##### Table of Contents

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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 January 3, 2004



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from
 to



Commission File Number 01-07284



Baldor Electric Company

Exact name
of registrant as specified in its charter



|                                                             |  |                                
|------------------------------------------------------------ |  | -------------------------------
|Missouri                                                     |  | 43-0168840                     
|State or other jurisdiction of incorporation or organization |  | IRS Employer Identification No.
|                                                             | 
|5711 R. S. Boreham, Jr., St, Fort Smith, Arkansas            |  | 72901                          
|Address of principal executive offices                       |  | Zip Code                       



Registrants
telephone number, including area code 479-646-4711



Securities registered pursuant to section 12(b) of the Act:



|                              |  |                                          
|----------------------------- |  | -----------------------------------------
|Title of Class                |  | Name of each exchange on 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. ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ̈



The aggregate market value of voting stock held by non-affiliates of the registrant based on the closing price on June 28, 2003, was $558,079,703.



At March 10, 2004, there were 32,924,728 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 3, 2004 (the
2003 Annual Report to Shareholders), are incorporated by reference into Part II and Part III.



Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held April 24, 2004 (the 2004 Proxy Statement), are incorporated by reference into Part III.



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##### Table of Contents

TABLE OF CONTENTS



|                  |  |    |  |                                                                                                |  |     
|----------------- |  | -- |  | ---------------------------------------------------------------------------------------------- |  | ----
|                  |  |    |  |                                                                                                |  | Page
|PART I            |  |   
|                  |  |    | 
|Item 1            |  |   |  | Business                                                                                       |  | 3   
|                  |  |    | 
|                  |  |    |  | Products                                                                                       |  | 3   
|                  |  |    |  | Sales and marketing                                                                            |  | 3   
|                  |  |    |  | Competition                                                                                    |  | 4   
|                  |  |    |  | Manufacturing                                                                                  |  | 4   
|                  |  |    |  | Research and engineering                                                                       |  | 4   
|                  |  |    |  | Environment                                                                                    |  | 4   
|                  |  |    |  | Employees                                                                                      |  | 4   
|                  |  |    |  | Executive officers of the registrant                                                           |  | 5   
|                  |  |    |  | International operations                                                                       |  | 5   
|                  |  |    |  | Access to filings on Company website                                                           |  | 5   
|                  |  |    | 
|Item 2            |  |   |  | Properties                                                                                     |  | 6   
|Item 3            |  |   |  | Legal Proceedings                                                                              |  | 6   
|Item 4            |  |   |  | Submission of Matters to a Vote of Security Holders                                            |  | 6   
|                  | 
|PART II           |  |   
|                  |  |    | 
|Item 5            |  |   |  | Market for the Registrants Common Equity and Related Stockholder Matters                      |  | 7   
|Item 6            |  |   |  | Selected Financial Data                                                                        |  | 7   
|Item 7            |  |   |  | Managements Discussion and Analysis of Financial Condition and Results of Operation           |  | 7   
|Item 7A           |  |   |  | Quantitative and Qualitative Disclosures about Market Risk                                     |  | 7   
|Item 8            |  |   |  | Financial Statements and Supplementary Data                                                    |  | 7   
|Item 9            |  |   |  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure           |  | 7   
|Item 9A           |  |   |  | Controls and Procedures                                                                        |  | 8   
|                  | 
|PART III          |  |   
|                  |  |    | 
|Item 10           |  |   |  | Directors and Executive Officers of the Registrant                                             |  | 8   
|Item 11           |  |   |  | Executive Compensation                                                                         |  | 9   
|Item 12           |  |   |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  | 9   
|Item 13           |  |   |  | Certain Relationships and Related Transactions                                                 |  | 9   
|Item 14           |  |   |  | Principal Accountant Fees and Services                                                         |  | 9   
|                  | 
|PART IV           |  |   
|                  |  |    | 
|Item 15           |  |   |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                               |  | 10  
|                  | 
|SIGNATURES        |  | 11
|                  | 
|POWER OF ATTORNEY |  | 11
|                  | 
|SCHEDULE II       |  | 13
|                  | 
|INDEX OF EXHIBITS |  | 14





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##### Table of Contents

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, drives, generators and related products. Baldor has made several small acquisitions; however, the majority of its growth has come internally through broadening its markets and product lines.



Products



The AC motor product line presently
ranges in size from 1/50 up to 1500 horsepower. The DC motor product line presently ranges from 1/50 through 800 horsepower. The adjustable speed controls product line ranges from 1/50 to 900 horsepower. The Companys industrial control
products include servo products, DC controls, position controls, and inverter and vector drives. With these products, the Company provides its customers the ability to purchase a drive from one manufacturer. Baldor defines a
drive as an industrial motor and an electronic control. The Companys power generator line ranges from 1.3 kilowatts to 2000 kilowatts. Sales of industrial electric motors represented approximately 78% of the Companys business
in 2003, 79% in 2002, and 81% in 2001. Almost all of the remaining sales were of power generators, drives, speed reducers, industrial grinders, buffers, polishing lathes, stampings, castings, and repair parts.



Baldors industrial motors and drives are designed, manufactured, and marketed for
general purpose uses (stock products) and to individual customer requirements and specifications (custom products). Stock products represented approximately 62% of total product sales in 2003 and 65% in each of 2002 and 2001.
Most stock product sales are to customers who place their orders for immediate shipment from current inventory. Custom products generally are shipped within two 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 personnel, consists of more than 70
locations, including 39 in North America. The remainder of the Companys representatives are located in various parts of the world including 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 that is being modernized or upgraded for improved performance.



No single customer accounted for more than 5% of sales; therefore, the Company does not
believe that the loss of any single customer would have a material effect on its total business.



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##### Table of Contents

Competition



The Company faces substantial
competition in the sale 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 product availability, shorter lead-times, on-time delivery, local support, 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 Electrical 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, stamped steel parts, and aluminum die castings. Manufacturing many of its own components permits the Company to better manage cost, quality, and availability. In addition to the
manufacturing 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, insulating materials, and diesel engines. Many of these materials 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, drives and generators include 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 approximately $21,932,000 in 2003, $22,484,000 in 2002, and
$24,415,000 in 2001.



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 February 28, 2004, the Company
had 3,696 employees.



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##### Table of Contents

Executive Officers of the Registrant



Information
regarding executive officers is contained in Part III, Item 10, and incorporated herein by reference.



International Operations



Sales from
international operations (foreign affiliates and exports) were approximately 15% of total sales in 2003, 14% of total sales in each of the years 2002 and 2001. See also Note I on page 28 of the 2003 Annual Report to Shareholders.



The Companys products are distributed in more than 60 foreign countries, principally in
Canada, Mexico, Europe, Australia, the Far East, and Latin America. Baldors wholly-owned affiliate, UK-based Optimised Control Ltd., has sales offices and a development and manufacturing facility in the UK. Baldor and its affiliates in Europe
have sales offices in Germany and Switzerland. The Company owns majority interests in Australian Baldor Pty. Limited which has locations in Sydney and Melbourne. The Company wholly owns Baldor Electric (Far East) Pte. Ltd. located in Singapore and
Baldor Japan Corporation located in Yokohama, Japan, and has sales offices in Taiwan and the Philippines. The Company also 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 effect on
the Companys business.



Access to Filings on Company Website



The Company
makes available its Forms 10-K, 10-Q, 8-K, and amendments thereto on its corporate website when filed with the SEC. These filings, along with the Companys Annual Reports to Shareholders and Proxy Statements, may be viewed online free of charge
by accessing the Companys website at www.baldor.com and selecting the Investor Relations section.



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##### Table of Contents

|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 following table contains information with respect to the Companys properties.



|                              |  |                                                                                  |  |               
|----------------------------- |  | -------------------------------------------------------------------------------- |  | --------------
|LOCATION                      |  | PRIMARY USE                                                                      |  | AREA (SQ. FT.)
|Fort Smith, AR                |  | AC motor production                                                              |  | 384,969       
|                              |  |                                                                                 
|                              |  | Distribution and service center                                                  |  | 208,000       
|                              |  |                                                                                 
|                              |  | Administration and engineering offices                                           |  | 79,675        
|                              |  |                                                                                 
|                              |  | Aluminum die casting                                                             |  | 79,330        
|                              |  |                                                                                 
|                              |  | Drives production center                                                         |  | 162,000       
|                              |  |                                                                                 
|St. Louis, MO                 |  | Metal stamping and engineering toolroom                                          |  | 187,385       
|                              |  |                                                                                 
|Columbus, MS                  |  | AC motor production                                                              |  | 156,000       
|                              |  |                                                                                 
|Westville, OK                 |  | AC and DC motor production                                                       |  | 207,250       
|                              |  |                                                                                 
|Fort Mill, SC                 |  | DC motor, AC motor, and tachometer production                                    |  | 108,000       
|                              |  |                                                                                 
|Clarksville, AR               |  | Subfractional motor, gear motor, DC motor and worm-gear speed reducer production |  | *165,735      
|                              |  |                                                                                 
|Ozark, AR                     |  | AC motor production                                                              |  | 151,783       
|                              |  |                                                                                 
|Five other domestic locations |  | Metal stamping and motor, drives, and generator production                       |  | 278,798       
|                              |  |                                                                                 
|Ten foreign locations         |  | Sales and distribution centers and electronic controls production                |  | 99,200        
|                              |  |                                                                                  |  |               
|                              |  |                                                                                  |  | 2,268,125     



|* | This property is leased pursuant to an Industrial Revenue Bond agreement.
|- | -------------------------------------------------------------------------



The Company also has approximately 350,000 sq. ft. of space available for expansion, currently fully leased to outside firms.



|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.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------



Not applicable.



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##### Table of Contents

PART II



|Item 5. | Market for the Registrants Common Equity and Related Stockholder Matters
|------- | -------------------------------------------------------------------------



Information under the captions Ticker, Dividends Paid, Common stock price range, and
Shareholders, on page 33 of the 2003 Annual Report to Shareholders, is incorporated herein by reference.



During the fourth quarter of 2003, 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 Managers equaled the fair market value on the date of the grant. The total amount of shares granted under the DM Plan is approximately 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 concerning net sales, net earnings, net earnings per share, dividends per share, long-term obligations, and total assets for the years ended 1993 through 2003
is contained under the caption Eleven-Year Summary of Financial Data on page 16 of the 2003 Annual Report to Shareholders and is incorporated herein by reference.



|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operation
|------- | ------------------------------------------------------------------------------------



Information under the caption Managements Discussion and Analysis of Financial Condition and Results of Operations on
pages 18 through 20 of the 2003 Annual Report to Shareholders is incorporated herein by reference.



|Item 7A. | Quantitative and Qualitative Disclosures about Market Risk
|-------- | ----------------------------------------------------------



Information under the sub-caption Market Risk of the caption Managements Discussion and Analysis of Financial Condition and Results of
Operations on page 19 of the 2003 Annual Report to Shareholders is incorporated herein by reference.



|Item 8. | Financial Statements and Supplementary Data
|------- | -------------------------------------------



The consolidated financial statements of the Company and related notes on pages 21 through 30, the Report of Ernst & Young LLP, Independent Auditors and
Report of Management on Responsibility for Financial Reporting on page 31, and the Summary of Quarterly Results of Operations (unaudited) on page 22 of the 2003 Annual Report to Shareholders are incorporated herein by
reference.



|Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------



Not Applicable.



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##### Table of Contents

|Item 9A. | Controls and Procedures
|-------- | -----------------------



The Company has established and maintains disclosure controls and procedures to ensure that information required to be disclosed is gathered, analyzed and disclosed in
its reports filed pursuant to the Securities and Exchange Act of 1934. The Companys principal executive officer and principal financial officer have concluded, based on their evaluation as of the end of the period covered by this report under
the supervision and with participation of the Companys management, that the Companys disclosure controls and procedures are effective. In addition, there have been no significant changes in the Companys internal controls or in
other factors that could significantly affect these controls subsequent to the date of their evaluation.



PART III



|Item 10. | Directors and Executive Officers of the Registrant
|-------- | --------------------------------------------------



Information contained in the 2004 Proxy Statement under the captions Proposal 1 - Election of Directors, Code of Ethics, Statement of Audit
Committee Member Independence and Financial Expertise, and Section 16(a) Beneficial Ownership Reporting Compliance 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:



|                       |  |     |  |                                             |  |                        
|---------------------- |  | --- |  | ------------------------------------------- |  | -----------------------
|Name                   |  | Age |  | Position                                    |  | Served as Officer Since
|Roland S. Boreham, Jr. |  | 79  |  | Chairman                                    |  | 1961                   
|                       |  |     | 
|John A. McFarland      |  | 52  |  | President and Chief Executive Officer       |  | 1990                   
|                       |  |     | 
|Ronald E. Tucker       |  | 46  |  | Chief Financial Officer and Secretary       |  | 1997                   
|                       |  |     | 
|Randall P. Breaux      |  | 41  |  | Vice President  Marketing                  |  | 2001                   
|                       |  |     | 
|Roger V. Bullock       |  | 54  |  | Vice President  Drives                     |  | 2002                   
|                       |  |     | 
|Randy L. Colip         |  | 45  |  | Vice President  Sales                      |  | 1997                   
|                       |  |     | 
|Charles H. Cramer      |  | 59  |  | Vice President  Human Resources            |  | 1984                   
|                       |  |     | 
|Gene J. Hagedorn       |  | 57  |  | Vice President  Materials                  |  | 1994                   
|                       |  |     | 
|Jeffrey R. Hubert      |  | 50  |  | Vice President  Sales                      |  | 2002                   
|                       |  |     | 
|Terry B. King          |  | 43  |  | Vice President  Linear Motors & Generators |  | 2003                   
|                       |  |     | 
|Tracy L. Long          |  | 38  |  | Treasurer and Assistant Secretary           |  | 2003                   
|                       |  |     | 
|Randal G. Waltman      |  | 54  |  | Vice President  Operations                 |  | 1997                   



Each of the executive officers has
served as an officer or in a management capacity with the Company for the last five years except for Jeffrey R. Hubert. Mr. Hubert joined Baldor in July 2001 as the Companys Director of Business Development. Prior to joining Baldor, Mr. Hubert
spent 15 years in the motor business in various areas of sales, marketing, customer service, and application engineering. There are no family relationships among the directors or executive officers.



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##### Table of Contents

|Item 11. | Executive Compensation
|-------- | ----------------------



Information contained in the 2004 Proxy Statement under the caption Executive Compensation, except for the information contained in the sub-captions
Board Report on Executive Compensation and Performance Graph, is incorporated herein by reference. Information contained in the 2004 Proxy Statement under the caption Proposal 1  Election of Directors
paragraph headed Director Compensation is also incorporated herein by reference.



|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------



The security ownership by officers, directors, and beneficial owners of more than five percent of the Companys Common Stock included
under the caption Security Ownership of Certain Beneficial Owners and Management of the 2004 Proxy Statement is incorporated herein by reference.



Information about equity compensation plans not approved by security holders contained in the 2003 Annual Report to Shareholders under the caption Note K Stock
Plans is incorporated herein by reference. The following table contains information regarding the number of shares of common stock that may be issued pursuant to the Companys equity compensation plans as of January 3, 2004.



Equity Compensation Plan Information



|                                                           |  |                                                                                                  |  |                                                                                   |       |                                                                                                                                                 |          
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------- | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ---------
|Plan Category                                              |  | (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights |  | (b) Weighted- average exercise price of outstanding options, warrants, and
rights |       | (c) Number of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column (a))
|Equity Compensation plans approved by security holders     |  | 2,393,892                                                                                        |  | $                                                                                 | 17.85 |                                                                                                                                                 | 1,343,407
|Equity compensation plans not approved by security holders |  | 97,295                                                                                           |  | $                                                                                 | 21.44 |                                                                                                                                                 | 122,941  
|                                                           |  |                                                                                                  |  |                                                                                   |       |                                                                                                                                                 |          
|Total                                                      |  | 2,491,187                                                                                        |  | $                                                                                 | 17.99 |                                                                                                                                                 | 1,466,348



|Item 13. | Certain Relationships and Related Transactions
|-------- | ----------------------------------------------



Richard E. Jaudes, a member of the Board of Directors of the Company, is also a partner at Thompson Coburn LLP, a law firm that provides legal counsel to the Company. R.
L. Qualls, also a member of the Board of Directors of the Company, provided management consulting services for Baldor during fiscal year 2003 for which he was paid $48,000. These consulting services were provided on as as-needed basis and there was
no formal arrangement between Dr. Qualls and Baldor as to the terms of the consulting services.



|Item 14. | Principal Accountant Fees and Services
|-------- | --------------------------------------



Information contained in the 2004 Proxy Statement under the caption Independent Auditors is incorporated herein by reference.



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##### Table of Contents

PART IV



|Item 15. | Exhibits, Financial Statement Schedules, and Reports on Form 8-K
|-------- | ----------------------------------------------------------------



|(a) (1) | The following consolidated financial statements of Baldor Electric Company and its affiliates, included in the 2003 Annual Report to Shareholders, are incorporated by reference in
Item 8 of this Report:
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Consolidated Balance Sheets - January 3, 2004 and December 28, 2002
| | - | -------------------------------------------------------------------



| |  | Consolidated Statements of Earnings - for each of the three years in the period ended January 3, 2004
| | - | -----------------------------------------------------------------------------------------------------



| |  | Consolidated Statements of Cash Flows - for each of the three years in the period ended January 3, 2004
| | - | -------------------------------------------------------------------------------------------------------



| |  | Consolidated Statements of Shareholders Equity - for each of the three years in the period ended January 3, 2004
| | - | -----------------------------------------------------------------------------------------------------------------



| |  | Notes to Consolidated Financial Statements
| | - | ------------------------------------------



| | (2) | The following consolidated financial statement schedule of Baldor Electric Company and its affiliates is included in Item 14(d) of this Report:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  | Schedule II Valuation and Qualifying Accounts
| | - | ---------------------------------------------



All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable.



| | (3) | See Exhibit Index at page 14 of this Report.
| | --- | --------------------------------------------



|(b) | Reports on Form 8-K
|--- | -------------------



None



|(c) | Exhibits
|--- | --------



See Exhibit Index at page 14 of this Report.



|(d) | Financial Statement Schedules
|--- | -----------------------------



The response to this portion of Item 15 is submitted as a separate section of this Report at page 13 hereof.



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##### Table of Contents

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/    JOHN A. MCFARLANDJohn A. McFarland President and Chief Executive Officer (Principal Executive Officer)




Date: March 18, 2004



POWER OF ATTORNEY



KNOW ALL MEN BY THESE PRESENTS,
that each person whose signature appears below constitutes and appoints R. S. Boreham, Jr. 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.



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##### Table of Contents

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.



SIGNATURE PAGE FOR FORM 10-K FOR YEAR ENDED JANUARY 3, 2004.



|                                                        |  |                                                                                                    |  |               
|------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------- |  | --------------
|Signature                                               |  | Title                                                                                              |  | Date          
|                                                        |  |                                                                                                   
|/s/    R. S. BOREHAM, JR.R. S. Boreham, Jr.             |  | Chairman and Director                                                                              |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    JOHN A.
MCFARLANDJohn A.
McFarland               |  | President, Chief Executive Officer, and Director (Principal Executive Officer)                     |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    RONALD E.
TUCKERRonald E.
Tucker                 |  | Chief Financial Officer and Secretary (Principal Financial Officer) (Principal Accounting Officer) |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    JEFFERSON W. ASHER,
JR.Jefferson W. Asher,
Jr.   |  | Director                                                                                           |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    MERLIN J. AUGUSTINE,
JR.Merlin J. Augustine,
Jr. |  | Director                                                                                           |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    RICHARD E.
JAUDESRichard E.
Jaudes               |  | Director                                                                                           |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    ROBERT J.
MESSEYRobert J.
Messey                 |  | Director                                                                                           |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    ROBERT L.
PROOSTRobert L.
Proost                 |  | Director                                                                                           |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    R. L. QUALLSR. L. Qualls                         |  | Director                                                                                           |  | March 18, 2004
|                                                        |  |                                                                                                   
|/s/    BARRY K.
ROGSTADBarry K.
Rogstad                 |  | Director                                                                                           |  | March 18, 2004



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##### Table of Contents

BALDOR ELECTRIC COMPANY AND AFFILIATES



SCHEDULE II



VALUATION AND
QUALIFYING ACCOUNTS



(In thousands)



|                                |  |                                |       |                           |   |            |  |  |                          |   |       |     |  |   |      
|------------------------------- |  | ------------------------------ | ----- | ------------------------- | - | ---------- |  |  | ------------------------ | - | ----- | --- |  | - | -----
|Column A                        |  | Column B                       |       | Column C                  |   | Column D   |  |  | Column E                
|Description                     |  | Balance at Beginning of Period |       | Additions                 |   | Deductions |  |  | Balance at End of Period
|                                |  | Charged to Costs and Expenses  |       | Charged to Other Accounts |   |           
|                                |  |                                |       |                           |  
|Deducted from current assets:   |  |                                |       |                           |   |            |  |  |                          |   |       |     |  |   |      
|Allowance for doubtful accounts |  |                                |       |                           |   |            |  |  |                          |   |       |     |  |   |      
|2003                            |  | $                              | 4,031 |                           | $ | 450        |  |  |                          | $ | 611   | (A) |  | $ | 3,870
|2002                            |  | $                              | 4,600 |                           | $ | 1,386      |  |  |                          | $ | 1,955 | (A) |  | $ | 4,031
|2001                            |  | $                              | 4,600 |                           | $ | 1,043      |  |  |                          | $ | 1,043 | (A) |  | $ | 4,600

---

|(A) | Uncollectible accounts written off (net of recoveries) during year.
|--- | -------------------------------------------------------------------



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##### Table of Contents

BALDOR ELECTRIC COMPANY AND AFFILIATES



INDEX OF EXHIBITS



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                  
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                      
|            | 
|3(i) *      |  | Articles of Incorporation (as restated and amended) of Baldor Electric Company, effective May 2, 1998, filed as Exhibit 3(i) to the Registrants Current Report on Form 10-Q for the
quarter ended July 4, 1998.                                                                                                                                                                                 
|            | 
|3(ii) *     |  | Bylaws of Baldor Electric Company (as restated and amended), dated August 2, 1999, filed as Exhibit 3(ii) to the Registrants Quarterly Report on Form 10-Q for the quarter ended October
2, 1999.                                                                                                                                                                                               
|            | 
|4(i) *      |  | Rights Agreement, dated May 6, 1998, 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 the Registrants Current Report on Form 8-K dated May 13, 1988, and refiled as Exhibit 4(i) to the Registrants Annual Report on Form 10-K for the year ended December 31, 1994.
|            | 
|4(ii) *     |  | Amendment Number 1 to the Rights Agreement, dated February 5, 1996, filed as Exhibit 2 to the Registrants Registration Statement on Form 8-A/A dated March 21, 1996.                                                                                                                                                                                                                            
|            | 
|4(iii) *    |  | Amendment Number 2 to the Rights Agreement, dated June 1, 1999, filed as Exhibit 4(i)(c) to the Registrants Quarterly Report on Form 10-Q for the quarter ended July 3,
1999.                                                                                                                                                                                                                   
|            | 
|10(ii) *   |  | Officers Compensation Plan, originally filed as Exhibit 10.6 to the Registrants Annual Report on Form 10-K for year ended December 31, 1988, and refiled as Exhibit 10(iii)(A)(2) to the
Registrants Annual Report on Form 10-K for the year ended December 31, 1994.                                                                                                                          
|            | 
|10(iii) *  |  | 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 the Registrants Annual Report
on Form 10-K for the year ended December 31, 1994.                                                                                                                                                         
|            | 
|10(iv) *   |  | 1989 Stock Option Plan for Non-Employee Directors, as restated and amended at the Board of Directors Meeting on August 10, 1998, filed as Exhibit 10(iii)A.2 to the Registrants Quarterly
Report on Form 10-Q for the quarter ended July 4, 1998.                                                                                                                                               
|            | 
|10(v) *    |  | 1994 Incentive Stock Option Plan, as restated and amended at the Companys Annual Meeting on May 2, 1998, filed as Exhibit 10(iii)A.1 to the Registrants Quarterly Report on Form
10-Q for the quarter ended July 4, 1998.                                                                                                                                                                      



(continued on next
page)



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##### Table of Contents

BALDOR ELECTRIC COMPANY AND AFFILIATES



INDEX OF EXHIBITS



(continued from previous page)



|            |  |                                                                                                                                                                                                                                                                                                                                            
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                
|            | 
|10(vi) *   |  | 1996 Stock Option Plan for Non-Employee Directors, as restated and amended at the Board of Directors Meeting on August 10, 1998, filed as Exhibit 10(iii)A.3 to the Registrants Quarterly
Report on Form 10-Q for the quarter ended July 4, 1998.                                                                                         
|            | 
|10(vii) *  |  | Stock Option Plan for Non-Employee Directors, as approved by the Companys Board of Directors on February 5, 2001, filed as Exhibit 10 to the Registrants Quarterly Report on Form
10-Q for the quarter ended September 29, 2001.                                                                                                         
|            | 
|11          |  | Computation of Earnings Per Share, incorporated by reference in Note J of the 2003 Annual Report to Shareholders filed as Exhibit 13.                                                                                                                                                                                                      
|            | 
|13          |  | Portions of the 2003 Annual Report to Shareholders. 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.
|            | 
|21          |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                                            
|            | 
|23          |  | Consent of Independent Auditors.                                                                                                                                                                                                                                                                                                           
|            | 
|24          |  | Powers of Attorney (set forth on signature page hereto).                                                                                                                                                                                                                                                                                   
|            | 
|31.1        |  | Certification by Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                        
|            | 
|31.2        |  | Certification by Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                        
|            | 
|32          |  | Certifications Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                  
|            | 
|99          |  | Not applicable                                                                                                                                                                                                                                                                                                                             



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.



|* | Previously filed.
|- | -----------------



| | Management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------



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