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

                                    FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
    For the fiscal year ended:                      Commission File Number:
         January 2, 1999                                     1-7284

                    B A L D O R  E L E C T R I C  C O M P A N Y
             (Exact name of registrant as specified in its charter)

           Missouri                                        43-0168840
   (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                        Identification No.)

 5711 R. S. Boreham, Jr St, Fort Smith, Arkansas  72908       (501) 646-4711
(Address of principal executive offices)        (Zip Code)   (Telephone Number)

   Securities registered pursuant to Section 12(b) of the Act:
                                                   
                                                   Name of each exchange on
    Title of Each Class                                which registered
Common Stock, $0.10 Par Value                      New York Stock Exchange
Common Stock Purchase Rights                       New York Stock Exchange

    Securities registered pursuant to Section 12(g) of the Act:     NONE

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 and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The  aggregate  market  value of  common  stock  held by  non-affiliates  of the
registrant based on the closing price on February 27, 1999, was $ 505,116,323.

At February 27, 1999, there were 36,222,522  shares of the  registrant's  common
stock outstanding.
                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders  for the fiscal year ended January
2, 1999 (the "Annual Report to  Shareholders  for 1998"),  are  incorporated  by
reference into Part I and Part II.

Portions of the Proxy  Statement for the Annual  Meeting of  Shareholders  to be
held May 1, 1999 (the "1999 Proxy  Statement"),  are  incorporated  by reference
into Parts I and III.


<PAGE>


PART I

Item 1.    Business
Baldor Electric Company ("Baldor" or the "Company") was incorporated in Missouri
in 1920. The Company operates in one industry segment which includes the design,
manufacture,  and sale of electric  motors and  drives.  In addition to electric
motors  and  drives,  products  include  speed  reducers,  industrial  grinders,
buffers,  polishing lathes,  stampings,  castings,  and repair parts. Baldor has
made several small  acquisitions;  however,  the majority of its growth has come
internally through broadening its markets and product lines.

Products
Sales  of  industrial  electric  motors  represented  approximately  76%  of the
Company's  net sales in 1998,  1997 and 1996.  The AC motor product and controls
line  presently  ranges in size from  1/50 up to 1000  horsepower.  The DC motor
product line presently ranges from 1/50 through 700 horsepower.

The  Company  also  sells  industrial  control  products,  which  include  servo
products,  DC controls,  position controls,  and inverter and vector drives. The
Company's line of adjustable  speed controls ranges from 1/50 to 800 horsepower.
With these products,  the Company provides its customers the ability to purchase
a "Drive" which Baldor defines as an industrial motor and an electronic control,
from one manufacturer.  Sales of drives were approximately 23% of total 1998 and
1997 sales, and 22% of total 1996 sales.

Baldor's motors and drives are designed,  manufactured, and marketed for general
purpose uses ("stock  products") and for individual  customer  requirements  and
specifications   ("custom   products").    Stock   product   sales   represented
approximately 63% of sales for 1998, 1997 and 1996. Most stock product sales are
to  customers  who place  their  orders  for  immediate  shipment  from  current
inventory.  Custom  products  generally are shipped  within three weeks from the
date of order.  Because of these and other factors, the Company does not believe
that its backlog represents an accurate indication of future shipments.

Sales and Marketing
The products of the Company are  marketed  throughout  the United  States and in
more  than  60  foreign  countries.  The  company's  field  sales  organization,
comprised  of  independent  manufacturer's  representatives  and  company  sales
offices, consists of more than 51 groups, including 37 in the United States. The
remainder of the Company's  representatives  are located in various parts of the
world, including Canada, Europe, Latin America, Australia, and the Far East.

Custom products and stock products are sold to original equipment  manufacturers
("OEMs") . Stock products are also sold to independent  distributors for resale,
often  as  replacement   components  in  industrial  machinery  which  is  being
modernized or upgraded for improved performance.

No single  customer  accounted for more than 4% of sales,  therefore the Company
does not  believe  that the loss of any  single  customer  would have a material
effect on its total business.

Competition
The Company faces  substantial  competition  in the sales of its products in all
markets  served.  Some of the  Company's  competitors  are larger in size or are
divisions  of  large  diversified   companies  and  have  substantially  greater
financial  resources.  The Company  competes by providing its  customers  better
value through  product  quality and  efficiency and better  services,  including
availability,  shorter lead-times,  on-time delivery,  product  literature,  and
training.

The  Company  is not aware of any  industry-wide  statistics  from  which it can
precisely  determine  its relative  position in the  industrial  electric  motor
industry.  In the United States,  certain industry statistics are available from
the  U.S.  Department  of  Commerce  and  the  National  Electric  Manufacturers
Association.  However, these sources do not include all competitors or all sizes
of motors.  The Company believes that it is a significant  factor in the markets
it serves and that its share of the market has  increased  over the past several
years.

Manufacturing
The Company  manufactures many of the components used in its products  including
laminations,  motor hardware,  and aluminum die castings.  Manufacturing many of
its own  components  permits the Company to better  manage  cost,  quality,  and
availability.  In addition to the manufacture of components, the Company's motor
manufacturing operations include machining,  welding, winding,  assembling,  and
finishing operations.

The raw  materials  necessary  for the Company's  manufacturing  operations  are
available from several sources. These materials include steel, copper wire, gray
iron castings,  aluminum, and insulating materials,  many of which are purchased
from more than one supplier;  the Company believes that alternative  sources are
available for such materials.

Research and Engineering
The Company's design and development of electric motors and drives includes both
the development of products which extend the product lines and the  modification
of  existing   products  to  meet  new  application   requirements.   Additional
development work is done to improve  production  methods.  Costs associated with
research, new product development, and product and cost improvements are treated
as expenses when incurred and amounted to  $25,300,000  in 1998,  $22,900,000 in
1997, and $19,900,000 in 1996.

Environment
Compliance with laws relating to the discharge of materials into the environment
or  otherwise  relating  to the  protection  of the  environment  has  not had a
material effect on capital expenditures,  earnings, or the financial position of
the Company and is not expected to have such an effect.

Employees
As of January 2, 1999, the Company had 3,865 employees.

Executive Officers of the Registrant
Information  regarding executive officers is contained in Part III, Item 10, and
incorporated herein by reference.

International Operations
For each of the three fiscal years in the period ended  January 2, 1999,  export
and  international  sales revenues have increased and represented  approximately
15% of  consolidated  sales.  See also Note H on page 24 of the Annual Report to
Shareholders for 1998, incorporated by reference.

The  Company's  products  are  distributed  in more than 60  foreign  countries,
principally in Canada, Europe,  Australia,  the Far East, and Latin America. The
Company's international  operations include the Baldor Europe group of companies
which was  acquired in 1983.  Baldor  Europe has sales  offices in  Switzerland,
Germany,  Italy, and the United Kingdom.  Baldor Europe also has development and
manufacturing  operations in Germany.  In April 1997,  the Company  acquired the
UK-based  Optimised  Control Ltd to create Baldor  England.  Baldor  England has
sales offices and two development and manufacturing facilities. The Company also
owns  majority  interests in Baldor  Electric (Far East) Pte.  Ltd.,  located in
Singapore,  and Australian Baldor Pty. Limited which has locations in Sydney and
Melbourne.  The Company wholly owns Baldor de Mexico,  S.A. de C.V.,  located in
Leon, Mexico.

The Company believes that it is in a position to act on global  opportunities as
they become available. The Company also believes that there are additional risks
attendant  to  international  operations  including  currency  fluctuations  and
possible  restrictions on the movement of funds.  However,  these risks have not
had a significant adverse effect on the Company's business.



<PAGE>


Item 2.  Properties
The Company believes that its facilities, including equipment and machinery, are
in good condition,  suitable for current operations,  adequately  maintained and
insured,  and capable of sufficient  additional  production  levels. The Company
also has other  properties for possible  future  expansion.  The following table
sets forth certain information with respect to the Company's properties.

                                                                      AREA
LOCATION                PRIMARY USE                                (SQ.  FT.)
--------                -----------                                 ---------

Fort Smith, AR          AC motor production                          298,150
                        Distribution and service center              208,000
                        Administration and engineering offices        70,950
                        Aluminum die casting                          76,400
                        Drives production center                      98,500

St. Louis County, MO    Metal stamping and engineering toolroom      133,850
                        DC and miscellaneous motor production         55,600

Columbus, MS            AC motor production                          191,000

Westville, OK           AC and DC motor production                   207,900

Fort Mill, SC           DC motor, AC motor                           108,000
                        and tachometer production

Clarksville, AR         Subfractional motor, gear motor,             167,000
                        and worm-gear speed reducer production

Ozark, AR               AC motor production                           84,050

Four other              Metal stamping and motor, drives,
domestic locations      and servomotor production                     85,900

Ten foreign             Sales and distribution centers
locations               and servodrive production                     84,200
                                                                   ---------
                                                                   1,869,500
                                                                   =========

Certain  properties  listed above (430,400 sq. ft. in the aggregate) are leased,
principally pursuant to Industrial Revenue Bond agreements,  and where material,
are accounted for as capitalized  lease  obligations.  Certain lease  agreements
contain  purchase  options at varying prices and/or  renewal  options at reduced
rentals for extended additional periods.

Item 3.  Legal Proceedings
The  Company  is party  to a  number  of  legal  proceedings  incidental  to its
business, none of which is deemed to be material to its operations or business.

<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders
Not applicable.


PART II

Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Shareholder
Matters  Information under the captions  "Dividends  paid",  "Common stock price
range",  and  "Shareholders" on page 29 of the Annual Report to Shareholders for
1998 is incorporated herein by reference.

During  the  forth  quarter  of  1998,   certain  District  Managers   exercised
non-qualified stock options previously granted to them under the Baldor Electric
Company 1990 Stock Option Plan for District Managers (the DM Plan). The exercise
price paid by the District  Manager equaled the fair market value on the date of
grant.  The total amount of shares  granted under the DM Plan is less than 1% of
the outstanding shares of Baldor common stock.

None of the  transactions  were registered  under the Securities Act of 1933, as
amended (the "Act"), in reliance upon the exemption from  registration  afforded
by Section 4(2) of the Act. The Company deems this  exemption to be  appropriate
given that  there are a limited  number of  participants  in the DM Plan and all
parties are knowledgeable about the Company.

Item 6.  Selected Financial Data
Information under the caption  "Eleven-Year  Summary of Financial Data" only for
years 1994 through  1998 for net sales,  net  earnings,  net earnings per share,
dividends per share, long-term  obligations,  and total assets on page 14 of the
Annual Report to Shareholders for 1998 is incorporated herein by reference.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations 
"Management's  Discussion and Analysis of Financial Condition and
Results of Operations"  on pages 16 and 17 of the Annual Report to  Shareholders
for 1998, is incorporated herein by reference.

Item 7a.  Quantitative and Qualitative  Disclosure about Market Risk 
Information  under the caption  "Market Risk" of  "Management's  Discussion  and
Analysis of Financial  Condition  and Results of  Operations"  on page 17 of the
Annual Report to Shareholders for 1998, is incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data
The consolidated financial statements of the Company on pages 18 through 26, the
"Report  of  Ernst & Young  LLP,  Independent  Auditors,"  on page  26,  and the
"Summary  of  Quarterly  Results of  Operations  (Unaudited)"  on page 19 of the
Annual Report to Shareholders for 1998, are incorporated herein by reference.

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure 
None.

PART III

 Item 10.  Directors and Executive Officers of the Registrant
Information  contained in the 1999 Proxy Statement under the caption "Proposal 1
-- Election of Directors -- Information  Regarding the Nominees for Directors to
be  Elected  in 1999 for  Terms  Ending  in 2002"  and  under  the  caption  "--
Information  the  Directors  who are Not  Nominees  for Election and Whose Terms
Continue  Beyond  1999  or  Expire  during  1999,"  is  incorporated  herein  by
reference.

The current  executive  officers of the  Company,  each of whom is elected for a
term of one year or until his successor is elected and qualified, are:

                                                                      Served as
                                                                        Officer
Name                      Age    Position                                 Since
----                      ---    --------                                 -----
R. S. Boreham, Jr.        74     Chairman of the Board                     1961

R. L. Qualls              65     Vice Chairman                             1986

John A. McFarland         47     President                                 1990

Charles H. Cramer         54     Vice President-Personnel                  1984

Lloyd G. Davis            51     Chief Financial Officer,                  1992
                                 Executive Vice President - Finance,
                                 Secretary, and Treasurer

Gene J. Hagedorn          51     Vice President - Materials                1994

James R. Kimzey           60     Executive Vice President -                1984
                                 Research and Engineering

Randy L. Colip            39     Vice President - Sales                    1997

Jerry D. Peerbolte        42     Vice President - Marketing                1990

Randal G. Waltman         49     Vice President - Engineering              1997
                                 and Motor Operations

Ronald E. Tucker          41     Controller                                1997

John L. Peeples, III      46     Vice President-International              1998

Eddie L. Holderfield      59     Vice President-Fort Smith                 1999
                                 Motor Manufacturing


Each of the  executive  officers,  has served as an officer or in a management
capacity  with  the  Company  for the  last  five  years.  There  are no  family
relationships among the directors or executive officers.
<PAGE>

Item 11.  Executive Compensation
Information contained in the 1999 Proxy Statement under the caption "Information
About  the  Board  of  Directors  and   Committees  of  the  Board  --  Director
Compensation" and information under the caption "Executive Compensation" and all
sub-captions  thereof,  except for the  information  contained  in  sub-captions
"Report of the Executive and Stock Option Committees" and "Performance Graph" is
incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
Information   contained  under  the  caption  "Security   Ownership  of  Certain
Beneficial  Owners and  Management" of the 1999 Proxy  Statement is incorporated
herein by reference.

Item 13.  Certain Relationships and Related Transactions
Information  about Mr.  Richard  E.  Jaudes  under the  caption  "Proposal  1 --
Election of Directors -- Information  Regarding the Nominees for Directors to be
Elected in 1999 for Terms Ending in 2002" and  information  about Mr.  Robert L.
Proost under the caption "--  Information the Directors who are Not Nominees for
Election  and  Whose  Terms  Continue  Beyond  1999 or Expire  during  1999," is
incorporated herein by reference.
<PAGE>

PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) (1) and (2) - The  response  to this  portion of Item 14 is  submitted  as a
separate section of this Report at page 13 hereof.

    (3)   Listing of Exhibits

          Exhibit 3(i) - The Restated  Articles of Incorporation  (as amended)
          of  Baldor  Electric  Company,  incorporated  herein by  reference  as
          Exhibit 3(i) to Form 10-Q for the quarter ended July 4, 1998.

          Exhibit  3(ii) - Bylaws  of Baldor  Electric  Company  (as  amended)
          incorporated herein by reference as Exhibit 3(ii) to Form 10-Q for the
          quarter ended October 3, 1998.

          Exhibit 4(i)(a) - Rights Agreement dated May 6, 1988, between Baldor
          Electric Company and Wachovia Bank of North Carolina,  N.A.  (formerly
          Wachovia Bank & Trust Company, N.A.), as Rights Agent originally filed
          as Exhibit 1 to Registrant's  Form 8-K Current  Report,  dated May 13,
          1988,  and  refiled  as  Exhibit  4(i) to Form 10-K for the year ended
          December 31, 1994.

          Exhibit  4(i)(b)  -  Amendment  Number 1 to the  Shareholders'  Rights
          Agreement  dated  February 5, 1996 filed as Exhibit 2 to  Registrant's
          Form 8-A/A dated March 21, 1996.

          Exhibit  4(iii) - The  Registrant  agrees to furnish to the Securities
          and Exchange  Commission upon request pursuant to Item  601(b)(4)(iii)
          of  Regulation  S-K copies of  instruments  defining the rights of the
          holders  of  long-term  debt of the  Registrant  and its  consolidated
          affiliates.

          Exhibit  (10) -  Exhibits  10(iii)(A)(1)  through  10(iii)(A)(6)  were
          previously  submitted  as  exhibits  and are  incorporated  herein  by
          reference:

          o    10(iii)(A)(1)  1982 Incentive Stock Option Plan (originally filed
               as Exhibit  10.8 to Form 10-K for year ended  December  31, 1981,
               filed as Exhibit 10.1 to Form10-K for the year ended December 28,
               1991).

          o    10(iii)(A)(2)  Officers  Compensation  Plan (originally  filed as
               Exhibit 10.6 to Form 10-K for year ended  December 31, 1988,  and
               filed as  Exhibit  10(iii)(A)(2)  to Form 10-K for the year ended
               December 31, 1994).

          o    10(iii)(A)(3)  1987  Incentive  Stock Plan  (originally  filed as
               Appendix A to  Registrant's  Proxy Statement dated April 3, 1987,
               and  refiled as Exhibit  10(iii)(A)(3)  to Form 10-K for the year
               ended December 31, 1994.
<PAGE>

          o    10(iii)(A)(4)  1989 Stock Option Plan for Non-Employee  Directors
               (as amended) incorporated herein by reference to Exhibit 10 (iii)
               A.2 to Form 10-Q for quarter ended July 4,1998.

          o    10(iii)(A)(5)  1994  Incentive  Stock  Option  Plan as  (amended)
               incorporated  herein by reference as Exhibit  10(iii)A.1  to Form
               10-Q for the quarter ended July 4, 1998.

          o    10(iii)(A)(6)  1996 Stock Option Plan for Non-Employee  Directors
               (as  amended)  incorporated  herein  by  reference  as  Exhibit A
               (iii)A.3 to Form 10-Q for the quarter ended July 4, 1998).

          For a listing of all management  contracts and  compensatory  plans or
          arrangements  required to be filed as exhibits to this Form 10-K,  see
          the exhibits listed above under Exhibit 10.

          Exhibit  (11) -  Incorporated  by  reference  in Note J of the  Annual
          Report to Shareholders for 1998 filed as Exhibit (13).

          Exhibit (13) - Portions of the Annual Report to Shareholders for 1998.
               The Annual  Report is being  filed as an  exhibit  solely for the
               purpose of incorporating certain provisions thereof by reference.
               Portions of the Annual Report not  specifically  incorporated are
               not deemed  "filed" for the purposes of the  Securities  Exchange
               Act of 1934, as amended.

         Exhibit (21) - Affiliates of the Registrant filed herewith.

         Exhibit (23) - Consent of Independent Auditors filed herewith.

         Exhibit (24) - Powers of Attorney.  Included on signature pages 11 and
          12.

    (b)  Reports on Form 8-K
         No reports on Form 8-K have been filed  during the last  quarter of the
         period covered by this Report.

    (c)  Exhibits
         See Exhibit Index at page 16 of this Report.

    (d)  Financial Statement Schedules
         The  response  to this  portion of Item 14 is  submitted  as a separate
         section of this Report at page 14 hereof.


<PAGE>


                                SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) 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.


                                   BALDOR ELECTRIC COMPANY
                                        (Registrant)



                                     By   /s/ R. S. Boreham, Jr.
                                     ---------------------------
                                            Chairman
                                     (Principal Executive Officer)





Date:  March 26, 1999



                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears below
constitutes  and  appoints  R. S.  Boreham,  Jr.,  R.  L.  Qualls,  and  John A.
McFarland,  and each of them, his true and lawful  attorneys-in-fact and agents,
with full power of  substitution  and  resubstitution,  for him and in his name,
place and stead, in any and all capacities,  to sign this Report and any and all
amendments to this Report, and to file the same, with all exhibits thereto,  and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents  full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the  premises,  as fully to all intents and  purposes as
they might or could do in person,  hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.


<PAGE>


Signature                      Title                                Date
---------                      -----                                ----

/s/ R. S. Boreham, Jr.         Chairman and Director            March 26, 1999
----------------------
R. S. Boreham, Jr.             (Principal Executive Officer)

/s/ R. L. Qualls               Vice Chairman and Director       March 26, 1999
----------------
R. L. Qualls

/s/ John A. McFarland          President and Director           March 26, 1999
---------------------
John A. McFarland

/s/ Lloyd G. Davis             Chief Financial Officer,         March 26, 1999
------------------
Lloyd G. Davis                 Executive Vice President -
                               Finance, Secretary, and
                               Treasurer (Principal Financial
                               and Accounting Officer)

/s/ Jefferson W. Asher, Jr.    Director                         March 26, 1999
---------------------------
Jefferson W. Asher, Jr.

/s/ Fred C. Ballman            Director                         March 26, 1999
-------------------
Fred C. Ballman

/s/ O. A. Baumann              Director                         March 26, 1999
O. A. Baumann

/s/ Robert J. Messey           Director                         March 26, 1999
--------------------
Robert J. Messey

/s/ Robert L. Proost           Director                         March 26, 1999
--------------------
Robert L. Proost
/s/ Willis J. Wheat            Director                         March 26, 1999
-------------------
Willis J. Wheat

<PAGE>





                           ANNUAL REPORT ON FORM 10-K

                       ITEM 14(a)(1) and (2), (c) and (d)

                          LIST OF FINANCIAL STATEMENTS

                          FINANCIAL STATEMENT SCHEDULE

                                CERTAIN EXHIBITS

                           YEAR ENDED JANUARY 2, 1999

                             BALDOR ELECTRIC COMPANY

                              FORT SMITH, ARKANSAS










<PAGE>


                        FORM 10-K, ITEM 14(a)(1) and (2)
          LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
                     BALDOR ELECTRIC COMPANY AND AFFILIATES




The following  consolidated  financial statements of Baldor Electric Company and
Affiliates,  included  in the  Annual  Report  to  Shareholders  for  1998,  are
incorporated by reference in Item 8:

        o   Consolidated Balance Sheets
                  - January 2, 1999 and January 3, 1998

        o   Consolidated Statements of Earnings
                  - for the three years in the period ended January 2, 1999

        o   Consolidated Statements of Cash Flows
                  - for the three years in the period ended January 2, 1999

        o   Consolidated Statements of Shareholders' Equity
                  - for the three years in the period ended January 2, 1999

        o   Notes to Consolidated Financial Statements


The  following  consolidated  financial  statement  schedule of Baldor  Electric
Company and Affiliates is included in Item 14(d):


        o   Schedule II                   Valuation and Qualifying Accounts


All other  schedules for which  provision is made in the  applicable  accounting
regulation of the Securities and Exchange  Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.


<PAGE>


                     BALDOR ELECTRIC COMPANY AND AFFILIATES

                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS

Column A       Column B               Column C           Column D    Column E
--------       --------               --------           --------    --------

                                     Additions   
                            ---------------------------            
                             Charged to    Charged to
               Balance at      Costs        Other                      Balance
               Beginning        and        Accounts      Additions   at End of
Description    of Period      Expenses     Describe      Describe      Period
-----------    ---------      --------     --------      --------      ------
                                 (In thousands)

Deducted from current assets:
    Allowance for doubtful accounts

  1998           $3,525       $ 511         $206(A)       $520(C)      $4,350
  1997            3,200         509          184(A)                     3,525
  1996            2,800         695          295(A)                     3,200


Included in current liabilities:
    Anticipated warranty costs

  1998           $5,200       $ 725(B)                                 $5,925
  1997            4,500         700(B)                                  5,200
  1996            4,100         400(B)                                  4,500


(A) Net uncollectible accounts written off during year.

(B)  Additions  to reserve  for  anticipated  warranty  costs,  net of  expenses
incurred.

(C) Additions to reserve for acquisition, net of expenses incurred.





<PAGE>



                     BALDOR ELECTRIC COMPANY AND AFFILIATES

                                INDEX OF EXHIBITS



  EXHIBIT   
  NUMBER                 DESCRIPTION
  ----------             ---------------------


      11         Computation of Earnings Per Common Share - Incorporated by 
                 reference  in Note J of the Annual Report to Shareholders 
                 for 1998 in Exhibit (13)

      13         Portions of the Annual Report to Shareholders for 1998-
                 filed herewith

      21         Affiliates of the Registrant - filed herewith

      23         Consent of Independent Auditors - filed herewith

      24         Powers of Attorney - Included on signature pages 11 and 12

      27         Financial Data Schedules - filed herewith


<PAGE>