolving Facility”), including a $50.0 million letter of credit sub facility, available for general corporate purposes. Borrowings under the Credit Agreement bear interest at floating rates based upon indices determined by the currency of the borrowing, plus an applicable margin determined by reference to the Company's consolidated funded debt to consolidated EBITDA ratio or at an alternative base rate.
The Term Facility was drawn in full on August 27, 2018 with the proceeds settling the amounts owed under prior borrowings. The Term Facility requires quarterly amortization at a rate starting at 5.0% per annum, increasing to 7.5% per annum after three years and further increasing to 10.0% per annum for the last year of the Term Facility, unless previously prepaid. The weighted average interest rate on the Term Facility for the three months ended September 26, 2020 and September 28, 2019 was 1.5% and 3.6%, respectively. The weighted average interest rate on the Term Facility for the nine months ended September 26, 2020 and September 28, 2019 was 2.1% and 3.8%, respectively. The Credit Agreement requires that the Company prepay the loans under the Term Facility with 100% of the net cash proceeds received from specified asset sales and borrowed money indebtedness, subject to certain exceptions.
At September 26, 2020, the Company had no borrowings under the Multicurrency Revolving Facility, $0.2 million of standby letters of credit issued under the facility, and $499.8 million of available borrowing capacity. For the three months ended September 26, 2020 and September 28, 2019 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $51.4 million and $127.1 million, respectively, and weighted average interest rate of 1.5% and 3.6%, respectively. For the nine months ended September 26, 2020 and September 28, 2019 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $189.7 million and $91.3 million, respectively, and the weighted average interest rate of 2.1% and 3.7%, respectively. The Company pays a non-use fee on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.
Senior Notes
At September 26, 2020, the Company had $400.0 million of senior notes (the “Notes”) outstanding. The Notes consist of $400.0 million in senior notes in a private placement which were issued in five tranches with maturities from ten to twelve years and carry fixed interest rates. As of September 26, 2020, $230.0 million and $170.0 million of the Notes are included in Current Maturities of Long-Term Debt and Long-Term Debt, respectively, on the Condensed Consolidated Balance Sheets.
The following table presents details on the Notes at September 26, 2020 (in millions):
PrincipalInterest RateMaturity
Fixed Rate Series 2011A$230.0 
4.8 to 5.0%
July 14, 2021
Fixed Rate Series 2011A170.0 
4.9 to 5.1%
July 14, 2023
$400.0 

21


Compliance with Financial Covenants

The Credit Agreement and the Notes require the Company to meet specified financial ratios and to satisfy certain financial condition tests. The Company was in compliance with all financial covenants contained in the Notes and the Credit Agreement as of September 26, 2020.
Other Notes Payable

At September 26, 2020, other notes payable of approximately $4.3 million were outstanding with a weighted average interest rate of 4.9%. At December 28, 2019, other notes payable of approximately $4.5 million were outstanding with a weighted average rate of 5.0%.

Other Disclosures

Based on rates for instruments with comparable maturities and credit quality, which are classified as Level 2 inputs (see also Note 15), the approximate fair value of the Company's total debt was $1,087.3 million and $1,162.1 million as of September 26, 2020 and December 28, 2019, respectively.

8. RETIREMENT AND POST RETIREMENT HEALTH CARE PLANS

The following table presents the Company’s net periodic benefit cost (income) components (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Service Cost$0.4 $1.5 $1.5 $4.6 
Interest Cost2.1 2.8 6.2 8.2 
Expected Return on Plan Assets(3.3)(3.2)(9.9)(9.4)
Amortization of Prior Service Cost and Net Actuarial Loss0.1 0.5 0.4 1.6 
Net Periodic Benefit Cost (Income)$(0.7)$1.6 $(1.8)$5.0 

The service cost component is included in Cost of Sales and Operating Expenses. All other components of net periodic benefit costs are included in Other (Income) Expenses, net on the Company's Condensed Consolidated Statements of Income.
The estimated net actuarial loss and prior (income) service cost for post retirement plans that will be amortized from AOCI into net periodic benefit cost (income) during the 2020 fiscal year are $1.2 million and $(0.6) million, respectively.
For the three months ended September 26, 2020 and September 28, 2019, the Company contributed $1.3 million and $4.1 million, respectively, to post retirement plans. For the nine months ended September 26, 2020 and September 28, 2019, the Company contributed $3.6 million and $9.0 million, respectively. The Company expects to make total contributions of $5.6 million in 2020. The Company contributed a total of $10.8 million in fiscal 2019.

9. LEASES

The Company leases certain manufacturing facilities, warehouses/distribution centers, office space, machinery, equipment, IT assets, and vehicles. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, it is considered to be or contain a lease. Right-of-use ("ROU") assets and lease liabilities are recognized at lease commencement date based on the present value of the future lease payments over the expected lease term.

As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is calculated based upon the sovereign treasury rate for the currency in which the lease liability is denominated when the Company takes possession of the leased asset, adjusted for various factors, such as term and internal credit spread. The ROU asset also includes any lease payments made and excludes lease incentive and initial direct costs incurred.

22


Leases entered into may include one or more options to renew. The renewal terms can extend the lease term from one to twenty-five years. The exercise of lease renewal options is at the Company's sole discretion. Renewal option periods are included in the measurement of the ROU asset and lease liability when the exercise is reasonably certain to occur. Some leases include options to terminate the lease upon breach of contract and are remeasured at that point in time.

The depreciable life of leased assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Some of the Company's lease agreements include rental payments adjusted periodically for inflation or are based on an index rate. These increases are reflected as variable lease payments and are included in the measurement of the ROU asset and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating leases are included in the following asset and liability accounts on the Company's Condensed Consolidated Balance Sheet: Operating Lease Assets, Current Operating Lease Liabilities, and Noncurrent Operating Lease Liabilities. ROU assets and liabilities arising from finance leases are included in the following asset and liability accounts on the Company's Condensed Consolidated Balance Sheet: Net Property, Plant and Equipment, Current Maturities of Long-Term Debt, and Long-Term Debt.

Short-term and variable lease expenses were immaterial. The components of lease expense were as follows (in millions):
Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Operating Lease Cost$7.5 $7.8 $22.8 $24.9 
Finance Lease Cost:
   Amortization of ROU Assets0.1 0.1 0.2 0.2 
   Interest on Lease Liabilities  0.1 0.2 
Total Lease Expense$7.6 7.9 $23.1 $25.3 

Maturity of lease liabilities as of September 26, 2020 were as follows (in millions):
Operating LeasesFinance LeasesTotal
Remainder of 2020$7.4 $0.1 $7.5 
202125.2 0.5 25.7 
202218.4 0.6 19.0 
202312.2 0.6 12.8 
20248.2 0.6 8.8 
Thereafter23.1 1.9 25.0 
Total Lease Payments$94.5 $4.3 $98.8 
Less: Interest(17.3)(0.8)(18.1)
Present Value of Lease Liabilities$77.2 $3.5 $80.7 

23


Other information related to leases was as follows (in millions):
Nine Months Ended
Supplemental Cash Flows InformationSeptember 26, 2020September 28, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
  Operating Cash Flows Used For Operating Leases$21.8 $24.9 
  Operating Cash Flows Used For Finance Leases0.1 0.2 
  Financing Cash Flows Used For Finance Leases0.2 0.2 
Leased Assets Obtained in Exchange for New Operating Lease Liabilities21.3 10.6 
Weighted Average Remaining Lease Term
Operating Leases5.2 years4.6 years
Finance Leases7.5 years8.5 years
Weighted Average Discount Rate
Operating Leases8.2 %8.3 %
Finance Leases5.9 %5.9 %

The Company had no operating or finance leases that had not yet commenced nor entered into during the quarter.

10. SHAREHOLDERS’ EQUITY

Repurchase of Common Stock

At a meeting of the Board of Directors on July 24, 2018, the Company's Board of Directors approved the extinguishment of the existing 3.0 million share repurchase program that was approved in November 2013 and replaced it with an authorization to purchase up to $250.0 million of shares. At a meeting of the Board of Directors on October 25, 2019, the July 2018 repurchase authorization was extinguished and replaced with an authorization to purchase up to $250.0 million of shares. For the three and nine months ended September 26, 2020, the Company repurchased and retired zero and 315,072 shares, respectively, of its common stock. For the nine months ended September 26, 2020, the common stock had an average cost of $79.38 per share for a total cost of $25.0 million. For the three months ended September 28, 2019, the Company repurchased and retired 1,282,037 shares of its common stock at an average cost of $73.43 for a total cost of $94.2 million. For the nine months ended September 28, 2019, the Company repurchased and retired 2,013,782 shares of its common stock at an average cost of $74.52 per share and a total cost of $150.1 million under the July 2018 program.

As of September 26, 2020, there was approximately $210.0 million in common stock available for repurchase under the October 2019 program. The Company announced it had suspended the share repurchase program starting in the first quarter of 2020. The Company has re-instated the share purchase program starting in the fourth quarter of 2020. The existing share repurchase program remains authorized by the Company's Board of Directors.

Share-Based Compensation

The majority of the Company’s annual share-based incentive awards had historically been granted in the second fiscal quarter. Beginning in fiscal 2020, the Company moved its granting of share-based incentive awards to the first fiscal quarter.

The Company recognized approximately $2.7 million and $2.6 million in share-based compensation expense for the three months ended September 26, 2020 and September 28, 2019, respectively. Share-based compensation expense was $8.2 million and $10.0 million for the nine months ended September 26, 2020 and September 28, 2019, respectively. The total income tax benefit recognized in the Condensed Consolidated Statements of Income for share-based compensation expense was $0.6 million and $0.5 million for the three months ended September 26, 2020 and September 28, 2019, respectively. The total income tax benefit recognized in the Condensed Consolidated Statements of Income for share-based compensation expense was $1.7 million and $2.1 million for the nine months ended September 26, 2020 and September 28, 2019, 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 September 26, 2020, total unrecognized compensation cost related to share-based compensation awards was approximately $20.8 million, net of estimated forfeitures, which the Company expects to recognize over a weighted average period of approximately 2.0 years.

24


Approximately 1.8 million shares were available for future grant under the 2018 Equity Incentive Plan at September 26, 2020.

Stock Appreciation Rights
The Company uses stock settled stock appreciation rights (“SARs”) as a form of share-based incentive awards. SARs are the right to receive stock in an amount equal to the appreciation in value of a share of stock over the base price per share. Shares granted prior to fiscal 2020 generally vest over five years on the anniversary date while shares granted in fiscal 2020 generally vest over three years on the anniversary date of the grant date. Generally all grants expire 10 years from the grant date. All grants are made at prices equal to the fair market value of the stock on the grant date. For the nine months ended September 26, 2020 and September 28, 2019, expired and canceled shares were immaterial.
The following table presents share-based compensation activity for the nine months ended September 26, 2020 and September 28, 2019 (in millions):
September 26, 2020September 28, 2019
Total Intrinsic Value of Share-Based Incentive Awards Exercised$5.7 $5.1 
Cash Received from Stock Option Exercises0.2  
Income Tax Benefit from the Exercise of SARs0.4 (0.1)
Total Fair Value of Share-Based Incentive Awards Vested1.8 5.4 

The following table presents assumptions used in the Company's Black-Scholes valuation related to grants of SARs:
20202019
Per share weighted average fair value of grants$21.23 $20.84 
Risk-free interest rate1.5 %2.4 %
Expected life (years)7.07.0
Expected volatility25.2 %25.0 %
Expected dividend yield1.4 %1.5 %

The average risk-free interest rate is based on the US Treasury security rate as of the grant date. The expected dividend yield is based on the projected annual dividend as a percentage of the estimated market value of the Company's common stock as of the grant date. The Company estimated the expected volatility using a weighted average of daily historical volatility of the Company's stock price over the expected term of the award. The Company estimated the expected term using historical data.

The following table presents a summary of share-based incentive plan grant activity for the nine months ended September 26, 2020.
Number of Shares Under SARsSharesWeighted Average Exercise PriceWeighted Average Remaining Contractual Term (Years)Aggregate Intrinsic Value (in millions)
Outstanding as of December 28, 2019817,790 $73.34 6.0$9.9 
Granted181,177 88.25 
Exercised(299,816)69.29 
Forfeited(92,352)76.99 
Expired(3,308)67.38 
Outstanding as of September 26, 2020603,491 $79.00 4.5$5.7 
Exercisable as of September 26, 2020197,612 $70.73 4.5$4.4 

Compensation expense recognized related to SARs was $2.2 million for the nine months ended September 26, 2020.
As of September 26, 2020, there was $6.5 million of unrecognized compensation cost related to non-vested SARs that is expected to be recognized as a charge to earnings over a weighted average period of 2.7 years.

The number of SARs expected to vest is materially consistent with those outstanding and not yet exercisable.
25


Restricted Stock Awards and Restricted Stock Units
Restricted stock awards ("RSA") and restricted stock units ("RSU") consist of shares or the rights to shares of the Company's stock. The awards are restricted such that they are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer. As defined in the individual grant agreements, acceleration of vesting may occur under a change in control, death or disability.
The following table presents a summary of RSA award activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested RSAs as of December 28, 201915,571 $80.41 0.4
Granted16,280 70.05 
Vested(15,148)80.29 
Unvested RSAs as of September 26, 202016,703 $70.42 0.6

RSAs vest on the first anniversary of the grant date, provided the holder of the shares is continuously employed by or in the service of the Company until the vesting date. Compensation expense recognized related to the RSAs was $0.9 million for the nine months ended September 26, 2020.
As of September 26, 2020, there was $0.7 million of unrecognized compensation cost related to non-vested RSAs that is expected to be recognized as a charge to earnings over a weighted average period of 0.6 years.
The following table presents a summary of RSU award activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested RSUs as of December 28, 2019175,025 $78.19 1.9
Granted66,815 85.68 
Vested(49,259)80.20 
Forfeited(27,288)78.11 
Unvested RSUs as of September 26, 2020165,293 $80.63 1.9
RSUs granted prior to fiscal 2020 vest on the third anniversary of the grant date while RSUs granted in fiscal 2020 vest one third each year on the anniversary of the grant date, provided the holder of the RSUs is continuously employed by the Company until the vesting date. Compensation expense recognized related to the RSUs was $3.5 million for the nine months ended September 26, 2020.
As of September 26, 2020, there was $8.2 million of unrecognized compensation cost related to non-vested RSUs that is expected to be recognized as a charge to earnings over a weighted average period of 1.9 years.
Performance Share Units
Performance share units ("PSU") consist of shares or the rights to shares of the Company's stock which are awarded to employees of the Company. These shares are payable upon the determination that the Company achieved certain established performance targets and can range from 0% to 200% of the targeted payout based on the actual results. PSUs have a performance period of 3 years and vest 3 years from the grant date. The PSUs have performance criteria based on a return on invested capital metric or they have performance criteria using returns relative to the Company's peer group. As set forth in the individual award agreements, acceleration of vesting may occur under a change in control, death or disability. There are no voting rights associated with PSUs until vesting occurs and a share of stock is issued. Some of the PSU awards are valued using a Monte Carlo simulation method as of the grant date while others are valued using the closing market price as of the grant date depending on the performance criteria for the award.
26



The assumptions used in the Company's Monte Carlo simulation were as follows:
20202019
Risk-free interest rate1.4 %2.3 %
Expected life (years)3.03.0
Expected volatility24.0 %25.0 %
Expected dividend yield1.4 %1.5 %


The following table presents a summary of PSU activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested PSUs as of December 28, 201990,565 $86.35 1.9
Granted42,677 99.74 
Vested(7,545)95.33 
Forfeited(30,987)86.59 
Unvested PSUs as of September 26, 202094,710 $91.59 2.0
Compensation expense for awards granted is recognized based on the grant issuance value or the expected payout ratio depending upon the performance criterion for the award, net of estimated forfeitures. Compensation expense recognized related to PSUs was $1.6 million for the nine months ended September 26, 2020. Total unrecognized compensation expense for all PSUs granted as of September 26, 2020 is estimated to be $5.4 million which is expected to be recognized as a charge to earnings over a weighted average period of 2.0 years.

11. INCOME TAXES
The effective tax rate for the three months ended September 26, 2020 was 20.5% versus 16.3% for the three months ended September 28, 2019. The effective tax rate for the nine months ended September 26, 2020 was 21.7% versus 18.8% for the nine months ended September 28, 2019. The change in the effective tax rate for the three and nine months ended September 26, 2020 was primarily driven by the 2019 expiration of the China incentives awarded to the Company for research and development efforts and the mix of earnings. The Company has applied for the renewal of the China tax incentives and will record the benefit if approval is granted.
As of September 26, 2020 and December 28, 2019, the Company had approximately $6.9 million of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. The Company had approximately $2.7 million and $2.3 million of accrued interest as of September 26, 2020 and December 28, 2019, respectively.
With few exceptions, the Company is no longer subject to US Federal and state/local income tax examinations by tax authorities for years prior to 2014, and the Company is no longer subject to non-US income tax examinations by tax authorities for years prior to 2012.

27


12. EARNINGS PER SHARE

Diluted earnings per share is calculated based upon earnings applicable to common shares divided by the weighted-average number of common shares outstanding during the period adjusted for the effect of other dilutive securities. The amount of the anti-dilutive shares were 0.3 million and 0.5 million for the three months ended September 26, 2020 and September 28, 2019, respectively. The amount of the anti-dilutive shares were 0.4 million and 0.4 million for the nine months ended September 26, 2020 and September 28, 2019, respectively. The following table reconciles the basic and diluted shares used in earnings per share calculations for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Denominator for Basic Earnings Per Share40.6 41.5 40.6 42.3 
Effect of Dilutive Securities0.2 0.2 0.1 0.3 
Denominator for Diluted Earnings Per Share40.8 41.7 40.7 42.6 

13. CONTINGENCIES
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 manufactured and sold in high volumes by a third party. These ventilation units are subject to product safety requirements and other potential regulation of their performance by government agencies such as the US Consumer Product Safety Commission (“CPSC”). The claims generally allege that the ventilation units were the cause of fires. The Company has recorded an estimated liability for incurred claims. Based on the current facts, the Company cannot assure that these claims, individually or in the aggregate, will not have a material adverse effect on its subsidiary's financial condition. The Company's subsidiary cannot reasonably predict the outcome of these claims, the nature or extent of any CPSC or other remedial actions, if any, that the Company's subsidiary may need to undertake with respect to motors that remain in the field, or the costs that may be incurred, some of which could be significant.
The Company is, from time to time, party to litigation and other legal or regulatory proceedings that arise in the normal course of its business operations and the outcomes of which are subject to significant uncertainty, including product warranty and liability claims, contract disputes and environmental, asbestos, intellectual property, employment and other litigation matters. The Company's products are used in a variety of industrial, commercial and residential applications that subject the Company to claims that the use of its products is alleged to have resulted in injury or other damage. Many of these matters will only be resolved when one or more future events occur or fail to occur. Management conducts regular reviews, including updates from legal counsel, to assess the need for accounting recognition or disclosure of these contingencies, and such assessment inherently involves an exercise in judgment. The Company accrues for exposures in amounts that it believes are adequate, and the Company does not believe that the outcome of any such lawsuit individually or collectively will have a material effect on the Company's financial position, its results of operations or its cash flows.
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 table presents a reconciliation of the changes in accrued warranty costs for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Beginning Balance$15.7 $16.4 $15.1 $14.8 
Less: Payments(3.7)(4.3)(10.6)(9.0)
Provisions4.4 4.4 11.9 11.1 
Held for Sale   (0.4)
Ending Balance$16.4 $16.5 $16.4 $16.5 
These liabilities are included in Other Accrued Expenses and Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheet.

28


14. DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are commodity price risk, currency exchange risk, 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 utilized to manage interest rate risk associated with the Company's floating rate borrowings.
The Company is exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including its commodity hedging transactions, foreign currency exchange contracts and interest rate swap agreements. Exposure to counterparty credit risk is managed by limiting counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. The Company does not obtain collateral or other security to support financial instruments subject to credit risk. The Company does not anticipate non-performance by its counterparties, but cannot provide assurances.
The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. 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 September 26, 2020 or September 28, 2019.
Cash Flow Hedges
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 AOCI and reclassified into the same line within the Condensed Consolidated Statement of Income as the earnings effect of the hedged item 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.
At September 26, 2020, the Company had $(0.5) million, net of tax, of derivative losses on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings. At December 28, 2019, the Company had $1.3 million, net of tax, of derivative gains on closed hedge instruments in AOCI that was subsequently realized in earnings when the hedged items impacted earnings.
As of September 26, 2020, the Company had the following currency forward contracts outstanding (with maturities extending through June 2022) to hedge forecasted foreign currency cash flows (in millions):
 Notional Amount (in US Dollars)
Chinese Renminbi$55.6 
Mexican Peso110.8 
Euro148.6 
Indian Rupee32.2 
Canadian Dollar2.4 
Australian Dollar16.7 
British Pound17.9 
Thai Baht6.2 

As of September 26, 2020, the Company had the following commodity forward contracts outstanding (with maturities extending through December 2021) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item (in millions)):
 Notional Amount
Copper$38.9 
Aluminum3.2 

29


As of September 26, 2020, the total notional amount of the Company's receive variable/pay-fixed interest rate swap was $88.4 million with a maturity of April 12, 2021.
The Company entered into two receive variable/pay-fixed forward starting non-amortizing interest rate swaps in June 2020, with a total notional amount of $250.0 million. These swaps become effective July 2021 and will expire in July 2025.

The following table presents the fair values of derivative instruments as of September 26, 2020 and December 28, 2019 (in millions):
 September 26, 2020
 Prepaid Expenses and Other Current AssetsOther Noncurrent AssetsCurrent Hedging ObligationsNoncurrent Hedging Obligations
Designated as Hedging Instruments:
Interest Rate Swap Contracts$ $ $1.2 $2.0 
Currency Contracts9.7 1.0 6.8 0.3 
Commodity Contracts6.8    
Not Designated as Hedging Instruments:
Currency Contracts0.1    
Total Derivatives$16.6 $1.0 $8.0 $2.3 
 December 28, 2019
 Prepaid Expenses and Other Current AssetsOther Noncurrent AssetsCurrent Hedging ObligationsNoncurrent Hedging Obligations
Designated as Hedging Instruments:
Interest Rate Swap Contracts$ $ $ $1.0 
Currency Contracts8.8 10.3 3.0 0.2 
Commodity Contracts2.6 0.1 0.2  
Not Designated as Hedging Instruments:
Currency Contracts0.1  0.1  
Commodity Contracts  0.1  
Total Derivatives$11.5 $10.4 $3.4 $1.2 

30


The following table presents the effect of derivative instruments on the Condensed Consolidated Statements of Income and Condensed Consolidated Statement of Comprehensive Income (pre-tax) (in millions):
Derivatives Designated as Cash Flow Hedging Instruments
Three Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsInterest Rate SwapsTotalCommodity ForwardsCurrency ForwardsInterest Rate SwapsTotal
Gain (Loss) Recognized in Other Comprehensive Income (Loss)$5.8 $2.4 $(0.3)$7.9 $(3.9)$(3.2)$0.6 $(6.5)
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain recognized in Net Sales     0.1  0.1 
Gain (Loss) Recognized in Cost of Sales(0.4)(4.9) (5.3)(1.8)2.0  0.2 
Gain (Loss) Recognized in Operating Expenses (3.1) (3.1) 3.2  3.2 
Gain Recognized in Interest Expense  0.2 0.2   0.7 0.7 
Nine Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsInterest Rate SwapsTotalCommodity ForwardsCurrency ForwardsInterest Rate SwapsTotal
Gain (Loss) Recognized in Other Comprehensive Income (Loss)$5.1 $(19.9)$(1.4)$(16.2)$(3.3)$8.5 $0.6 $5.8 
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales     0.3  0.3 
Gain (Loss) Recognized in Cost of Sales(2.4)(2.1) (4.5)(5.4)3.8  (1.6)
Gain (Loss) Recognized in Operating Expenses (4.0) (4.0) 3.6  3.6 
Gain Recognized in Interest Expense  0.8 0.8   1.9 1.9 
31



Derivatives Not Designated as Cash Flow Hedging Instruments (in millions):
Three Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsCommodity ForwardsCurrency Forwards
Gain recognized in Cost of Sales$0.1 $ $ $ 
Gain (Loss) recognized in Operating Expenses$ $(2.4)$ $0.6 
Nine Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsCommodity ForwardsCurrency Forwards
Gain recognized in Cost of Sales$0.1 $0.1 $ 
Gain (Loss) recognized in Operating Expenses$ $(3.7)$ $0.1 
The net AOCI hedging component balance of a $1.5 million gain at September 26, 2020 includes $4.0 million of net current deferred gain expected to be realized in the next twelve months. The gain/loss reclassified from AOCI into earnings on such derivatives will be recognized in the same period in which the related item affects earnings.
The Company's commodity and currency derivative contracts are subject to master netting agreements with the respective counterparties which allow the Company to net settle transactions with a single net amount payable by one party to another party. The Company has elected to present the derivative assets and derivative liabilities on the Condensed Consolidated Balance Sheets on a gross basis for the periods ended September 26, 2020 and December 28, 2019.
32


The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements (in millions):
September 26, 2020
Gross Amounts as Presented in the Condensed Consolidated Balance SheetDerivative Contract Amounts Subject to Right of Offset Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$9.8 $(3.5)$6.3 
Derivative Commodity Contracts6.8  6.8 
Other Noncurrent Assets:
Derivative Currency Contracts1.0 (0.1)0.9 
Current Hedging Obligations:
Derivative Currency Contracts6.8 (3.5)3.3 
Noncurrent Hedging Obligations:
Derivative Currency Contracts0.3 (0.1)0.2 
December 28, 2019
Gross Amounts as Presented in the Condensed Consolidated Balance SheetDerivative Contract Amounts Subject to Right of OffsetDerivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$8.9 $(2.5)$6.4 
Derivative Commodity Contracts2.6 (0.3)2.3 
Other Noncurrent Assets:
Derivative Currency Contracts10.3 (0.1)10.2 
Derivative Commodity Contracts0.1  0.1 
Current Hedging Obligations:
Derivative Currency Contracts3.1 (2.5)0.6 
Derivative Commodity Contracts0.3 (0.3) 
Noncurrent Hedging Obligations:
Derivative Currency Contracts0.2 (0.1)0.1 

33


15. FAIR VALUE
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:
Level 1Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2Unadjusted quoted prices in active markets for similar assets or liabilities, or
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
Inputs other than quoted prices that are observable for the asset or liability
Level 3Unobservable inputs for the asset or liability
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 fair values of cash equivalents and short-term deposits approximate their carrying values as of September 26, 2020 and December 28, 2019, due to the short period of time to maturity and are classified using Level 1 inputs. The fair values of trade receivables and accounts payable approximate the carrying values due to the short period of time to maturity. See Note 7 for disclosure of the approximate fair value of the Company's debt at September 26, 2020 and December 28, 2019.
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 September 26, 2020 and December 28, 2019 (in millions):
September 26, 2020December 28, 2019Classification
Assets:
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$9.8 $8.9 Level 2
Derivative Commodity Contracts6.8 2.6 Level 2
Other Noncurrent Assets:
Assets Held in Rabbi Trust6.2 6.1 Level 1
Derivative Currency Contracts1.0 10.3 Level 2
Derivative Commodity Contracts 0.1 Level 2
Liabilities:
Current Hedging Obligations:
Interest Rate Swap1.2  Level 2
Derivative Currency Contracts6.8 3.1 Level 2
Derivative Commodity Contracts 0.3 Level 2
Noncurrent Hedging Obligations:
Interest Rate Swap2.0 1.0 Level 2
Derivative Currency Contracts0.3 0.2 Level 2
Level 1 fair value measurements for assets held in a Rabbi Trust are unadjusted quoted prices.
Level 2 fair value measurements for derivative assets and liabilities are measured using quoted prices in active markets for similar assets and liabilities. Interest rate swaps are valued based on the discounted cash flows for the LIBOR forward yield curve for a swap with similar contractual terms. Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. Commodity forwards are valued based on observable market transactions of forward commodity prices.

34


16. RESTRUCTURING ACTIVITIES
The Company incurred restructuring and restructuring-related costs on projects during fiscal 2020 and 2019. Restructuring costs include employee termination and plant relocation costs. Restructuring-related costs include costs directly associated with actions resulting from the Company's Simplification initiatives, such as asset write-downs or accelerated depreciation due to shortened useful lives in connection with site closures, discretionary employment benefit costs and other facility rationalization costs. Restructuring costs for employee termination expenses are generally required to be accrued over the employees' remaining service period while restructuring costs for plant relocation costs and restructuring-related costs are generally required to be expensed as incurred.

The following table presents a reconciliation of provisions and payments for the restructuring projects for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Beginning Balance$2.9 $0.7 $0.9 $0.2 
Provision5.8 7.3 18.7 13.2 
Less: Payments7.7 8.0 18.6 13.4 
Ending Balance$1.0 $ $1.0 $ 

The following table presents a reconciliation of restructuring and restructuring-related costs for restructuring projects for the three and nine months ended September 26, 2020 and September 28, 2019, respectively (in millions):
Three Months Ended
September 26, 2020September 28, 2019
Restructuring Costs:Cost of SalesOperating ExpensesTotalCost of SalesOperating ExpensesTotal
Employee Termination Expenses$1.5 $0.5 $2.0 $2.5 $2.4 $4.9 
Facility Related Costs2.5 1.6 4.1 1.9 0.5 2.4 
Other Expenses (0.3)(0.3)   
  Total Restructuring Costs$4.0 $1.8 $5.8 $4.4 $2.9 $7.3 
Nine Months Ended
September 26, 2020September 28, 2019
Restructuring Costs:Cost of SalesOperating ExpensesTotalCost of SalesOperating ExpensesTotal
Employee Termination Expenses$4.4 $3.5 $7.9 $2.9 $3.9 $6.8 
Facility Related Costs8.4 2.4 10.8 3.2 3.2 6.4 
Other Expenses0.3 (0.3)    
  Total Restructuring Costs$13.1 $5.6 $18.7 $6.1 $7.1 $13.2 
35



The following table presents the allocation of restructuring and restructuring-related costs by segment for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Restructuring Costs - Three Months EndedTotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
September 26, 2020$5.8 $0.7 $2.3 $0.8 $2.0 
September 28, 2019$7.3 $2.5 $3.1 $0.8 $0.9 
Restructuring Costs - Nine Months EndedTotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
September 26, 2020$18.7 $4.8 $5.2 $3.2 $5.5 
September 28, 2019$13.2 $4.8 $5.5 $1.5 $1.4 

The Company's current restructuring activities are expected to continue. The Company expects to record aggregate future charges of approximately $8.9 million which includes $3.2 million of employee termination expenses and $5.7 million of facility related costs on approved projects. The Company anticipates total restructuring costs of approximately $25.0 million for fiscal 2020.

17. SUBSEQUENT EVENT
The Company has evaluated subsequent events since September 26, 2020, the date of these financial statements, and is not aware of any events to disclose.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless the context requires otherwise, references in this Item 2 to “we,” “us,” “our” or the “Company” refer collectively to Regal Beloit Corporation and its subsidiaries.
Overview
Regal Beloit Corporation (NYSE: RBC), based in Beloit, Wisconsin (USA), is a leading manufacturer of electric motors, electrical motion controls, power generation and power transmission products serving markets throughout the world.

Operating Segments

Our company is comprised of four operating segments: Commercial Systems, Industrial Systems, Climate Solutions and Power Transmission Solutions.

A description of the four operating segments is as follows:

Commercial Systems segment produces fractional to approximately 5 horsepower AC and DC motors, electronic variable speed controls, fans, and blowers for commercial applications. These products serve markets including commercial building ventilation and HVAC, pool and spa, irrigation, dewatering, agriculture, and general commercial equipment.

Industrial Systems segment produces integral motors, generators, alternators and switchgear for industrial applications, along with aftermarket parts and kits to support such products. These products serve markets including agriculture, marine, mining, oil and gas, food and beverage, data centers, healthcare, prime and standby power, and general industrial equipment.

Climate Solutions segment produces small motors, electronic variable speed controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters and commercial refrigeration.

36


Power Transmission Solutions segment produces, sells and services belt and chain drives, helical and worm gearing, mounted and unmounted bearings, couplings, modular plastic belts, conveying chains and components, hydraulic pump drives, large open gearing and specialty mechanical products serving markets including beverage, bulk handling, metals, special machinery, energy, aerospace and general industrial.

Components of Profit and Loss

Net Sales. We sell our products to a variety of manufacturers, distributors and end users. Our customers consist of a large cross-section of businesses, ranging from Fortune 100 companies to small businesses. A number of our products are sold to Original Equipment Manufacturers ("OEMs"), who incorporate our products, such as electric motors, into products they manufacture, and many of our products are built to the requirements of our customers. The majority of our sales derive from direct sales, but a significant portion derives from sales made by manufacturer’s representatives, who are paid exclusively on commission. Our product sales are made via purchase order, long-term contract, and, in some instances, one-time purchases. Many of our products have broad customer bases, with the levels of concentration of revenues varying from business unit to business unit.

Our level of net sales for any given period is dependent upon a number of factors, including (i) the demand for our products; (ii) the strength of the economy generally and the end markets in which we compete; (iii) our customers’ perceptions of our product quality at any given time; (iv) our ability to timely meet customer demands; (v) the selling price of our products; and (vi) the weather. As a result, our total revenue has tended to experience quarterly variations and our total revenue for any particular quarter may not be indicative of future results.

We use the term “organic sales" to refer to sales from existing operations excluding (i) sales from acquired businesses recorded prior to the first anniversary of the acquisition (“Acquisition Sales”), (ii) less the amount of sales attributable to any businesses divested/to be exited, and (iii) the impact of foreign currency translation. The impact of foreign currency translation is determined by translating the respective period’s organic sales using the same currency exchange rates that were in effect during the prior year periods. We use the term “organic sales growth” to refer to the increase in our sales between periods that is attributable to organic sales. We use the term “acquisition growth” to refer to the increase in our sales between periods that is attributable to Acquisition Sales.

Gross Profit. Our gross profit is impacted by our levels of net sales and cost of sales. Our cost of sales consists of costs for, among other things (i) raw materials, including copper, steel and aluminum; (ii) components such as castings, bars, tools, bearings and electronics; (iii) wages and related personnel expenses for fabrication, assembly and logistics personnel; (iv) manufacturing facilities, including depreciation on our manufacturing facilities and equipment, insurance and utilities; and (v) shipping. The majority of our cost of sales consists of raw materials and components. The price we pay for commodities and components can be subject to commodity price fluctuations. We attempt to mitigate this through fixed-price agreements with suppliers and our hedging strategies. When we experience commodity price increases, we have tended to announce price increase to our customers who purchase via purchase order, with such increases generally taking effect a period of time after the public announcements. For those sales we make under long-term contracts, we tend to include material price formulas that specify quarterly or semi-annual price adjustments based on a variety of factors, including commodity prices.

Outside of general economic cyclicality, our business units experience different levels of variation in gross profit from quarter to quarter based on factors specific to each business. For example, a portion of our Climate Solutions segment manufactures products that are used in air conditioning applications. As a result, our sales for that business tend to be lower in the first and fourth quarters and higher in the second and third quarters. In contrast, our Commercial Systems segment, Industrial Systems segment and Power Transmission Solutions segment have a broad customer base and a variety of applications, thereby helping to mitigate large quarter-to-quarter fluctuations outside of general economic conditions.

Operating Expenses. Our operating expenses consist primarily of (i) general and administrative expenses; (ii) sales and marketing expenses; (iii) general engineering and research and development expenses; and (iv) handling costs incurred in conjunction with distribution activities. Personnel related costs are our largest operating expense.

Our general and administrative expenses consist primarily of costs for (i) salaries, benefits and other personnel expenses related to our executive, finance, human resource, information technology, legal and operations functions; (ii) occupancy expenses; (iii) technology related costs; (iv) depreciation and amortization; and (v) corporate-related travel. The majority of our general and administrative costs are for salaries and related personnel expenses. These costs can vary by business given the location of our different manufacturing operations.

37


Our sales and marketing expenses consist primarily of costs for (i) salaries, benefits and other personnel expenses related to our sales and marketing function; (ii) internal and external sales commissions and bonuses; (iii) travel, lodging and other out-of-pocket expenses associated with our selling efforts; and (iv) other related overhead.

Our general engineering and research and development expenses consist primarily of costs for (i) salaries, benefits and other personnel expenses; (ii) the design and development of new energy efficiency products and enhancements; (iii) quality assurance and testing; and (iv) other related overhead. Our research and development efforts tend to be targeted toward developing new products that would allow us to maintain or gain additional market share, whether in new or existing applications. While these costs make up an insignificant portion of our operating expenses in the Power Transmission Solutions segment, they are more substantial in our Commercial Systems, Industrial Systems and Climate Solutions segments. In particular, a large driver of our research and development efforts in those three segments is energy efficiency, which generally means using less electrical power to produce more mechanical power.

Operating Profit. Our operating profit consists of the segment gross profit less the segment operating expenses. In addition, there are shared operating costs that cover corporate and information technology expenses that are consistently allocated to the operating segments and are included in the segment operating expenses. Operating profit is a key metric used to measure year over year improvement of the segments.

Restructuring and Restructuring Related Costs. We incurred restructuring-related costs on employee termination and plant relocation costs. Restructuring related costs includes costs directly associated with actions resulting from our simplification initiatives, such as asset write-downs or accelerated depreciation due to shortened useful lives in connection with site closures, discretionary employment benefit costs and other facility rationalization costs. Restructuring costs for employee termination expenses are generally required to be accrued over the employees remaining service period while restructuring costs for plant relocation costs and restructuring-related costs are generally required to be expensed as incurred.
COVID-19 Pandemic
COVID-19 evolved during the first quarter of 2020 into a global pandemic, resulting in a severe global health crisis that drove a dramatic slowdown in global economic and social activity. COVID-19 started to impact our businesses in China early in the first quarter of this year, and as the virus spread and the year progressed, the virus increasingly impacted our business on a global scale.

Impacts from COVID-19 on our business became more severe during the first half of the second quarter in terms of weakening demand in many of our end markets, which are weighted to North America, and its impact on our manufacturing operations, particularly in Mexico and India. As the second quarter progressed, pressure on our order rates started to abate, and previously disrupted manufacturing operations improved. Our order rates started to push back into positive territory in the third quarter. Currently, our manufacturing operations are, on average, running closer to full capacity. We acknowledge that in many regions confirmed cases of COVID-19 are increasing, including in much of the United States, Mexico, Europe and India.

We are an essential business, and as such have worked to ensure that our global facilities have remained operational. Our products are essential components in a range of applications used in the food & beverage, pharmaceutical, medical, transportation, and data communications industries, among many others. Certain global manufacturing operations have been impacted with plant closures or plants running at reduced rates at various points during the first nine months of the fiscal year.

In the face of this global crisis, our first priority has been the health and safety of our associates. In response, we implemented a host of measures to help our associates stay safe, measures that have been enhanced and refined as impacts from COVID-19 grew, and as our knowledge about how to enhance their effectiveness improved.

Factors deriving from the COVID-19 response that have or may negatively impact sales and operating profit in the future include, but are not limited to: limitations on the ability of our suppliers to manufacture, or procure from manufacturers, components and raw materials used in our products, or to meet delivery requirements and commitments; limitations on the ability of our employees to perform their work due to illness caused by the pandemic or local, state, or federal orders requiring employees to remain at home; limitations on the ability of carriers to deliver our products to customers; limitations on the ability of our customers to conduct their business and purchase our products and services; reductions in demands of our customers; and limitations on the ability of our customers to pay us on a timely basis.

38


As part of our response to the impacts of COVID-19, we have taken additional cost reduction actions, in addition to the substantial restructuring, supply chain, and 80/20 reorganization efforts that were already underway prior to the start of the COVID-19 pandemic. These additional actions included an organization wide reduction in force and a voluntary early retirement program. We will consider making further changes to our cost structure as the implications of COVID-19 continue to evolve.

Outlook
Our August and September order rates pushed back into positive territory as compared to the prior year evidencing some level of stability. Net sales in the fourth quarter are typically lower compared to our first three quarters due to seasonality and we expect fourth quarter and full year sales to be down versus the prior year.

Results of Operations
Three Months Ended September 26, 2020 Compared to September 28, 2019
Net sales decreased $14.1 million or 1.8% for the third quarter 2020 compared to the third quarter 2019. The decrease consisted of negative organic sales of 1.5%, negative foreign currency translation of 0.2%, and a negative 0.1% from the businesses divested/to be exited. The decrease was primarily driven by sales declines in North America general industrial, oil & gas end markets due to the lower customer demand and production disruptions caused by the COVID-19 pandemic and ongoing proactive account pruning. Gross profit increased $19.7 million or 9.8% for the third quarter 2020 as compared to the third quarter 2019. The increase in gross profit on lower volume was driven by favorable price realization versus cost, improved sales mix, proactive account pruning, supply chain optimization and benefits of prior cost actions. Total operating expenses for the third quarter 2020 increased $2.5 million or 1.9% as compared to the third quarter 2019. The increase was primarily driven by foreign exchange losses and real estate sale losses partially offset by lower variable selling costs and lower employee related wage and benefit costs.
Commercial Systems Segment net sales for the third quarter 2020 were $218.5 million, an increase of $3.7 million or 1.7% as compared to the third quarter 2019. The increase consisted of positive organic sales of 1.3% and positive foreign currency translation of 0.5%. The increase was primarily driven by strength in the pool pump market, share gains in the China motor business and to a lesser extent growth in North American large commercial HVAC. The gains were partially offset by ongoing COVID-19 pandemic related disruptions in our Mexico manufacturing operations and ongoing proactive account pruning. Gross profit increased $7.9 million or 14.8% as compared to the third quarter 2019. The increase in gross profit was primarily driven by favorable price realization versus cost and improved sales mix partially offset by expedited freight charges incurred as a result of the manufacturing operations disruptions. Total operating expenses for the third quarter 2020 were $36.1 million compared to $36.9 million in the third quarter 2019. The $0.8 million or 2.2% decrease was primarily due to lower employee related wage and benefit costs partially offset by foreign exchange losses.
Industrial Systems Segment net sales for the third quarter 2020 were $138.8 million, a decrease of $5.0 million or 3.5% as compared to the third quarter 2019. The decrease consisted of negative organic sales of 2.9% and negative foreign currency translation of 0.6%. The decrease was primarily driven by headwinds related to the COVID-19 pandemic impacting sales into the North American general industrial and oil & gas markets, combined with ongoing proactive account pruning; partially offset by share gains in the data center market. Gross profit increased $7.5 million or 31.6% as compared to the third quarter 2019. The increase in gross profit was primarily driven by supply chain optimization, favorable mix and positive price realization versus cost partially offset by lower volumes. Total operating expenses for the third quarter 2020 were $24.6 million compared to $26.0 million in the third quarter 2019. The $1.4 million or 5.4% decrease was primarily due to lower variable selling costs on the lower sales volumes, lower employee related wage and benefit costs and general cost savings initiatives partially offset by real estate losses and foreign exchange losses.
Climate Solutions Segment net sales were $234.0 million, an increase of $3.1 million or 1.3% as compared to the third quarter 2019. The increase consisted of positive organic sales of 2.5% offset by a decline of 0.4% from the businesses divested/to be exited and negative foreign currency translation of 0.8%. The increase was primarily due to strong demand in the North America residential HVAC market, partially offset by headwinds related to COVID-19 pandemic in the commercial refrigeration market and in the North American light commercial HVAC market, as well as ongoing account pruning. Gross profit increased $4.9 million or 7.6% compared to the third quarter 2019. The increase in gross profit was primarily driven by favorable mix and higher volumes partially offset by slightly weaker price realization versus cost and expedited freight charges. Total operating expenses for the third quarter 2020 were $29.9 million compared to $26.6 million in the third quarter 2019. The increase was primarily due to increased foreign exchange losses.
39


Power Transmission Solutions Segment net sales for the third quarter 2020 were $166.9 million, a decrease of $15.9 million or 8.7% compared to third quarter 2019 net sales of $182.8 million. The decrease consisted of negative organic sales of 8.9% and positive foreign currency of 0.2%. The decrease was primarily due to the decrease in sales volume driven by significant COVID-19 pandemic related declines in the United States general industrial and upstream oil & gas end markets in addition to ongoing proactive account pruning activities. Gross profit for the third quarter 2020 decreased $0.6 million or 1.0%. The decrease was driven by lower sales volume partially offset by favorable price realization versus cost, continued cost out initiatives and favorable mix. Total operating expenses for the third quarter 2020 increased $1.4 million as compared to the third quarter 2019 primarily due to foreign exchange losses and real estate losses partially offset by lower variable selling related costs along with lower employee related wage and benefit costs.
Nine Months Ended September 26, 2020 Compared to September 28, 2019

Net sales decreased $373.3 million or 14.9% for the nine months ended September 26, 2020 compared to the nine months ended September 28, 2019. The decrease consisted of negative organic sales of 12.4%, negative foreign currency translation of 0.7%, and a negative 1.8% from the businesses divested/to be exited. The decrease was primarily driven by sales declines across the segments due to lower demand and production delays associated with the COVID-19 pandemic. Gross profit decreased $75.3 million or 11.2% for the nine months ended September 26, 2020 as compared to the nine months ended September 28, 2019 primarily due to lower sales volumes partially offset by supply chain optimization, favorable price realization versus cost and the benefits of prior cost actions. Total operating expenses for the nine months ended September 26, 2020 increased $8.2 million or 2.2% as compared to the nine months ended September 28, 2019. The increase was primarily due to prior year gains on the divestiture of businesses that did not repeat and higher foreign exchange losses partially offset by lower costs related to the businesses divested/to be exited and lower salary and wage related expenses.
Commercial Systems Segment net sales for the nine months ended September 26, 2020 were $593.8 million, a decrease of $109.5 million or 15.6% as compared to the nine months ended September 28, 2019. The decrease consisted of negative organic sales of 12.0%, a decline of 3.1% from the businesses divested/to be exited and negative foreign currency translation of 0.5%. The decrease was primarily driven by lower sales volumes as a result of COVID-19 pandemic related production delays in our Mexico manufacturing operations, COVID-19 related end market pressure on Europe air moving and North American general industrial combined with account pruning partially offset by share gains in China markets. Gross profit decreased $29.8 million or 16.2% as compared to the nine months ended September 28, 2019. The decrease was primarily driven by lower sales volumes. Total operating expenses for the nine months ended September 26, 2020 were $110.5 million compared to $89.1 million in the nine months ended September 28, 2019. The $21.4 million or 24.0% increase was primarily due to prior year gains on the divestiture of businesses that did not repeat and higher foreign exchange losses partially offset by lower costs related to the businesses divested/to be exited and lower salary and wage related expenses.
Industrial Systems Segment net sales for the nine months ended September 26, 2020 were $389.0 million, a decrease of $48.4 million or 11.1% as compared to the nine months ended September 28, 2019. The decrease consisted of negative organic sales of 9.4% and negative foreign currency translation of 1.7%. The decrease was primarily driven by lower sales volumes as a result of headwinds in industrial end markets, combined with account pruning, and overall headwinds related to the COVID-19 pandemic, partially offset by share gains in the data center market. Gross profit increased $3.4 million or 4.5% as compared to the nine months ended September 28, 2019. The increase was primarily driven by supply chain optimization and favorable mix partially offset by lower volumes. Total operating expenses for the nine months ended September 26, 2020 were $69.4 million compared to $83.2 million in the nine months ended September 28, 2019. The $13.8 million or 16.6% decrease was primarily due to benefits realized under prior cost savings initiatives, lower salary and wage related expenses, lower variable selling costs on lower sales volumes partially offset by real estate losses.
Climate Solutions Segment net sales were $622.3 million, a decrease of $139.8 million or 18.3% as compared to the nine months ended September 28, 2019. The decrease consisted of negative organic sales of 15.3%, a decline of 2.4% from the businesses divested/to be exited and negative foreign currency translation of 0.6%. The decrease was primarily driven by weather related weakness early in the year and COVID-19 related disruptions in end markets. Gross profit decreased $33.8 million or 16.1% compared to the nine months ended September 28, 2019. The decrease was primarily due to lower sales volumes driven and overall headwinds related to the COVID-19 pandemic. Total operating expenses for the nine months ended September 26, 2020 were $87.2 million compared to $81.5 million in the nine months ended September 28, 2019. The increase was primarily due to gains on divestitures of businesses recorded in the prior year and higher professional fees partially offset by lower variable selling costs on the lower sales volumes, lower salary and wage related expenses and general cost savings initiatives.
40


Power Transmission Solutions Segment net sales for the nine months ended September 26, 2020 were $521.4 million, a decrease of $75.6 million or 12.7% compared to the nine months ended September 28, 2019. The decrease consisted of negative organic sales of 11.5%, a negative 0.8% from the businesses divested/to be exited and unfavorable foreign currency of 0.4%. The decrease was primarily due to a decrease in sales volume driven by significant COVID-19 pandemic related declines in the United States general industrial and upstream oil & gas end markets in addition to ongoing proactive account pruning activities. Gross profit for the nine months ended September 26, 2020 decreased $15.1 million or 7.5%. The decrease was driven by lower sales volume driven by the impact of COVID-19 on end markets partially offset by continued cost out initiatives. Total operating expenses for the nine months ended September 26, 2020 decreased $5.1 million as compared to the nine months ended September 28, 2019. The decrease is primarily due to lower salary and wage related expenses, lower variable selling related costs and general cost savings initiatives partially offset by foreign exchange losses.
41


Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
(Dollars in Millions)
Net Sales:
  Commercial Systems$218.5 $214.8 $593.8 $703.3 
  Industrial Systems138.8 143.8 389.0 437.4 
  Climate Solutions234.0 230.9 622.3 762.1 
  Power Transmission Solutions166.9 182.8 521.4 597.0 
Consolidated$758.2 $772.3 $2,126.5 $2,499.8 
Gross Profit as a Percent of Net Sales:
  Commercial Systems28.1 %24.9 %26.0 %26.2 %
  Industrial Systems22.5 %16.5 %20.2 %17.2 %
  Climate Solutions29.5 %27.8 %28.3 %27.5 %
  Power Transmission Solutions35.9 %33.1 %35.7 %33.7 %
Consolidated29.2 %26.1 %28.0 %26.8 %
Operating Expenses as a Percent of Net Sales:
  Commercial Systems16.5 %17.1 %18.2 %17.3 %
  Industrial Systems17.7 %18.1 %17.8 %18.8 %
  Climate Solutions12.8 %11.5 %13.8 %11.3 %
  Power Transmission Solutions24.6 %21.7 %23.4 %21.1 %
Consolidated17.4 %16.7 %18.1 %16.7 %
Income (Loss) from Operations as a Percent of Net Sales:
  Commercial Systems*11.6 %7.7 %7.4 %13.5 %
  Industrial Systems4.8 %(1.6)%2.4 %(1.8)%
  Climate Solutions**16.8 %16.3 %14.3 %16.8 %
  Power Transmission Solutions11.3 %11.4 %12.3 %12.4 %
Consolidated11.9 %9.4 %9.7 %11.6 %
Income from Operations$90.0 $72.8 $205.9 $289.4 
Other (Income) Expenses, net(1.1)0.1 (3.3)0.4 
Interest Expense9.0 13.5 31.2 40.5 
Interest Income1.3 1.5 3.8 4.0 
  Income before Taxes83.4 60.7 181.8 252.5 
Provision for Income Taxes17.1 9.9 39.5 47.5 
  Net Income66.3 50.8 142.3 205.0 
Less: Net Income Attributable to Noncontrolling Interests1.3 1.1 3.4 2.8 
  Net Income Attributable to Regal Beloit Corporation$65.0 $49.7 $138.9 $202.2 
* The three and nine months ended September 28, 2019 results included a loss on divestiture of $0.1 million and a gain on divestiture of $39.4 million, respectively.

** The three and nine months ended September 28, 2019 results included a loss on divestiture of $0.1 million and a gain on divestiture of $6.0 million, respectively.

42


The effective tax rate for the three months ended September 26, 2020 was 20.5% versus 16.3% for the three months ended September 28, 2019. The effective tax rate for the nine months ended September 26, 2020 was 21.7% versus 18.8% for the nine months ended September 28, 2019. The change in the effective tax rate for the three and nine months ended September 26, 2020 was primarily driven by the 2019 expiration of the China incentives awarded to the Company for research and development efforts and the mix of earnings.

Liquidity and Capital Resources
General
Our principal source of liquidity is cash flow provided by operating activities. In addition to operating income, other significant factors affecting our cash flow include working capital levels, capital expenditures, dividends, share repurchases, acquisitions and divestitures, availability of debt financing and the ability to attract long-term capital at acceptable terms.

Cash flow provided by operating activities was $309.9 million for the nine months ended September 26, 2020, a $38.7 million increase from the nine months ended September 28, 2019. The higher net income for the nine months ended September 28, 2019 included a $45.2 million gain on divestiture of businesses compared to $0.1 million gain on divestiture of businesses for the nine months ended September 26, 2020. In addition, working capital was a higher source of cash in the current year for the nine months ended September 26, 2020 compared to the nine months ended September 28, 2019, most notably accounts payable being a source of cash in the current year versus a use of cash in the prior year.

Cash flow used in investing activities was $21.8 million for the nine months ended September 26, 2020 as compared to cash flow provided by investing activities of $84.0 million for the nine months ended September 28, 2019. The change was driven primarily by $159.6 million of divestiture proceeds received partially offset by higher capital investments in the prior year.

Cash flow used in financing activities was $135.2 million for the nine months ended September 26, 2020, compared to $303.8 million used in financing activities for the nine months ended September 28, 2019. We had net debt repayments of $67.8 million during the nine months ended September 26, 2020, compared to net debt repayments of $107.3 million during the nine months ended September 28, 2019. We paid $36.5 million of dividends to shareholders during the nine months ended September 26, 2020, compared to $36.6 million for the nine months ended September 28, 2019. There were $25.0 million of share repurchases for the nine months ended September 26, 2020, compared to $150.1 million for the nine months ended September 28, 2019.

Our working capital was $921.8 million at September 26, 2020, compared to $1,047.2 million at December 28, 2019. At September 26, 2020 and December 28, 2019, our current ratio (which is the ratio of our current assets to current liabilities) was 2.1:1 and 2.9:1, respectively. Our working capital decreased primarily due to the increase in cash from operations and the reclassification of $230.0 million of Senior Notes from Long-Term Debt to Short-Term Debt. We plan to use capacity under our Multicurrency Revolving Facility to payoff these notes.

The following table presents selected financial information and statistics as of September 26, 2020 and December 28, 2019 (in millions):
September 26, 2020December 28, 2019
Cash and Cash Equivalents$487.5 $331.4 
Trade Receivables, Net472.5 461.4 
Inventories677.2 678.4 
Working Capital921.8 1,047.2 
Current Ratio2.1 :12.9 :1

At September 26, 2020 our cash and cash equivalents totaled $487.5 million, of which $468.1 million was held by foreign subsidiaries and could be used in our domestic operations if necessary. We periodically evaluate our cash held outside the US and may pursue opportunities to repatriate certain foreign cash amounts. As a result of the Tax Cuts and Jobs Act of 2017, dividends to the US no longer incur US tax.

We will, from time to time, maintain excess cash balances which may be used to (i) fund operations, (ii) repay outstanding debt, (iii) fund acquisitions, (iv) pay dividends, (v) make investments in new product development programs, (vi) repurchase our common stock, or (vii) fund other corporate objectives.
43


Credit Agreement
On August 27, 2018 we entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders named therein, providing for a (i) 5-year unsecured term loan facility in the principal amount of $900.0 million (the “Term Facility”) and (ii) a 5-year unsecured multicurrency revolving facility in the principal amount of $500.0 million (the “Multicurrency Revolving Facility”), including a $50.0 million letter of credit sub facility, available for general corporate purposes. Borrowings under the Credit Agreement bear interest at floating rates based upon indices determined by the currency of the borrowing, plus an applicable margin determined by reference to our consolidated funded debt to consolidated EBITDA ratio or at an alternative base rate.
The Term Facility was drawn in full on August 27, 2018 with the proceeds settling the amounts owed under prior borrowings. The Term Facility requires quarterly amortization at a rate starting at 5.0% per annum, increasing to 7.5% per annum after three years and further increasing to 10.0% per annum for the last year of the Term Facility, unless previously prepaid. The weighted average interest rate on the Term Facility for the three months ended September 26, 2020 and September 28, 2019 was 1.5% and 3.6%, respectively. The weighted average interest rate on the Term Facility for the nine months ended September 26, 2020 and September 28, 2019 was 2.1% and 3.8%, respectively. The Credit Agreement requires that we prepay the loans under the Term Facility with 100% of the net cash proceeds received from specified asset sales and borrowed money indebtedness, subject to certain exceptions.
At September 26, 2020, we had borrowings under the Multicurrency Revolving Facility in the amount of nil, $0.2 million of standby letters of credit issued under the facility, and $499.8 million of available borrowing capacity. For the three months ended September 26, 2020 and September 28, 2019 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $51.4 million and $127.1 million, respectively and weighted average interest rate of 1.5% and 3.6%, respectively. For the nine months ended September 26, 2020 and September 28, 2019 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $189.7 million and $91.3 million, respectively, and the weighted average interest rate of 2.1% and 3.7%, respectively. We pay a non-use fee on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.
Senior Notes
At September 26, 2020, we had $400.0 million of senior notes (the “Notes”) outstanding. The Notes consist of $400.0 million in senior notes in a private placement which were issued in five tranches with maturities from ten to twelve years and carry fixed interest rates. As of September 26, 2020, $230.0 million and $170.0 million of the Notes are included in Current Maturities of Long-Term Debt and Long-Term Debt, respectively on the Condensed Consolidated Balance Sheets. The Notes maturing in 2021 will be paid using capacity on our Multicurrency Revolving Facility.
The following table presents details on the Notes at September 26, 2020 (in millions):
PrincipalInterest RateMaturity
Fixed Rate Series 2011A$230.0 4.8 to 5.0%July 14, 2021
Fixed Rate Series 2011A170.0 4.9 to 5.1%July 14, 2023
$400.0 
We have an interest rate swap agreement to manage fluctuations in cash flows resulting from interest rate risk (see also Note 14 of Notes to the Condensed Consolidated Financial Statements).

Compliance with Financial Covenants

The Credit Agreement and the Notes require us to meet specified financial ratios and to satisfy certain financial condition tests. We were in compliance with all financial covenants contained in the Notes and the Credit Agreement as of September 26, 2020.

Other Notes Payable

At September 26, 2020, other notes payable of approximately $4.3 million were outstanding with a weighted average interest rate of 4.9%. At December 28, 2019, other notes payable of approximately $4.5 million were outstanding with a weighted average rate of 5.0%.

44


Other Disclosures

Based on rates for instruments with comparable maturities and credit quality, which are classified as Level 2 inputs (see also Note 15 of Notes to the Condensed Consolidated Financial Statements), the approximate fair value of our total debt was $1,087.3 million and $1,162.1 million as of September 26, 2020 and December 28, 2019, respectively.

Critical Accounting Policies
Our disclosures of critical accounting policies, which are contained in our Annual Report on Form 10-K for the year ended December 28, 2019, have not materially changed since that report was filed.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk relating to our operations due to changes in interest rates, foreign currency exchange rates and commodity prices of purchased raw materials. We manage the exposure to these risks through a combination of normal operating and financing activities and derivative financial instruments such as interest rate swaps, commodity cash flow hedges and foreign currency forward exchange contracts. All hedging transactions are authorized and executed pursuant to clearly defined policies and procedures, which prohibit the use of financial instruments for speculative purposes.
All qualified hedges are recorded on the balance sheet at fair value and are accounted for as cash flow hedges, with changes in fair value recorded in Accumulated Other comprehensive Income (Loss) (“AOCI”) in each accounting period. An ineffective portion of the hedges change in fair value, if any, is recorded in earnings in the period of change.
Interest Rate Risk
We are exposed to interest rate risk on certain of our outstanding debt obligations used to finance our operations and acquisitions. Loans under the Credit Agreement bear interest at variable rates plus a margin, based on our consolidated net leverage ratio. At September 26, 2020, excluding the impact of interest rate swaps, we had $404.1 million of fixed rate debt and $670.2 million of variable rate debt. We utilize interest rate swaps to manage fluctuations in cash flows resulting from exposure to interest rate risk on forecasted variable rate interest payments.
We have floating rate borrowings, which expose us to variability in interest payments due to changes in interest rates. A hypothetical 10% change in our weighted average borrowing rate on outstanding variable rate debt at September 26, 2020 would result in a $0.9 million change in after-tax annualized earnings. In April 2018, we entered into a spot, non-amortizing interest rate swap to pay fixed/receive floating with a notional amount of $88.4 million to manage fluctuations in cash flows from interest rate risk related to floating rate interest. The swap expires in April 2021. We also entered into two forward starting pay fixed/receive floating non-amortizing interest rate swaps in June 2020, with a total notional amount of $250.0 million to managed fluctuations in cash flows from interest rate risk related to floating rate interest. These swaps become effective July 2021 and will expire in July 2025. Upon inception, the swaps were designated as a cash flow hedges against forecasted interest payments under ASU 2017-12, with gains and losses, net of tax, measured on an ongoing basis, recorded in AOCI.
Details regarding the instruments as of September 26, 2020 are as follows (in millions):
InstrumentNotional AmountMaturityRate PaidRate ReceivedFair Value
Swap$88.4April 20212.5%LIBOR (1 month)$(1.2)
Swap$250.0July 20250.6%LIBOR (1 month)$(2.0)
As of September 26, 2020, the interest rate swap liability of $(1.2) million was included in Current Hedging Obligations and $(2.0) million in Noncurrent Hedging Obligations. The unrealized loss on the effective portion of the contract net of tax of $(2.5) million was recorded in AOCI. At December 28, 2019, a $(1.0) million interest rate swap liability was included in Noncurrent Hedging Obligations.
In July 2017, the United Kingdom Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR after 2021. We have material exposure to LIBOR through our revolving credit facility, certain lines of credit and interest rate swaps that are indexed to USD-LIBOR. It is expected that LIBOR will be discontinued and, while we believe an acceptable replacement to LIBOR will be available, if LIBOR is discontinued, we cannot reasonably estimate the impact, if any, on such discontinuation.
45


Foreign Currency Risk
We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances of foreign subsidiaries, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. Our objective is to minimize our exposure to these risks through a combination of normal operating activities and the utilization of foreign currency exchange contracts to manage our exposure on the forecasted transactions denominated in currencies other than the applicable functional currency. Contracts are executed with credit worthy banks and are denominated in currencies of major industrial countries. We do not hedge our exposure to the translation of reported results of foreign subsidiaries from local currency to United States dollars.
As of September 26, 2020, derivative currency assets (liabilities) of $9.8 million, $1.0 million, $(6.8) million and $(0.3) million, are recorded in Prepaid Expenses and Other Current Assets, Other Noncurrent Assets, Current Hedging Obligations, and Noncurrent Hedging Obligations, respectively. As of December 28, 2019, derivative currency assets (liabilities) of $8.9 million, $10.3 million, $(3.1) million and $(0.2) million, are recorded in Prepaid Expenses and Other Current Assets, Other Noncurrent Assets, Current Hedging Obligations and Noncurrent Hedging Obligations, respectively. The unrealized (losses) gains on the effective portions of the hedges of $(0.6) million net of tax, and $5.7 million net of tax, as of September 26, 2020 and December 28, 2019 respectively, were recorded in AOCI. At September 26, 2020, we had $(2.0) million, net of tax, of derivative currency losses on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings. At December 28, 2019, we had $2.1 million, net of tax, currency gains on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings.
The following table quantifies the outstanding foreign exchange contracts intended to hedge non-US dollar denominated receivables and payables and the corresponding impact on the value of these instruments assuming a hypothetical 10% appreciation/depreciation of their counter currency on September 26, 2020 (in millions):
   Gain (Loss) From
CurrencyNotional AmountFair Value10% Appreciation of Counter Currency10% Depreciation of Counter Currency
Chinese Renminbi$55.6 $0.8 $5.6 $(5.6)
Mexican Peso110.8 (2.7)11.1 (11.1)
Euro148.6 5.7 14.9 (14.9)
Indian Rupee32.2 0.2 3.2 (3.2)
Canadian Dollar2.4 — 0.2 (0.2)
Australian Dollar16.7 (0.2)1.7 (1.7)
British Pound17.9 — 1.8 (1.8)
Thai Baht6.2 (0.1)0.6 (0.6)
Gains and losses indicated in the sensitivity analysis would be offset by gains and losses on the underlying forecasted non-US dollar denominated cash flows.
Commodity Price Risk
We periodically enter into commodity hedging transactions to reduce the impact of changing prices for certain commodities such as copper and aluminum based upon forecasted purchases of such commodities. Qualified hedge transactions are designated as cash flow hedges and the contract terms of commodity hedge instruments generally mirror those of the hedged item, providing a high degree of risk reduction and correlation.
Derivative commodity assets (liabilities) of $6.8 million were recorded in Prepaid Expenses and Other Current Assets at September 26, 2020. Derivative commodity assets (liabilities) of $2.6 million, $0.1 million and $(0.3) million were recorded in Prepaid Expenses and Other Noncurrent Assets and Current Hedging Obligations, respectively, at December 28, 2019. The unrealized gain on the effective portion of the hedges of $5.1 million net of tax and $1.8 million net of tax, as of September 26, 2020 and December 28, 2019, respectively, was recorded in AOCI. At September 26, 2020, we had $1.5 million, net of tax, of derivative commodity gains on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings. At December 28, 2019, there was an additional $(0.8) million, net of tax, of derivative commodity losses on closed hedge instruments in AOCI that were realized into earnings when the hedged items impacted earnings.
46


The following table quantifies the outstanding commodity contracts intended to hedge raw material commodity prices and the corresponding impact on the value of these instruments assuming a hypothetical 10% appreciation/depreciation of their prices on September 26, 2020 (in millions):
   Gain (Loss) From
CommodityNotional AmountFair Value10% Appreciation of Commodity Prices10% Depreciation of Commodity Prices
Copper$38.9 $6.7 $3.9 $(3.9)
Aluminum3.2 0.1 0.3 (0.3)
Gains and losses indicated in the sensitivity analysis would be offset by the actual prices of the commodities.
The net AOCI hedging component balance of a $1.5 million gains at September 26, 2020 includes $4.0 million of net current deferred losses expected to be realized in the next twelve months. The gain/loss reclassified from AOCI into earnings on such derivatives will be recognized in the same period in which the related item affects earnings.
Counterparty Risk
We are exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including our interest rate swap agreements, foreign currency exchange contracts and commodity hedging transactions. We manage exposure to counterparty credit risk by limiting our counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. We do not obtain collateral or other security to support financial instruments subject to credit risk. We do not anticipate non-performance by our counterparties, but cannot provide assurances.

ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective to ensure that (a) information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and (b) information required to be disclosed by us in the reports the Company files or submits under the Exchange Act is accumulated and communicated to our management, including its Chief Executive Officer and its Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
There have been no material changes in the legal matters described in Part I, Item 3 in our Annual Report on Form 10-K for the year ended December 28, 2019, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS
Our business and financial results are subject to numerous risks and uncertainties. The following risk factor supplements the risk factors reported in Part I, Item 1A in our 2019 Annual Report on Form 10-K for the year ended December 28, 2019, which is incorporated herein by reference.
The COVID-19 pandemic has adversely impacted our business and could continue to have a material adverse impact on our business, results of operation, financial condition, liquidity, customers, suppliers, and the geographies in which we operate.
47


The COVID-19 pandemic has significantly increased economic, demand and operational uncertainty. We have global operations, customers and suppliers, including in countries most impacted by COVID-19. Authorities around the world have taken a variety of measures to slow the spread of COVID-19, including travel bans or restrictions, increased border controls or closures, quarantines, shelter-in-place orders and business shutdowns and such authorities may impose additional restrictions. We have also taken actions to protect our employees and to mitigate the spread of COVID-19, including embracing guidelines set by the World Health Organization and the U.S. Centers for Disease Control and Prevention on social distancing, good hygiene, restrictions on employee travel and in-person meetings, and changes to employee work arrangements including remote work arrangements where feasible. The actions taken around the world to slow the spread of COVID-19 have also impacted our customers and suppliers, and future developments could cause further disruptions to us due to the interconnected nature of our business relationships.
The impact of COVID-19 on the global economy and our customers, as well as recent volatility in commodity markets, has negatively impacted demand for our products and could continue to do so in the future. Its effects could also result in further disruptions to our manufacturing operations, including higher rates of employee absenteeism, and supply chain, which could continue to negatively impact our ability to meet customer demand. Additionally, the potential deterioration and volatility of credit and financial markets could limit our ability to obtain external financing. The extent to which COVID-19 will impact our business, results of operations, financial condition or liquidity is highly uncertain and will depend on future developments, including the spread and duration of the virus, potential actions taken by governmental authorities, and how quickly economic conditions stabilize and recover.
For additional information regarding risks and uncertainties facing the Company, please also see the information provided under the header “Cautionary Statement” contained in this Quarterly Report on Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no repurchases of our common stock during the current quarter. 

Under our equity incentive plans, participants may pay the exercise price or satisfy all or a portion of the federal, state and local withholding tax obligations arising in connection with plan awards by electing to (a) have the Company withhold shares of common stock otherwise issuable under the award, (b) tender back shares received in connection with such award or (c) deliver other previously owned shares of common stock, in each case having a value equal to the exercise price or the amount to be withheld. During the quarter ended September 26, 2020, we did not acquire any shares in connection with transactions pursuant to equity incentive plans.
At a meeting of the Board of Directors on July 24, 2018, the Company's Board of Directors approved the extinguishment of the existing 3.0 million share repurchase program that was approved in November 2013 and replaced it with an authorization to purchase up to $250.0 million of shares. At a meeting of the Board of Directors on October 25, 2019, the July 2018 repurchase authorization was extinguished and replaced with an authorization to purchase up to $250.0 million of shares.
48


ITEM 6. EXHIBITS
 
Exhibit Number  Exhibit Description
31.1  
31.2  
32.1  
101.INS  XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).



49


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
REGAL BELOIT CORPORATION
(Registrant)
/s/ Robert J. Rehard
Robert J. Rehard
Vice President
Chief Financial Officer
(Principal Financial Officer)
/s/ Jason R. Longley
Jason R. Longley
Vice President
Corporate Controller
(Principal Accounting Officer)
Date: November 5, 2020



50
Document

EXHIBIT 31.1
CERTIFICATIONS
I, Louis V. Pinkham, certify that:
1I have reviewed this quarterly report on Form 10-Q of Regal Beloit Corporation;
2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Louis V. Pinkham
Louis V. Pinkham
Chief Executive Officer
Date: November 5, 2020

Document

EXHIBIT 31.2
CERTIFICATIONS
I, Robert J. Rehard, certify that:
1I have reviewed this quarterly report on Form 10-Q of Regal Beloit Corporation;
2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Robert J. Rehard
Robert J. Rehard
Vice President
Chief Financial Officer
Date: November 5, 2020

Document

EXHIBIT 32.1
CERTIFICATIONS of the
Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350
Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Regal Beloit Corporation (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the three and nine months ended September 26, 2020 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/ Louis V. Pinkham
Louis V. Pinkham
Chief Executive Officer
 
/s/ Robert J. Rehard
Robert J. Rehard
Vice President
Chief Financial Officer
Date: November 5, 2020

v3.20.2
Cover Page - shares
9 Months Ended
Sep. 26, 2020
Oct. 26, 2020
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 26, 2020  
Document Transition Report false  
Entity File Number 001-07283  
Entity Registrant Name REGAL BELOIT CORP  
Entity Incorporation, State or Country Code WI  
Entity Tax Identification Number 39-0875718  
Entity Address, Address Line One 200 State Street  
Entity Address, City or Town Beloit  
Entity Address, State or Province WI  
Entity Address, Postal Zip Code 53511  
City Area Code 608  
Local Phone Number 364-8800  
Title of 12(b) Security Common Stock  
Trading Symbol RBC  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   40,595,282
Entity Central Index Key 0000082811  
Amendment Flag false  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Current Fiscal Year End Date --01-02  
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Millions, $ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Income Statement [Abstract]        
Net Sales $ 758.2 $ 772.3 $ 2,126.5 $ 2,499.8
Cost of Sales 536.6 570.4 1,531.3 1,829.3
Gross Profit 221.6 201.9 595.2 670.5
Operating Expenses 131.6 128.9 385.1 416.3
Gain (Loss) on Divestiture of Businesses 0.0 0.2 (0.1) (45.2)
Asset Impairments 0.0 0.0 4.3 10.0
Total Operating Expenses 131.6 129.1 389.3 381.1
Income from Operations 90.0 72.8 205.9 289.4
Other (Income) Expenses, net (1.1) 0.1 (3.3) 0.4
Interest Expense 9.0 13.5 31.2 40.5
Interest Income 1.3 1.5 3.8 4.0
Income before Taxes 83.4 60.7 181.8 252.5
Provision for Income Taxes 17.1 9.9 39.5 47.5
Net Income 66.3 50.8 142.3 205.0
Less: Net Income Attributable to Noncontrolling Interests 1.3 1.1 3.4 2.8
Net Income Attributable to Regal Beloit Corporation $ 65.0 $ 49.7 $ 138.9 $ 202.2
Earnings Per Share Attributable to Regal Beloit Corporation:        
Basic (in dollars per share) $ 1.60 $ 1.20 $ 3.42 $ 4.78
Assuming Dilution (in dollars per share) $ 1.60 $ 1.19 $ 3.41 $ 4.75
Weighted Average Number of Shares Outstanding:        
Basic (in shares) 40.6 41.5 40.6 42.3
Assuming Dilution (in shares) 40.8 41.7 40.7 42.6
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Statement of Comprehensive Income [Abstract]        
Net Income $ 66.3 $ 50.8 $ 142.3 $ 205.0
Other Comprehensive Income (Loss) Net of Tax:        
Foreign Currency Translation Adjustments 36.7 (38.5) (2.8) (31.7)
Reclassification of Foreign Currency Translation Adjustments included in Net Income, Net of $0.0 Million Tax Effects for the Three Months and Nine Months Ended September 26, 2020 and September 28, 2019, Respectively 0.0 0.0 0.0 1.6
Hedging Activities:        
Increase (Decrease) in Fair Value of Hedging Activities, Net of Tax Effects of $1.9 Million and $(1.6) Million for the Three Months Ended September 26, 2020 and September 28, 2019 and $(3.9) Million and $1.4 Million for the Nine Months Ended September 26, 2020 and September 28, 2019, Respectively 6.0 (4.9) (12.3) 4.4
Reclassification of Losses (Gains) included in Net Income, Net of Tax Effects of $2.0 Million and $(1.0) Million for the Three Months Ended September 26, 2020 and September 28, 2019 and $1.9 Million and $(1.0) Million for the Nine Months Ended September 26, 2020 and September 28, 2019, Respectively 6.2 (3.2) 5.8 (3.2)
Pension and Post Retirement Plans:        
Reclassification Adjustments for Pension and Post Retirement Benefits included in Net Income, Net of Tax Effects of $0.0 Million and $0.1 Million for the Three Months Ended September 26, 2020 and September 28, 2019 and $0.1 Million and $0.3 Million for the Nine Months Ended September 26, 2020 and September 28, 2019, Respectively 0.1 0.4 0.3 1.3
Other Comprehensive Income (Loss) 49.0 (46.2) (9.0) (27.6)
Comprehensive Income 115.3 4.6 133.3 177.4
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests 2.2 (0.1) 3.5 1.6
Comprehensive Income Attributable to Regal Beloit Corporation $ 113.1 $ 4.7 $ 129.8 $ 175.8
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Statement of Comprehensive Income [Abstract]        
Reclassification of foreign currency translation adjustments, tax $ 0.0 $ 0.0 $ 0.0 $ 0.0
Increase in fair value of hedging activities, tax effects 1.9 (1.6) (3.9) 1.4
Reclassification of losses (gains) included in net income, tax effects 2.0 (1.0) 1.9 (1.0)
Reclassification adjustments for pension and post retirement benefits included in net income, tax effects $ 0.0 $ 0.1 $ 0.1 $ 0.3
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Current Assets:    
Cash and Cash Equivalents $ 487.5 $ 331.4
Trade Receivables, Less Allowances of $15.6 Million in 2020 and $9.7 Million in 2019 472.5 461.4
Inventories 677.2 678.4
Prepaid Expenses and Other Current Assets 110.4 133.7
Assets Held for Sale 5.0 2.8
Total Current Assets 1,752.6 1,607.7
Net Property, Plant, and Equipment 549.4 605.0
Operating Lease Assets 74.7 71.0
Goodwill 1,508.4 1,501.3
Intangible Assets, Net of Amortization 535.4 567.2
Deferred Income Tax Benefits 43.9 58.4
Other Noncurrent Assets 15.0 20.1
Total Assets 4,479.4 4,430.7
Current Liabilities:    
Accounts Payable 363.8 337.0
Dividends Payable 12.2 12.2
Current Hedging Obligations 8.0 3.4
Accrued Compensation and Employee Benefits 82.1 67.3
Other Accrued Expenses 112.4 118.4
Current Operating Lease Liabilities 21.7 21.6
Current Maturities of Long-Term Debt 230.6 0.6
Total Current Liabilities 830.8 560.5
Long-Term Debt 840.2 1,136.9
Deferred Income Taxes 177.6 171.9
Noncurrent Hedging Obligations 2.3 1.2
Pension and Other Post Retirement Benefits 74.1 80.8
Noncurrent Operating Lease Liabilities 55.5 51.0
Other Noncurrent Liabilities 47.0 48.0
Contingencies (see Note 13)
Regal Beloit Corporation Shareholders' Equity:    
Common Stock, $0.01 par value, 100.0 Million Shares Authorized, 40.6 Million and 40.8 Million Shares Issued and Outstanding for 2020 and 2019, Respectively 0.4 0.4
Additional Paid-In Capital 695.9 701.8
Retained Earnings 1,972.5 1,886.7
Accumulated Other Comprehensive Loss (246.9) (237.8)
Total Regal Beloit Corporation Shareholders' Equity 2,421.9 2,351.1
Noncontrolling Interests 30.0 29.3
Total Equity 2,451.9 2,380.4
Total Liabilities and Equity $ 4,479.4 $ 4,430.7
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts receivable $ 15.6 $ 9.7
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 100,000,000.0 100,000,000.0
Common stock, shares issued (in shares) 40,600,000 40,800,000
Common stock, shares outstanding (in shares) 40,600,000 40,800,000
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($)
$ in Millions
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock $0.01 Par Value
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Adoption of ASU 2016-13 $ 2,338.5   $ 0.4 $ 783.6 $ 1,777.9 $ (251.4) $ 28.0
Beginning Balance at Dec. 29, 2018 2,338.5   0.4 783.6 1,777.9 (251.4) 28.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net Income 205.0       202.2   2.8
Other Comprehensive Income (Loss) (27.6)         (26.4) (1.2)
Dividends Declared (36.9)       (36.9)    
Stock Options Exercised (8.0)     (8.0)      
Stock Repurchase (150.1)     (77.8) (72.3)    
Share-Based Compensation 10.0     10.0      
Adoption of ASU 2016-13 2,338.5   0.4 707.8 1,777.9 (251.4) 27.8
Dividends Declared to Noncontrolling Interests (1.8)           (1.8)
Ending Balance at Sep. 28, 2019 2,329.1   0.4 707.8 1,870.9 (277.8) 27.8
Beginning Balance at Dec. 29, 2018 $ 2,338.5   0.4 783.6 1,777.9 (251.4) 28.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Adoption of ASU 2016-13 us-gaap:AccountingStandardsUpdate201613Member            
Adoption of ASU 2016-13 $ 2,338.5 $ (2.7) 0.4 783.6 1,777.9 (251.4) 28.0
Ending Balance at Dec. 28, 2019 2,380.4 (2.7) 0.4 701.8 1,886.7 (237.8) 29.3
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Adoption of ASU 2016-13 2,430.4   0.4 750.7 1,882.7 (232.8) 29.4
Beginning Balance at Jun. 29, 2019 2,430.4   0.4 750.7 1,882.7 (232.8) 29.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net Income 50.8       49.7   1.1
Other Comprehensive Income (Loss) (46.2)         (45.0) (1.2)
Dividends Declared (12.3)       (12.3)    
Stock Options Exercised (0.5)     (0.5)      
Stock Repurchase (94.2)     (45.0) (49.2)    
Share-Based Compensation 2.6     2.6      
Adoption of ASU 2016-13 2,329.1   0.4 707.8 1,870.9 (232.8) 27.8
Dividends Declared to Noncontrolling Interests (1.5)           (1.5)
Ending Balance at Sep. 28, 2019 2,329.1   0.4 707.8 1,870.9 (277.8) 27.8
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Adoption of ASU 2016-13 2,329.1   0.4 707.8 1,870.9 (277.8) 27.8
Adoption of ASU 2016-13 2,380.4 (2.7) 0.4 701.8 1,886.7 (237.8) 29.3
Beginning Balance at Dec. 28, 2019 2,380.4 (2.7) 0.4 701.8 1,886.7 (237.8) 29.3
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net Income 142.3       138.9   3.4
Other Comprehensive Income (Loss) (9.0)         (9.1) 0.1
Dividends Declared (36.5)       (36.5)    
Stock Options Exercised (3.0)     (3.0)      
Stock Repurchase (25.0)     (11.1) (13.9)    
Share-Based Compensation $ 8.2     8.2      
Adoption of ASU 2016-13 us-gaap:AccountingStandardsUpdate201613Member            
Adoption of ASU 2016-13 $ 2,380.4 $ (2.7) 0.4 701.8 1,886.7 (246.9) 30.0
Dividends Declared to Noncontrolling Interests (2.8)           (2.8)
Ending Balance at Sep. 26, 2020 2,451.9   0.4 695.9 1,972.5 (246.9) 30.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Adoption of ASU 2016-13 2,347.0   0.4 694.0 1,919.7 (295.0) 27.9
Beginning Balance at Jun. 27, 2020 2,347.0   0.4 694.0 1,919.7 (295.0) 27.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net Income 66.3       65.0   1.3
Other Comprehensive Income (Loss) 49.0         48.1 0.9
Dividends Declared (12.2)       (12.2)    
Stock Options Exercised (0.8)     (0.8)      
Share-Based Compensation 2.7     2.7      
Adoption of ASU 2016-13 2,347.0   0.4 695.9 1,972.5 (246.9) 30.0
Dividends Declared to Noncontrolling Interests (0.1)           (0.1)
Ending Balance at Sep. 26, 2020 2,451.9   0.4 695.9 1,972.5 (246.9) 30.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Adoption of ASU 2016-13 $ 2,451.9   $ 0.4 $ 695.9 $ 1,972.5 $ (246.9) $ 30.0
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Statement of Stockholders' Equity [Abstract]        
Dividends declared, per share (in dollars per share) $ 0.30 $ 0.30 $ 0.90 $ 0.88
Adoption of ASU 2016-13     us-gaap:AccountingStandardsUpdate201613Member  
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Income $ 142.3 $ 205.0
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities (Net of Acquisitions and Divestitures):    
Depreciation and Amortization 98.8 100.4
Asset Impairments 4.3 10.0
Noncash Lease Expense 18.3 20.5
Loss on Sale or Disposition of Assets, Net 2.7 1.7
Share-Based Compensation Expense 8.2 10.0
Gain on Divestiture of Businesses (0.1) (45.2)
Change in Operating Assets and Liabilities 35.4 (31.2)
Net Cash Provided by Operating Activities 309.9 271.2
CASH FLOWS FROM INVESTING ACTIVITIES:    
Additions to Property, Plant and Equipment (29.7) (77.3)
Proceeds from Divestiture of Businesses 0.3 159.6
Proceeds from Sale of Assets 7.6 1.7
Net Cash (Used in) Provided by Investing Activities (21.8) 84.0
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowings Under Revolving Credit Facility 898.1 894.3
Repayments Under Revolving Credit Facility (915.8) (977.4)
Proceeds from Short-Term Borrowings 2.3 27.5
Repayments of Short-Term Borrowings (2.3) (27.5)
Proceeds from Long-Term Borrowings 0.1 0.0
Repayments of Long-Term Borrowings (50.2) (24.2)
Dividends Paid to Shareholders (36.5) (36.6)
Shares Surrendered for Taxes (3.3) (8.0)
Proceeds from the Exercise of Stock Options 0.2 0.0
Repurchase of Common Stock (25.0) (150.1)
Distributions to Noncontrolling Interests (2.8) (1.8)
Net Cash Used in Financing Activities (135.2) (303.8)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS 3.2 (7.0)
Net Increase in Cash and Cash Equivalents 156.1 44.4
Cash and Cash Equivalents at Beginning of Period 331.4 248.6
Cash and Cash Equivalents at End of Period 487.5 293.0
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION    
Interest 36.2 44.4
Income taxes $ 20.4 $ 31.9
v3.20.2
BASIS OF PRESENTATION
9 Months Ended
Sep. 26, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION BASIS OF PRESENTATION
The accompanying (a) Condensed Consolidated Balance Sheet of Regal Beloit Corporation (the “Company”) as of December 28, 2019, which has been derived from audited Consolidated Financial Statements, and (b) unaudited interim Condensed Consolidated Financial Statements as of September 26, 2020 and for the three and nine months ended September 26, 2020 and September 28, 2019, 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 of America ("GAAP"), 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.
It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s 2019 Annual Report on Form 10-K filed on February 26, 2020.
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 and nine months ended September 26, 2020 are not necessarily indicative of the results that may be expected for the entire fiscal year ending January 2, 2021.
The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Financial Statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. The Company uses estimates in accounting for, among other items, allowance for doubtful accounts; excess and obsolete inventory; share-based compensation; acquisitions; product warranty obligations; pension and post retirement assets and liabilities; derivative fair values; goodwill and other asset impairments; health care reserves; retirement benefits; rebates and incentives; litigation claims and contingencies, including environmental matters; and income taxes. The Company accounts for changes to estimates and assumptions when warranted by factually based experience.
The Company operates on a 52/53 week fiscal year ending on the Saturday closest to December 31.
Recently Issued Accounting Standards
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20). The ASU addresses modifications to the disclosure requirements for Defined Benefit Plans. Under ASU 2018-14 the disclosure requirements that can be removed are amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, amount and timing of plan assets expected to be returned to the employer, and the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs and benefit obligations for postretirement health care benefits. Additional disclosures are required for the weighted -average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation for significant gains and losses related to the changes in the benefit obligation for the period. If a defined benefit pension plan has a projected benefit obligation greater than plan assets the projected benefit obligation and fair value of plan assets should be disclosed. This additional disclosure is also required when comparing the accumulated benefit obligation to plan assets. This ASU becomes effective for fiscal years ending after December 15, 2020 on a retrospective basis for all years presented. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance, but does not anticipate a material impact on the financial statement disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, and clarifies and amends existing guidance to improve consistent application. This ASU becomes effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.
Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU provides optional transition guidance, for a limited time, to companies that have contracts, hedging relationships or other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate which is expected to be discontinued because of reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions if certain criteria are met. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. In the second quarter, the Company adopted this standard prospectively and is applying those expedients that allow the Company to continue to assert that LIBOR-based interest remains probable, despite the sunset of LIBOR at the end of 2021 with no impact on the Company's Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU focuses on updates around disclosures of Level 3 fair value measurements and it presents modifications to current disclosure requirements. The additional requirements under this ASU include disclosure for the changes in unrealized gains and losses included in other comprehensive income ("OCI") held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs. The ASU is also eliminating the disclosure requirement for the amount and reason for transfers between Level 1 and Level 2 fair value measurement, valuation processes for Level 3 measurements, and policy for timing of transfers between levels of the fair value hierarchy. In addition, the ASU modifies the disclosure requirements for investments that are valued based on net asset value. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods therein. The ASU requires prospective application for only the most recent interim or annual period presented in the year of adoption for changes in unrealized gains and losses included in OCI, the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the narrative description of measurement uncertainty. The Company adopted the standard as of December 29, 2019, the beginning of fiscal 2020, with no material impact on the Company's Condensed Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326). The focus of this ASU is to require businesses to adjust their allowance for lifetime expected credit losses rather than incurred losses. It is believed that the change will result in more timely recognition of such losses. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods therein. The Company adopted the standard as of December 29, 2019, the beginning of fiscal 2020, under the modified retrospective approach. The Company recorded a $3.4 million increase in the allowance for credit losses and a $2.7 million net decrease to retained earnings as of December 29, 2019 for the cumulative effect of adopting ASU 2016-13.
v3.20.2
OTHER FINANCIAL INFORMATION
9 Months Ended
Sep. 26, 2020
Balance Sheet Related Disclosures [Abstract]  
OTHER FINANCIAL INFORMATION OTHER FINANCIAL INFORMATION
Inventories
The following table presents approximate percentage distribution between major classes of inventories:
September 26, 2020December 28, 2019
Raw Material and Work in Process49%48%
Finished Goods and Purchased Parts51%52%

Inventories are stated at cost, which is not in excess of market. Cost for approximately 54% of the Company's inventory at September 26, 2020, and 53% at December 28, 2019 was determined using the last-in, first-out ("LIFO") method.
Property, Plant, and Equipment
The following table presents property, plant, and equipment by major classification (dollars in millions):
Useful Life in YearsSeptember 26, 2020December 28, 2019
Land and Improvements$75.3 $80.3 
Buildings and Improvements
3 - 50
285.0 305.2 
Machinery and Equipment
3 - 15
969.6 988.2 
Property, Plant and Equipment1,329.9 1,373.7 
Less: Accumulated Depreciation(780.5)(768.7)
Net Property, Plant and Equipment$549.4 $605.0 

For the nine months ended September 26, 2020, the Company recognized $4.3 million of asset impairments related to the transfer of assets to held for sale. For the nine months ended September 28, 2019, the Company recognized $5.1 million of asset impairments related to the transfer of assets to held for sale.

Revenue Recognition

The Company recognizes revenue from the sale of electric motors, electrical motion controls, power generation and power transmission products. The Company recognizes revenue when control of the product passes to the customer or the service is provided and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.
Nature of Goods and Services
The Company sells products with multiple applications as well as customized products that have a single application such as those manufactured for its OEM customers. The Company reports in four operating segments: Commercial Systems, Industrial Systems, Climate Solutions and Power Transmission Solutions. See Note 6 for a description of the different segments.
Nature of Performance Obligations
The Company’s contracts with customers typically consist of purchase orders, invoices and master supply agreements. At contract inception, across all four segments, the Company assesses the goods and services promised in its sales arrangements with customers and identifies a performance obligation for each promise to transfer to the customer a good or service that is distinct. The Company’s primary performance obligations consist of product sales and customized system/solutions.
Product:
The nature of products varies from segment to segment but across all segments, individual products are not integrated and represent separate performance obligations.
Customized system/solutions:
The Company provides customized system/solutions which consist of multiple products engineered and designed to specific customer specification, combined or integrated into one combined solution for a specific customer application. The goods are transferred to the customer and revenue is typically recognized over time as the performance obligations are satisfied.
When Performance Obligations are Satisfied
For performance obligations related to substantially all of the Company's product sales, the Company determines that the customer obtains control upon shipment and recognizes revenue accordingly. Once a product has shipped, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset. The Company considers control to have transferred upon shipment because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset.
For a limited number of contracts, the Company transfers control and recognizes revenue over time. The Company satisfies its performance obligations over time and the Company uses a cost-based input method to measure progress. In applying the cost-based method of revenue recognition, the Company uses actual costs incurred to date relative to the total estimated costs for the contract in conjunction with the customer's commitment to perform in determining the amount of revenue and cost to recognize. The Company has determined that the cost-based input method provides a faithful depiction of the transfer of goods to the customer.
Payment Terms
The arrangement with the customer states the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payment terms vary by customer but typically range from due upon delivery to 120 days after delivery. For contracts recognized at a point in time, revenue and billing typically occur simultaneously. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money. For contracts recognized using the cost-based input method, revenue recognized in excess of customer billings and billings in excess of revenue recognized are reviewed to determine the net asset or net liability position and classified as such on the Condensed Consolidated Balance Sheet.
Returns, Refunds, and Warranties
The Company’s contracts do not explicitly offer a “general” right of return to its customers (e.g. customers ordered excess products and return unused items). Warranties are classified as either assurance type or service type warranties. A warranty is considered an assurance type warranty if it provides the customer with assurance that the product will function as intended. A warranty that goes above and beyond ensuring basic functionality is considered a service type warranty. The Company generally only offers limited warranties which are considered to be assurance type warranties and are not accounted for as separate performance obligations. Customers generally receive repair or replacement on products that do not function to specification. Estimated product warranties are provided for specific product groups and the Company accrues for estimated future warranty cost in the period in which the sale is recognized. The Company estimates the accrual requirements based on historical warranty loss experience and the cost is included in Cost of Sales.
Volume Rebates
In some cases, the nature of the Company’s contract may give rise to variable consideration including volume based sales incentives. If the customer achieves specific sales targets, they are entitled to rebates. The Company estimates the projected amount of the rebates that will be achieved and recognizes the estimated costs as a reduction to Net Sales as revenue is recognized.
Disaggregation of Revenue
The following tables presents the Company’s revenues disaggregated by geographical region (in millions):
Three Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$156.9 $71.1 $210.7 $133.5 $572.2 
Asia35.4 35.7 9.7 7.4 88.2 
Europe8.0 6.4 7.7 20.1 42.2 
Rest-of-World18.2 25.6 5.9 5.9 55.6 
Total$218.5 $138.8 $234.0 $166.9 $758.2 
September 28, 2019Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$151.4 $78.8 $204.4 $146.3 $580.9 
Asia27.4 42.7 7.4 7.1 84.6 
Europe32.1 11.8 9.3 22.8 76.0 
Rest-of-World3.9 10.5 9.8 6.6 30.8 
Total$214.8 $143.8 $230.9 $182.8 $772.3 
Nine Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$412.8 $213.2 $554.1 $417.6 $1,597.7 
Asia87.7 109.1 19.3 19.8 235.9 
Europe62.0 34.3 22.8 66.2 185.3 
Rest-of-World31.3 32.4 26.1 17.8 107.6 
Total$593.8 $389.0 $622.3 $521.4 $2,126.5 
September 28, 2019Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$503.5 $238.0 $671.1 $485.8 $1,898.4 
Asia82.4 126.8 28.6 21.7 259.5 
Europe101.8 39.2 31.5 70.0 242.5 
Rest-of-World15.6 33.4 30.9 19.5 99.4 
Total$703.3 $437.4 $762.1 $597.0 $2,499.8 
v3.20.2
HELD FOR SALE, DIVESTITURES AND ACQUISITIONS
9 Months Ended
Sep. 26, 2020
Business Combinations [Abstract]  
HELD FOR SALE, DIVESTITURES AND ACQUISITIONS HELD FOR SALE, DIVESTITURES AND ACQUISITIONS
Assets Held for Sale

The balances that were classified as Assets Held for Sale as of September 26, 2020 and December 28, 2019 were $5.0 million and $2.8 million, respectively, as the Company has both the intent and ability to sell these assets.

2019 Divestitures

Regal Drive Technologies

On January 7, 2019, the Company sold its Regal Drive Technologies business and received proceeds of $0.3 million in the first quarter of 2020 and $119.9 million in 2019. Regal Drive Technologies was included in the Company's Commercial Systems segment. The Company recognized a gain on sale of $0.1 million in the first quarter of 2020 and $41.0 million in 2019 in the Condensed Consolidated Statements of Income.

Velvet Drive

On April 1, 2019, the Company sold its Velvet Drive business and received proceeds of $8.9 million. This business was included in the Company's Power Transmissions Solutions segment. The Company recognized a loss on sale of $0.5 million in the Condensed Consolidated Statements of Income.

CapCom

On April 1, 2019, the Company sold its CapCom business and received proceeds of $9.9 million. This business was included in the Company's Climate Solutions segment. The Company recognized a gain on sale of $6.0 million in the Condensed Consolidated Statements of Income.

Vapor Recovery

On July 1, 2019, the Company sold its Vapor Recovery business and received proceeds of $19.2 million. The business was included in the Company's Commercial Systems segment. The Company recognized a loss on sale of $1.9 million in the Condensed Consolidated Statements of Income.
v3.20.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
9 Months Ended
Sep. 26, 2020
Equity [Abstract]  
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustments, hedging activities and pension and post retirement benefit adjustments are included in Accumulated Other Comprehensive Income (Loss) ("AOCI") a component of Total Equity.
The following tables present changes in AOCI by component for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months Ended
September 26, 2020Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$(10.7)$(30.5)$(253.8)$(295.0)
Other Comprehensive Income (Loss) before Reclassifications7.9 (0.1)35.9 43.7 
Tax Impact(1.9)— — (1.9)
Amounts Reclassified from Accumulated Other Comprehensive Income8.2 0.1 — 8.3 
Tax Impact(2.0)— — (2.0)
Net Current Period Other Comprehensive Income12.2 — 35.9 48.1 
Ending Balance$1.5 $(30.5)$(217.9)$(246.9)
September 28, 2019Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$3.9 $(37.5)$(199.2)$(232.8)
Other Comprehensive Income (Loss) before Reclassifications(6.5)0.1 (37.4)(43.8)
Tax Impact1.6 — — 1.6 
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)(4.2)0.5 — (3.7)
Tax Impact1.0 (0.1)— 0.9 
Net Current Period Other Comprehensive Income (Loss)(8.1)0.5 (37.4)(45.0)
Ending Balance$(4.2)$(37.0)$(236.6)$(277.8)
Nine Months Ended
September 26, 2020Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$8.0 $(31.0)$(214.8)$(237.8)
Other Comprehensive Income (Loss) before Reclassifications(16.2)0.2 (3.1)(19.1)
Tax Impact3.9 — — 3.9 
Amounts Reclassified from Accumulated Other Comprehensive Income7.7 0.4 — 8.1 
Tax Impact(1.9)(0.1)— (2.0)
Net Current Period Other Comprehensive Income (Loss)(6.5)0.5 (3.1)(9.1)
Ending Balance$1.5 $(30.5)$(217.9)$(246.9)
September 28, 2019Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning balance$(5.4)$(38.2)$(207.8)$(251.4)
Other Comprehensive Income (Loss) before Reclassifications5.8 (0.1)(30.4)(24.7)
Tax Impact(1.4)— — (1.4)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)(4.2)1.6 1.6 (1.0)
Tax Impact1.0 (0.3)— 0.7 
Net Current Period Other Comprehensive Income (Loss)1.2 1.2 (28.8)(26.4)
Ending Balance$(4.2)$(37.0)$(236.6)$(277.8)
The Condensed Consolidated Statements of Income line items affected by the hedging activities reclassified from AOCI in the tables above are disclosed in Note 14.
The reclassification amounts for pension and post retirement benefit adjustments in the tables above are part of net periodic benefit costs recorded in Other (Income) Expenses, net (see also Note 8).
v3.20.2
GOODWILL AND INTANGIBLE ASSETS
9 Months Ended
Sep. 26, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS GOODWILL AND INTANGIBLE ASSETS
Goodwill

As required, the Company performs an annual impairment test of goodwill as of the end of the October fiscal month 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.

In the fourth quarter 2019, in conjunction with the Company's annual goodwill impairment test, the Company concluded that the excess fair value over carrying value for the global industrial motors, commercial air moving and power switch reporting units were less than 10 percent. In the third quarter 2020, the Company performed an interim impairment analysis for the global industrial motors reporting unit triggered by events primarily driven by the economic uncertainty caused by COVID-19. The excess fair value over carrying value continues to be less than 10 percent for the global industrial motors reporting unit.

The Company developed assumptions for the potential impact of COVID-19 given the uncertainty related to supply and demand disruptions on operating results for the global industrial motors reporting unit.
While the Company is committed to the strategic actions necessary to realize the long-term forecasted revenues and EBITDA margins a worsening economic outlook could result in future impairment charges.

A lack of recovery or further deterioration in market conditions, a sustained trend of weaker than expected financial performance or a lack of recovery or further decline in the Company's market capitalization, among other factors, as a result of the COVID-19 pandemic could result in an impairment charge in future periods which could have a material adverse effect on the Company's financial statements.

The global industrial motors reporting unit had goodwill of $123.8 million as of September 26, 2020.

The following table presents changes to goodwill during the nine months ended September 26, 2020 (in millions):
TotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
Balance as of December 28, 2019$1,501.3 $426.6 $170.8 $331.2 $572.7 
Translation Adjustments7.1 (0.6)1.3 (1.2)7.6 
Balance as of September 26, 2020$1,508.4 $426.0 $172.1 $330.0 $580.3 
Cumulative Goodwill Impairment Charges$285.2 $183.2 $61.6 $17.2 $23.2 
Intangible Assets
The following table presents intangible assets (in millions):
 September 26, 2020December 28, 2019
 Weighted Average Amortization Period (Years)Gross ValueAccumulated AmortizationGross ValueAccumulated Amortization
Amortizable Intangible Assets:
  Customer Relationships17$698.5 $334.4 $692.1 $302.4 
  Technology14144.7 105.4 144.0 99.0 
  Trademarks1436.5 26.6 35.9 25.0 
  Patent and Engineering Drawings516.6 16.6 16.6 16.6 
896.3 483.0 888.6 443.0 
Non-Amortizable Trade Name122.1 — 121.6 — 
$1,018.4 $483.0 $1,010.2 $443.0 
Intangible Assets, Net of Amortization$535.4 $567.2 

Amortization expense recorded for the three and nine months ended September 26, 2020 was $11.9 million and $36.3 million, respectively. Amortization expense recorded for the three and nine months ended September 28, 2019 was $12.6 million and $38.0 million, respectively. Amortization expense for fiscal year 2020 is estimated to be $48.0 million. There was no impairment of intangible assets during the three and nine months ended September 26, 2020. For the nine months ended September 28, 2019, the Company recognized $4.9 million of customer relationships intangible asset impairments related to the transfer of assets to held for sale.
The following table presents future estimated annual amortization for intangible assets (in millions):
 YearEstimated Amortization
2021$43.0 
202241.2 
202341.2 
202440.6 
202538.5 
v3.20.2
SEGMENT INFORMATION
9 Months Ended
Sep. 26, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
The Company is comprised of four operating segments: Commercial Systems, Industrial Systems, Climate Solutions and Power Transmission Solutions.

Commercial Systems segment produces fractional to approximately 5 horsepower AC and DC motors, electronic variable speed controls, fans, and blowers for commercial applications. These products serve markets including commercial building ventilation and HVAC, pool and spa, irrigation, dewatering, agriculture, and general commercial equipment.

Industrial Systems segment produces integral motors, generators, alternators and switchgear for industrial applications, along with aftermarket parts and kits to support such products. These products serve markets including agriculture, marine, mining, oil and gas, food and beverage, data centers, healthcare, prime and standby power, and general industrial equipment.

Climate Solutions segment produces small motors, electronic variable speed controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters and commercial refrigeration.

Power Transmission Solutions segment produces, sells and services belt and chain drives, helical and worm gearing, mounted and unmounted bearings, couplings, modular plastic belts, conveying chains and components, hydraulic pump drives, large open gearing and specialty mechanical products serving markets including beverage, bulk handling, metals, special machinery, energy, aerospace and general industrial.

The Company evaluates performance based on the segment's income from operations. Corporate costs have been allocated to each segment based on the net sales of each segment. The reported external net sales of each segment are from external customers.
The following sets forth certain financial information attributable to the Company's operating segments for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsEliminationsTotal
External Sales$218.5 $138.8 $234.0 $166.9 $— $758.2 
Intersegment Sales14.5 7.4 4.6 0.6 (27.1)— 
 Total Sales233.0 146.2 238.6 167.5 (27.1)758.2 
Gross Profit61.4 31.2 69.1 59.9 — 221.6 
Operating Expenses36.1 24.6 29.9 41.0 — 131.6 
Total Operating Expenses36.1 24.6 29.9 41.0 — 131.6 
Income from Operations25.3 6.6 39.2 18.9 — 90.0 
Depreciation and Amortization7.9 6.0 5.0 14.0 — 32.9 
Capital Expenditures3.2 1.7 1.8 2.6 — 9.3 
September 28, 2019
External Sales$214.8 $143.8 $230.9 $182.8 $— $772.3 
Intersegment Sales10.8 8.0 4.2 1.2 (24.2)— 
 Total Sales225.6 151.8 235.1 184.0 (24.2)772.3 
Gross Profit53.5 23.7 64.2 60.5 — 201.9 
Operating Expenses36.8 26.0 26.5 39.6 — 128.9 
Loss on Divestitures0.1 — 0.1 — — 0.2 
Total Operating Expenses36.9 26.0 26.6 39.6 — 129.1 
Income (Loss) from Operations16.6 (2.3)37.6 20.9 — 72.8 
Depreciation and Amortization8.3 6.5 5.1 14.0 — 33.9 
Capital Expenditures6.8 4.2 6.8 3.3 — 21.1 
Nine Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsEliminationsTotal
External Sales$593.8 $389.0 $622.3 $521.4 $— $2,126.5 
Intersegment Sales43.2 23.2 13.0 1.9 (81.3)— 
  Total Sales637.0 412.2 635.3 523.3 (81.3)2,126.5 
Gross Profit154.5 78.7 175.9 186.1 — 595.2 
Operating Expenses107.8 69.2 85.9 122.2 — 385.1 
Gain on Divestiture of Businesses(0.1)— — — — (0.1)
Asset Impairments2.8 0.2 1.3 — — 4.3 
Total Operating Expenses110.5 69.4 87.2 122.2 — 389.3 
Income from Operations44.0 9.3 88.7 63.9 — 205.9 
Depreciation and Amortization24.5 17.9 14.7 41.7 — 98.8 
Capital Expenditures8.5 6.0 8.0 7.2 — 29.7 
September 28, 2019
External Sales$703.3 $437.4 $762.1 $597.0 $— $2,499.8 
Intersegment Sales34.7 27.8 13.1 3.3 (78.9)— 
  Total Sales738.0 465.2 775.2 600.3 (78.9)2,499.8 
Gross Profit184.3 75.3 209.7 201.2 — 670.5 
Operating Expenses121.8 82.2 86.2 126.1 — 416.3 
(Gain) Loss on Divestiture of Businesses(39.4)0.1 (6.0)0.1 — (45.2)
Asset Impairments6.7 0.9 1.3 1.1 — 10.0 
Total Operating Expenses89.1 83.2 81.5 127.3 — 381.1 
Income (Loss) from Operations95.2 (7.9)128.2 73.9 — 289.4 
Depreciation and Amortization26.1 18.2 14.5 41.6 — 100.4 
Capital Expenditures24.2 18.1 19.4 15.6 — 77.3 

The following table presents identifiable assets information attributable to the Company's operating segments as of September 26, 2020 and December 28, 2019 (in millions):
Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
Identifiable Assets as of September 26, 2020$1,258.2 $826.1 $876.4 $1,518.7 $4,479.4 
Identifiable Assets as of December 28, 2019$1,198.5 $802.8 $878.3 $1,551.1 $4,430.7 
v3.20.2
DEBT AND BANK CREDIT FACILITIES
9 Months Ended
Sep. 26, 2020
Debt Disclosure [Abstract]  
DEBT AND BANK CREDIT FACILITIES DEBT AND BANK CREDIT FACILITIES
The following table presents the Company’s indebtedness as of September 26, 2020 and December 28, 2019 (in millions):
September 26, 2020December 28, 2019
Term Facility$670.0 $720.0 
Senior Notes400.0 400.0 
Multicurrency Revolving Facility— 17.7 
Other4.3 4.5 
Less: Debt Issuance Costs(3.5)(4.7)
Total1,070.8 1,137.5 
Less: Current Maturities230.6 0.6 
Long-Term Debt$840.2 $1,136.9 
Credit Agreement
On August 27, 2018 the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders named therein, providing for a (i) 5-year unsecured term loan facility in the principal amount of $900.0 million (the “Term Facility”) and (ii) a 5-year unsecured multicurrency revolving facility in the principal amount of $500.0 million (the “Multicurrency Revolving Facility”), including a $50.0 million letter of credit sub facility, available for general corporate purposes. Borrowings under the Credit Agreement bear interest at floating rates based upon indices determined by the currency of the borrowing, plus an applicable margin determined by reference to the Company's consolidated funded debt to consolidated EBITDA ratio or at an alternative base rate.
The Term Facility was drawn in full on August 27, 2018 with the proceeds settling the amounts owed under prior borrowings. The Term Facility requires quarterly amortization at a rate starting at 5.0% per annum, increasing to 7.5% per annum after three years and further increasing to 10.0% per annum for the last year of the Term Facility, unless previously prepaid. The weighted average interest rate on the Term Facility for the three months ended September 26, 2020 and September 28, 2019 was 1.5% and 3.6%, respectively. The weighted average interest rate on the Term Facility for the nine months ended September 26, 2020 and September 28, 2019 was 2.1% and 3.8%, respectively. The Credit Agreement requires that the Company prepay the loans under the Term Facility with 100% of the net cash proceeds received from specified asset sales and borrowed money indebtedness, subject to certain exceptions.
At September 26, 2020, the Company had no borrowings under the Multicurrency Revolving Facility, $0.2 million of standby letters of credit issued under the facility, and $499.8 million of available borrowing capacity. For the three months ended September 26, 2020 and September 28, 2019 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $51.4 million and $127.1 million, respectively, and weighted average interest rate of 1.5% and 3.6%, respectively. For the nine months ended September 26, 2020 and September 28, 2019 under the Multicurrency Revolving Facility, the average daily balance in borrowings was $189.7 million and $91.3 million, respectively, and the weighted average interest rate of 2.1% and 3.7%, respectively. The Company pays a non-use fee on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.
Senior Notes
At September 26, 2020, the Company had $400.0 million of senior notes (the “Notes”) outstanding. The Notes consist of $400.0 million in senior notes in a private placement which were issued in five tranches with maturities from ten to twelve years and carry fixed interest rates. As of September 26, 2020, $230.0 million and $170.0 million of the Notes are included in Current Maturities of Long-Term Debt and Long-Term Debt, respectively, on the Condensed Consolidated Balance Sheets.
The following table presents details on the Notes at September 26, 2020 (in millions):
PrincipalInterest RateMaturity
Fixed Rate Series 2011A$230.0 
4.8 to 5.0%
July 14, 2021
Fixed Rate Series 2011A170.0 
4.9 to 5.1%
July 14, 2023
$400.0 
Compliance with Financial Covenants

The Credit Agreement and the Notes require the Company to meet specified financial ratios and to satisfy certain financial condition tests. The Company was in compliance with all financial covenants contained in the Notes and the Credit Agreement as of September 26, 2020.
Other Notes Payable

At September 26, 2020, other notes payable of approximately $4.3 million were outstanding with a weighted average interest rate of 4.9%. At December 28, 2019, other notes payable of approximately $4.5 million were outstanding with a weighted average rate of 5.0%.

Other Disclosures

Based on rates for instruments with comparable maturities and credit quality, which are classified as Level 2 inputs (see also Note 15), the approximate fair value of the Company's total debt was $1,087.3 million and $1,162.1 million as of September 26, 2020 and December 28, 2019, respectively.
v3.20.2
RETIREMENT AND POST RETIREMENT HEALTH CARE PLANS
9 Months Ended
Sep. 26, 2020
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]  
RETIREMENT AND POST RETIREMENT HEALTH CARE PLANS RETIREMENT AND POST RETIREMENT HEALTH CARE PLANS
The following table presents the Company’s net periodic benefit cost (income) components (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Service Cost$0.4 $1.5 $1.5 $4.6 
Interest Cost2.1 2.8 6.2 8.2 
Expected Return on Plan Assets(3.3)(3.2)(9.9)(9.4)
Amortization of Prior Service Cost and Net Actuarial Loss0.1 0.5 0.4 1.6 
Net Periodic Benefit Cost (Income)$(0.7)$1.6 $(1.8)$5.0 

The service cost component is included in Cost of Sales and Operating Expenses. All other components of net periodic benefit costs are included in Other (Income) Expenses, net on the Company's Condensed Consolidated Statements of Income.
The estimated net actuarial loss and prior (income) service cost for post retirement plans that will be amortized from AOCI into net periodic benefit cost (income) during the 2020 fiscal year are $1.2 million and $(0.6) million, respectively.
For the three months ended September 26, 2020 and September 28, 2019, the Company contributed $1.3 million and $4.1 million, respectively, to post retirement plans. For the nine months ended September 26, 2020 and September 28, 2019, the Company contributed $3.6 million and $9.0 million, respectively. The Company expects to make total contributions of $5.6 million in 2020. The Company contributed a total of $10.8 million in fiscal 2019.
v3.20.2
LEASES
9 Months Ended
Sep. 26, 2020
Leases [Abstract]  
Leases LEASES
The Company leases certain manufacturing facilities, warehouses/distribution centers, office space, machinery, equipment, IT assets, and vehicles. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, it is considered to be or contain a lease. Right-of-use ("ROU") assets and lease liabilities are recognized at lease commencement date based on the present value of the future lease payments over the expected lease term.

As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is calculated based upon the sovereign treasury rate for the currency in which the lease liability is denominated when the Company takes possession of the leased asset, adjusted for various factors, such as term and internal credit spread. The ROU asset also includes any lease payments made and excludes lease incentive and initial direct costs incurred.
Leases entered into may include one or more options to renew. The renewal terms can extend the lease term from one to twenty-five years. The exercise of lease renewal options is at the Company's sole discretion. Renewal option periods are included in the measurement of the ROU asset and lease liability when the exercise is reasonably certain to occur. Some leases include options to terminate the lease upon breach of contract and are remeasured at that point in time.

The depreciable life of leased assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Some of the Company's lease agreements include rental payments adjusted periodically for inflation or are based on an index rate. These increases are reflected as variable lease payments and are included in the measurement of the ROU asset and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating leases are included in the following asset and liability accounts on the Company's Condensed Consolidated Balance Sheet: Operating Lease Assets, Current Operating Lease Liabilities, and Noncurrent Operating Lease Liabilities. ROU assets and liabilities arising from finance leases are included in the following asset and liability accounts on the Company's Condensed Consolidated Balance Sheet: Net Property, Plant and Equipment, Current Maturities of Long-Term Debt, and Long-Term Debt.

Short-term and variable lease expenses were immaterial. The components of lease expense were as follows (in millions):
Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Operating Lease Cost$7.5 $7.8 $22.8 $24.9 
Finance Lease Cost:
   Amortization of ROU Assets0.1 0.1 0.2 0.2 
   Interest on Lease Liabilities— — 0.1 0.2 
Total Lease Expense$7.6 7.9 $23.1 $25.3 

Maturity of lease liabilities as of September 26, 2020 were as follows (in millions):
Operating LeasesFinance LeasesTotal
Remainder of 2020$7.4 $0.1 $7.5 
202125.2 0.5 25.7 
202218.4 0.6 19.0 
202312.2 0.6 12.8 
20248.2 0.6 8.8 
Thereafter23.1 1.9 25.0 
Total Lease Payments$94.5 $4.3 $98.8 
Less: Interest(17.3)(0.8)(18.1)
Present Value of Lease Liabilities$77.2 $3.5 $80.7 
Other information related to leases was as follows (in millions):
Nine Months Ended
Supplemental Cash Flows InformationSeptember 26, 2020September 28, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
  Operating Cash Flows Used For Operating Leases$21.8 $24.9 
  Operating Cash Flows Used For Finance Leases0.1 0.2 
  Financing Cash Flows Used For Finance Leases0.2 0.2 
Leased Assets Obtained in Exchange for New Operating Lease Liabilities21.3 10.6 
Weighted Average Remaining Lease Term
Operating Leases5.2 years4.6 years
Finance Leases7.5 years8.5 years
Weighted Average Discount Rate
Operating Leases8.2 %8.3 %
Finance Leases5.9 %5.9 %

The Company had no operating or finance leases that had not yet commenced nor entered into during the quarter.
Leases LEASES
The Company leases certain manufacturing facilities, warehouses/distribution centers, office space, machinery, equipment, IT assets, and vehicles. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, it is considered to be or contain a lease. Right-of-use ("ROU") assets and lease liabilities are recognized at lease commencement date based on the present value of the future lease payments over the expected lease term.

As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is calculated based upon the sovereign treasury rate for the currency in which the lease liability is denominated when the Company takes possession of the leased asset, adjusted for various factors, such as term and internal credit spread. The ROU asset also includes any lease payments made and excludes lease incentive and initial direct costs incurred.
Leases entered into may include one or more options to renew. The renewal terms can extend the lease term from one to twenty-five years. The exercise of lease renewal options is at the Company's sole discretion. Renewal option periods are included in the measurement of the ROU asset and lease liability when the exercise is reasonably certain to occur. Some leases include options to terminate the lease upon breach of contract and are remeasured at that point in time.

The depreciable life of leased assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Some of the Company's lease agreements include rental payments adjusted periodically for inflation or are based on an index rate. These increases are reflected as variable lease payments and are included in the measurement of the ROU asset and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating leases are included in the following asset and liability accounts on the Company's Condensed Consolidated Balance Sheet: Operating Lease Assets, Current Operating Lease Liabilities, and Noncurrent Operating Lease Liabilities. ROU assets and liabilities arising from finance leases are included in the following asset and liability accounts on the Company's Condensed Consolidated Balance Sheet: Net Property, Plant and Equipment, Current Maturities of Long-Term Debt, and Long-Term Debt.

Short-term and variable lease expenses were immaterial. The components of lease expense were as follows (in millions):
Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Operating Lease Cost$7.5 $7.8 $22.8 $24.9 
Finance Lease Cost:
   Amortization of ROU Assets0.1 0.1 0.2 0.2 
   Interest on Lease Liabilities— — 0.1 0.2 
Total Lease Expense$7.6 7.9 $23.1 $25.3 

Maturity of lease liabilities as of September 26, 2020 were as follows (in millions):
Operating LeasesFinance LeasesTotal
Remainder of 2020$7.4 $0.1 $7.5 
202125.2 0.5 25.7 
202218.4 0.6 19.0 
202312.2 0.6 12.8 
20248.2 0.6 8.8 
Thereafter23.1 1.9 25.0 
Total Lease Payments$94.5 $4.3 $98.8 
Less: Interest(17.3)(0.8)(18.1)
Present Value of Lease Liabilities$77.2 $3.5 $80.7 
Other information related to leases was as follows (in millions):
Nine Months Ended
Supplemental Cash Flows InformationSeptember 26, 2020September 28, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
  Operating Cash Flows Used For Operating Leases$21.8 $24.9 
  Operating Cash Flows Used For Finance Leases0.1 0.2 
  Financing Cash Flows Used For Finance Leases0.2 0.2 
Leased Assets Obtained in Exchange for New Operating Lease Liabilities21.3 10.6 
Weighted Average Remaining Lease Term
Operating Leases5.2 years4.6 years
Finance Leases7.5 years8.5 years
Weighted Average Discount Rate
Operating Leases8.2 %8.3 %
Finance Leases5.9 %5.9 %

The Company had no operating or finance leases that had not yet commenced nor entered into during the quarter.
v3.20.2
SHAREHOLDERS' EQUITY
9 Months Ended
Sep. 26, 2020
Stockholders' Equity Note [Abstract]  
SHAREHOLDERS' EQUITY SHAREHOLDERS’ EQUITY
Repurchase of Common Stock

At a meeting of the Board of Directors on July 24, 2018, the Company's Board of Directors approved the extinguishment of the existing 3.0 million share repurchase program that was approved in November 2013 and replaced it with an authorization to purchase up to $250.0 million of shares. At a meeting of the Board of Directors on October 25, 2019, the July 2018 repurchase authorization was extinguished and replaced with an authorization to purchase up to $250.0 million of shares. For the three and nine months ended September 26, 2020, the Company repurchased and retired zero and 315,072 shares, respectively, of its common stock. For the nine months ended September 26, 2020, the common stock had an average cost of $79.38 per share for a total cost of $25.0 million. For the three months ended September 28, 2019, the Company repurchased and retired 1,282,037 shares of its common stock at an average cost of $73.43 for a total cost of $94.2 million. For the nine months ended September 28, 2019, the Company repurchased and retired 2,013,782 shares of its common stock at an average cost of $74.52 per share and a total cost of $150.1 million under the July 2018 program.

As of September 26, 2020, there was approximately $210.0 million in common stock available for repurchase under the October 2019 program. The Company announced it had suspended the share repurchase program starting in the first quarter of 2020. The Company has re-instated the share purchase program starting in the fourth quarter of 2020. The existing share repurchase program remains authorized by the Company's Board of Directors.

Share-Based Compensation

The majority of the Company’s annual share-based incentive awards had historically been granted in the second fiscal quarter. Beginning in fiscal 2020, the Company moved its granting of share-based incentive awards to the first fiscal quarter.

The Company recognized approximately $2.7 million and $2.6 million in share-based compensation expense for the three months ended September 26, 2020 and September 28, 2019, respectively. Share-based compensation expense was $8.2 million and $10.0 million for the nine months ended September 26, 2020 and September 28, 2019, respectively. The total income tax benefit recognized in the Condensed Consolidated Statements of Income for share-based compensation expense was $0.6 million and $0.5 million for the three months ended September 26, 2020 and September 28, 2019, respectively. The total income tax benefit recognized in the Condensed Consolidated Statements of Income for share-based compensation expense was $1.7 million and $2.1 million for the nine months ended September 26, 2020 and September 28, 2019, 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 September 26, 2020, total unrecognized compensation cost related to share-based compensation awards was approximately $20.8 million, net of estimated forfeitures, which the Company expects to recognize over a weighted average period of approximately 2.0 years.
Approximately 1.8 million shares were available for future grant under the 2018 Equity Incentive Plan at September 26, 2020.

Stock Appreciation Rights
The Company uses stock settled stock appreciation rights (“SARs”) as a form of share-based incentive awards. SARs are the right to receive stock in an amount equal to the appreciation in value of a share of stock over the base price per share. Shares granted prior to fiscal 2020 generally vest over five years on the anniversary date while shares granted in fiscal 2020 generally vest over three years on the anniversary date of the grant date. Generally all grants expire 10 years from the grant date. All grants are made at prices equal to the fair market value of the stock on the grant date. For the nine months ended September 26, 2020 and September 28, 2019, expired and canceled shares were immaterial.
The following table presents share-based compensation activity for the nine months ended September 26, 2020 and September 28, 2019 (in millions):
September 26, 2020September 28, 2019
Total Intrinsic Value of Share-Based Incentive Awards Exercised$5.7 $5.1 
Cash Received from Stock Option Exercises0.2 — 
Income Tax Benefit from the Exercise of SARs0.4 (0.1)
Total Fair Value of Share-Based Incentive Awards Vested1.8 5.4 

The following table presents assumptions used in the Company's Black-Scholes valuation related to grants of SARs:
20202019
Per share weighted average fair value of grants$21.23 $20.84 
Risk-free interest rate1.5 %2.4 %
Expected life (years)7.07.0
Expected volatility25.2 %25.0 %
Expected dividend yield1.4 %1.5 %

The average risk-free interest rate is based on the US Treasury security rate as of the grant date. The expected dividend yield is based on the projected annual dividend as a percentage of the estimated market value of the Company's common stock as of the grant date. The Company estimated the expected volatility using a weighted average of daily historical volatility of the Company's stock price over the expected term of the award. The Company estimated the expected term using historical data.

The following table presents a summary of share-based incentive plan grant activity for the nine months ended September 26, 2020.
Number of Shares Under SARsSharesWeighted Average Exercise PriceWeighted Average Remaining Contractual Term (Years)Aggregate Intrinsic Value (in millions)
Outstanding as of December 28, 2019817,790 $73.34 6.0$9.9 
Granted181,177 88.25 
Exercised(299,816)69.29 
Forfeited(92,352)76.99 
Expired(3,308)67.38 
Outstanding as of September 26, 2020603,491 $79.00 4.5$5.7 
Exercisable as of September 26, 2020197,612 $70.73 4.5$4.4 

Compensation expense recognized related to SARs was $2.2 million for the nine months ended September 26, 2020.
As of September 26, 2020, there was $6.5 million of unrecognized compensation cost related to non-vested SARs that is expected to be recognized as a charge to earnings over a weighted average period of 2.7 years.

The number of SARs expected to vest is materially consistent with those outstanding and not yet exercisable.
Restricted Stock Awards and Restricted Stock Units
Restricted stock awards ("RSA") and restricted stock units ("RSU") consist of shares or the rights to shares of the Company's stock. The awards are restricted such that they are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer. As defined in the individual grant agreements, acceleration of vesting may occur under a change in control, death or disability.
The following table presents a summary of RSA award activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested RSAs as of December 28, 201915,571 $80.41 0.4
Granted16,280 70.05 
Vested(15,148)80.29 
Unvested RSAs as of September 26, 202016,703 $70.42 0.6

RSAs vest on the first anniversary of the grant date, provided the holder of the shares is continuously employed by or in the service of the Company until the vesting date. Compensation expense recognized related to the RSAs was $0.9 million for the nine months ended September 26, 2020.
As of September 26, 2020, there was $0.7 million of unrecognized compensation cost related to non-vested RSAs that is expected to be recognized as a charge to earnings over a weighted average period of 0.6 years.
The following table presents a summary of RSU award activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested RSUs as of December 28, 2019175,025 $78.19 1.9
Granted66,815 85.68 
Vested(49,259)80.20 
Forfeited(27,288)78.11 
Unvested RSUs as of September 26, 2020165,293 $80.63 1.9
RSUs granted prior to fiscal 2020 vest on the third anniversary of the grant date while RSUs granted in fiscal 2020 vest one third each year on the anniversary of the grant date, provided the holder of the RSUs is continuously employed by the Company until the vesting date. Compensation expense recognized related to the RSUs was $3.5 million for the nine months ended September 26, 2020.
As of September 26, 2020, there was $8.2 million of unrecognized compensation cost related to non-vested RSUs that is expected to be recognized as a charge to earnings over a weighted average period of 1.9 years.
Performance Share Units
Performance share units ("PSU") consist of shares or the rights to shares of the Company's stock which are awarded to employees of the Company. These shares are payable upon the determination that the Company achieved certain established performance targets and can range from 0% to 200% of the targeted payout based on the actual results. PSUs have a performance period of 3 years and vest 3 years from the grant date. The PSUs have performance criteria based on a return on invested capital metric or they have performance criteria using returns relative to the Company's peer group. As set forth in the individual award agreements, acceleration of vesting may occur under a change in control, death or disability. There are no voting rights associated with PSUs until vesting occurs and a share of stock is issued. Some of the PSU awards are valued using a Monte Carlo simulation method as of the grant date while others are valued using the closing market price as of the grant date depending on the performance criteria for the award.
The assumptions used in the Company's Monte Carlo simulation were as follows:
20202019
Risk-free interest rate1.4 %2.3 %
Expected life (years)3.03.0
Expected volatility24.0 %25.0 %
Expected dividend yield1.4 %1.5 %


The following table presents a summary of PSU activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested PSUs as of December 28, 201990,565 $86.35 1.9
Granted42,677 99.74 
Vested(7,545)95.33 
Forfeited(30,987)86.59 
Unvested PSUs as of September 26, 202094,710 $91.59 2.0
Compensation expense for awards granted is recognized based on the grant issuance value or the expected payout ratio depending upon the performance criterion for the award, net of estimated forfeitures. Compensation expense recognized related to PSUs was $1.6 million for the nine months ended September 26, 2020. Total unrecognized compensation expense for all PSUs granted as of September 26, 2020 is estimated to be $5.4 million which is expected to be recognized as a charge to earnings over a weighted average period of 2.0 years.
v3.20.2
INCOME TAXES
9 Months Ended
Sep. 26, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The effective tax rate for the three months ended September 26, 2020 was 20.5% versus 16.3% for the three months ended September 28, 2019. The effective tax rate for the nine months ended September 26, 2020 was 21.7% versus 18.8% for the nine months ended September 28, 2019. The change in the effective tax rate for the three and nine months ended September 26, 2020 was primarily driven by the 2019 expiration of the China incentives awarded to the Company for research and development efforts and the mix of earnings. The Company has applied for the renewal of the China tax incentives and will record the benefit if approval is granted.
As of September 26, 2020 and December 28, 2019, the Company had approximately $6.9 million of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. The Company had approximately $2.7 million and $2.3 million of accrued interest as of September 26, 2020 and December 28, 2019, respectively.
With few exceptions, the Company is no longer subject to US Federal and state/local income tax examinations by tax authorities for years prior to 2014, and the Company is no longer subject to non-US income tax examinations by tax authorities for years prior to 2012.
v3.20.2
EARNINGS PER SHARE
9 Months Ended
Sep. 26, 2020
Earnings Per Share [Abstract]  
EARNINGS PER SHARE EARNINGS PER SHARE
Diluted earnings per share is calculated based upon earnings applicable to common shares divided by the weighted-average number of common shares outstanding during the period adjusted for the effect of other dilutive securities. The amount of the anti-dilutive shares were 0.3 million and 0.5 million for the three months ended September 26, 2020 and September 28, 2019, respectively. The amount of the anti-dilutive shares were 0.4 million and 0.4 million for the nine months ended September 26, 2020 and September 28, 2019, respectively. The following table reconciles the basic and diluted shares used in earnings per share calculations for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Denominator for Basic Earnings Per Share40.6 41.5 40.6 42.3 
Effect of Dilutive Securities0.2 0.2 0.1 0.3 
Denominator for Diluted Earnings Per Share40.8 41.7 40.7 42.6 
v3.20.2
CONTINGENCIES
9 Months Ended
Sep. 26, 2020
Commitments and Contingencies Disclosure [Abstract]  
CONTINGENCIES CONTINGENCIES
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 manufactured and sold in high volumes by a third party. These ventilation units are subject to product safety requirements and other potential regulation of their performance by government agencies such as the US Consumer Product Safety Commission (“CPSC”). The claims generally allege that the ventilation units were the cause of fires. The Company has recorded an estimated liability for incurred claims. Based on the current facts, the Company cannot assure that these claims, individually or in the aggregate, will not have a material adverse effect on its subsidiary's financial condition. The Company's subsidiary cannot reasonably predict the outcome of these claims, the nature or extent of any CPSC or other remedial actions, if any, that the Company's subsidiary may need to undertake with respect to motors that remain in the field, or the costs that may be incurred, some of which could be significant.
The Company is, from time to time, party to litigation and other legal or regulatory proceedings that arise in the normal course of its business operations and the outcomes of which are subject to significant uncertainty, including product warranty and liability claims, contract disputes and environmental, asbestos, intellectual property, employment and other litigation matters. The Company's products are used in a variety of industrial, commercial and residential applications that subject the Company to claims that the use of its products is alleged to have resulted in injury or other damage. Many of these matters will only be resolved when one or more future events occur or fail to occur. Management conducts regular reviews, including updates from legal counsel, to assess the need for accounting recognition or disclosure of these contingencies, and such assessment inherently involves an exercise in judgment. The Company accrues for exposures in amounts that it believes are adequate, and the Company does not believe that the outcome of any such lawsuit individually or collectively will have a material effect on the Company's financial position, its results of operations or its cash flows.
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 table presents a reconciliation of the changes in accrued warranty costs for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Beginning Balance$15.7 $16.4 $15.1 $14.8 
Less: Payments(3.7)(4.3)(10.6)(9.0)
Provisions4.4 4.4 11.9 11.1 
Held for Sale— — — (0.4)
Ending Balance$16.4 $16.5 $16.4 $16.5 
These liabilities are included in Other Accrued Expenses and Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheet.
v3.20.2
DERIVATIVE FINANCIAL INSTRUMENTS
9 Months Ended
Sep. 26, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are commodity price risk, currency exchange risk, 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 utilized to manage interest rate risk associated with the Company's floating rate borrowings.
The Company is exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including its commodity hedging transactions, foreign currency exchange contracts and interest rate swap agreements. Exposure to counterparty credit risk is managed by limiting counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. The Company does not obtain collateral or other security to support financial instruments subject to credit risk. The Company does not anticipate non-performance by its counterparties, but cannot provide assurances.
The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. 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 September 26, 2020 or September 28, 2019.
Cash Flow Hedges
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 AOCI and reclassified into the same line within the Condensed Consolidated Statement of Income as the earnings effect of the hedged item 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.
At September 26, 2020, the Company had $(0.5) million, net of tax, of derivative losses on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings. At December 28, 2019, the Company had $1.3 million, net of tax, of derivative gains on closed hedge instruments in AOCI that was subsequently realized in earnings when the hedged items impacted earnings.
As of September 26, 2020, the Company had the following currency forward contracts outstanding (with maturities extending through June 2022) to hedge forecasted foreign currency cash flows (in millions):
 Notional Amount (in US Dollars)
Chinese Renminbi$55.6 
Mexican Peso110.8 
Euro148.6 
Indian Rupee32.2 
Canadian Dollar2.4 
Australian Dollar16.7 
British Pound17.9 
Thai Baht6.2 

As of September 26, 2020, the Company had the following commodity forward contracts outstanding (with maturities extending through December 2021) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item (in millions)):
 Notional Amount
Copper$38.9 
Aluminum3.2 
As of September 26, 2020, the total notional amount of the Company's receive variable/pay-fixed interest rate swap was $88.4 million with a maturity of April 12, 2021.
The Company entered into two receive variable/pay-fixed forward starting non-amortizing interest rate swaps in June 2020, with a total notional amount of $250.0 million. These swaps become effective July 2021 and will expire in July 2025.

The following table presents the fair values of derivative instruments as of September 26, 2020 and December 28, 2019 (in millions):
 September 26, 2020
 Prepaid Expenses and Other Current AssetsOther Noncurrent AssetsCurrent Hedging ObligationsNoncurrent Hedging Obligations
Designated as Hedging Instruments:
Interest Rate Swap Contracts$— $— $1.2 $2.0 
Currency Contracts9.7 1.0 6.8 0.3 
Commodity Contracts6.8 — — — 
Not Designated as Hedging Instruments:
Currency Contracts0.1 — — — 
Total Derivatives$16.6 $1.0 $8.0 $2.3 
 December 28, 2019
 Prepaid Expenses and Other Current AssetsOther Noncurrent AssetsCurrent Hedging ObligationsNoncurrent Hedging Obligations
Designated as Hedging Instruments:
Interest Rate Swap Contracts$— $— $— $1.0 
Currency Contracts8.8 10.3 3.0 0.2 
Commodity Contracts2.6 0.1 0.2 — 
Not Designated as Hedging Instruments:
Currency Contracts0.1 — 0.1 — 
Commodity Contracts— — 0.1 — 
Total Derivatives$11.5 $10.4 $3.4 $1.2 
The following table presents the effect of derivative instruments on the Condensed Consolidated Statements of Income and Condensed Consolidated Statement of Comprehensive Income (pre-tax) (in millions):
Derivatives Designated as Cash Flow Hedging Instruments
Three Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsInterest Rate SwapsTotalCommodity ForwardsCurrency ForwardsInterest Rate SwapsTotal
Gain (Loss) Recognized in Other Comprehensive Income (Loss)$5.8 $2.4 $(0.3)$7.9 $(3.9)$(3.2)$0.6 $(6.5)
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain recognized in Net Sales— — — — — 0.1 — 0.1 
Gain (Loss) Recognized in Cost of Sales(0.4)(4.9)— (5.3)(1.8)2.0 — 0.2 
Gain (Loss) Recognized in Operating Expenses— (3.1)— (3.1)— 3.2 — 3.2 
Gain Recognized in Interest Expense— — 0.2 0.2 — — 0.7 0.7 
Nine Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsInterest Rate SwapsTotalCommodity ForwardsCurrency ForwardsInterest Rate SwapsTotal
Gain (Loss) Recognized in Other Comprehensive Income (Loss)$5.1 $(19.9)$(1.4)$(16.2)$(3.3)$8.5 $0.6 $5.8 
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales— — — — — 0.3 — 0.3 
Gain (Loss) Recognized in Cost of Sales(2.4)(2.1)— (4.5)(5.4)3.8 — (1.6)
Gain (Loss) Recognized in Operating Expenses— (4.0)— (4.0)— 3.6 — 3.6 
Gain Recognized in Interest Expense— — 0.8 0.8 — — 1.9 1.9 
Derivatives Not Designated as Cash Flow Hedging Instruments (in millions):
Three Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsCommodity ForwardsCurrency Forwards
Gain recognized in Cost of Sales$0.1 $— $— $— 
Gain (Loss) recognized in Operating Expenses$— $(2.4)$— $0.6 
Nine Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsCommodity ForwardsCurrency Forwards
Gain recognized in Cost of Sales$0.1 $0.1 $— 
Gain (Loss) recognized in Operating Expenses$— $(3.7)$— $0.1 
The net AOCI hedging component balance of a $1.5 million gain at September 26, 2020 includes $4.0 million of net current deferred gain expected to be realized in the next twelve months. The gain/loss reclassified from AOCI into earnings on such derivatives will be recognized in the same period in which the related item affects earnings.
The Company's commodity and currency derivative contracts are subject to master netting agreements with the respective counterparties which allow the Company to net settle transactions with a single net amount payable by one party to another party. The Company has elected to present the derivative assets and derivative liabilities on the Condensed Consolidated Balance Sheets on a gross basis for the periods ended September 26, 2020 and December 28, 2019.
The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements (in millions):
September 26, 2020
Gross Amounts as Presented in the Condensed Consolidated Balance SheetDerivative Contract Amounts Subject to Right of Offset Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$9.8 $(3.5)$6.3 
Derivative Commodity Contracts6.8 — 6.8 
Other Noncurrent Assets:
Derivative Currency Contracts1.0 (0.1)0.9 
Current Hedging Obligations:
Derivative Currency Contracts6.8 (3.5)3.3 
Noncurrent Hedging Obligations:
Derivative Currency Contracts0.3 (0.1)0.2 
December 28, 2019
Gross Amounts as Presented in the Condensed Consolidated Balance SheetDerivative Contract Amounts Subject to Right of OffsetDerivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$8.9 $(2.5)$6.4 
Derivative Commodity Contracts2.6 (0.3)2.3 
Other Noncurrent Assets:
Derivative Currency Contracts10.3 (0.1)10.2 
Derivative Commodity Contracts0.1 — 0.1 
Current Hedging Obligations:
Derivative Currency Contracts3.1 (2.5)0.6 
Derivative Commodity Contracts0.3 (0.3)— 
Noncurrent Hedging Obligations:
Derivative Currency Contracts0.2 (0.1)0.1 
v3.20.2
FAIR VALUE
9 Months Ended
Sep. 26, 2020
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
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:
Level 1Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2Unadjusted quoted prices in active markets for similar assets or liabilities, or
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
Inputs other than quoted prices that are observable for the asset or liability
Level 3Unobservable inputs for the asset or liability
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 fair values of cash equivalents and short-term deposits approximate their carrying values as of September 26, 2020 and December 28, 2019, due to the short period of time to maturity and are classified using Level 1 inputs. The fair values of trade receivables and accounts payable approximate the carrying values due to the short period of time to maturity. See Note 7 for disclosure of the approximate fair value of the Company's debt at September 26, 2020 and December 28, 2019.
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 September 26, 2020 and December 28, 2019 (in millions):
September 26, 2020December 28, 2019Classification
Assets:
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$9.8 $8.9 Level 2
Derivative Commodity Contracts6.8 2.6 Level 2
Other Noncurrent Assets:
Assets Held in Rabbi Trust6.2 6.1 Level 1
Derivative Currency Contracts1.0 10.3 Level 2
Derivative Commodity Contracts— 0.1 Level 2
Liabilities:
Current Hedging Obligations:
Interest Rate Swap1.2 — Level 2
Derivative Currency Contracts6.8 3.1 Level 2
Derivative Commodity Contracts— 0.3 Level 2
Noncurrent Hedging Obligations:
Interest Rate Swap2.0 1.0 Level 2
Derivative Currency Contracts0.3 0.2 Level 2
Level 1 fair value measurements for assets held in a Rabbi Trust are unadjusted quoted prices.
Level 2 fair value measurements for derivative assets and liabilities are measured using quoted prices in active markets for similar assets and liabilities. Interest rate swaps are valued based on the discounted cash flows for the LIBOR forward yield curve for a swap with similar contractual terms. Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. Commodity forwards are valued based on observable market transactions of forward commodity prices.
v3.20.2
RESTRUCTURING ACTIVITIES
9 Months Ended
Sep. 26, 2020
Restructuring and Related Activities [Abstract]  
RESTRUCTURING ACTIVITIES RESTRUCTURING ACTIVITIES
The Company incurred restructuring and restructuring-related costs on projects during fiscal 2020 and 2019. Restructuring costs include employee termination and plant relocation costs. Restructuring-related costs include costs directly associated with actions resulting from the Company's Simplification initiatives, such as asset write-downs or accelerated depreciation due to shortened useful lives in connection with site closures, discretionary employment benefit costs and other facility rationalization costs. Restructuring costs for employee termination expenses are generally required to be accrued over the employees' remaining service period while restructuring costs for plant relocation costs and restructuring-related costs are generally required to be expensed as incurred.

The following table presents a reconciliation of provisions and payments for the restructuring projects for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Beginning Balance$2.9 $0.7 $0.9 $0.2 
Provision5.8 7.3 18.7 13.2 
Less: Payments7.7 8.0 18.6 13.4 
Ending Balance$1.0 $— $1.0 $— 

The following table presents a reconciliation of restructuring and restructuring-related costs for restructuring projects for the three and nine months ended September 26, 2020 and September 28, 2019, respectively (in millions):
Three Months Ended
September 26, 2020September 28, 2019
Restructuring Costs:Cost of SalesOperating ExpensesTotalCost of SalesOperating ExpensesTotal
Employee Termination Expenses$1.5 $0.5 $2.0 $2.5 $2.4 $4.9 
Facility Related Costs2.5 1.6 4.1 1.9 0.5 2.4 
Other Expenses— (0.3)(0.3)— — — 
  Total Restructuring Costs$4.0 $1.8 $5.8 $4.4 $2.9 $7.3 
Nine Months Ended
September 26, 2020September 28, 2019
Restructuring Costs:Cost of SalesOperating ExpensesTotalCost of SalesOperating ExpensesTotal
Employee Termination Expenses$4.4 $3.5 $7.9 $2.9 $3.9 $6.8 
Facility Related Costs8.4 2.4 10.8 3.2 3.2 6.4 
Other Expenses0.3 (0.3)— — — — 
  Total Restructuring Costs$13.1 $5.6 $18.7 $6.1 $7.1 $13.2 
The following table presents the allocation of restructuring and restructuring-related costs by segment for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Restructuring Costs - Three Months EndedTotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
September 26, 2020$5.8 $0.7 $2.3 $0.8 $2.0 
September 28, 2019$7.3 $2.5 $3.1 $0.8 $0.9 
Restructuring Costs - Nine Months EndedTotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
September 26, 2020$18.7 $4.8 $5.2 $3.2 $5.5 
September 28, 2019$13.2 $4.8 $5.5 $1.5 $1.4 
The Company's current restructuring activities are expected to continue. The Company expects to record aggregate future charges of approximately $8.9 million which includes $3.2 million of employee termination expenses and $5.7 million of facility related costs on approved projects. The Company anticipates total restructuring costs of approximately $25.0 million for fiscal 2020.
v3.20.2
SUBSEQUENT EVENT
9 Months Ended
Sep. 26, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENT SUBSEQUENT EVENTThe Company has evaluated subsequent events since September 26, 2020, the date of these financial statements, and is not aware of any events to disclose.
v3.20.2
BASIS OF PRESENTATION (Policies)
9 Months Ended
Sep. 26, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
New Accounting Standards
Recently Issued Accounting Standards
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20). The ASU addresses modifications to the disclosure requirements for Defined Benefit Plans. Under ASU 2018-14 the disclosure requirements that can be removed are amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, amount and timing of plan assets expected to be returned to the employer, and the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs and benefit obligations for postretirement health care benefits. Additional disclosures are required for the weighted -average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation for significant gains and losses related to the changes in the benefit obligation for the period. If a defined benefit pension plan has a projected benefit obligation greater than plan assets the projected benefit obligation and fair value of plan assets should be disclosed. This additional disclosure is also required when comparing the accumulated benefit obligation to plan assets. This ASU becomes effective for fiscal years ending after December 15, 2020 on a retrospective basis for all years presented. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance, but does not anticipate a material impact on the financial statement disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, and clarifies and amends existing guidance to improve consistent application. This ASU becomes effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.
Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU provides optional transition guidance, for a limited time, to companies that have contracts, hedging relationships or other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate which is expected to be discontinued because of reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions if certain criteria are met. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. In the second quarter, the Company adopted this standard prospectively and is applying those expedients that allow the Company to continue to assert that LIBOR-based interest remains probable, despite the sunset of LIBOR at the end of 2021 with no impact on the Company's Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU focuses on updates around disclosures of Level 3 fair value measurements and it presents modifications to current disclosure requirements. The additional requirements under this ASU include disclosure for the changes in unrealized gains and losses included in other comprehensive income ("OCI") held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs. The ASU is also eliminating the disclosure requirement for the amount and reason for transfers between Level 1 and Level 2 fair value measurement, valuation processes for Level 3 measurements, and policy for timing of transfers between levels of the fair value hierarchy. In addition, the ASU modifies the disclosure requirements for investments that are valued based on net asset value. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods therein. The ASU requires prospective application for only the most recent interim or annual period presented in the year of adoption for changes in unrealized gains and losses included in OCI, the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the narrative description of measurement uncertainty. The Company adopted the standard as of December 29, 2019, the beginning of fiscal 2020, with no material impact on the Company's Condensed Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326). The focus of this ASU is to require businesses to adjust their allowance for lifetime expected credit losses rather than incurred losses. It is believed that the change will result in more timely recognition of such losses. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods therein. The Company adopted the standard as of December 29, 2019, the beginning of fiscal 2020, under the modified retrospective approach. The Company recorded a $3.4 million increase in the allowance for credit losses and a $2.7 million net decrease to retained earnings as of December 29, 2019 for the cumulative effect of adopting ASU 2016-13.
v3.20.2
OTHER FINANCIAL INFORMATION (Tables)
9 Months Ended
Sep. 26, 2020
Balance Sheet Related Disclosures [Abstract]  
Percentage Distribution between Major Classes of Inventory
The following table presents approximate percentage distribution between major classes of inventories:
September 26, 2020December 28, 2019
Raw Material and Work in Process49%48%
Finished Goods and Purchased Parts51%52%
Property, Plant, and Equipment by Major Classification
The following table presents property, plant, and equipment by major classification (dollars in millions):
Useful Life in YearsSeptember 26, 2020December 28, 2019
Land and Improvements$75.3 $80.3 
Buildings and Improvements
3 - 50
285.0 305.2 
Machinery and Equipment
3 - 15
969.6 988.2 
Property, Plant and Equipment1,329.9 1,373.7 
Less: Accumulated Depreciation(780.5)(768.7)
Net Property, Plant and Equipment$549.4 $605.0 
Disaggregation of Revenue
The following tables presents the Company’s revenues disaggregated by geographical region (in millions):
Three Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$156.9 $71.1 $210.7 $133.5 $572.2 
Asia35.4 35.7 9.7 7.4 88.2 
Europe8.0 6.4 7.7 20.1 42.2 
Rest-of-World18.2 25.6 5.9 5.9 55.6 
Total$218.5 $138.8 $234.0 $166.9 $758.2 
September 28, 2019Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$151.4 $78.8 $204.4 $146.3 $580.9 
Asia27.4 42.7 7.4 7.1 84.6 
Europe32.1 11.8 9.3 22.8 76.0 
Rest-of-World3.9 10.5 9.8 6.6 30.8 
Total$214.8 $143.8 $230.9 $182.8 $772.3 
Nine Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$412.8 $213.2 $554.1 $417.6 $1,597.7 
Asia87.7 109.1 19.3 19.8 235.9 
Europe62.0 34.3 22.8 66.2 185.3 
Rest-of-World31.3 32.4 26.1 17.8 107.6 
Total$593.8 $389.0 $622.3 $521.4 $2,126.5 
September 28, 2019Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
North America$503.5 $238.0 $671.1 $485.8 $1,898.4 
Asia82.4 126.8 28.6 21.7 259.5 
Europe101.8 39.2 31.5 70.0 242.5 
Rest-of-World15.6 33.4 30.9 19.5 99.4 
Total$703.3 $437.4 $762.1 $597.0 $2,499.8 
v3.20.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)
9 Months Ended
Sep. 26, 2020
Equity [Abstract]  
Changes In Accumulated Other Comprehensive Loss By Component, Net Of Tax
The following tables present changes in AOCI by component for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months Ended
September 26, 2020Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$(10.7)$(30.5)$(253.8)$(295.0)
Other Comprehensive Income (Loss) before Reclassifications7.9 (0.1)35.9 43.7 
Tax Impact(1.9)— — (1.9)
Amounts Reclassified from Accumulated Other Comprehensive Income8.2 0.1 — 8.3 
Tax Impact(2.0)— — (2.0)
Net Current Period Other Comprehensive Income12.2 — 35.9 48.1 
Ending Balance$1.5 $(30.5)$(217.9)$(246.9)
September 28, 2019Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$3.9 $(37.5)$(199.2)$(232.8)
Other Comprehensive Income (Loss) before Reclassifications(6.5)0.1 (37.4)(43.8)
Tax Impact1.6 — — 1.6 
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)(4.2)0.5 — (3.7)
Tax Impact1.0 (0.1)— 0.9 
Net Current Period Other Comprehensive Income (Loss)(8.1)0.5 (37.4)(45.0)
Ending Balance$(4.2)$(37.0)$(236.6)$(277.8)
Nine Months Ended
September 26, 2020Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning Balance$8.0 $(31.0)$(214.8)$(237.8)
Other Comprehensive Income (Loss) before Reclassifications(16.2)0.2 (3.1)(19.1)
Tax Impact3.9 — — 3.9 
Amounts Reclassified from Accumulated Other Comprehensive Income7.7 0.4 — 8.1 
Tax Impact(1.9)(0.1)— (2.0)
Net Current Period Other Comprehensive Income (Loss)(6.5)0.5 (3.1)(9.1)
Ending Balance$1.5 $(30.5)$(217.9)$(246.9)
September 28, 2019Hedging ActivitiesPension and Post Retirement Benefit AdjustmentsForeign Currency Translation AdjustmentsTotal
Beginning balance$(5.4)$(38.2)$(207.8)$(251.4)
Other Comprehensive Income (Loss) before Reclassifications5.8 (0.1)(30.4)(24.7)
Tax Impact(1.4)— — (1.4)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)(4.2)1.6 1.6 (1.0)
Tax Impact1.0 (0.3)— 0.7 
Net Current Period Other Comprehensive Income (Loss)1.2 1.2 (28.8)(26.4)
Ending Balance$(4.2)$(37.0)$(236.6)$(277.8)
v3.20.2
GOODWILL AND INTANGIBLE ASSETS (Tables)
9 Months Ended
Sep. 26, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Changes to Goodwill
The following table presents changes to goodwill during the nine months ended September 26, 2020 (in millions):
TotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
Balance as of December 28, 2019$1,501.3 $426.6 $170.8 $331.2 $572.7 
Translation Adjustments7.1 (0.6)1.3 (1.2)7.6 
Balance as of September 26, 2020$1,508.4 $426.0 $172.1 $330.0 $580.3 
Cumulative Goodwill Impairment Charges$285.2 $183.2 $61.6 $17.2 $23.2 
Schedule of Finite-Lived Intangible Assets
The following table presents intangible assets (in millions):
 September 26, 2020December 28, 2019
 Weighted Average Amortization Period (Years)Gross ValueAccumulated AmortizationGross ValueAccumulated Amortization
Amortizable Intangible Assets:
  Customer Relationships17$698.5 $334.4 $692.1 $302.4 
  Technology14144.7 105.4 144.0 99.0 
  Trademarks1436.5 26.6 35.9 25.0 
  Patent and Engineering Drawings516.6 16.6 16.6 16.6 
896.3 483.0 888.6 443.0 
Non-Amortizable Trade Name122.1 — 121.6 — 
$1,018.4 $483.0 $1,010.2 $443.0 
Intangible Assets, Net of Amortization$535.4 $567.2 
Schedule of Indefinite-Lived Intangible Assets
The following table presents intangible assets (in millions):
 September 26, 2020December 28, 2019
 Weighted Average Amortization Period (Years)Gross ValueAccumulated AmortizationGross ValueAccumulated Amortization
Amortizable Intangible Assets:
  Customer Relationships17$698.5 $334.4 $692.1 $302.4 
  Technology14144.7 105.4 144.0 99.0 
  Trademarks1436.5 26.6 35.9 25.0 
  Patent and Engineering Drawings516.6 16.6 16.6 16.6 
896.3 483.0 888.6 443.0 
Non-Amortizable Trade Name122.1 — 121.6 — 
$1,018.4 $483.0 $1,010.2 $443.0 
Intangible Assets, Net of Amortization$535.4 $567.2 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
The following table presents future estimated annual amortization for intangible assets (in millions):
 YearEstimated Amortization
2021$43.0 
202241.2 
202341.2 
202440.6 
202538.5 
v3.20.2
SEGMENT INFORMATION (Tables)
9 Months Ended
Sep. 26, 2020
Segment Reporting [Abstract]  
Schedule Of Reportable Segments
The following sets forth certain financial information attributable to the Company's operating segments for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsEliminationsTotal
External Sales$218.5 $138.8 $234.0 $166.9 $— $758.2 
Intersegment Sales14.5 7.4 4.6 0.6 (27.1)— 
 Total Sales233.0 146.2 238.6 167.5 (27.1)758.2 
Gross Profit61.4 31.2 69.1 59.9 — 221.6 
Operating Expenses36.1 24.6 29.9 41.0 — 131.6 
Total Operating Expenses36.1 24.6 29.9 41.0 — 131.6 
Income from Operations25.3 6.6 39.2 18.9 — 90.0 
Depreciation and Amortization7.9 6.0 5.0 14.0 — 32.9 
Capital Expenditures3.2 1.7 1.8 2.6 — 9.3 
September 28, 2019
External Sales$214.8 $143.8 $230.9 $182.8 $— $772.3 
Intersegment Sales10.8 8.0 4.2 1.2 (24.2)— 
 Total Sales225.6 151.8 235.1 184.0 (24.2)772.3 
Gross Profit53.5 23.7 64.2 60.5 — 201.9 
Operating Expenses36.8 26.0 26.5 39.6 — 128.9 
Loss on Divestitures0.1 — 0.1 — — 0.2 
Total Operating Expenses36.9 26.0 26.6 39.6 — 129.1 
Income (Loss) from Operations16.6 (2.3)37.6 20.9 — 72.8 
Depreciation and Amortization8.3 6.5 5.1 14.0 — 33.9 
Capital Expenditures6.8 4.2 6.8 3.3 — 21.1 
Nine Months Ended
September 26, 2020Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsEliminationsTotal
External Sales$593.8 $389.0 $622.3 $521.4 $— $2,126.5 
Intersegment Sales43.2 23.2 13.0 1.9 (81.3)— 
  Total Sales637.0 412.2 635.3 523.3 (81.3)2,126.5 
Gross Profit154.5 78.7 175.9 186.1 — 595.2 
Operating Expenses107.8 69.2 85.9 122.2 — 385.1 
Gain on Divestiture of Businesses(0.1)— — — — (0.1)
Asset Impairments2.8 0.2 1.3 — — 4.3 
Total Operating Expenses110.5 69.4 87.2 122.2 — 389.3 
Income from Operations44.0 9.3 88.7 63.9 — 205.9 
Depreciation and Amortization24.5 17.9 14.7 41.7 — 98.8 
Capital Expenditures8.5 6.0 8.0 7.2 — 29.7 
September 28, 2019
External Sales$703.3 $437.4 $762.1 $597.0 $— $2,499.8 
Intersegment Sales34.7 27.8 13.1 3.3 (78.9)— 
  Total Sales738.0 465.2 775.2 600.3 (78.9)2,499.8 
Gross Profit184.3 75.3 209.7 201.2 — 670.5 
Operating Expenses121.8 82.2 86.2 126.1 — 416.3 
(Gain) Loss on Divestiture of Businesses(39.4)0.1 (6.0)0.1 — (45.2)
Asset Impairments6.7 0.9 1.3 1.1 — 10.0 
Total Operating Expenses89.1 83.2 81.5 127.3 — 381.1 
Income (Loss) from Operations95.2 (7.9)128.2 73.9 — 289.4 
Depreciation and Amortization26.1 18.2 14.5 41.6 — 100.4 
Capital Expenditures24.2 18.1 19.4 15.6 — 77.3 
Reconciliation of Segment Assets
The following table presents identifiable assets information attributable to the Company's operating segments as of September 26, 2020 and December 28, 2019 (in millions):
Commercial SystemsIndustrial SystemsClimate SolutionsPower Transmission SolutionsTotal
Identifiable Assets as of September 26, 2020$1,258.2 $826.1 $876.4 $1,518.7 $4,479.4 
Identifiable Assets as of December 28, 2019$1,198.5 $802.8 $878.3 $1,551.1 $4,430.7 
v3.20.2
DEBT AND BANK CREDIT FACILITIES (Tables)
9 Months Ended
Sep. 26, 2020
Debt Disclosure [Abstract]  
Schedule Of Indebtedness
The following table presents the Company’s indebtedness as of September 26, 2020 and December 28, 2019 (in millions):
September 26, 2020December 28, 2019
Term Facility$670.0 $720.0 
Senior Notes400.0 400.0 
Multicurrency Revolving Facility— 17.7 
Other4.3 4.5 
Less: Debt Issuance Costs(3.5)(4.7)
Total1,070.8 1,137.5 
Less: Current Maturities230.6 0.6 
Long-Term Debt$840.2 $1,136.9 
Details On The Senior Notes
The following table presents details on the Notes at September 26, 2020 (in millions):
PrincipalInterest RateMaturity
Fixed Rate Series 2011A$230.0 
4.8 to 5.0%
July 14, 2021
Fixed Rate Series 2011A170.0 
4.9 to 5.1%
July 14, 2023
$400.0 
v3.20.2
RETIREMENT AND POST RETIREMENT HEALTH CARE PLANS (Tables)
9 Months Ended
Sep. 26, 2020
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]  
Schedule of Net Periodic Defined Benefit Pension Cost
The following table presents the Company’s net periodic benefit cost (income) components (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Service Cost$0.4 $1.5 $1.5 $4.6 
Interest Cost2.1 2.8 6.2 8.2 
Expected Return on Plan Assets(3.3)(3.2)(9.9)(9.4)
Amortization of Prior Service Cost and Net Actuarial Loss0.1 0.5 0.4 1.6 
Net Periodic Benefit Cost (Income)$(0.7)$1.6 $(1.8)$5.0 
v3.20.2
LEASES (Tables)
9 Months Ended
Sep. 26, 2020
Leases [Abstract]  
Lease Costs The components of lease expense were as follows (in millions):
Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Operating Lease Cost$7.5 $7.8 $22.8 $24.9 
Finance Lease Cost:
   Amortization of ROU Assets0.1 0.1 0.2 0.2 
   Interest on Lease Liabilities— — 0.1 0.2 
Total Lease Expense$7.6 7.9 $23.1 $25.3 
Other information related to leases was as follows (in millions):
Nine Months Ended
Supplemental Cash Flows InformationSeptember 26, 2020September 28, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
  Operating Cash Flows Used For Operating Leases$21.8 $24.9 
  Operating Cash Flows Used For Finance Leases0.1 0.2 
  Financing Cash Flows Used For Finance Leases0.2 0.2 
Leased Assets Obtained in Exchange for New Operating Lease Liabilities21.3 10.6 
Weighted Average Remaining Lease Term
Operating Leases5.2 years4.6 years
Finance Leases7.5 years8.5 years
Weighted Average Discount Rate
Operating Leases8.2 %8.3 %
Finance Leases5.9 %5.9 %
Finance Lease Maturities
Maturity of lease liabilities as of September 26, 2020 were as follows (in millions):
Operating LeasesFinance LeasesTotal
Remainder of 2020$7.4 $0.1 $7.5 
202125.2 0.5 25.7 
202218.4 0.6 19.0 
202312.2 0.6 12.8 
20248.2 0.6 8.8 
Thereafter23.1 1.9 25.0 
Total Lease Payments$94.5 $4.3 $98.8 
Less: Interest(17.3)(0.8)(18.1)
Present Value of Lease Liabilities$77.2 $3.5 $80.7 
Operating Lease Maturities
Maturity of lease liabilities as of September 26, 2020 were as follows (in millions):
Operating LeasesFinance LeasesTotal
Remainder of 2020$7.4 $0.1 $7.5 
202125.2 0.5 25.7 
202218.4 0.6 19.0 
202312.2 0.6 12.8 
20248.2 0.6 8.8 
Thereafter23.1 1.9 25.0 
Total Lease Payments$94.5 $4.3 $98.8 
Less: Interest(17.3)(0.8)(18.1)
Present Value of Lease Liabilities$77.2 $3.5 $80.7 
v3.20.2
SHAREHOLDERS' EQUITY (Tables)
9 Months Ended
Sep. 26, 2020
Stockholders' Equity Note [Abstract]  
Schedule of Share-Based Compensation Activity
The following table presents share-based compensation activity for the nine months ended September 26, 2020 and September 28, 2019 (in millions):
September 26, 2020September 28, 2019
Total Intrinsic Value of Share-Based Incentive Awards Exercised$5.7 $5.1 
Cash Received from Stock Option Exercises0.2 — 
Income Tax Benefit from the Exercise of SARs0.4 (0.1)
Total Fair Value of Share-Based Incentive Awards Vested1.8 5.4 
Schedule of Share-based Payment Award, Valuation Assumptions
The following table presents assumptions used in the Company's Black-Scholes valuation related to grants of SARs:
20202019
Per share weighted average fair value of grants$21.23 $20.84 
Risk-free interest rate1.5 %2.4 %
Expected life (years)7.07.0
Expected volatility25.2 %25.0 %
Expected dividend yield1.4 %1.5 %
The assumptions used in the Company's Monte Carlo simulation were as follows:
20202019
Risk-free interest rate1.4 %2.3 %
Expected life (years)3.03.0
Expected volatility24.0 %25.0 %
Expected dividend yield1.4 %1.5 %
Summary of Share-Based Incentive Plan Grant Activity For SAR's
The following table presents a summary of share-based incentive plan grant activity for the nine months ended September 26, 2020.
Number of Shares Under SARsSharesWeighted Average Exercise PriceWeighted Average Remaining Contractual Term (Years)Aggregate Intrinsic Value (in millions)
Outstanding as of December 28, 2019817,790 $73.34 6.0$9.9 
Granted181,177 88.25 
Exercised(299,816)69.29 
Forfeited(92,352)76.99 
Expired(3,308)67.38 
Outstanding as of September 26, 2020603,491 $79.00 4.5$5.7 
Exercisable as of September 26, 2020197,612 $70.73 4.5$4.4 
Summary of RSA Award Activity
The following table presents a summary of RSA award activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested RSAs as of December 28, 201915,571 $80.41 0.4
Granted16,280 70.05 
Vested(15,148)80.29 
Unvested RSAs as of September 26, 202016,703 $70.42 0.6
Summary of RSU Award Activity
The following table presents a summary of RSU award activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested RSUs as of December 28, 2019175,025 $78.19 1.9
Granted66,815 85.68 
Vested(49,259)80.20 
Forfeited(27,288)78.11 
Unvested RSUs as of September 26, 2020165,293 $80.63 1.9
Summary of PSU Award Activity
The following table presents a summary of PSU activity for the nine months ended September 26, 2020:
SharesWeighted Average Fair Value at Grant DateWeighted Average Remaining Contractual Term (Years)
Unvested PSUs as of December 28, 201990,565 $86.35 1.9
Granted42,677 99.74 
Vested(7,545)95.33 
Forfeited(30,987)86.59 
Unvested PSUs as of September 26, 202094,710 $91.59 2.0
v3.20.2
EARNINGS PER SHARE (Tables)
9 Months Ended
Sep. 26, 2020
Earnings Per Share [Abstract]  
Schedule Of Reconciliation Of Basic And Diluted Shares Used in EPS The following table reconciles the basic and diluted shares used in earnings per share calculations for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Denominator for Basic Earnings Per Share40.6 41.5 40.6 42.3 
Effect of Dilutive Securities0.2 0.2 0.1 0.3 
Denominator for Diluted Earnings Per Share40.8 41.7 40.7 42.6 
v3.20.2
CONTINGENCIES (Tables)
9 Months Ended
Sep. 26, 2020
Commitments and Contingencies Disclosure [Abstract]  
Schedule Of Accrued Warranty Costs The following table presents a reconciliation of the changes in accrued warranty costs for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
 Three Months EndedNine Months Ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Beginning Balance$15.7 $16.4 $15.1 $14.8 
Less: Payments(3.7)(4.3)(10.6)(9.0)
Provisions4.4 4.4 11.9 11.1 
Held for Sale— — — (0.4)
Ending Balance$16.4 $16.5 $16.4 $16.5 
v3.20.2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
9 Months Ended
Sep. 26, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Notional Amounts of Forward Contracts
As of September 26, 2020, the Company had the following currency forward contracts outstanding (with maturities extending through June 2022) to hedge forecasted foreign currency cash flows (in millions):
 Notional Amount (in US Dollars)
Chinese Renminbi$55.6 
Mexican Peso110.8 
Euro148.6 
Indian Rupee32.2 
Canadian Dollar2.4 
Australian Dollar16.7 
British Pound17.9 
Thai Baht6.2 

As of September 26, 2020, the Company had the following commodity forward contracts outstanding (with maturities extending through December 2021) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item (in millions)):
 Notional Amount
Copper$38.9 
Aluminum3.2 
Schedule of Fair Values of Derivative Instruments
The following table presents the fair values of derivative instruments as of September 26, 2020 and December 28, 2019 (in millions):
 September 26, 2020
 Prepaid Expenses and Other Current AssetsOther Noncurrent AssetsCurrent Hedging ObligationsNoncurrent Hedging Obligations
Designated as Hedging Instruments:
Interest Rate Swap Contracts$— $— $1.2 $2.0 
Currency Contracts9.7 1.0 6.8 0.3 
Commodity Contracts6.8 — — — 
Not Designated as Hedging Instruments:
Currency Contracts0.1 — — — 
Total Derivatives$16.6 $1.0 $8.0 $2.3 
 December 28, 2019
 Prepaid Expenses and Other Current AssetsOther Noncurrent AssetsCurrent Hedging ObligationsNoncurrent Hedging Obligations
Designated as Hedging Instruments:
Interest Rate Swap Contracts$— $— $— $1.0 
Currency Contracts8.8 10.3 3.0 0.2 
Commodity Contracts2.6 0.1 0.2 — 
Not Designated as Hedging Instruments:
Currency Contracts0.1 — 0.1 — 
Commodity Contracts— — 0.1 — 
Total Derivatives$11.5 $10.4 $3.4 $1.2 
Schedule of Cash Flow Hedging Instruments
The following table presents the effect of derivative instruments on the Condensed Consolidated Statements of Income and Condensed Consolidated Statement of Comprehensive Income (pre-tax) (in millions):
Derivatives Designated as Cash Flow Hedging Instruments
Three Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsInterest Rate SwapsTotalCommodity ForwardsCurrency ForwardsInterest Rate SwapsTotal
Gain (Loss) Recognized in Other Comprehensive Income (Loss)$5.8 $2.4 $(0.3)$7.9 $(3.9)$(3.2)$0.6 $(6.5)
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain recognized in Net Sales— — — — — 0.1 — 0.1 
Gain (Loss) Recognized in Cost of Sales(0.4)(4.9)— (5.3)(1.8)2.0 — 0.2 
Gain (Loss) Recognized in Operating Expenses— (3.1)— (3.1)— 3.2 — 3.2 
Gain Recognized in Interest Expense— — 0.2 0.2 — — 0.7 0.7 
Nine Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsInterest Rate SwapsTotalCommodity ForwardsCurrency ForwardsInterest Rate SwapsTotal
Gain (Loss) Recognized in Other Comprehensive Income (Loss)$5.1 $(19.9)$(1.4)$(16.2)$(3.3)$8.5 $0.6 $5.8 
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales— — — — — 0.3 — 0.3 
Gain (Loss) Recognized in Cost of Sales(2.4)(2.1)— (4.5)(5.4)3.8 — (1.6)
Gain (Loss) Recognized in Operating Expenses— (4.0)— (4.0)— 3.6 — 3.6 
Gain Recognized in Interest Expense— — 0.8 0.8 — — 1.9 1.9 
Derivatives Not Designated as Cash Flow Hedging Instruments (in millions):
Three Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsCommodity ForwardsCurrency Forwards
Gain recognized in Cost of Sales$0.1 $— $— $— 
Gain (Loss) recognized in Operating Expenses$— $(2.4)$— $0.6 
Nine Months Ended
September 26, 2020September 28, 2019
Commodity ForwardsCurrency ForwardsCommodity ForwardsCurrency Forwards
Gain recognized in Cost of Sales$0.1 $0.1 $— 
Gain (Loss) recognized in Operating Expenses$— $(3.7)$— $0.1 
Schedule of Derivatives Under Enforceable Master Netting Agreements
The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements (in millions):
September 26, 2020
Gross Amounts as Presented in the Condensed Consolidated Balance SheetDerivative Contract Amounts Subject to Right of Offset Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$9.8 $(3.5)$6.3 
Derivative Commodity Contracts6.8 — 6.8 
Other Noncurrent Assets:
Derivative Currency Contracts1.0 (0.1)0.9 
Current Hedging Obligations:
Derivative Currency Contracts6.8 (3.5)3.3 
Noncurrent Hedging Obligations:
Derivative Currency Contracts0.3 (0.1)0.2 
December 28, 2019
Gross Amounts as Presented in the Condensed Consolidated Balance SheetDerivative Contract Amounts Subject to Right of OffsetDerivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$8.9 $(2.5)$6.4 
Derivative Commodity Contracts2.6 (0.3)2.3 
Other Noncurrent Assets:
Derivative Currency Contracts10.3 (0.1)10.2 
Derivative Commodity Contracts0.1 — 0.1 
Current Hedging Obligations:
Derivative Currency Contracts3.1 (2.5)0.6 
Derivative Commodity Contracts0.3 (0.3)— 
Noncurrent Hedging Obligations:
Derivative Currency Contracts0.2 (0.1)0.1 
v3.20.2
FAIR VALUE (Tables)
9 Months Ended
Sep. 26, 2020
Fair Value Disclosures [Abstract]  
Schedule Of Financial Assets And Liabilities At Fair Value
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 September 26, 2020 and December 28, 2019 (in millions):
September 26, 2020December 28, 2019Classification
Assets:
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts$9.8 $8.9 Level 2
Derivative Commodity Contracts6.8 2.6 Level 2
Other Noncurrent Assets:
Assets Held in Rabbi Trust6.2 6.1 Level 1
Derivative Currency Contracts1.0 10.3 Level 2
Derivative Commodity Contracts— 0.1 Level 2
Liabilities:
Current Hedging Obligations:
Interest Rate Swap1.2 — Level 2
Derivative Currency Contracts6.8 3.1 Level 2
Derivative Commodity Contracts— 0.3 Level 2
Noncurrent Hedging Obligations:
Interest Rate Swap2.0 1.0 Level 2
Derivative Currency Contracts0.3 0.2 Level 2
v3.20.2
RESTRUCTURING ACTIVITIES (Tables)
9 Months Ended
Sep. 26, 2020
Restructuring and Related Activities [Abstract]  
Schedule Of Restructuring Reserve
The following table presents a reconciliation of provisions and payments for the restructuring projects for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Beginning Balance$2.9 $0.7 $0.9 $0.2 
Provision5.8 7.3 18.7 13.2 
Less: Payments7.7 8.0 18.6 13.4 
Ending Balance$1.0 $— $1.0 $— 
Reconciliation Of Expenses By Type
The following table presents a reconciliation of restructuring and restructuring-related costs for restructuring projects for the three and nine months ended September 26, 2020 and September 28, 2019, respectively (in millions):
Three Months Ended
September 26, 2020September 28, 2019
Restructuring Costs:Cost of SalesOperating ExpensesTotalCost of SalesOperating ExpensesTotal
Employee Termination Expenses$1.5 $0.5 $2.0 $2.5 $2.4 $4.9 
Facility Related Costs2.5 1.6 4.1 1.9 0.5 2.4 
Other Expenses— (0.3)(0.3)— — — 
  Total Restructuring Costs$4.0 $1.8 $5.8 $4.4 $2.9 $7.3 
Nine Months Ended
September 26, 2020September 28, 2019
Restructuring Costs:Cost of SalesOperating ExpensesTotalCost of SalesOperating ExpensesTotal
Employee Termination Expenses$4.4 $3.5 $7.9 $2.9 $3.9 $6.8 
Facility Related Costs8.4 2.4 10.8 3.2 3.2 6.4 
Other Expenses0.3 (0.3)— — — — 
  Total Restructuring Costs$13.1 $5.6 $18.7 $6.1 $7.1 $13.2 
The following table presents the allocation of restructuring and restructuring-related costs by segment for the three and nine months ended September 26, 2020 and September 28, 2019 (in millions):
Restructuring Costs - Three Months EndedTotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
September 26, 2020$5.8 $0.7 $2.3 $0.8 $2.0 
September 28, 2019$7.3 $2.5 $3.1 $0.8 $0.9 
Restructuring Costs - Nine Months EndedTotalCommercial SystemsIndustrial SystemsClimate SolutionsPower Transmission Solutions
September 26, 2020$18.7 $4.8 $5.2 $3.2 $5.5 
September 28, 2019$13.2 $4.8 $5.5 $1.5 $1.4 
v3.20.2
BASIS OF PRESENTATION (Details) - USD ($)
$ in Millions
9 Months Ended 12 Months Ended
Sep. 26, 2020
Dec. 28, 2019
Jun. 27, 2020
Dec. 29, 2019
Sep. 28, 2019
Jun. 29, 2019
Dec. 29, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Allowance for doubtful accounts receivable $ 15.6 $ 9.7          
Stockholders' equity, including portion attributable to noncontrolling interest $ 2,451.9 $ 2,380.4 $ 2,347.0   $ 2,329.1 $ 2,430.4 $ 2,338.5
Adoption of ASU 2016-13 us-gaap:AccountingStandardsUpdate201613Member us-gaap:AccountingStandardsUpdate201613Member          
Retained Earnings              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Stockholders' equity, including portion attributable to noncontrolling interest $ 1,972.5 $ 1,886.7 $ 1,919.7   $ 1,870.9 $ 1,882.7 $ 1,777.9
Adjustment              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Allowance for doubtful accounts receivable       $ 3.4      
Stockholders' equity, including portion attributable to noncontrolling interest   $ (2.7)          
Adjustment | Retained Earnings              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Stockholders' equity, including portion attributable to noncontrolling interest       $ (2.7)      
v3.20.2
OTHER FINANCIAL INFORMATION (Percentage Distribution Between Major Classes of Inventory) (Details)
9 Months Ended 12 Months Ended
Sep. 26, 2020
Dec. 28, 2019
Inventory [Line Items]    
Percentage of inventory cost using the LIFO method 54.00% 53.00%
Inventory Concentration Risk | Inventories | Raw Material and Work in Process    
Inventory [Line Items]    
Percentage of total Inventory 49.00% 48.00%
Inventory Concentration Risk | Inventories | Finished Goods and Purchased Parts    
Inventory [Line Items]    
Percentage of total Inventory 51.00% 52.00%
v3.20.2
OTHER FINANCIAL INFORMATION (Property, Plant, And Equipment By Major Classification) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Dec. 28, 2019
Property, Plant and Equipment [Line Items]          
Property, Plant and Equipment $ 1,329.9   $ 1,329.9   $ 1,373.7
Less: Accumulated Depreciation (780.5)   (780.5)   (768.7)
Net Property, Plant and Equipment 549.4   549.4   605.0
Asset Impairments 0.0 $ 0.0 4.3 $ 10.0  
Impairment charge on transfer of assets to held for sale       $ 5.1  
Land and Improvements          
Property, Plant and Equipment [Line Items]          
Property, Plant and Equipment 75.3   75.3   80.3
Buildings and Improvements          
Property, Plant and Equipment [Line Items]          
Property, Plant and Equipment 285.0   $ 285.0   305.2
Buildings and Improvements | Minimum          
Property, Plant and Equipment [Line Items]          
Useful life     3 years    
Buildings and Improvements | Maximum          
Property, Plant and Equipment [Line Items]          
Useful life     50 years    
Machinery and Equipment          
Property, Plant and Equipment [Line Items]          
Property, Plant and Equipment $ 969.6   $ 969.6   $ 988.2
Machinery and Equipment | Minimum          
Property, Plant and Equipment [Line Items]          
Useful life     3 years    
Machinery and Equipment | Maximum          
Property, Plant and Equipment [Line Items]          
Useful life     15 years    
v3.20.2
OTHER FINANCIAL INFORMATION (Narrative) (Details)
9 Months Ended
Sep. 26, 2020
segment
Balance Sheet Related Disclosures [Abstract]  
Number of operating segments 4
v3.20.2
OTHER FINANCIAL INFORMATION (Disaggregation of Revenue) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Disaggregation of Revenue [Line Items]        
Net Sales $ 758.2 $ 772.3 $ 2,126.5 $ 2,499.8
Commercial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 218.5 214.8 593.8 703.3
Industrial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 138.8 143.8 389.0 437.4
Climate Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 234.0 230.9 622.3 762.1
Power Transmission Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 166.9 182.8 521.4 597.0
North America        
Disaggregation of Revenue [Line Items]        
Net Sales 572.2 580.9 1,597.7 1,898.4
North America | Commercial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 156.9 151.4 412.8 503.5
North America | Industrial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 71.1 78.8 213.2 238.0
North America | Climate Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 210.7 204.4 554.1 671.1
North America | Power Transmission Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 133.5 146.3 417.6 485.8
Asia        
Disaggregation of Revenue [Line Items]        
Net Sales 88.2 84.6 235.9 259.5
Asia | Commercial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 35.4 27.4 87.7 82.4
Asia | Industrial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 35.7 42.7 109.1 126.8
Asia | Climate Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 9.7 7.4 19.3 28.6
Asia | Power Transmission Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 7.4 7.1 19.8 21.7
Europe        
Disaggregation of Revenue [Line Items]        
Net Sales 42.2 76.0 185.3 242.5
Europe | Commercial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 8.0 32.1 62.0 101.8
Europe | Industrial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 6.4 11.8 34.3 39.2
Europe | Climate Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 7.7 9.3 22.8 31.5
Europe | Power Transmission Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 20.1 22.8 66.2 70.0
Rest-of-World        
Disaggregation of Revenue [Line Items]        
Net Sales 55.6 30.8 107.6 99.4
Rest-of-World | Commercial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 18.2 3.9 31.3 15.6
Rest-of-World | Industrial Systems        
Disaggregation of Revenue [Line Items]        
Net Sales 25.6 10.5 32.4 33.4
Rest-of-World | Climate Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales 5.9 9.8 26.1 30.9
Rest-of-World | Power Transmission Solutions        
Disaggregation of Revenue [Line Items]        
Net Sales $ 5.9 $ 6.6 $ 17.8 $ 19.5
v3.20.2
HELD FOR SALE, DIVESTITURES AND ACQUISITIONS (Assets Held For Sale) (Details) - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Business Combinations [Abstract]    
Assets Held for Sale $ 5.0 $ 2.8
v3.20.2
HELD FOR SALE, DIVESTITURES AND ACQUISITIONS (Divestitures) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jul. 01, 2019
Apr. 01, 2019
Sep. 26, 2020
Mar. 28, 2020
Sep. 28, 2019
Mar. 30, 2019
Sep. 26, 2020
Sep. 28, 2019
Business Acquisition [Line Items]                
Proceeds from divestiture of businesses             $ 0.3 $ 159.6
Gain (loss) on divestiture of businesses     $ 0.0   $ (0.2)   $ 0.1 $ 45.2
Regal Drive Technologies | Disposed of by sale                
Business Acquisition [Line Items]                
Proceeds from divestiture of businesses       $ 0.3   $ 119.9    
Gain (loss) on divestiture of businesses       $ 0.1   $ 41.0    
Velvet Drive | Disposed of by sale                
Business Acquisition [Line Items]                
Proceeds from divestiture of businesses   $ 8.9            
Gain (loss) on divestiture of businesses   (0.5)            
CapCom | Disposed of by sale                
Business Acquisition [Line Items]                
Proceeds from divestiture of businesses   9.9            
Gain (loss) on divestiture of businesses   $ 6.0            
Vapor Recovery | Disposed of by sale                
Business Acquisition [Line Items]                
Proceeds from divestiture of businesses $ 19.2              
Gain (loss) on divestiture of businesses $ (1.9)              
v3.20.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance $ 2,347.0 $ 2,430.4 $ 2,380.4 $ 2,338.5
Other Comprehensive Income (Loss) before Reclassifications 43.7 (43.8) (19.1) (24.7)
Tax Impact (1.9) 1.6 3.9 (1.4)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 8.3 (3.7) 8.1 (1.0)
Tax Impact (2.0) 0.9 (2.0) 0.7
Net Current Period Other Comprehensive Income (Loss) 48.1 (45.0) (9.1) (26.4)
Ending Balance 2,451.9 2,329.1 2,451.9 2,329.1
Total        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance (295.0) (232.8) (237.8) (251.4)
Ending Balance (246.9) (277.8) (246.9) (277.8)
Hedging Activities        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance (10.7) 3.9 8.0 (5.4)
Other Comprehensive Income (Loss) before Reclassifications 7.9 (6.5) (16.2) 5.8
Tax Impact (1.9) 1.6 3.9 (1.4)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 8.2 (4.2) 7.7 (4.2)
Tax Impact (2.0) 1.0 (1.9) 1.0
Net Current Period Other Comprehensive Income (Loss) 12.2 (8.1) (6.5) 1.2
Ending Balance 1.5 (4.2) 1.5 (4.2)
Pension and Post Retirement Benefit Adjustments        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance (30.5) (37.5) (31.0) (38.2)
Other Comprehensive Income (Loss) before Reclassifications (0.1) 0.1 0.2 (0.1)
Tax Impact 0.0 0.0 0.0 0.0
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 0.1 0.5 0.4 1.6
Tax Impact 0.0 (0.1) (0.1) (0.3)
Net Current Period Other Comprehensive Income (Loss) 0.0 0.5 0.5 1.2
Ending Balance (30.5) (37.0) (30.5) (37.0)
Foreign Currency Translation Adjustments        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance (253.8) (199.2) (214.8) (207.8)
Other Comprehensive Income (Loss) before Reclassifications 35.9 (37.4) (3.1) (30.4)
Tax Impact 0.0 0.0 0.0 0.0
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 0.0 0.0 0.0 1.6
Tax Impact 0.0 0.0 0.0 0.0
Net Current Period Other Comprehensive Income (Loss) 35.9 (37.4) (3.1) (28.8)
Ending Balance $ (217.9) $ (236.6) $ (217.9) $ (236.6)
v3.20.2
GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Jun. 27, 2020
Dec. 28, 2019
Finite-Lived Intangible Assets [Line Items]            
Percentage of excess fair value over carrying value, less than         10.00% 10.00%
Goodwill $ 1,508,400,000   $ 1,508,400,000     $ 1,501,300,000
Amortization of intangible assets 11,900,000 $ 12,600,000 36,300,000 $ 38,000,000.0    
Estimated amortization expense remainder of year 48,000,000.0   48,000,000.0      
Impairment of intangible assets 0   0      
Customer Relationships            
Finite-Lived Intangible Assets [Line Items]            
Impairment of intangible assets       $ 4,900,000    
Global Industrial Motors            
Finite-Lived Intangible Assets [Line Items]            
Goodwill $ 123,800,000   $ 123,800,000      
v3.20.2
GOODWILL AND INTANGIBLE ASSETS (Schedule Of Changes To Goodwill) (Details)
$ in Millions
9 Months Ended
Sep. 26, 2020
USD ($)
Goodwill [Roll Forward]  
Beginning balance $ 1,501.3
Translation Adjustments 7.1
Ending balance 1,508.4
Cumulative Goodwill Impairment Charges 285.2
Commercial Systems  
Goodwill [Roll Forward]  
Beginning balance 426.6
Translation Adjustments (0.6)
Ending balance 426.0
Cumulative Goodwill Impairment Charges 183.2
Industrial Systems  
Goodwill [Roll Forward]  
Beginning balance 170.8
Translation Adjustments 1.3
Ending balance 172.1
Cumulative Goodwill Impairment Charges 61.6
Climate Solutions  
Goodwill [Roll Forward]  
Beginning balance 331.2
Translation Adjustments (1.2)
Ending balance 330.0
Cumulative Goodwill Impairment Charges 17.2
Power Transmission Solutions  
Goodwill [Roll Forward]  
Beginning balance 572.7
Translation Adjustments 7.6
Ending balance 580.3
Cumulative Goodwill Impairment Charges $ 23.2
v3.20.2
GOODWILL AND INTANGIBLE ASSETS (Schedule Of Intangible Assets) (Details) - USD ($)
$ in Millions
9 Months Ended
Sep. 26, 2020
Dec. 28, 2019
Finite-Lived Intangible Assets [Line Items]    
Gross Value $ 896.3 $ 888.6
Accumulated Amortization 483.0 443.0
Gross Value 122.1 121.6
Intangible Assets 1,018.4 1,010.2
Intangible Assets, Net of Amortization $ 535.4 567.2
Customer Relationships    
Finite-Lived Intangible Assets [Line Items]    
Weighted Average Amortization Period (Years) 17 years  
Gross Value $ 698.5 692.1
Accumulated Amortization $ 334.4 302.4
Technology    
Finite-Lived Intangible Assets [Line Items]    
Weighted Average Amortization Period (Years) 14 years  
Gross Value $ 144.7 144.0
Accumulated Amortization $ 105.4 99.0
Trademarks    
Finite-Lived Intangible Assets [Line Items]    
Weighted Average Amortization Period (Years) 14 years  
Gross Value $ 36.5 35.9
Accumulated Amortization $ 26.6 25.0
Patent and Engineering Drawings    
Finite-Lived Intangible Assets [Line Items]    
Weighted Average Amortization Period (Years) 5 years  
Gross Value $ 16.6 16.6
Accumulated Amortization $ 16.6 $ 16.6
v3.20.2
GOODWILL AND INTANGIBLE ASSETS (Schedule Of Estimated Amortization) (Details)
$ in Millions
Sep. 26, 2020
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Estimated Amortization, 2021 $ 43.0
Estimated Amortization, 2022 41.2
Estimated Amortization, 2023 41.2
Estimated Amortization, 2024 40.6
Estimated Amortization, 2025 $ 38.5
v3.20.2
SEGMENT INFORMATION (Details)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
USD ($)
Sep. 28, 2019
USD ($)
Sep. 26, 2020
USD ($)
segment
Sep. 28, 2019
USD ($)
Dec. 28, 2019
USD ($)
Segment Reporting Information [Line Items]          
Number of operating segments | segment     4    
Total Sales $ 758.2 $ 772.3 $ 2,126.5 $ 2,499.8  
Gross Profit 221.6 201.9 595.2 670.5  
Operating Expenses 131.6 128.9 385.1 416.3  
(Gain) Loss on Divestiture of Businesses 0.0 0.2 (0.1) (45.2)  
Asset Impairments 0.0 0.0 4.3 10.0  
Total Operating Expenses 131.6 129.1 389.3 381.1  
Income from Operations 90.0 72.8 205.9 289.4  
Depreciation and Amortization 32.9 33.9 98.8 100.4  
Capital Expenditures 9.3 21.1 29.7 77.3  
Assets 4,479.4   4,479.4   $ 4,430.7
Commercial Systems          
Segment Reporting Information [Line Items]          
Total Sales 218.5 214.8 593.8 703.3  
Assets 1,258.2   1,258.2   1,198.5
Industrial Systems          
Segment Reporting Information [Line Items]          
Total Sales 138.8 143.8 389.0 437.4  
Assets 826.1   826.1   802.8
Climate Solutions          
Segment Reporting Information [Line Items]          
Total Sales 234.0 230.9 622.3 762.1  
Assets 876.4   876.4   878.3
Power Transmission Solutions          
Segment Reporting Information [Line Items]          
Total Sales 166.9 182.8 521.4 597.0  
Assets 1,518.7   1,518.7   $ 1,551.1
Intersegment Eliminations          
Segment Reporting Information [Line Items]          
Total Sales 27.1 24.2 81.3 78.9  
Intersegment Eliminations | Commercial Systems          
Segment Reporting Information [Line Items]          
Total Sales (14.5) (10.8) (43.2) (34.7)  
Intersegment Eliminations | Industrial Systems          
Segment Reporting Information [Line Items]          
Total Sales (7.4) (8.0) (23.2) (27.8)  
Intersegment Eliminations | Climate Solutions          
Segment Reporting Information [Line Items]          
Total Sales (4.6) (4.2) (13.0) (13.1)  
Intersegment Eliminations | Power Transmission Solutions          
Segment Reporting Information [Line Items]          
Total Sales (0.6) (1.2) (1.9) (3.3)  
Operating Segments | Commercial Systems          
Segment Reporting Information [Line Items]          
Total Sales 233.0 225.6 637.0 738.0  
Gross Profit 61.4 53.5 154.5 184.3  
Operating Expenses 36.1 36.8 107.8 121.8  
(Gain) Loss on Divestiture of Businesses   0.1 (0.1) (39.4)  
Asset Impairments     2.8 6.7  
Total Operating Expenses 36.1 36.9 110.5 89.1  
Income from Operations 25.3 16.6 44.0 95.2  
Depreciation and Amortization 7.9 8.3 24.5 26.1  
Capital Expenditures 3.2 6.8 8.5 24.2  
Operating Segments | Industrial Systems          
Segment Reporting Information [Line Items]          
Total Sales 146.2 151.8 412.2 465.2  
Gross Profit 31.2 23.7 78.7 75.3  
Operating Expenses 24.6 26.0 69.2 82.2  
(Gain) Loss on Divestiture of Businesses   0.0 0.0 0.1  
Asset Impairments     0.2 0.9  
Total Operating Expenses 24.6 26.0 69.4 83.2  
Income from Operations 6.6 (2.3) 9.3 (7.9)  
Depreciation and Amortization 6.0 6.5 17.9 18.2  
Capital Expenditures 1.7 4.2 6.0 18.1  
Operating Segments | Climate Solutions          
Segment Reporting Information [Line Items]          
Total Sales 238.6 235.1 635.3 775.2  
Gross Profit 69.1 64.2 175.9 209.7  
Operating Expenses 29.9 26.5 85.9 86.2  
(Gain) Loss on Divestiture of Businesses   0.1 0.0 (6.0)  
Asset Impairments     1.3 1.3  
Total Operating Expenses 29.9 26.6 87.2 81.5  
Income from Operations 39.2 37.6 88.7 128.2  
Depreciation and Amortization 5.0 5.1 14.7 14.5  
Capital Expenditures 1.8 6.8 8.0 19.4  
Operating Segments | Power Transmission Solutions          
Segment Reporting Information [Line Items]          
Total Sales 167.5 184.0 523.3 600.3  
Gross Profit 59.9 60.5 186.1 201.2  
Operating Expenses 41.0 39.6 122.2 126.1  
(Gain) Loss on Divestiture of Businesses   0.0 0.0 0.1  
Asset Impairments     0.0 1.1  
Total Operating Expenses 41.0 39.6 122.2 127.3  
Income from Operations 18.9 20.9 63.9 73.9  
Depreciation and Amortization 14.0 14.0 41.7 41.6  
Capital Expenditures $ 2.6 $ 3.3 $ 7.2 $ 15.6  
v3.20.2
DEBT AND BANK CREDIT FACILITIES (Schedule Of Indebtedness) (Details) - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Debt Instrument [Line Items]    
Less: Debt Issuance Costs $ (3.5) $ (4.7)
Total 1,070.8 1,137.5
Less: Current Maturities 230.6 0.6
Long-Term Debt 840.2 1,136.9
Term Facility    
Debt Instrument [Line Items]    
Long-term debt, gross 670.0 720.0
Senior Notes    
Debt Instrument [Line Items]    
Long-term debt, gross 400.0 400.0
Multicurrency Revolving Facility    
Debt Instrument [Line Items]    
Long-term debt, gross 0.0 17.7
Other    
Debt Instrument [Line Items]    
Long-term debt, gross $ 4.3 $ 4.5
v3.20.2
DEBT AND BANK CREDIT FACILITIES (Narrative) (Details)
3 Months Ended 9 Months Ended
Aug. 27, 2018
USD ($)
Sep. 26, 2020
USD ($)
Sep. 28, 2019
USD ($)
Sep. 26, 2020
USD ($)
tranche
Sep. 28, 2019
USD ($)
Dec. 28, 2019
USD ($)
Debt Instrument [Line Items]            
Long-term debt   $ 1,070,800,000   $ 1,070,800,000   $ 1,137,500,000
Fair value of debt   1,087,300,000   1,087,300,000   1,162,100,000
Term Facility            
Debt Instrument [Line Items]            
Debt instrument term 5 years          
Principal amount $ 900,000,000.0          
Amortization rate per annum 5.00%          
Amortization rate, after two years 7.50%          
Amortization rate, last two years 10.00%          
Percent of certain cash proceeds received for required prepayment 100.00%          
Long-term debt, gross   670,000,000.0   670,000,000.0   720,000,000.0
Multicurrency Revolving Facility            
Debt Instrument [Line Items]            
Debt instrument term 5 years          
Long-term debt, gross   0   0   17,700,000
Senior Notes            
Debt Instrument [Line Items]            
Long-term debt, gross   400,000,000.0   400,000,000.0   400,000,000.0
Other            
Debt Instrument [Line Items]            
Long-term debt, gross   $ 4,300,000   $ 4,300,000   $ 4,500,000
Weighted average interest rate   4.90%   4.90%   5.00%
Letter of Credit            
Debt Instrument [Line Items]            
Principal amount $ 50,000,000.0          
Multicurrency Revolving Facility            
Debt Instrument [Line Items]            
Principal amount $ 500,000,000.0          
Multicurrency Revolving Facility | Term Facility            
Debt Instrument [Line Items]            
Available borrowing capacity   $ 499,800,000   $ 499,800,000    
Multicurrency Revolving Facility | Line of Credit            
Debt Instrument [Line Items]            
Borrowings under line of credit   0   0    
Multicurrency Revolving Facility | Letter of Credit | Term Facility            
Debt Instrument [Line Items]            
Borrowings under line of credit   200,000   200,000    
2011 Notes | Senior Notes            
Debt Instrument [Line Items]            
Senior notes   $ 400,000,000.0   $ 400,000,000.0    
Number of tranches in private placement | tranche       5    
2011 Notes | Minimum | Senior Notes            
Debt Instrument [Line Items]            
Debt instrument term       10 years    
2011 Notes | Maximum | Senior Notes            
Debt Instrument [Line Items]            
Debt instrument term       12 years    
Emerson Electric Co. | Term Facility            
Debt Instrument [Line Items]            
Weighted average interest rate, over time   1.50% 3.60% 2.10% 3.80%  
Emerson Electric Co. | Multicurrency Revolving Facility | Line of Credit            
Debt Instrument [Line Items]            
Weighted average interest rate, over time   1.50% 3.60% 2.10% 3.70%  
Average daily balance   $ 51,400,000 $ 127,100,000 $ 189,700,000 $ 91,300,000  
v3.20.2
DEBT AND BANK CREDIT FACILITIES (Details On The Senior Notes) (Details) - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Fixed Rate Series 2011A, Maturing 2021 | Minimum    
Debt Instrument [Line Items]    
Debt instrument interest rate (percent) 4.80%  
Fixed Rate Series 2011A, Maturing 2021 | Maximum    
Debt Instrument [Line Items]    
Debt instrument interest rate (percent) 5.00%  
Fixed Rate Series 2011A, Maturing 2023 | Minimum    
Debt Instrument [Line Items]    
Debt instrument interest rate (percent) 4.90%  
Fixed Rate Series 2011A, Maturing 2023 | Maximum    
Debt Instrument [Line Items]    
Debt instrument interest rate (percent) 5.10%  
Senior Notes    
Debt Instrument [Line Items]    
Principal $ 400.0 $ 400.0
Senior Notes | Fixed Rate Series 2011A, Maturing 2021    
Debt Instrument [Line Items]    
Principal 230.0  
Senior Notes | Fixed Rate Series 2011A, Maturing 2023    
Debt Instrument [Line Items]    
Principal $ 170.0  
v3.20.2
RETIREMENT AND POST RETIREMENT HEALTH CARE PLANS (Schedule Of Net Periodic Defined Benefit Pension Cost) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]        
Service Cost $ 0.4 $ 1.5 $ 1.5 $ 4.6
Interest Cost 2.1 2.8 6.2 8.2
Expected Return on Plan Assets (3.3) (3.2) (9.9) (9.4)
Amortization of Prior Service Cost and Net Actuarial Loss 0.1 0.5 0.4 1.6
Net Periodic Benefit Cost (Income) $ (0.7) $ 1.6 $ (1.8) $ 5.0
v3.20.2
RETIREMENT AND POST RETIREMENT HEALTH CARE PLANS (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Dec. 28, 2019
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]          
Estimated net actuarial loss to be amortized from accumulated other comprehensive loss $ 1.2   $ 1.2    
Estimated prior service cost to be amortized from accumulated other comprehensive loss (0.6)   (0.6)    
Contribution to defined benefit pension plans 1.3 $ 4.1 3.6 $ 9.0 $ 10.8
Expected total contribution to defined benefit pension plans $ 5.6   $ 5.6    
v3.20.2
LEASES (Narrative) (Details)
9 Months Ended
Sep. 26, 2020
option
Lessee, Lease, Description [Line Items]  
Number of options to renew 1
Minimum  
Lessee, Lease, Description [Line Items]  
Lessee, renewal term 1 year
Maximum  
Lessee, Lease, Description [Line Items]  
Lessee, renewal term 25 years
v3.20.2
LEASES (Lease Cost) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Leases [Abstract]        
Operating Lease Cost $ 7.5 $ 7.8 $ 22.8 $ 24.9
Finance Lease Cost:        
Amortization of ROU Assets 0.1 0.1 0.2 0.2
Interest on Lease Liabilities 0.0 0.0 0.1 0.2
Total Lease Expense $ 7.6 $ 7.9 $ 23.1 $ 25.3
v3.20.2
LEASES (Lease Maturities) (Details)
$ in Millions
Sep. 26, 2020
USD ($)
Operating Leases  
Remainder of 2020 $ 7.4
2021 25.2
2022 18.4
2023 12.2
2024 8.2
Thereafter 23.1
Total Lease Payments 94.5
Less: Interest (17.3)
Present Value of Lease Liabilities 77.2
Finance Leases  
Remainder of 2020 0.1
2021 0.5
2022 0.6
2023 0.6
2024 0.6
Thereafter 1.9
Total Lease Payments 4.3
Less: Interest (0.8)
Present Value of Lease Liabilities 3.5
Total  
Remainder of 2020 7.5
2021 25.7
2022 19.0
2023 12.8
2024 8.8
Thereafter 25.0
Total Lease Payments 98.8
Less: Interest (18.1)
Present Value of Lease Liabilities $ 80.7
v3.20.2
LEASES (Supplemental Information) (Details) - USD ($)
$ in Millions
9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Leases [Abstract]    
Operating Cash Flows Used For Operating Leases $ 21.8 $ 24.9
Operating Cash Flows Used For Finance Leases 0.1 0.2
Financing Cash Flows Used For Finance Leases 0.2 0.2
Leased Assets Obtained in Exchange for New Operating Lease Liabilities $ 21.3 $ 10.6
Weighted Average Remaining Lease Term    
Operating Leases 5 years 2 months 12 days 4 years 7 months 6 days
Finance Leases 7 years 6 months 8 years 6 months
Weighted Average Discount Rate    
Operating Leases 8.20% 8.30%
Finance Leases 5.90% 5.90%
v3.20.2
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Oct. 25, 2019
Jul. 24, 2018
Dec. 28, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Stock repurchase program, authorized amount         $ 250,000,000.0 $ 250,000,000.0 $ 3,000,000.0
Stock repurchased and retired (in shares) 0 1,282,037 315,072 2,013,782      
Shares repurchased (in dollars per share) $ 79.38 $ 73.43   $ 74.52      
Stock repurchased and retired $ 25,000,000.0 $ 94,200,000   $ 150,100,000      
Remaining shares to be repurchased (in shares) 210,000,000.0   210,000,000.0        
Compensation expense $ 2,700,000 2,600,000 $ 8,200,000 10,000,000.0      
Excess income tax benefit recognized related to share-based compensation 600,000 $ 500,000 1,700,000 $ 2,100,000      
Unrecognized compensation cost $ 20,800,000   $ 20,800,000        
Weighted average period of recognition     2 years        
Number of shares available for grant 1,800,000   1,800,000        
SARs              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Compensation expense     $ 2,200,000        
Weighted average period of recognition 2 years 8 months 12 days            
Award expiration period     10 years        
Compensation expense not yet recognized $ 6,500,000   $ 6,500,000        
Restricted Stock Awards (RSAs)              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Compensation expense     $ 900,000        
Weighted average period of recognition     7 months 6 days        
Compensation expense not yet recognized 700,000   $ 700,000        
Restricted Stock Units (RSUs)              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Compensation expense     $ 3,500,000        
Weighted average period of recognition     1 year 10 months 24 days        
Compensation expense not yet recognized 8,200,000   $ 8,200,000        
Performance Share Units (PSUs)              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Compensation expense     $ 1,600,000        
Weighted average period of recognition     2 years        
Award vesting period     3 years        
Compensation expense not yet recognized $ 5,400,000   $ 5,400,000        
Performance period     3 years        
Minimum | Performance Share Units (PSUs)              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Performance target percentage, payout     0.00%        
Maximum | Performance Share Units (PSUs)              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Performance target percentage, payout     200.00%        
Shares granted prior to fiscal 2020 | SARs              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Award vesting period     5 years        
Shares granted in fiscal 2020 | SARs              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Award vesting period     3 years        
v3.20.2
SHAREHOLDERS' EQUITY (Schedule Of Share-Based Compensation Activity) (Details) - USD ($)
$ in Millions
9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Stockholders' Equity Note [Abstract]    
Total Intrinsic Value of Share-Based Incentive Awards Exercised $ 5.7 $ 5.1
Cash Received from Stock Option Exercises 0.2 0.0
Income Tax Benefit from the Exercise of SARs 0.4 (0.1)
Total Fair Value of Share-Based Incentive Awards Vested $ 1.8 $ 5.4
v3.20.2
SHAREHOLDERS' EQUITY (Schedule Of Assumptions Used In Black-Scholes Valuation For Options and SAR's) (Details) - SARs - $ / shares
9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Per share weighted average fair value of grants (in dollars per share) $ 21.23 $ 20.84
Risk-free interest rate 1.50% 2.40%
Expected life (years) 7 years 7 years
Expected volatility 25.20% 25.00%
Expected dividend yield 1.40% 1.50%
v3.20.2
SHAREHOLDERS' EQUITY (Summary Of Share-Based Incentive Plan Grant Activity For Options and SAR's) (Details) - SARs - USD ($)
$ / shares in Units, $ in Millions
9 Months Ended 12 Months Ended
Sep. 26, 2020
Dec. 28, 2019
Shares    
Outstanding (in shares) 817,790  
Granted (in shares) 181,177  
Exercised (in shares) (299,816)  
Forfeited (in shares) (92,352)  
Expired (in shares) (3,308)  
Outstanding (in shares) 603,491 817,790
Exercisable (in shares) 197,612  
Weighted Average Exercise Price    
Outstanding, weighted average exercise price (in dollars per share) $ 73.34  
Granted, weighted average exercise price (in dollars per share) 88.25  
Exercised, weighted average exercise price (in dollars per share) 69.29  
Forfeited, weighted average exercise price (in dollars per share) 76.99  
Expired, weighted average exercise price (in dollars per share) 67.38  
Outstanding, weighted average exercise price (in dollars per share) 79.00 $ 73.34
Exercisable, weighted average exercise price (in dollars per share) $ 70.73  
Outstanding, weighted average remaining contractual term 4 years 6 months 6 years
Exercisable, weighted average remaining contractual term 4 years 6 months  
Outstanding, aggregate intrinsic value $ 5.7 $ 9.9
Exercisable, aggregate intrinsic value $ 4.4  
v3.20.2
SHAREHOLDERS' EQUITY (Summary Of RSA Award Activity) (Details) - Restricted Stock Awards (RSAs) - $ / shares
9 Months Ended 12 Months Ended
Sep. 26, 2020
Dec. 28, 2019
Shares    
Unvested (in shares) 15,571  
Granted (in shares) 16,280  
Vested (in shares) (15,148)  
Unvested (in shares) 16,703 15,571
Weighted Average Fair Value at Grant Date    
Unvested, weighted average fair value at grant date (in dollars per share) $ 80.41  
Granted, weighted average fair value at grant date (in dollars per share) 70.05  
Vested, weighted average fair value at grant date (in dollars per share) 80.29  
Unvested, weighted average fair value at grant date (in dollars per share) $ 70.42 $ 80.41
Unvested, weighted average remaining contractual term 7 months 6 days 4 months 24 days
v3.20.2
SHAREHOLDERS' EQUITY (Summary Of RSU Award Activity) (Details) - Restricted Stock Units (RSUs) - $ / shares
9 Months Ended 12 Months Ended
Sep. 26, 2020
Dec. 28, 2019
Shares    
Unvested (in shares) 175,025  
Granted (in shares) 66,815  
Vested (in shares) (49,259)  
Forfeited (in shares) (27,288)  
Unvested (in shares) 165,293 175,025
Weighted Average Fair Value at Grant Date    
Unvested, weighted average fair value at grant date (in dollars per share) $ 78.19  
Granted, weighted average fair value at grant date (in dollars per share) 85.68  
Vested, weighted average fair value at grant date (in dollars per share) 80.20  
Forfeited, weighted average fair value at grant date (in dollars per share) 78.11  
Unvested, weighted average fair value at grant date (in dollars per share) $ 80.63 $ 78.19
Unvested, weighted average remaining contractual term 1 year 10 months 24 days 1 year 10 months 24 days
v3.20.2
SHAREHOLDERS' EQUITY (Schedule Of Assumptions Used In Monte Carlo Simulation For Performance Share Units) (Details) - Performance Share Units (PSUs)
9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rate 1.40% 2.30%
Expected life (years) 3 years 3 years
Expected volatility 24.00% 25.00%
Expected dividend yield 1.40% 1.50%
v3.20.2
SHAREHOLDERS' EQUITY (Summary Of PSU Award Activity) (Details) - Performance Share Units (PSUs) - $ / shares
9 Months Ended 12 Months Ended
Sep. 26, 2020
Dec. 28, 2019
Shares    
Unvested (in shares) 90,565  
Granted (in shares) 42,677  
Vested (in shares) (7,545)  
Forfeited (in shares) (30,987)  
Unvested (in shares) 94,710 90,565
Weighted Average Fair Value at Grant Date    
Unvested, weighted average fair value at grant date (in dollars per share) $ 86.35  
Granted, weighted average fair value at grant date (in dollars per share) 99.74  
Vested, weighted average fair value at grant date (in dollars per share) 95.33  
Forfeited, weighted average fair value at grant date (in dollars per share) 86.59  
Unvested, weighted average fair value at grant date (in dollars per share) $ 91.59 $ 86.35
Unvested, weighted average remaining contractual term 2 years 1 year 10 months 24 days
v3.20.2
INCOME TAXES (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Dec. 28, 2019
Income Tax Disclosure [Abstract]          
Effective tax rate 20.50% 16.30% 21.70% 18.80%  
Unrecognized tax benefits $ 6.9   $ 6.9   $ 6.9
Accrued interest $ 2.7   $ 2.7   $ 2.3
v3.20.2
EARNINGS PER SHARE (Details) - shares
shares in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Earnings Per Share [Abstract]        
Shares excluded from the calculation of the effect of dilutive securities (in shares) 0.3 0.5 0.4 0.4
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]        
Denominator for Basic Earnings Per Share (in shares) 40.6 41.5 40.6 42.3
Effect of Dilutive Securities (in shares) 0.2 0.2 0.1 0.3
Denominator for Diluted Earnings Per Share (in shares) 40.8 41.7 40.7 42.6
v3.20.2
CONTINGENCIES (Details)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
USD ($)
Sep. 28, 2019
USD ($)
Sep. 26, 2020
USD ($)
subsidiary
Sep. 28, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]        
Number of subsidiaries involved in litigation | subsidiary     1  
Movement in Standard Product Warranty Accrual [Roll Forward]        
Beginning Balance $ 15.7 $ 16.4 $ 15.1 $ 14.8
Less: Payments (3.7) (4.3) (10.6) (9.0)
Provisions 4.4 4.4 11.9 11.1
Held for Sale 0.0 0.0 0.0 (0.4)
Ending Balance $ 16.4 $ 16.5 $ 16.4 $ 16.5
v3.20.2
DERIVATIVE FINANCIAL INSTRUMENTS (Narrative) (Details)
9 Months Ended 12 Months Ended
Sep. 26, 2020
USD ($)
derivative_instrument
Dec. 28, 2019
USD ($)
Derivative [Line Items]    
Derivative gains, net of tax $ (500,000) $ 1,300,000
Net AOCI hedging component 1,500,000  
Net current deferred losses expected to be realized in the next twelve months 4,000,000.0  
Receive-variable/pay-fixed interest rate swap    
Derivative [Line Items]    
Notional amount of instrument 88,400,000  
Foreign currency swap    
Derivative [Line Items]    
Notional amount of instrument $ 250,000,000.0  
Number of derivative instruments | derivative_instrument 2  
v3.20.2
DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Notional Amounts Of Forward Contracts) (Details)
$ in Millions
Sep. 26, 2020
USD ($)
Currency Contracts | Chinese Renminbi  
Derivative [Line Items]  
Notional Amount (in US Dollars) $ 55.6
Currency Contracts | Mexican Peso  
Derivative [Line Items]  
Notional Amount (in US Dollars) 110.8
Currency Contracts | Euro  
Derivative [Line Items]  
Notional Amount (in US Dollars) 148.6
Currency Contracts | Indian Rupee  
Derivative [Line Items]  
Notional Amount (in US Dollars) 32.2
Currency Contracts | Canadian Dollar  
Derivative [Line Items]  
Notional Amount (in US Dollars) 2.4
Currency Contracts | Australian Dollar  
Derivative [Line Items]  
Notional Amount (in US Dollars) 16.7
Currency Contracts | British Pound  
Derivative [Line Items]  
Notional Amount (in US Dollars) 17.9
Currency Contracts | Thai Baht  
Derivative [Line Items]  
Notional Amount (in US Dollars) 6.2
Commodity Contracts | Copper  
Derivative [Line Items]  
Notional Amount (in US Dollars) 38.9
Commodity Contracts | Aluminum  
Derivative [Line Items]  
Notional Amount (in US Dollars) $ 3.2
v3.20.2
DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Fair Values Of Derivative Instruments) (Details) - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Prepaid Expenses and Other Current Assets    
Derivative [Line Items]    
Derivative asset $ 16.6 $ 11.5
Prepaid Expenses and Other Current Assets | Currency Contracts    
Derivative [Line Items]    
Derivative asset 9.8 8.9
Prepaid Expenses and Other Current Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative asset 6.8 2.6
Other Noncurrent Assets    
Derivative [Line Items]    
Derivative asset 1.0 10.4
Other Noncurrent Assets | Currency Contracts    
Derivative [Line Items]    
Derivative asset 1.0 10.3
Other Noncurrent Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative asset   0.1
Current Hedging Obligations    
Derivative [Line Items]    
Derivative liability 8.0 3.4
Current Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative liability 6.8 3.1
Current Hedging Obligations | Commodity Contracts    
Derivative [Line Items]    
Derivative liability   0.3
Noncurrent Hedging Obligations    
Derivative [Line Items]    
Derivative liability 2.3 1.2
Noncurrent Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative liability 0.3 0.2
Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Interest Rate Swap Contracts    
Derivative [Line Items]    
Derivative asset 0.0 0.0
Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Currency Contracts    
Derivative [Line Items]    
Derivative asset 9.7 8.8
Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative asset 6.8 2.6
Designated as Hedging Instruments: | Other Noncurrent Assets | Interest Rate Swap Contracts    
Derivative [Line Items]    
Derivative asset 0.0 0.0
Designated as Hedging Instruments: | Other Noncurrent Assets | Currency Contracts    
Derivative [Line Items]    
Derivative asset 1.0 10.3
Designated as Hedging Instruments: | Other Noncurrent Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative asset 0.0 0.1
Designated as Hedging Instruments: | Current Hedging Obligations | Interest Rate Swap Contracts    
Derivative [Line Items]    
Derivative liability 1.2 0.0
Designated as Hedging Instruments: | Current Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative liability 6.8 3.0
Designated as Hedging Instruments: | Current Hedging Obligations | Commodity Contracts    
Derivative [Line Items]    
Derivative liability 0.0 0.2
Designated as Hedging Instruments: | Noncurrent Hedging Obligations | Interest Rate Swap Contracts    
Derivative [Line Items]    
Derivative liability 2.0 1.0
Designated as Hedging Instruments: | Noncurrent Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative liability 0.3 0.2
Designated as Hedging Instruments: | Noncurrent Hedging Obligations | Commodity Contracts    
Derivative [Line Items]    
Derivative liability 0.0 0.0
Not Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Currency Contracts    
Derivative [Line Items]    
Derivative asset 0.1 0.1
Not Designated as Hedging Instruments: | Prepaid Expenses and Other Current Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative asset   0.0
Not Designated as Hedging Instruments: | Other Noncurrent Assets | Currency Contracts    
Derivative [Line Items]    
Derivative asset 0.0 0.0
Not Designated as Hedging Instruments: | Other Noncurrent Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative asset   0.0
Not Designated as Hedging Instruments: | Current Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative liability 0.0 0.1
Not Designated as Hedging Instruments: | Current Hedging Obligations | Commodity Contracts    
Derivative [Line Items]    
Derivative liability   0.1
Not Designated as Hedging Instruments: | Noncurrent Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative liability $ 0.0 0.0
Not Designated as Hedging Instruments: | Noncurrent Hedging Obligations | Commodity Contracts    
Derivative [Line Items]    
Derivative liability   $ 0.0
v3.20.2
DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Cash Flow Hedging Instruments) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Dec. 28, 2019
Derivative [Line Items]          
Gain (Loss) Recognized in Other Comprehensive Income (Loss)     $ (0.5)   $ 1.3
Cash Flow Hedging | Designated as Hedging Instruments:          
Derivative [Line Items]          
Gain (Loss) Recognized in Other Comprehensive Income (Loss) $ 7.9 $ (6.5) (16.2) $ 5.8  
Cash Flow Hedging | Designated as Hedging Instruments: | Net sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.1 0.0 0.3  
Cash Flow Hedging | Designated as Hedging Instruments: | Cost of Sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): (5.3) 0.2 (4.5) (1.6)  
Cash Flow Hedging | Designated as Hedging Instruments: | Operating expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): (3.1) 3.2 (4.0) 3.6  
Cash Flow Hedging | Designated as Hedging Instruments: | Interest expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.2 0.7 0.8 1.9  
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards          
Derivative [Line Items]          
Gain (Loss) Recognized in Other Comprehensive Income (Loss) 5.8 (3.9) 5.1 (3.3)  
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards | Net sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards | Cost of Sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): (0.4) (1.8) (2.4) (5.4)  
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards | Operating expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Designated as Hedging Instruments: | Commodity Forwards | Interest expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards          
Derivative [Line Items]          
Gain (Loss) Recognized in Other Comprehensive Income (Loss) 2.4 (3.2) (19.9) 8.5  
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards | Net sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.1 0.0 0.3  
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards | Cost of Sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): (4.9) 2.0 (2.1) 3.8  
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards | Operating expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): (3.1) 3.2 (4.0) 3.6  
Cash Flow Hedging | Designated as Hedging Instruments: | Currency Forwards | Interest expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps          
Derivative [Line Items]          
Gain (Loss) Recognized in Other Comprehensive Income (Loss) (0.3) 0.6 (1.4) 0.6  
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps | Net sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps | Cost of Sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps | Operating expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Designated as Hedging Instruments: | Interest Rate Swaps | Interest expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.2 0.7 0.8 1.9  
Cash Flow Hedging | Not Designated as Hedging Instruments: | Commodity Forwards | Cost of Sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.1 0.0 0.1 0.1  
Cash Flow Hedging | Not Designated as Hedging Instruments: | Commodity Forwards | Operating expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0 0.0  
Cash Flow Hedging | Not Designated as Hedging Instruments: | Currency Forwards | Cost of Sales          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): 0.0 0.0 0.0  
Cash Flow Hedging | Not Designated as Hedging Instruments: | Currency Forwards | Operating expense          
Derivative [Line Items]          
Amounts Reclassified from Other Comprehensive Income (Loss): $ (2.4) $ 0.6 $ (3.7) $ 0.1  
v3.20.2
DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Derivatives Under Enforceable Master Netting Agreements) (Details) - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Prepaid Expenses and Other Current Assets    
Derivative [Line Items]    
Derivative Asset, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet $ 16.6 $ 11.5
Prepaid Expenses and Other Current Assets | Currency Contracts    
Derivative [Line Items]    
Derivative Asset, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 9.8 8.9
Derivative Asset, Derivative Contract Amounts Subject to Right of Offset (3.5) (2.5)
Derivative Asset, Derivative Contracts as Presented on a Net Basis 6.3 6.4
Prepaid Expenses and Other Current Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative Asset, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 6.8 2.6
Derivative Asset, Derivative Contract Amounts Subject to Right of Offset 0.0 (0.3)
Derivative Asset, Derivative Contracts as Presented on a Net Basis 6.8 2.3
Other Noncurrent Assets    
Derivative [Line Items]    
Derivative Asset, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 1.0 10.4
Other Noncurrent Assets | Currency Contracts    
Derivative [Line Items]    
Derivative Asset, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 1.0 10.3
Derivative Asset, Derivative Contract Amounts Subject to Right of Offset (0.1) (0.1)
Derivative Asset, Derivative Contracts as Presented on a Net Basis 0.9 10.2
Other Noncurrent Assets | Commodity Contracts    
Derivative [Line Items]    
Derivative Asset, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet   0.1
Derivative Asset, Derivative Contract Amounts Subject to Right of Offset   0.0
Derivative Asset, Derivative Contracts as Presented on a Net Basis   0.1
Current Hedging Obligations    
Derivative [Line Items]    
Derivative Liability, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 8.0 3.4
Current Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative Liability, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 6.8 3.1
Derivative Liability, Derivative Contract Amounts Subject to Right of Offset (3.5) (2.5)
Derivative Liability, Derivative Contracts as Presented on a Net Basis 3.3 0.6
Current Hedging Obligations | Commodity Contracts    
Derivative [Line Items]    
Derivative Liability, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet   0.3
Derivative Liability, Derivative Contract Amounts Subject to Right of Offset   (0.3)
Derivative Liability, Derivative Contracts as Presented on a Net Basis   0.0
Noncurrent Hedging Obligations    
Derivative [Line Items]    
Derivative Liability, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 2.3 1.2
Noncurrent Hedging Obligations | Currency Contracts    
Derivative [Line Items]    
Derivative Liability, Gross Amounts as Presented in the Condensed Consolidated Balance Sheet 0.3 0.2
Derivative Liability, Derivative Contract Amounts Subject to Right of Offset (0.1) (0.1)
Derivative Liability, Derivative Contracts as Presented on a Net Basis $ 0.2 $ 0.1
v3.20.2
FAIR VALUE (Details) - USD ($)
$ in Millions
Sep. 26, 2020
Dec. 28, 2019
Prepaid Expenses and Other Current Assets    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative asset $ 16.6 $ 11.5
Prepaid Expenses and Other Current Assets | Derivative Currency Contracts | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative asset 9.8 8.9
Prepaid Expenses and Other Current Assets | Derivative Commodity Contracts | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative asset 6.8 2.6
Other Noncurrent Assets    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative asset 1.0 10.4
Other Noncurrent Assets | Derivative Currency Contracts | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative asset 1.0 10.3
Other Noncurrent Assets | Derivative Commodity Contracts | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative asset 0.0 0.1
Other Noncurrent Assets | Assets Held in Rabbi Trust | Level 1    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative asset 6.2 6.1
Current Hedging Obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative liability 8.0 3.4
Current Hedging Obligations | Derivative Currency Contracts | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative liability 6.8 3.1
Current Hedging Obligations | Derivative Commodity Contracts | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative liability 0.0 0.3
Current Hedging Obligations | Interest Rate Swaps | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative liability 1.2 0.0
Noncurrent Hedging Obligations    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative liability 2.3 1.2
Noncurrent Hedging Obligations | Derivative Currency Contracts | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative liability 0.3 0.2
Noncurrent Hedging Obligations | Interest Rate Swaps | Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Derivative liability $ 2.0 $ 1.0
v3.20.2
RESTRUCTURING ACTIVITIES (Schedule Of Restructuring Reserve) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Restructuring Reserve [Roll Forward]        
Beginning Balance $ 2.9 $ 0.7 $ 0.9 $ 0.2
Provision 5.8 7.3 18.7 13.2
Less: Payments 7.7 8.0 18.6 13.4
Ending Balance $ 1.0 $ 0.0 $ 1.0 $ 0.0
v3.20.2
RESTRUCTURING ACTIVITIES (Reconciliation Of Expenses By Type) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 26, 2020
Sep. 28, 2019
Sep. 26, 2020
Sep. 28, 2019
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs $ 5.8 $ 7.3 $ 18.7 $ 13.2
Total restructuring and restructuring-related costs 5.8 7.3 18.7 13.2
Commercial Systems        
Restructuring Cost and Reserve [Line Items]        
Total restructuring and restructuring-related costs 0.7 2.5 4.8 4.8
Industrial Systems        
Restructuring Cost and Reserve [Line Items]        
Total restructuring and restructuring-related costs 2.3 3.1 5.2 5.5
Climate Solutions        
Restructuring Cost and Reserve [Line Items]        
Total restructuring and restructuring-related costs 0.8 0.8 3.2 1.5
Power Transmission Solutions        
Restructuring Cost and Reserve [Line Items]        
Total restructuring and restructuring-related costs 2.0 0.9 5.5 1.4
Employee Termination Expenses        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 2.0 4.9 7.9 6.8
Facility Related Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 4.1 2.4 10.8 6.4
Other Expenses        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs (0.3) 0.0 0.0 0.0
Cost of Sales        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 4.0 4.4 13.1 6.1
Cost of Sales | Employee Termination Expenses        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 1.5 2.5 4.4 2.9
Cost of Sales | Facility Related Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 2.5 1.9 8.4 3.2
Cost of Sales | Other Expenses        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 0.0 0.0 0.3 0.0
Operating Expenses        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 1.8 2.9 5.6 7.1
Operating Expenses | Employee Termination Expenses        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 0.5 2.4 3.5 3.9
Operating Expenses | Facility Related Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs 1.6 0.5 2.4 3.2
Operating Expenses | Other Expenses        
Restructuring Cost and Reserve [Line Items]        
Restructuring Costs $ (0.3) $ 0.0 $ (0.3) $ 0.0
v3.20.2
RESTRUCTURING ACTIVITIES (Narrative) (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Sep. 26, 2020
Restructuring Cost and Reserve [Line Items]    
Expected future restructuring charges   $ 8.9
Forecast    
Restructuring Cost and Reserve [Line Items]    
Expected future restructuring charges $ 25.0  
Employee Termination Expenses    
Restructuring Cost and Reserve [Line Items]    
Expected future restructuring charges   3.2
Facility and other related costs    
Restructuring Cost and Reserve [Line Items]    
Expected future restructuring charges   $ 5.7