RECEIVABLES SECURITIZATION |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RECEIVABLES SECURITIZATION | RECEIVABLES SECURITIZATION On June 30, 2025, Regal Rexnord Receivables Finance LLC, a bankruptcy remote special purpose entity formed as a wholly-owned subsidiary of the Company (“SPE”), entered into a one-year $400.0 million accounts receivable securitization facility (the “Securitization Facility”) with PNC Bank National Association, Wells Fargo Bank, N.A., and Truist Bank (the “Purchasers”). On June 29, 2026, the SPE and the Purchasers renewed the Securitization Facility for eighteen months with an increased facility capacity of $430.0 million. Under the Securitization Facility, certain US subsidiaries of the Company (the “Originators”) transfer their accounts receivable (the “Receivables”) to the SPE, who in turn sells certain of the Receivables (the “Sold Receivables”) to the Purchasers. The Originators service the Receivables on behalf of the Purchasers but have no continuing involvement with the Sold Receivables. Transfers of the Sold Receivables from the SPE to the Purchasers are accounted for as a sale of financial assets, resulting in derecognition of the Sold Receivables from the Company’s Condensed Consolidated Financial Statements. These sales are priced at the face value of the Sold Receivables less a fair market value discount, resulting in a loss on the Sold Receivables recorded in Operating Expenses in the Condensed Consolidated Statements of Income (Loss). The Sold Receivables are no longer available to satisfy creditors of any Originator in the event of bankruptcy. The SPE also retains certain Receivables as collateral to the Purchasers as a guarantee of cash collections on the Sold Receivables (the “Collateral”), which is recorded in Trade Receivables, Less Allowances in the Condensed Consolidated Balance Sheets. The Securitization Facility is structured on a revolving basis under which the Purchasers reinvest the cash collections in the Securitization Facility and purchase additional Receivables. The total outstanding balance of accounts receivable sold from the SPE to the Purchasers under the Securitization Facility and derecognized from the Condensed Consolidated Balance Sheets was $375.8 million and $372.5 million as of September 30, 2026 and December 31, 2025, respectively. Under the Securitization Facility, the Company sold accounts receivable and collected cash on receivables sold as follows:
The net cash flows are reflected in Net Cash Provided by Operating Activities in the Condensed Consolidated Statements of Cash Flows. As of September 30, 2026 and December 31, 2025, unsold accounts receivable of $71.3 million and $64.6 million, respectively, were pledged by the SPE as collateral to the Purchasers. The Company incurred charges of $4.3 million and $11.9 million associated with the Securitization Facility for the three and nine months ended September 30, 2026, respectively, which are reflected in Operating Expenses in the Condensed Consolidated Statements of Income (Loss). For the three and nine months ended September 30, 2025, such charges were $5.0 million.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||