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PRODUCTION MODINA: DISCUSSION DE LA GESTION ET ANALYSE DES CONDITIONS FINANCIÈRES ET DES RÉSULTATS COMMERCIAUX. (Formulaire 10-K)


Aperçu


Founded in 1916, Modine Manufacturing Company is a global leader in thermal
management systems and components, bringing heating and cooling technology and
solutions to diversified global markets.  We operate on five continents, in 17
countries, and employ approximately 11,300 persons worldwide.

Our primary product groups include i) powertrain cooling and engine cooling; ii)
coils, coolers, and coatings; and iii) heating, ventilation and air
conditioning.  Our products are used in on- and off-highway original-equipment
vehicular applications.  In addition, we provide our thermal management
technology and solutions to a wide array of commercial, industrial, and building
heating, ventilating, air conditioning, and refrigeration markets.

Stratégie d’entreprise


Fiscal 2020 brought challenges, including market weakness in key vehicular end
markets and the COVID-19 pandemic, which negatively impacted our businesses,
beginning in the fourth quarter in Asia and Europe.  In response to these
challenges, we have rapidly implemented cost-savings measures to mitigate the
impacts of lower customer demand.  These measures have included, but are not
limited to, production staffing adjustments, furloughs, shortened work weeks,
and temporary salary reductions at all levels of our organization.  We are
reducing operating and administrative expenses, including travel and
entertainment expenditures, and lowering the annual compensation paid to the
Board of Directors.  We have also taken steps specifically aimed to preserve
cash and maximize our liquidity.  In addition, we are focused on reducing
capital expenditures by delaying certain projects and the purchase of some
program-related equipment and tooling.

Both the vehicular market weakness and the impacts of the COVID-19 pandemic
during fiscal 2020 placed significant strain on our previously-announced
evaluation of strategic alternatives for the automotive business.  As a result,
we have paused this process until economic conditions improve.  We remain
committed, however, to exiting the automotive business in a manner that is in
the best interest of our shareholders.

As we steer our business through these uncertain times in light of the COVID-19
pandemic, we are focused on leveraging the advantages we have.  We have made
significant strides in becoming an industrial thermal management company and
possess superior technology that we can apply to targeted end markets.  We are
confident in our Company's strong foundation, comprised of our effective
leadership team, committed workforce, and engaged board of directors.  Through
our strong foundation, we believe we can create and maintain shareholder value
even in these times of unprecedented uncertainty.

Développement de nouveaux produits et technologies


Our ability to develop new products and technologies based upon our building
block strategy for new and emerging markets is one of our competitive
strengths.  Under this strategy, we focus on creating core technologies that
form the basis for multiple products and product lines across multiple business
segments.  Each of our business segments have a strong heritage of new product
development, and our entire global technology organization benefits from mutual
strengths.  We own four global, state-of-the-art technology centers, dedicated
to the development and testing of products and technologies.  The centers are
located in Racine, Wisconsin, Grenada, Mississippi, Pocenia, Italy and
Bonlanden, Germany.  Our reputation for providing high quality products and
technologies has been a Company strength valued by our customers.

Nous bénéficions toujours de relations avec des clients qui reconnaissent
La valeur de nous est de participer directement à la conception, au développement et
processus de validation. Cela a abouti et nous espérons que cela continuera
se traduisent par des relations clients solides et à long terme avec les entreprises qu’elles apprécient
partenariats avec leurs fournisseurs.

Planification stratégique et développement de l’entreprise


We employ both short-term (one-to-three year) and longer-term (five-to-seven
year) strategic planning processes, which enable us to continually assess our
opportunities, competitive threats, and economic market challenges.

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We devote significant resources to global strategic planning and development
activities to strengthen our competitive position.  We expect to continue to
pursue organic- and external-growth opportunities, particularly to grow our
global, market leading positions in our industrial businesses.  As an example,
we recently announced that we are changing how we will go to market to existing
and potential new data center customers and are expanding our data center
offerings into the North American market.  We are bringing together the full
systems capability and established roots of our BHVAC segment in the data center
space with the global manufacturing expertise and customer relationships within
CIS.  We expect strong growth opportunities in the North American data center
market as the industry is growing exponentially in order to keep up with the
ever-increasing reliance on digital technologies.

Discipline opérationnelle et financière


We operate in a dynamic, global marketplace; therefore, we manage our business
with a disciplined focus on increasing productivity and reducing waste.  The
nature of the global marketplace requires us to move toward a greater
manufacturing scale in order to create a more competitive cost base.  In order
to optimize our cost structure and improve efficiency of our operations, we have
executed restructuring activities in our VTS and CIS segments during recent
years. We have also developed a single focus approach to the data center market
by combining the resources and capabilities of our BHVAC and CIS teams.  In
addition, as costs for materials and purchased parts may rise from time to time
due to increases in commodity markets, we seek low-cost sourcing, when
appropriate, and enter into contracts with some of our customers that provide
for commodity price adjustments, on a lag basis.

We follow a rigorous financial process for investment and returns, intended to
enable increased profitability and cash flows over the long term.  We place
particular emphasis on working capital improvement and prioritization of our
capital investments.

Our executive management incentive compensation (annual cash incentive) plan for
fiscal 2020 was based upon consolidated operating income growth and a cash flow
margin metric.  These performance goals drive alignment of management and
shareholders' interests in both our earnings growth and cash flow targets.  In
addition, we provide a long-term incentive compensation plan for officers and
certain key employees to attract, retain, and motivate employees who directly
impact the long-term performance of our company.  The plan is comprised of stock
awards, stock options, and performance-based stock awards.  The
performance-based stock awards for the fiscal 2020 through 2022 performance
period are based upon a target three-year average annual revenue growth and a
target three-year average consolidated cash flow return on invested capital.

Information sectorielle – Stratégie, conditions et tendances du marché


Each of our operating segments is managed by a vice president and has separate
strategic and financial plans, and financial results, all of which are reviewed
by our chief operating decision maker.  These plans and results are used by
management to evaluate the performance of each segment and to make decisions on
the allocation of resources.

Effective April 1, 2020, we began managing our automotive business separate from
the VTS segment as we target the sale or eventual exit of the automotive
business.  We will report financial results for the automotive segment beginning
in the first quarter of fiscal 2021.

Solutions thermiques embarquées (58% des ventes nettes au cours de l’exercice 2020)


Our VTS segment provides powertrain and engine cooling products, including, but
not limited to, radiators, charge air coolers, condensers, oil coolers, EGR
coolers, and fuel coolers, to OEMs in the automotive, commercial vehicle, and
off-highway markets in North America, South America, Europe, and Asia.  In
addition, our VTS segment also serves Brazil's automotive and commercial vehicle
aftermarkets.

Sales volume in the VTS segment decreased during fiscal 2020, as compared with
the prior year.  In particular, sales to commercial vehicle and off-highway
customers decreased significantly compared with the prior year, resulting from
weakness in the global vehicular markets and the planned wind-down of certain
commercial vehicle programs.  In addition, to a lesser extent, sales volume
decreased to automotive customers in fiscal 2020.  During fiscal 2020, we
recorded asset impairment charges totaling $8 million, primarily related to
manufacturing facilities in Austria and Germany that are expected to be
negatively impacted by planned wind downs of certain commercial vehicle and
automotive programs.

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We previously announced our evaluation of strategic alternatives for the
automotive business.  As a result of the widespread economic impacts of the
COVID-19 pandemic, we have paused this process, yet we remain committed to
exiting this business in a manner that is in the best interest of our
shareholders.  We intend to resume this process once we determine that market
conditions will support our effort to maximize the value of our business.  It is
possible that our exit strategy may ultimately include a combination of both
selling and winding-down or closing portions of the automotive business.  We
remain committed to executing on the best strategic alternative for the
automotive business in order to both optimize our VTS segment's financial
performance and maximize shareholder value.

Solutions commerciales et industrielles (31% des ventes nettes au cours de l’exercice 2020)


Our CIS segment provides a broad offering of thermal management products to the
HVAC&R markets, including solutions tailored to indoor and mobile climates, food
storage and transport-refrigeration, and industrial processes.  CIS's primary
product groups include coils, coolers, and coatings.  Our coils products include
custom-designed condensers, evaporators, round-tube solutions, as well as steam
and water/fluid coils.  Our coolers include commercial refrigeration units,
which are used across the food supply chain, products for precision climate
control for other applications such as data center cooling, carbon dioxide and
ammonia unit coolers, remote condensers, transformer oil coolers, and brine
coolers.  In addition, we offer proprietary coating solutions for corrosion
protection, prolonging the life of heat-transfer equipment.

During fiscal 2020, CIS segment sales volume decreased to both commercial HVAC&R
and data center customers.  The lower sales volume to commercial HVAC&R
customers was largely attributable to general market weakness.  In particular,
the U.S. refrigeration transport market declined compared with the prior year.
The lower data center sales primarily resulted from a significant decline in
sales to an individual data center customer in fiscal 2020.  The lower sales to
this customer primarily resulted from the customer's temporary lull in
additional investment, after strong capacity expansion in the prior year.

Looking ahead, while the duration and severity of the impacts of COVID-19 on the
markets we serve are currently uncertain, our team is focused on improving
financial results through manufacturing efficiencies, vertical integration
projects and pricing strategies.  We will continue to support our customers with
innovative products, such as coils with smaller diameter tubing, to help them
meet increasingly-stringent environmental requirements.  Also, we have increased
our product offerings that feature low Global Warming Potential refrigerants,
which are more environmentally friendly than traditional refrigerants, and will
continue to support the transition to natural refrigerants through our
comprehensive line of commercial cooler products.  We aim to capitalize on
opportunities arising from energy and environmental regulations and believe we
are well-positioned to be the partner of choice for our customers.

Construction d’un système de CVC (11% des ventes nettes au cours de l’exercice 2020)


Our BHVAC segment manufactures and distributes a variety of original equipment
and aftersales HVAC products, primarily for commercial buildings and related
applications in North America, the U.K., mainland Europe, the Middle East, Asia,
and Africa.  We sell and distribute our heating, ventilation and cooling
products through wholesalers, distributors, consulting engineers, contractors
and building owners for applications such as warehouses, repair garages,
greenhouses, residential garages, schools, data centers, manufacturing
facilities, hotels, hospitals, restaurants, stadiums, and retail stores.  Our
heating products include gas (natural and propane), electric, oil and hydronic
unit heaters, low- and high-intensity infrared, and large roof-mounted direct-
and indirect-fired makeup air units.  Our ventilation products include
single-packaged vertical units and unit ventilators used in school room
applications, air-handling equipment, and rooftop packaged ventilation units
used in a variety of commercial building applications.  Our cooling products
include precision air conditioning units used primarily for data center cooling
applications, air- and water-cooled chillers, and ceiling cassettes, which are
used in a variety of commercial building applications.

Economic conditions, such as demand for new commercial construction, building
renovations, including HVAC replacement, growth in data centers and school
renovations, and higher efficiency requirements, are growth drivers for our
building HVAC products.  During fiscal 2020, sales increased in North America,
primarily driven by increased sales of ventilation and heating products.  These
higher sales in North America were partially offset by lower sales in the U.K.,
primarily due to lower sales of air conditioning and ventilation products.

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We are focused on being a leader in the development of sustainable HVAC
solutions for our customers.  As recently announced, we are targeting to expand
our data center cooling business into the North American market.  We have
established roots in the data center space and plan to leverage our North
American presence, including our manufacturing footprint and thermal management
expertise, to deploy integrated data center cooling solutions to the U.S.
market.  We are seeing heightened demand in the data center markets,
particularly in light of the increasing reliance on virtual capabilities
resulting from stay-at-home edicts associated with the COVID-19 pandemic.

Résultats commerciaux consolidés


Fiscal 2020 net sales decreased $237 million, or 11 percent, from the prior
year, primarily due to lower sales in our VTS and CIS operating segments,
partially offset by higher sales in our BHVAC segment.  Foreign currency
exchange rate changes negatively impacted sales in fiscal 2020 by $46 million.
Cost of sales decreased $179 million, or 10 percent, from last year, primarily
due to lower sales volume.  Gross profit decreased $58 million and gross margin
declined 90 basis points to 15.6 percent.  SG&A expenses increased $6 million,
primarily due to separation and project costs associated with our review of
strategic alternatives for the VTS segment's automotive business, which
increased approximately $29 million compared with fiscal 2019.  The higher
separation and project costs were partially offset by lower-compensation related
expenses.  Operating income during fiscal 2020 decreased $72 million to $38
million, primarily due to lower gross profit and higher SG&A expenses.

The COVID-19 pandemic began negatively impacting our business beginning with our
Asian and European markets in the fourth quarter of fiscal 2020.  Both weakness
in key vehicular markets and the impacts of the COVID-19 pandemic placed
significant strain on our previously-announced evaluation of strategic
alternatives for the automotive business within the VTS segment.  As a result,
we paused this process until economic conditions improve.  We remain committed,
however, to exiting the automotive business in a manner that is in the best
interest of our shareholders.  Once we resume the process, it is possible that
our exit strategy may ultimately include a combination of both selling and
winding-down or closing portions of the automotive business.  We have spent
considerable time and money separating the automotive business and preparing for
a potential sale.  We have dedicated resources to physically separate the
automotive manufacturing operations, including resources for IT systems and
separate business processes, and have also established new legal entities.  We
believe these resource investments are critical to exiting the automotive
business.  We remain committed to our strategy of becoming a diversified
industrial company and executing on the best strategic alternative for the
automotive business in order to both optimize our VTS segment's financial
performance and maximize shareholder value.

As a result of the impacts of the COVID-19 pandemic, we suspended production at
certain manufacturing facilities in China, India, Italy, Spain, Germany, the
Netherlands, Austria, Hungary, the U.S., Mexico and Brazil due to local
government requirements or customer shutdowns and are operating other facilities
in the U.S. and abroad at reduced capacity levels.  Although the
temporarily-closed facilities have since reopened, many are operating at a
significantly reduced volume because of low customer demand.  Beginning largely
in April 2020 and in an effort to mitigate the negative impacts of COVID-19 on
our financial results, we have taken actions, including, but not limited to,
production staffing adjustments, furloughs, shortened work weeks, and temporary
salary reductions at all levels of our organization.  In addition, we are
reducing operating and administrative expenses, including travel and
entertainment expenditures, and lowering the annual compensation paid to the
Board of Directors.  We are also focused on reducing capital expenditures by
delaying certain projects and the purchase of some program-related equipment and
tooling.

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The following table presents our consolidated financial results on a comparative
basis for fiscal years 2020 and 2019.  A detailed comparison of our consolidated
fiscal 2019 and 2018 financial results can be found in the Management's
Discussion and Analysis of Financial Condition and Results of Operations section
in the Company's 2019 Annual Report on Form 10-K filed with the SEC on May 23,
2019.

                                                                 Years ended March 31,
                                                          2020                           2019
(in millions)                                     $'s         % of sales         $'s         % of sales
Net sales                                      $   1,976            100.0 %   $   2,213            100.0 %
Cost of sales                                      1,668             84.4 %       1,847             83.5 %
Gross profit                                         308             15.6 %         366             16.5 %
Selling, general and administrative expenses         250             12.6 %         244             11.0 %
Restructuring expenses                                12              0.6 %          10              0.4 %
Impairment charges                                     9              0.4 %           -                -
(Gain) loss on sale of assets                         (1 )              -             2              0.1 %
Operating income                                      38              1.9 %         110              5.0 %
Interest expense                                     (23 )           -1.1 %         (25 )           -1.1 %
Other expense - net                                   (5 )           -0.2 %          (4 )           -0.2 %
Earnings before income taxes                          10              0.5 %          81              3.7 %
(Provision) benefit for income taxes                 (12 )           -0.6 %           5              0.2 %
Net (loss) earnings                            $      (2 )           -0.1 %   $      86              3.9 %



Fiscal 2020 net sales of $1,976 million were $237 million, or 11 percent, lower
than the prior year, primarily due to lower sales in our VTS and CIS segments
and a $46 million unfavorable impact of foreign currency exchange rate changes,
partially offset by higher sales in our BHVAC segment.  Sales decreased $175
million and $84 million in our VTS and CIS segments, respectively.  Sales
increased $9 million in our BHVAC segment.

Fiscal 2020 cost of sales of $1,668 million decreased $179 million, or 10
percent, primarily due to lower sales volume and a $39 million favorable impact
of foreign currency exchange rate changes.  As a percentage of sales, cost of
sales increased 90 basis points to 84.4 percent and was negatively impacted by
approximately 80 basis points due to higher labor and inflationary costs and, to
a lesser extent, by sales mix.  These negative impacts were partially offset by
favorable material costs, which impacted costs of sales by approximately 30
basis points.  The favorable material costs primarily resulted from lower
commodity pricing, which more than offset the negative impacts of tariffs.  In
addition, we recorded $3 million of costs at Corporate for program and equipment
transfers associated with the separation of the VTS segment's automotive
business in preparation for a potential sale.

En raison de la baisse des ventes et de la hausse des coûts de vente en pourcentage des ventes,
exercice 2020. profit brut réduit 58 millions de dollars et la marge brute a été réduite de 90
le point de base est de 15,6%.

Les coûts de PSA pour l’exercice 2020 ont augmenté 6 millions de dollars. L’augmentation des frais de vente, dépenses administratives et autres frais généraux a été
principalement en raison des coûts de séparation et de projet enregistrés dans l’association de sociétés
avec notre revue des alternatives stratégiques pour le segment automobile VTS
un travail qui a grossi 29 millions de dollars. Cette augmentation est
rembourse partiellement les coûts inférieurs liés aux frais, qui ont été réduits
environ 13 millions de dollars, baisse des coûts environnementaux liés à
appartenant auparavant à des installations de production NOUS.qui a diminué
environ 3 millions de dollars, et un Quatre millions de dollars influence favorable de
changements de taux de change


Restructuring expenses totaled $12 million during fiscal 2020 and increased $2
million compared with the prior year.  The fiscal 2020 restructuring expenses
primarily consisted of severance expenses related to targeted headcount
reductions in the VTS segment and equipment transfer and plant consolidation
costs in the CIS segment.  The fiscal 2020 headcount reductions were in response
to lower market demand and in support of our objective to reduce operational and
SG&A cost structures.  During fiscal 2021, we approved headcount reductions in
the VTS and CIS segments and, as a result, we expect to record approximately $4
million of severance expenses during the first quarter of fiscal 2021.

Au cours de l’exercice 2020, nous avons comptabilisé le total des charges de dépréciation 9 millions de dollars,,
principalement lié à deux usines de production dans le segment VTS.

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Operating income of $38 million during fiscal 2020 decreased $72 million
compared with the prior year.  This decrease was primarily due to an increase of
$32 million of separation and project costs associated with our review of
strategic alternatives for our automotive business and lower earnings in our VTS
and CIS segments, which decreased $37 million and $20 million, respectively,
partially offset by higher earnings in our BHVAC segment, which increased $9
million.

The provision for income taxes was $12 million in fiscal 2020, compared with a
benefit for income taxes of $5 million in fiscal 2019.  The $17 million change
was primarily due to the absence of income tax benefits totaling $25 million
recorded in the prior year and income tax charges totaling $10 million in the
current year, partially offset by lower operating earnings in fiscal 2020.  The
$25 million of income tax benefits recorded in fiscal 2019 related to the
recognition of tax assets for foreign tax credits and a manufacturing deduction
in the U.S. and our accounting for the Tax Act.  The $10 million of income tax
charges in fiscal 2020 were comprised of net charges totaling $7 million
resulting from adjustments of valuation allowances on certain deferred tax
assets in the U.S. and in a foreign jurisdiction and $3 million associated with
legal entity restructuring in preparation for a potential sale of our automotive
business.  See Note 7 of the Notes to Consolidated Financial Statements for
additional information.

Résultats du secteur d’activité


A detailed comparison of our segment financial results for fiscal 2019 and 2018
can be found in the Management's Discussion and Analysis of Financial Condition
and Results of Operations section in the Company's 2019 Annual Report on Form
10-K filed with the SEC on May 23, 2019.

Effective April 1, 2020, we began managing our automotive business separate from
the other businesses within the VTS segment.  We are managing the automotive
business as a separate segment as we target the sale or eventual exit of the
automotive businesses.  Beginning for fiscal 2021, we will report the financial
results for the automotive business as the Automotive segment.  The remaining
portion of the previous VTS segment will be named the Heavy-Duty Equipment
segment and will include the heavy-duty commercial vehicle and off-highway
businesses.

VTS
                                                                 Years ended March 31,
                                                          2020                           2019
(in millions)                                     $'s         % of sales         $'s         % of sales
Net sales                                      $   1,177            100.0 %   $   1,352            100.0 %
Cost of sales                                      1,032             87.7 %       1,165             86.2 %
Gross profit                                         145             12.3 %         187             13.8 %
Selling, general and administrative expenses         100              8.5 %         113              8.3 %
Restructuring expenses                                10              0.8 %           9              0.7 %
Impairment charges                                     8              0.7 %           -                -
Gain on sale of assets                                (1 )           -0.1 %           -                -
Operating income                               $      28              2.3 %   $      65              4.8 %



VTS net sales decreased $175 million, or 13 percent, in fiscal 2020 compared
with the prior year, primarily due to lower sales volume, a $31 million
unfavorable impact of foreign currency exchange rate changes, and, to a lesser
extent, unfavorable customer pricing largely resulting from
contractually-scheduled price-downs.  Sales to commercial vehicle, off-highway,
and automotive customers decreased $64 million, $60 million, and $34 million,
respectively.  These sales declines largely result from weakness in global
vehicular markets and the planned wind-down of certain commercial vehicle
programs.

VTS cost of sales decreased $133 million, or 11 percent, primarily due to lower
sales volume and a $26 million favorable impact of foreign currency exchange
rate changes.  As a percentage of sales, cost of sales increased 150 basis
points to 87.7 percent.  Beyond the unfavorable impact of the lower sales
volume, higher labor and inflationary costs and unfavorable customer pricing
negatively impacted cost of sales by approximately 90 basis points and 70 basis
points, respectively.  Higher depreciation costs, primarily resulting from
recent manufacturing capacity expansion in China and Hungary, also negatively
impacted cost of sales to a lesser extent.  These negative impacts were
partially offset by favorable material costs, which impacted cost of sales by
approximately 30 basis points, improved operating efficiencies and cost savings
from procurement initiatives.  The favorable material costs primarily resulted
from lower commodity pricing, which more than offset the negative impacts of
tariffs.

En raison de la baisse des ventes et de la hausse des coûts de vente en pourcentage de
ventes, bénéfice brut en baisse 42 millions de dollars et la marge brute a diminué de 150 points de base
points 12,3 pour cent.

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VTS SG&A expenses decreased $13 million compared with the prior year yet
increased 20 basis points as a percentage of sales.  The decrease in SG&A
expenses was primarily due to lower compensation-related expenses, which
decreased approximately $9 million, lower environmental charges related to
previously-owned manufacturing facilities in the U.S, which decreased
approximately $3 million, and a $3 million favorable impact of foreign currency
exchange rate changes.

Restructuring expenses during fiscal 2020 increased $1 million, primarily due to
higher severance expenses resulting from targeted headcount reductions in Europe
and in the Americas.

During fiscal 2020, we recorded asset impairment charges totaling $8 million,
primarily related to manufacturing facilities in Austria and Germany to write
down property and equipment assets to fair value.  We anticipate future cash
flows at these facilities will be negatively impacted by planned wind downs of
certain commercial vehicle and automotive programs.

Au cours de l’exercice 2020, nous avons conclu la vente d’une production précédemment fermée
objet u Allemagne et, par conséquent, enregistré un gain de Un million de dollars.


Operating income in fiscal 2020 decreased $37 million to $28 million, primarily
due to lower gross profit and higher impairment charges, partially offset by
lower SG&A expenses.

CIS
                                                                 Years ended March 31,
                                                          2020                           2019
(in millions)                                     $'s         % of sales         $'s         % of sales
Net sales                                      $     624            100.0 %   $     708            100.0 %
Cost of sales                                        531             85.1 %         593             83.8 %
Gross profit                                          93             14.9 %         115             16.2 %
Selling, general and administrative expenses          57              9.2 %          61              8.6 %
Restructuring expenses                                 2              0.3 %           -                -
Impairment charges                                     1              0.1 %           -              0.1 %
Operating income                               $      33              5.3 %   $      53              7.5 %



CIS net sales decreased $84 million, or 12 percent, in fiscal 2020 compared with
the prior year, primarily due to lower sales volume and a $12 million
unfavorable impact of foreign currency exchange rate changes.  Sales to
commercial HVAC&R and data center cooling customers decreased $43 million and
$38 million, respectively.

CIS cost of sales decreased $62 million, or 10 percent, primarily due to lower
sales volume and an $11 million favorable foreign currency exchange rate
impact.  As a percentage of sales, cost of sales increased 130 basis points to
85.1 percent, primarily due to the unfavorable impact of lower sales volume and
unfavorable sales mix.

En raison de la baisse des ventes et de la hausse des coûts de vente en pourcentage de
ventes, bénéfice brut en baisse 22 millions de dollars et la marge brute a baissé de 130 bases
points 14,9 pour cent.

Coûts SG&A CIS réduits Quatre millions de dollars par rapport à l’année précédente
augmenté de 60 points de base en pourcentage des ventes. Réduction SG&A
les coûts sont principalement dus à la baisse des coûts liés à la rémunération, qui
environ réduit 2 millions de dollarset l’impact bénéfique du contrôle des coûts
initiatives.


Restructuring expenses during fiscal 2020 increased $2 million, primarily due to
higher equipment transfer and plant consolidation costs.  We are currently
transferring product lines to our manufacturing facility in Mexico in order to
achieve operational improvements and organizational efficiencies.

Au cours de l’exercice 2020, nous avons enregistré Un million de dollars Compensation pour dépréciation d’actifs liée à
usine de production précédemment fermée à L’Autriche.

Les revenus d’exploitation de l’exercice 2020 ont diminué 20 millions de dollars à 33 millions de dollars, principalement
en raison de la baisse du bénéfice brut, partiellement compensée par la baisse des coûts PS.

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BHVAC
                                                                 Years ended March 31,
                                                          2020                           2019
(in millions)                                     $'s         % of sales         $'s         % of sales
Net sales                                      $     221            100.0 %   $     212            100.0 %
Cost of sales                                        150             67.7 %         149             70.1 %
Gross profit                                          72             32.3 %          63             29.9 %
Selling, general and administrative expenses          35             15.8 %          35             16.4 %
Loss on sale of assets                                 -                -             2              0.8 %
Operating income                               $      36             16.5 %   $      27             12.6 %



BHVAC net sales increased $9 million, or 4 percent, in fiscal 2020 compared with
the prior year, primarily due to higher sales in the U.S., which increased $14
million, partially offset by lower sales in the U.K., which decreased $5
million. The higher sales in the U.S. were primarily driven by the increased
sales of ventilation and heating products.  The lower sales in the U.K. were
primarily due to lower sales of air conditioning and ventilation products and a
$3 million unfavorable impact of foreign currency exchange rate changes,
partially offset by higher data center sales.

Le coût de vente du BHVAC a augmenté Un million de dollars, ou moins de 1 pour cent, en
2020. En pourcentage, les coûts de vente ont été réduits de 240 points de base
67,7%, principalement en raison d’un mix commercial favorable et d’un client favorable
des prix.

En raison de la hausse des ventes et de la baisse des coûts de vente en pourcentage de
ventes, bénéfice brut en hausse 9 millions de dollars et marge brute améliorée de 240 base
pointe à 32,3 pour cent.

Les frais de vente, frais généraux et administratifs de BHVAC sont restés conformes à ceux de l’année précédente, mais ont été réduits de 60%.
points de base en pourcentage des ventes.

Au cours de l’exercice 2019, nous avons vendu notre entreprise en Afrique du Sud et comme résultat,
enregistre une perte de 2 millions de dollars.

Bénéfice d’exploitation au cours de l’exercice 2020 36 millions de dollars augmenté 9 millions de dollars, principalement
en raison de la marge brute plus élevée.

Liquidité et ressources en capital


Our primary sources of liquidity are cash flow from operating activities, our
cash and cash equivalents as of March 31, 2020 of $71 million, and an available
borrowing capacity of $118 million under our revolving credit facility.  Given
our extensive international operations, approximately $31 million of our cash
and cash equivalents are held by our non-U.S. subsidiaries.  Amounts held by
non-U.S. subsidiaries are available for general corporate use; however, these
funds may be subject to foreign withholding taxes if repatriated.

In response to lower customer demand resulting from the COVID-19 pandemic, we
have taken actions to reduce operating expenses, conserve cash and maximize
liquidity.  These actions have included, but are not limited to, production
staffing adjustments, furloughs, shortened work weeks, and temporary salary
reductions at all levels of our organization.  In addition, we are reducing
operating and administrative expenses.  Further, as described below, we are
focused on reducing our capital expenditures and have executed amendments to our
primary credit agreements to help ensure liquidity through financial covenant
flexibility during the next two fiscal years.  Together with anticipated cash
flow from operations, we currently believe we have sufficient available cash and
access to both committed and uncommitted credit facilities to adequately cover
our funding needs on both a short- and long-term basis.  However, we are
continuing to monitor the impacts of COVID-19 on our business and the credit and
financial markets.

The full extent of the impacts of COVID-19, which will largely depend on the
length and severity of the pandemic, could have a material adverse effect on our
business, results of operations, and cash flows and could adversely affect our
access to capital and/or financing.

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Net Cash Provided by Operating Activities

Net cash provided by operating activities in fiscal 2020 was $58 million, a
decrease of $45 million from $103 million in the prior year.  This decrease in
operating cash flow was primarily due to lower operating earnings in the current
year and payments for separation and project costs associated with our strategic
review of alternatives for the VTS segment's automotive business, partially
offset by favorable net changes in working capital.  The favorable changes in
working capital, as compared with the prior year, included lower employee
benefit and incentive compensation payments.

Net cash provided by operating activities in fiscal 2019 was $103 million, a
decrease of $21 million from $124 million in fiscal 2018.  This decrease in
operating cash flow primarily resulted from unfavorable changes in working
capital, partially offset by the favorable impact of stronger earnings.  The
unfavorable changes in working capital, as compared with the prior year,
included higher incentive compensation and other employee benefit payments and
higher inventory levels associated with higher sales levels.

Dépenses en capital


Capital expenditures of $71 million during fiscal 2020 decreased $3 million
compared with fiscal 2019, primarily due to lower capital investments in our VTS
segment compared with the prior year, particularly in China and North America.
Similar to prior years, our capital spending in fiscal 2020 primarily occurred
in the VTS segment, which totaled $53 million, and included tooling and
equipment purchases in conjunction with new and renewal programs with customers,
as well as $7 million of capital investments associated with preparing our
automotive business for a potential sale.  In response to the economic impacts
of the COVID-19 pandemic, we are taking steps to preserve our financial
liquidity.  As part of this initiative, we are focused on reducing our capital
expenditures by delaying certain projects and the purchase of certain
program-related equipment and tooling.  At March 31, 2020, our capital
expenditure commitments totaled $12 million and primarily consisted of
commitments for tooling and equipment expenditures in support of new and renewal
programs in the VTS segment.

Debt

Our total debt outstanding increased $33 million to $482 million at March 31,
2020 compared with the prior year, primarily due to additional borrowings during
fiscal 2020.  In response to the economic impacts of the COVID-19 pandemic, we
executed amendments to our primary credit agreements in May 2020 to provide
additional covenant flexibility.  The amendments temporarily raise the leverage
coverage ratio limit during the next two fiscal years.

Our credit agreements require us to maintain compliance with various covenants.
As specified in the credit agreement, the term loans may require prepayments in
the event of certain asset sales.  In addition, at the time of each incremental
borrowing under the revolving credit facility, we must represent to the lenders
that there has been no material adverse effect, as defined in the credit
agreement, on our business, property, or results of operations.

Under our primary credit agreements in the U.S., we are subject to a leverage
ratio covenant, which requires us to limit our consolidated indebtedness, less a
portion of our cash balance, both as defined by the credit agreements, in
relation to our consolidated net earnings before interest, taxes, depreciation,
amortization, and certain other adjustments ("Adjusted EBITDA").  The leverage
ratio covenant limit was 3.25 to 1 through the fourth quarter of fiscal 2020.
We are also subject to an interest expense coverage ratio covenant, which
requires us to maintain Adjusted EBITDA of at least three times consolidated
interest expense.  As of March 31, 2020, we were in compliance with our debt
covenants; our leverage ratio and interest coverage ratio were 2.4 and 8.1,
respectively.

In May 2020, as noted above, we executed amendments to our primary credit
agreements that provide additional financial covenant flexibility during the
next two fiscal years in light of the risks and uncertainties associated with
the COVID-19 pandemic.  We believe this additional flexibility will enable us to
be compliant with our debt covenants, even if the adverse effects of the
COVID-19 pandemic on our business are more severe than we currently anticipate.
However, failure to comply with the debt covenants could result in an event of
default, which, if not cured or waived, could result in us being required to
repay borrowings before their due date.  Under the amended agreements, the
leverage ratio covenant limit is temporarily raised.  For fiscal 2021, the
leverage ratio covenant limit is 4.00 to 1, 4.75 to 1, 5.25 to 1, and 5.75 to 1
for the first, second, third, and fourth quarters, respectively.  In fiscal
2022, the leverage ratio covenant limit is 4.75 to 1, 3.75 to 1, and 3.50 to 1
for the first, second and third quarters, respectively, and subsequently returns
to 3.25 to 1 for the fourth quarter of fiscal 2022.  We expect to remain in
compliance with our debt covenants during fiscal 2021 and beyond.

Voir la note 17 pour les notes aux états financiers consolidés pour plus d’informations
des informations concernant nos accords de prêt.

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Off-Balance Sheet Arrangements

None.

Contractual Obligations

                                                                   March 31, 2020
                                                 Less than 1                                           More than 5
(in millions)                       Total           year           1 - 3 years       4 - 5 years          years

Long-term debt                    $   468.9$        15.2$        42.6$       294.4$       116.7
Interest associated with
long-term debt                         89.3              17.7              33.4              24.5              13.7
Operating lease obligations            71.8              12.8              20.7              12.1              26.2
Capital expenditure commitments        12.0              12.0                 -                 -                 -
Other long-term obligations (a)         9.9               1.9               3.1               3.0               1.9
Total contractual obligations     $   651.9$        59.6$        99.8$       334.0$       158.5

(a) Comprend les obligations de location-financement et autres passifs à long terme.




Our liabilities for pensions, postretirement benefits, and uncertain tax
positions totaled $145 million as of March 31, 2020.  We are unable to determine
the ultimate timing of payments for these liabilities; therefore, we have
excluded these amounts from the contractual obligations table above.  We expect
to contribute $20 million to our U.S. pension plans during fiscal 2021.

Principales conventions comptables


The following critical accounting policies reflect the more significant
judgments and estimates used in preparing our consolidated financial
statements.  Application of these policies results in accounting estimates that
have the greatest potential for a significant impact on our financial
statements.  The following discussion of these judgments and estimates is
intended to supplement the significant accounting policies presented in Note 1
of the Notes to Consolidated Financial Statements.  In addition, recently issued
accounting pronouncements that either have or could significantly impact our
financial statement are disclosed in Note 1 of the Notes to Consolidated
Financial Statements.

Reconnaissance des revenus


In fiscal 2019, we adopted new revenue recognition accounting guidance.  In
accordance with this new accounting guidance, we recognize revenue based upon
consideration specified in a contract and as we satisfy performance obligations
by transferring control over our products to our customers, which may be at a
point in time or over time.  The majority of our revenue is recognized at a
point in time, based upon shipment terms.  A limited number of our customer
contracts provide an enforceable right to payment for performance completed to
date.  For these contracts, we recognize revenue over time based upon our
estimated progress towards the satisfaction of the contract's performance
obligations.  We record an allowance for doubtful accounts for estimated
uncollectible receivables and we accrue for estimated warranty costs at the time
of sale.  We base these estimates upon historical experience, current business
trends, and current economic conditions.

Dépréciation des immobilisations


We perform impairment evaluations of long-lived assets, including property,
plant and equipment and intangible assets, whenever business conditions or
events indicate that those assets may be impaired.  We consider factors such as
operating losses, declining financial outlooks and market conditions when
evaluating the necessity for an impairment analysis.  When the net asset values
exceed undiscounted cash flows expected to be generated by the assets, we write
down the assets to fair value and record an impairment charge to current
operations.  We estimate fair value in various ways depending on the nature of
the underlying assets.  Fair value is generally based upon appraised value,
estimated salvage value, or selling prices under negotiation, as applicable.

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The most significant long-lived assets we evaluated for impairment indicators
were property, plant and equipment and intangible assets, which totaled $448
million and $106 million, respectively, at March 31, 2020.  Within property,
plant and equipment, the most significant assets evaluated are buildings and
improvements and machinery and equipment.  Our most significant intangible
assets evaluated are customer relationships, trade names, and acquired
technology, the majority of which are related to our CIS segment.  We evaluate
impairment at the lowest level of separately identifiable cash flows, which is
generally at the manufacturing plant level.  We monitor manufacturing plant
financial performance to determine whether indicators exist that would require
an impairment evaluation for the facility.  This includes significant adverse
changes in plant profitability metrics; substantial changes in the mix of
customer products manufactured in the plant; changes in manufacturing strategy;
and the shifting of programs to other facilities under a manufacturing
realignment strategy.  When such indicators are present, we perform an
impairment evaluation.  During fiscal 2020, we recorded asset impairment charges
totaling $8 million, primarily related manufacturing facilities in Austria and
Germany within the VTS segment.  See Note 5 of the Notes to the Consolidated
Financial Statements for additional information.

Assurance de Bonne volonté


We perform goodwill impairment tests annually, as of March 31, unless business
events or other conditions exist that require a more frequent evaluation.  We
consider factors such as operating losses, declining financial and market
outlooks, and market capitalization when evaluating the necessity for an interim
impairment analysis.  We test goodwill for impairment at a reporting unit
level.  Reporting units resulting from recent acquisitions generally represent
the highest risk of impairment, which typically decreases as the businesses are
integrated into the Company and positioned for future operating and financial
performance.  We test goodwill for impairment by comparing the fair value of
each reporting unit with its carrying value.  We determine the fair value of a
reporting unit based upon the present value of estimated future cash flows. 

Si

the fair value of a reporting unit exceeds the carrying value of the reporting
unit's net assets, goodwill is not impaired.  However, if the carrying value of
the reporting unit's net assets exceeds its fair value, we would conclude
goodwill is impaired and would record an impairment charge equal to the amount
that the reporting unit's carrying value exceeds its fair value.

Determining the fair value of a reporting unit involves judgment and the use of
significant estimates and assumptions, which include assumptions regarding the
revenue growth rates and operating profit margins used to calculate estimated
future cash flows, risk-adjusted discount rates, business trends and market
conditions.  We determine the expected future revenue growth rates and operating
profit margins after consideration of our historical revenue growth rates and
earnings levels, our assessment of future market potential and our expectations
of future business performance.  The discount rates used in determining
discounted cash flows are rates corresponding to our cost of capital, adjusted
for country-specific risks where appropriate.  While we believe the assumptions
used in our goodwill impairment tests are appropriate and result in a reasonable
estimate of the fair value of each reporting unit, future events or
circumstances could have a potential negative effect on the estimated fair value
of our reporting units.  These events or circumstances include lower than
forecasted revenues, market trends that fall below our current expectations,
actions of key customers, increases in discount rates, and the continued
economic uncertainty and impacts associated with the COVID-19 pandemic.  We
cannot predict the occurrence of certain events or changes in circumstances that
might adversely affect the carrying value of goodwill.

At March 31, 2020, our goodwill totaled $166 million related to our CIS and
BHVAC segments.  Each of these segments is comprised of two reporting units.  We
conducted annual goodwill impairment tests during the fourth quarter of fiscal
2020 by applying a fair value-based test and determined the fair value of each
of our reporting units exceeded the respective book value.

Acquisitions


From time to time, we make strategic acquisitions that have a material impact on
our consolidated results of operations or financial position.  We allocate the
purchase price of acquired businesses to the identifiable tangible and
intangible assets acquired and liabilities assumed in the transaction based upon
their estimated fair values as of the acquisition date.  We determine the
estimated fair values using information available to us and engage third-party
valuation specialists when necessary.  The estimates we use to determine the
fair value of long-lived assets, such as intangible assets, can be complex and
require significant judgments.  While we use our best estimates and assumptions,
our estimates are inherently uncertain and subject to refinement.  As a result,
during the measurement period, which may be up to one year from the acquisition
date, we record adjustments to the assets acquired and liabilities assumed, with
the corresponding offset to goodwill.  Upon conclusion of the measurement period
or final determination of the values of assets acquired or liabilities assumed,
whichever comes first, any subsequent adjustments are recorded to our
consolidated statement of operations.  We also estimate the useful lives of
intangible assets to determine the amount of amortization expense to record in
future periods.  We periodically review the estimated useful lives assigned to
our intangible assets to determine whether such estimated useful lives continue
to be appropriate.

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Warranty Costs

We estimate costs related to product warranties and accrue for such costs at the
time of the sale, within cost of sales.  We estimate warranty costs based upon
the best information available, which includes statistical and analytical
analysis of both historical and current claim data.  We adjust our warranty
accruals, which totaled $8 million at March 31, 2020, if it is probable that
expected claims will differ from previous estimates.

Obligations de retraite


Our calculation of the expense and liabilities of our pension plans is dependent
upon various assumptions.  At March 31, 2020, our pension liabilities totaled
$134 million.  The most significant assumptions include the discount rate,
long-term expected return on plan assets, and mortality rates.  We base our
selection of assumptions on historical trends and economic and market conditions
at the time of valuation.  In accordance with U.S. GAAP, actual results that
differ from these assumptions are accumulated and amortized over future
periods.  These differences impact future pension expenses.  Currently,
participants in our domestic pension plans are not accruing benefits based upon
their current service as the plans do not include increases in annual earnings
or for future service in calculating the average annual earnings and years of
credited service under the pension plan formula.

For the following discussion regarding sensitivity of assumptions, all amounts
presented are in reference to our domestic pension plans, since our domestic
plans comprise all of our pension plan assets and the large majority of our
pension plan expense.

To determine the expected rate of return on pension plan assets, we consider
such factors as (a) the actual return earned on plan assets, (b) historical
rates of return on the various asset classes in the plan portfolio, (c)
projections of returns on those asset classes, (d) the amount of active
management of the assets, (e) capital market conditions and economic forecasts,
and (f) administrative expenses paid with the plan assets.  The long-term rate
of return utilized in both fiscal 2020 and 2019 was 7.5 percent.  For fiscal
2021, we have also assumed a rate of 7.5 percent.  A change of 25 basis points
in the expected rate of return on assets would impact our fiscal 2021 pension
expense by $0.4 million.

The discount rate reflects rates available on long-term, high-quality
fixed-income corporate bonds on the measurement date of March 31.  For fiscal
2020 and 2019, for purposes of determining pension expense, we used a discount
rate of 4.0 percent.  We determined these rates based upon a yield curve that
was created following an analysis of the projected cash flows from our plans.
See Note 18 of the Notes to Consolidated Financial Statements for additional
information.  A change in the assumed discount rate of 25 basis points would
impact our fiscal 2021 pension expense by less than $1 million.

Impôts sur le revenu


We operate in numerous taxing jurisdictions; therefore, we are subject to
regular examinations by federal, state and non-U.S. taxing authorities.  Due to
the application of complex and sometimes ambiguous tax laws and rulings in the
jurisdictions in which we do business, there is an inherent level of uncertainty
within our worldwide tax provisions.  Despite our belief that our tax return
positions are consistent with applicable tax laws, it is possible that taxing
authorities could challenge certain positions.

Our deferred tax assets and liabilities reflect temporary differences between
the amount of assets and liabilities for financial and tax reporting purposes.
We adjust these amounts to reflect changes in tax rates expected to be in effect
when the temporary differences reverse.  We record a valuation allowance if we
determine it is more likely than not that the net deferred tax assets in a
particular jurisdiction will not be realized.  This determination, which is made
on a jurisdiction-by-jurisdiction basis, involves judgment and the use of
significant estimates and assumptions, including expectations of future taxable
income and tax planning strategies.  We believe the assumptions that we used are
appropriate and result in a reasonable determination regarding the future
realizability of deferred tax assets.  However, future events or circumstances,
such as lower-than-expected taxable income or unfavorable changes in the
financial outlook of our operations in certain jurisdictions, could cause us to
record additional valuation allowances.

Voir l’annexe 7 pour les notes aux états financiers consolidés pour plus d’informations
informations concernant l’impôt sur le revenu.

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Other Loss Reserves

We maintain liabilities and reserves for a number of other loss exposures, such
as environmental remediation costs, self-insurance reserves, uncollectible
accounts receivable, regulatory compliance matters, and litigation.
Establishing loss reserves for these exposures requires the use of estimates and
judgment to determine the risk exposure and ultimate potential liability.  We
estimate these reserve requirements by using consistent and suitable
methodologies for the particular type of loss reserve being calculated.  See
Note 20 of the Notes to Consolidated Financial Statements for additional
information regarding contingencies and litigation.

Déclarations pour l’avenir


This report, including, but not limited to, the discussion under Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, contains statements, including information about future financial
performance, accompanied by phrases such as "believes," "estimates," "expects,"
"plans," "anticipates," "intends," and other similar "forward-looking"
statements, as defined in the Private Securities Litigation Reform Act of 1995.
Modine's actual results, performance or achievements may differ materially from
those expressed or implied in these statements, because of certain risks and
uncertainties, including, but not limited to, those described under "Risk
Factors" in Item 1A. in Part I. of this report and identified in our other
public filings with the U.S. Securities and Exchange Commission.  Other risks
and uncertainties include, but are not limited to, the following:

Risques de marché:

• L’impact de la pandémie COVID-19 sur l’économie nationale et mondiale, la nôtre

entreprise, fournisseurs, clients et employés;

• conditions économiques, sociales et politiques, changements, défis et troubles,

en particulier sur les marchés géographiques, manufacturiers et financiers où nous sommes

les clients font des affaires et sont concurrentiels, notamment en devises étrangères

les fluctuations des taux de change; les droits de douane (et toute guerre commerciale potentielle en résultant

tarifs ou représailles); inflation; les changements de taux d’intérêt;

récession et reprise de celle-ci; limitations et incertitudes associées à

le commerce transfrontalier, les crises de santé publique, telles que les pandémies et les épidémies,

y compris la pandémie de COVID-19 en cours; et les incertitudes générales concernant

l’impact des changements réglementaires et / ou politiques, y compris ceux liés à la fiscalité

et le commerce, la pandémie de COVID-19 et d’autres questions qui étaient ou pourraient être

mis en œuvre en États Unis ou à l’étranger, ainsi qu’une incertitude constante

quant aux implications à court et à long terme du «Brexit»;

• l’impact d’éventuelles hausses de prix liées aux matières premières,

y compris aluminium, cuivre, acier et acier inoxydable (nickel) et autres

les stocks de composants achetés, y compris, mais sans s’y limiter, une augmentation

les coûts des matériaux de base basés sur London Metal Exchange et liés

primes ou coûts de fabrication. Ces prix peuvent être affectés par une multitude

facteurs, y compris les changements dans les lois commerciales et les tarifs, le comportement que nous avons

fournisseurs et les fluctuations importantes de la demande. Ce risque inclut le nôtre

la capacité de gérer avec succès l’exposition et notre capacité à adapter les produits

prix en réponse à des augmentations de prix, soit par le biais de notre processus de cotation

ou par le biais de dispositions contractuelles pour d’éventuels ajustements de prix, ainsi que

retard inhérent à la rédaction de ces dispositions contractuelles; je

• L’impact des lois et réglementations environnementales actuelles et futures sur les nôtres

les affaires et les affaires de nos clients, y compris notre capacité à prendre le relais

l’avantage de pouvoir proposer de nouvelles technologies alternatives pour répondre

normes et objectifs environnementaux et / ou énergétiques.

Risques opérationnels:

• État de santé général et concentration croissante des voitures sur la baisse des prix

clients à la lumière des facteurs et potentiels économiques et spécifiques au marché

impact sur nous de toute détérioration de la stabilité ou des performances de l’un des

   our major customers;



                                       36

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Contenu

• Problèmes inattendus avec des fournisseurs qui respectent notre temps, quantité, qualité et

les exigences de prix et la santé globale de nos fournisseurs, y compris leur capacité

et une volonté de répondre à nos besoins en volume si leur capacité de production est

   becomes constrained;



• Notre capacité à maintenir les programmes utilisateurs actuels et pour lesquels nous sommes compétitifs

nouvelles affaires, y compris notre capacité à compenser ou à résoudre les problèmes

pressions sur les prix et réductions de prix des concurrents et services généraux

   pressures from customers, particularly in the face of macro-economic
   instability;


• Difficultés inattendues de fonctionnement ou de production ou de fonctionnement

les inefficacités, y compris les lancements inattendus de programmes et les transferts de produits

défis et garanties et retards ou inefficacités qui en résultent

les restrictions imposées en réponse à la pandémie de COVID-19;

• Retards ou modifications inattendus initiés par les principaux clients dans le respect

lancer la programmation, les applications de produits ou les applications;

• Notre capacité à structurer de manière cohérente nos activités de développement et de développement

maintenir une base de coûts compétitive avec une main-d’œuvre qualifiée et stable,

et en même temps nous nous positionnons géographiquement pour continuer

soutenir nos clients avec une expertise technique et des produits de pointe

ils recherchent et attendent de Modina;

• Notre capacité à réduire efficacement et efficacement la structure des coûts

réponse à la baisse des ventes et à l’achèvement des activités de restructuration et

réaliser les avantages escomptés de ces activités;

• Coûts et autres effets des enquêtes et mesures correctives environnementales

contamination; surtout quand il se rapporte aux actions ou inactions des autres

et / ou des installations sur lesquelles nous n’avons aucun contrôle;

• Notre capacité à recruter et à maintenir des talents, y compris des cadres,

   leadership and administrative functions, in light of tight global labor
   markets;


• Notre capacité à protéger nos informations exclusives et notre propriété intellectuelle

contre le vol ou l’attaque de sources internes ou externes;

• L’impact de perturbations importantes ou de violations importantes de nos informations

les systèmes technologiques et les retards, problèmes ou coûts associés;

• Lois et réglementations de plus en plus complexes et restrictives, y compris celles

lié à être NOUS. société publique et autres présents dans divers

juridictions dans lesquelles nous opérons et coûts de conformité

   therewith;



• Retards ou perturbations dans nos installations ou dans nos plus grandes

clients et / ou fournisseurs;

• Pressions constantes et croissantes liées à la santé

   insurance costs; and



• Coûts et autres effets de litiges, poursuites ou autres imprévus

   obligations.



Strategic Risks:

• Notre capacité à sortir avec succès de l’activité automobile dans notre segment VTS

   in a manner that is in the best interest of our shareholders in order to
   optimize the segment's future financial performance;


• Notre capacité à réaliser avec succès les avantages escomptés de notre

présence «industrielle» sur le marché, avec nos sociétés CIS et BHVAC, tout en

maintenir une concentration appropriée sur les opportunités de marché offertes par nos VTS

   business;



• Notre capacité à reconnaître et à exécuter les opportunités de croissance et de diversification

   order to position us for long-term success; and



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Contenu

• les impacts potentiels des actions imprévues des militants,

y compris l’interruption de nos activités et les coûts associés.

Risques financiers:

• Notre capacité à financer efficacement nos besoins mondiaux de liquidité pour Modine

opérations en cours et respecter nos obligations à long terme, en particulier à la lumière

volatilité importante et pression négative sur les marchés financiers

le résultat de la pandémie COVID-19 et en cas de perturbations ou de tensions

   of the credit markets or extended recessionary conditions in the global
   economy;


• Impact des augmentations potentielles des taux d’intérêt, en particulier dans le LIBOR et

Taux interbancaire offert en euros (« EURIBOR ») par rapport à notre taux variable

obligations de dette et incertitude constante quant à l’utilisation

LIBOR ou taux de référence alternatifs;

• Notre capacité à respecter les dispositions financières modifiées dans notre solvabilité

accords, y compris notre ratio d’impact (endettement net divisé par le BAIIA ajusté,

tels que définis dans nos accords de prêt) et notre taux de couverture des intérêts

EBITDA divisé par les intérêts, tels que définis dans nos accords de prêt);

• impact négatif potentiel des fluctuations des taux de change

sur nos résultats financiers; je

• Notre capacité à réaliser efficacement les avantages des actifs d’impôts différés

les différentes juridictions dans lesquelles nous opérons.

Les déclarations pour l’avenir seront à partir de la date du présent rapport; nous ne supposons pas
toute obligation de mettre à jour les déclarations prospectives.

POINT 7A. ÉLIMINATION QUANTITATIVE ET QUALITATIVE DU RISQUE DE MARCHÉ.




In the normal course of business, we are subject to market exposure from changes
in foreign currency exchange rates, interest rates, commodity prices, credit
risk and other market changes.

Risque de change


We are subject to the risk of changes in foreign currency exchange rates due to
our operations in foreign countries. We have manufacturing facilities in Brazil,
China, India, Mexico, and throughout Europe.  We also have joint ventures in
China and South Korea.  We sell and distribute products throughout the world and
also purchase raw materials from suppliers in foreign countries.  As a result,
our financial results are affected by changes in foreign currency exchange rates
and economic conditions in the foreign markets in which we do business.
Whenever possible, we attempt to mitigate foreign currency risks on transactions
with customers and suppliers in foreign countries by entering into contracts
that are denominated in the functional currency of the entity engaging in the
transaction.  In addition, for certain transactions that are denominated in a
currency other than the engaging entity's functional currency, we may enter into
foreign currency derivative contracts to further manage our foreign currency
risk.  In fiscal 2020, we recorded a net gain of less than $1 million within our
statement of operations related to foreign currency derivative contracts.  In
addition, our consolidated financial results are impacted by the translation of
revenue and expenses in foreign currencies into U.S. dollars.  These translation
impacts are primarily affected by changes in exchange rates between the U.S.
dollar and European currencies, primarily the euro, and changes between the U.S.
dollar and the Brazilian real.  In fiscal 2020, more than 50 percent of our
sales were generated in countries outside the U.S.  A change in foreign currency
exchange rates will positively or negatively affect our sales; however, this
impact will be offset, usually to a large degree, with a corresponding effect on
our cost of sales and other expenses.  In fiscal 2020, changes in foreign
currency exchange rates unfavorably impacted our sales by $46 million; however,
the impact on our operating income was less than $3 million.  Foreign currency
exchange rate risk can be estimated by measuring the impact of a near-term
adverse movement of 10 percent in foreign currency exchange rates.  If these
rates were 10 percent higher or lower during fiscal 2020, there would not have
been a material impact on our fiscal 2020 earnings.

We maintain foreign currency-denominated debt obligations and intercompany loans
that are subject to foreign currency exchange risk.  We seek to mitigate this
risk through maintaining offsetting positions between external and intercompany
loans; however, from time to time, we also enter into foreign currency
derivative contracts to manage the currency exchange rate exposure.  These
derivative instruments are typically not accounted for as hedges, and
accordingly, gains or losses on the derivatives are recorded in other income and
expense in the consolidated statements of operations and typically offset the
foreign currency changes on the outstanding loans.

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Interest Rate Risk

We seek to reduce the potential volatility of earnings that could arise from
changes in interest rates.  We generally utilize a mixture of debt maturities
and both fixed-rate and variable-rate debt to manage exposure to changes in
interest rates.  Interest on both our term loans and borrowings under our
primary multi-currency revolving credit facility is based upon a variable
interest rate, primarily either LIBOR or EURIBOR, plus 137.5 to 250 basis
points, depending on our leverage ratio.  For purposes of calculating the
variable interest rate under our current credit agreement, LIBOR cannot be less
than one percent.  As a result, we are subject to risk of fluctuations in LIBOR
and EURIBOR and changes in our leverage ratio, which would affect the variable
interest rate on our term loans and revolving credit facility and could create
variability in interest expense.  As of March 31, 2020, our outstanding
borrowings on variable-rate term loans and the revolving credit facility totaled
$189 million and $127 million, respectively.  Based upon our outstanding debt
with variable interest rates at March 31, 2020, a 100-basis point increase in
interest rates would increase our annual interest expense in fiscal 2021 by
approximately $3 million.

Risques liés aux biens et à l’approvisionnement


We are dependent upon the supply of raw materials and supplies in our production
processes and, from time to time, enter into firm purchase commitments for
aluminum, copper, nickel, and natural gas.  Commodity price risk is most
prevalent to our vehicular businesses, which provide customized production and
service parts to customers under multi-year programs.  In order to mitigate
commodity price risk specific to these long-term sales programs, we maintain
contract provisions with certain customers that allow us to prospectively adjust
prices based upon raw material price fluctuations.  These prospective price
adjustments generally lag behind the actual raw material price fluctuations by
three months or longer, and typically the contract provisions are limited to the
underlying material cost based upon the London Metal Exchange and exclude
additional cost elements, such as related premiums and fabrication.  For our
industrial businesses, we predominantly seek to mitigate commodity price risk by
adjusting product pricing in response to any applicable price increases.

In an effort to manage and reduce our costs, we have been consolidating our
supply base.  As a result, we are dependent upon limited sources of supply for
certain components used in the manufacture of our products, including aluminum,
copper, steel and stainless steel (nickel).  We are exposed to the risk of
suppliers of certain raw materials not being able or willing to meet strong
customer demand (including the potential effects of trade laws and tariffs), as
they may not increase their output capacity as quickly as customers increase
their orders, and of increased prices being charged by raw material suppliers.

In addition, we purchase parts from suppliers that use our tooling to create the
parts.  In most instances, and for financial reasons, we do not have duplicate
tooling for the manufacture of the purchased parts.  As a result, we are exposed
to the risk of a supplier being unable to provide the quantity or quality of
parts that we require.  Even in situations where suppliers are manufacturing
parts without the use of our tooling, we face the challenge of obtaining
consistently high-quality parts from suppliers that are financially stable. 

nous

utiliser un programme de gestion des risques des fournisseurs qui utilise des
des outils tiers pour identifier et atténuer les situations avec les fournisseurs à haut risque.

Le risque de crédit


Credit risk represents the possibility of loss from a customer failing to make
payment according to contract terms.  Our principal credit risk consists of
outstanding trade accounts receivable.  At March 31, 2020, 34 percent of our
trade accounts receivable balance was concentrated with our top ten customers.
These customers operate primarily in the automotive, commercial vehicle,
off-highway, data center cooling and commercial air conditioning markets and are
influenced by similar market and general economic factors.  In the past, credit
losses from our customers have not been significant, nor have we experienced a
significant increase in credit losses in connection with the COVID-19 pandemic.

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We manage credit risk through a focus on the following:

• Trésorerie et placements – Nous examinons les dépôts en espèces et les placements à court terme

s’assurer que les banques ont des cotes de crédit acceptables et constituent des investissements à court terme

ils sont conservés dans des instruments sécurisés ou garantis. Nous pensons que nos investissements dans

la trésorerie et les investissements doivent être stables 31 mars 2020;

• Créances clients – Avant d’approuver les prêts, nous évaluons chacun

l’acheteur, compte tenu de la situation financière de l’acheteur, du paiement

expérience et informations de crédit. Après l’approbation du prêt, actif

surveiller la situation financière du client et les nouvelles commerciales applicables;

• Actifs de retraite – Nous avons retenu les services de conseillers externes pour nous aider à gérer

actifs dans nos régimes de retraite. Nous l’utilisons pour prendre des décisions d’investissement

un protocole de gestion des risques établi axé sur la protection du plan

actifs contre le risque négatif. Nous nous assurons que les investissements dans ces plans

assurer une diversification appropriée, les investissements sont surveillés

les équipes de placement et les gestionnaires de portefeuille adhèrent aux investissements établis

politique. Nous pensons que les fonds du plan sont soumis à des investissements appropriés

politiques et contrôles; je

• Assurance – Nous surveillons nos assureurs pour l’assurer

des estimations financières acceptables pour nous. Nous n’avons identifié aucun

préoccupations à ce sujet sur la base de nos critiques.

De plus, nous sommes également exposés aux risques liés à nos exigences
clients pour abaisser les prix de nos produits. Nous essayons de compenser cela
risque avec des contrats fermes avec nos clients chaque fois que possible, mais ceux-ci
les accords contiennent parfois des dispositions pour de futures baisses de prix.

Risque économique et de marché


Economic risk represents the possibility of loss resulting from economic
instability in certain areas of the world or downturns in markets in which we
operate.  We sell a broad range of products that provide thermal solutions to
customers operating in diverse markets, including the automotive, commercial
vehicle, off-highway, and commercial, industrial, and building HVAC&R markets.
The COVID-19 pandemic has negatively impacted these markets; the duration and
severity of the impacts of COVID-19 on these markets are currently uncertain.
We are monitoring economic conditions in the U.S. and abroad and the impacts
associated with the COVID-19 pandemic.

Considering our global presence, we also encounter risks imposed by potential
trade restrictions, including tariffs, embargoes, and the like.  We continue to
pursue non-speculative opportunities to mitigate these economic risks, and
capitalize, when possible, on changing market conditions.  We pursue new market
opportunities after careful consideration of the potential associated risks and
benefits.  Successes in new markets are dependent upon our ability to
commercialize our investments.  Current examples of new and emerging markets for
us include those related to electric vehicles, coils and coolers in certain
markets, and coatings.  Our investment in these areas is subject to the risks
associated with technological success, customer and market acceptance, and our
ability to meet the demands of our customers as these markets grow.

Contrats à terme de couverture et de change

Nous utilisons des instruments financiers dérivés comme outil de gestion de certains instruments financiers
des risques. Nous interdisons l’utilisation de dérivés dérivés.


Commodity derivatives:  From time to time, we enter into over-the-counter
forward contracts related to forecasted purchases of aluminum and copper.  Our
strategy is to reduce our exposure to changing market prices of these
commodities.  In fiscal 2020 and 2019, we designated certain commodity forward
contracts as cash flow hedges for accounting purposes.  Accordingly, for these
designated hedges, we record unrealized gains and losses related to the change
in the fair value of the contracts in other comprehensive income (loss) within
shareholders' equity and subsequently recognize the gains and losses within cost
of sales as the underlying inventory is sold.  In fiscal 2020, 2019 and 2018,
net gains and losses recognized in cost of sales related to commodity forward
contracts were less than $1 million in each year.

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Foreign currency forward contracts:  We use derivative financial instruments in
a limited way to mitigate foreign currency exchange risk.  We periodically enter
into foreign currency forward contracts to hedge specific foreign
currency-denominated assets and liabilities as well as forecasted transactions.
We have designated certain hedges of forecasted transactions as cash flow hedges
for accounting purposes.  Accordingly, for these designated hedges, we record
unrealized gains and losses related to the change in the fair value of the
contracts in other comprehensive income (loss) within shareholders' equity and
subsequently recognize the gains and losses as a component of earnings at the
same time and in the same financial statement line that the underlying
transactions impact earnings.  In fiscal 2020, 2019, and 2018, net gains and
losses recognized in sales and cost of sales related to foreign currency forward
contracts were less than $1 million in each year.  We have not designated
forward contracts related to foreign currency-denominated assets and liabilities
as hedges.  Accordingly, for these non-designated contracts, we record
unrealized gains and losses related to the change in the fair value of the
contracts in other income and expense.  Gains and losses on these non-designated
foreign currency forward contracts are offset by foreign currency gains and
losses associated with the related assets and liabilities.

Counterparty risks:  We manage counterparty risks by ensuring that
counterparties to derivative instruments maintain credit ratings acceptable to
us.  At March 31, 2020, all counterparties had a sufficient long-term credit
rating.

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