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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: December 26, 2003

Commission File Number: 1-1373


MODINE MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (262) 636-1200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

34,319,087 shares of registrant's Common Stock, $0.625 par value, were outstanding on February 6, 2004.

		Three months ended						Nine months ended
		December 26						December 26
		2003			2002			2003			2002
Net earnings before cumulative effect of accounting change as reported			$12,318			$9,612			$27,909		$26,267
Stock compensation expense under fair value method			-			(17)			(528)		(356)
Net earnings before cumulative effect of accounting change pro forma			$12,318			$9,595			$27,381		$25,912
Net earnings as reported			$12,318			$9,612			$27,909		$4,575
Stock compensation expense under fair value method			-			(17)			(528)		(356)
Net earnings pro forma			$12,318			$9,595			$27,381		$4,220
Net earnings per share-before cumulative effect of accounting change (basic) as reported			$0.36			$0.29			$0.82		$0.79
Net earnings per share-before cumulative effect of accounting change (basic) pro forma			$0.36			$0.29			$0.81		$0.78
Net earnings per share (basic) as reported			$0.36			$0.29			$0.82		$0.14
Net earnings per share (basic) pro forma			$0.36			$0.29			$0.81		$0.13
Net earnings per share-before cumulative effect of accounting change (diluted) as reported			$0.36			$0.29			$0.82		$0.78
Net earnings per share-before cumulative effect of accounting change (diluted) pro forma			$0.36			$0.29			$0.81		$0.77
Net earnings per share (diluted) as reported			$0.36			$0.29			$0.82		$0.14
Net earnings per share (diluted) pro forma			$0.36			$0.29			$0.81		$0.13

			(In thousands)
	Three months ended December 26		Nine months ended December 26
	2003	2002	2003	2002
Royalty income	$1,625	$  416	$4,182	$1,170
Gain/(loss) on the sale of property,
equipment, and business	1,069	516	1,838	(1,697)
Equity in earnings of    non-consolidated affiliates	726	216	1,678	1,451
Interest income	291	425	919	1,066
Other non-operating income	1,469	535	4,382	2,436
Total	$5,180	$2,108	$12,999	$4,426

4.      Earnings Per Share

		Three months ended December 26																					Nine months ended December 26
					2003					2002												2003					2002
Net earnings per share of common stock basic:
Before cumulative effect of accounting change				$0.36			$0.29												$ 0.82							$0.79
Cumulative effect of accounting change				-			-												-							(0.65)
Net earnings -- basic				$0.36			$0.29												$ 0.82							$0.14
Net earnings per share of common stock - diluted:
Before cumulative effect of accounting change				$0.36			$0.29												$ 0.82							$0.78
Cumulative effect of accounting change				-			-												-							(0.64)
Net earnings -- assuming dilution				$0.36			$0.29												$ 0.82							$0.14
Numerator:
Earnings before cumulative effect of accounting change				$12,318			$9,612												$27,909							$26,267
Cumulative effect of accounting change				-			-												-							(21,692)
Net earnings available to common shareholders				$12,318			$9,612												$27,909							$ 4,575
Denominator:
Weighted average shares outstanding - basic				33,924			33,639												33,888							33,619
Effect of dilutive securities - options*				213			56												123							130
Weighted average shares outstanding -- assuming dilution				34,137			33,695												34,011							33,749
*There were outstanding options to purchase common stock at prices that exceeded the   average market price for the income statement period as follows:
Average market price per share				$25.77				$18.23													$22.78							$22.60
Number of shares				1,040				2,608													1,723							2,493

5.      Comprehensive Earnings

		(In thousands)
	December 26, 2003	March 31, 2003
Raw materials	$ 27,624	$ 25,274
Work in process	27,024	28,868
Finished goods	72,749	76,670
Total inventories	$127,397	$130,812

		(In thousands)
	December 26, 2003	March 31, 2003
Gross property, plant & equipment	$ 832,566	$ 757,047
Less accumulated depreciation	(447,218)	(397,289)
Net property, plant & equipment	$ 385,348	$ 359,758

9.      Restructuring and plant closures

	(In thousands)
	Fiscal 2004
Termination Benefits:
Balance at April 1, 2003	$489
Payments and foreign currency translation	39
Adjustments	(47)
Balance at December 26, 2003	$481
Other Restructuring Charges:
Balance at April 1, 2003	$ 29
Payments	(8)
Adjustments	(21)
Balance at December 26, 2003	$ 0

10. Goodwill and Intangible Assets
    
    In connection with the goodwill impairment evaluation provisions of SFAS No.142, we performed our annual goodwill impairment review in the third quarter and found no impairment for fiscal year 2004.

			(In thousands)
	Original Equipment	Distributed Products	European Operations	Total
Balance, March 31, 2003	$ 20,344	$ 4,031	$ 7,218	$ 31,593
Fluctuations in foreign currency	-	(37)	875	838
Balance, December 26, 2003	$ 20,344	$ 3,994	$ 8,093	$ 32,431

					(In thousands)
	December 26, 2003			March 31, 2003
	Gross Carrying		Accumulated	Gross Carrying			Accumulated
	Value		Amortization	Value			Amortization
Amortized Intangible Assets:
Patents and product technology	$ 3,951		$ 2,586	$ 3,951			$ 2,388
Non-compete agreements	2,182		2,182	2,182			2,124
Other intangibles	118		118	118			118
Total	6,251		4,886	6,251			4,630
Unamortized Intangible Assets:
Pension Asset	2,904		-	2,892			-
Total intangible assets	$ 9,155		$ 4,886	$ 9,143			$ 4,630

11.     Financial Instruments

12.     Foreign Exchange Contracts/Derivatives/Hedges

		(In thousands)
Warranty Liability	2003	2002
Three months ended December 26:
Balance at September 26	$12,776	$10,470
Accruals for warranties issued in current year	2,890	2,129
Accruals related to pre-existing warranties	2,531	309
Settlements made	(2,441)	(2,638)
Effect of exchange-rate changes on the warranty liability	490	-
Balance at December 26	$16,246	$10,270
Nine months ended December 26:
Balance at March 31	$12,970	$9,093
Accruals for warranties issued in current year	7,550	6,226
Accruals related to pre-existing warranties	3,013	876
Settlements made	(7,779)	(5,925)
Effect of exchange-rate changes on the warranty liability	492	-
Balance at December 26	$16,246	$10,270

14.     Segment data

		(In thousands)
Quarter ended December 26,	2003	2002
Sales:
Original Equipment	$127,500	$113,550
Distributed Products	87,486	83,329
European Operations	106,948	89,962
Segment sales	321,934	286,841
Eliminations	(11,135)	(15,011)
Total net sales	$310,799	$271,830
Operating income:
Original Equipment	$  19,779	$  18,375
Distributed Products	862	(911)
European Operations	12,102	12,329
Segment operating income	32,743	29,793
Corporate & administrative expenses	(18,481)	(14,810)
Eliminations	37	39
Other items not allocated to segments	3,864	698
Earnings before income taxes and
cumulative effect of accounting change	$  18,163	$  15,720

		(In thousands)
Nine Months ended December 26,	2003	2002
Sales:
Original Equipment	$354,107	$347,295
Distributed Products	268,581	269,466
European Operations	291,504	246,779
Segment sales	914,192	863,540
Eliminations	(35,436)	(44,109)
Total net sales	$878,756	$819,431
Operating income:
Original Equipment	$  53,245	$  57,144
Distributed Products	3,323	6,035
European Operations	32,124	25,426
Segment operating income	88,692	88,605
Corporate & administrative expenses	(56,032)	(47,299)
Eliminations	106	78
Other items not allocated to segments	8,990	(129)
Earnings before income taxes and
cumulative effect of accounting change	$  41,756	$  41,255

15.     Contingencies and Litigation

Item 2.  Management's Discussion and Analysis of Results of Operations and Financial Condition

The following discussion and analysis provides information that Management believes is relevant to an assessment and understanding of Modine's consolidated results of operations and financial condition. This discussion should be read in conjunction with the consolidated financial statements and notes thereto.

RESULTS OF OPERATIONS

Comparison of the Third Quarter of 2003-04 with the Third Quarter of 2002-03

Third quarter net sales of $310.8 million were 14.3% higher than the $271.8 million reported in the third quarter of last year. Sales were positively impacted by net favorable currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, of approximately $17.5 million when compared to the same quarter last year.

Revenues from the European Operations segment grew by 18.9%, or $17.0 million, from the same quarter last year. Excluding the impact of the stronger Euro in relation to the U.S. Dollar, revenues would have increased by 1.3%. Volume declines recorded in the European automotive market were offset by volume increases in the European heavy-duty and industrial market. Revenues from the Original Equipment segment increased by 12.3% or $14.0 million, from the same quarter last year. Sales improvements occurred across all markets supplied by the Original Equipment segment, including the heavy duty and industrial, truck and automotive markets when compared to the third quarter of the prior year. In the Distributed Products segment, revenue increased 5.0%, or $4.2 million. Increased revenues in the HVAC&R and electronics cooling markets were partially offset by a small decline in Aftermarket revenues.

Gross profit, as a percentage of sales, was 23.9%. This was a 1.0% decrease as a percentage of sales from the 24.9% earned in the third quarter of the previous year. The current year gross profit was negatively impacted by incremental expenses of $2.2 million as a result of an agreement reached with a European Original Equipment customer relating to a product performance issue and approximately $1.0 million in warranty costs associated with a North American Original Equipment customer. Reflecting this impact, the quarter-over-quarter gross margin percentage comparison would have been essentially flat. Higher gross margins were reported in the Distributed Products segment, while declines occurred in the Original Equipment and European Operations segment. Improved margins occurred in the North American heavy duty & industrial markets as well as the aftermarket. The Company's heavy duty markets continue to benefit from the restructuring program initiated in the third quarter of fiscal 2002. These imp rovements were offset by reduced margins in the remainder of the Company markets for the third quarter. Declines in the North American truck market were primarily driven by the aforementioned warranty costs associated with a North American Original Equipment customer.

Selling, general and administrative expenses of $60.2 million increased by 13.7% from the prior year's third quarter of $52.9 million. The impact of currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, contributed to approximately 30 percent of the overall increase. Excluding the currency impact, small increases occurred in a number of expense categories; the largest increases occurred in wages, fringe benefits and other personnel-related benefits, and premium increases in non-employee related insurance.

Income from operations of $14.3 million decreased by $0.7 million, or 4.8% over the same quarter last year. The Original Equipment segment increased 7.6% to $19.8 million from $18.4 million a year ago, reflecting the positive impact of new business programs, such as the recently announced 2004 Dodge Durango for the Chrysler Group, and a number of engine-related programs. The improved profitability was achieved despite continued pricing pressure, costs incurred in launching new programs and products, and the aforementioned warranty expenses. The Distributed Products segment operating income turned from a loss of $0.9 million one year ago to a positive $0.9 million this year, with the aftermarket and HVAC businesses both contributing to the increase. The electronics business recorded the largest percentage increase in sales among the segment's business units. However, lower margins associated with a shift in product mix to consumer markets from telecommunications continue to have a negative impact on thi s segment's operating income. The European Operations segment decreased 1.8% to $12.1 million from $12.3 million one year ago. While net favorable currency exchange rates had a positive impact on the segment's profitability, the benefit was more than offset by the approximately $2.2 million of incremental expenses related to an agreement reached with a European Original Equipment customer relating to a product performance issue.

Interest expense decreased 6.7%, or $0.1 million, while average outstanding debt levels decreased $7.2 million, or approximately 6.5%, from the same quarter one-year ago. The decline in the interest expense was in line with the debt level decline during the compared periods.

Net non-operating income increased by $3.1 million from the same quarter one year ago. Royalty income was up $1.2 million from the third quarter last year. The current year included recognition of $0.7 million in royalty income that was in arrears from a manufacturer producing heat transfer products for the power generation industry. Also, a gain of $0.6 million was recorded during the third quarter from the sale of the manufacturing facility in LaPorte, Indiana, closed as part of the fiscal 2002 restructuring plan. In addition, equity in earnings of non-consolidated affiliates were up $0.5 million, which was a direct result of the strong performance of Modine's Brazilian joint venture company, Radiadores Visconde, Ltda., verses the prior year quarter. Favorable exchange gains on foreign currency transactions were up $0.8 million from the third quarter last year.

The provision for income taxes in the current quarter was $5.8 million compared to last year's third quarter amount of $6.1 million. The effective tax rate of 32.2% was reduced 6.7 percentage points from the prior year. The main item contributing to the overall reduction recorded in the quarter was the differential with respect to foreign tax rates and the related income mix in those foreign jurisdictions.

Net earnings for the quarter of $12.3 million, or $0.36 basic and diluted earnings per share were up when compared to last year's third quarter net earnings of $9.6 million, or $0.29 basic and diluted earnings per share. Return on shareholders' equity for the third quarter of the current fiscal year was 8.9%. Return on shareholders' equity is calculated by dividing net earnings recorded for the period by the average shareholders' equity. This result is then annualized to arrive at the return on shareholders' equity percentage.

Comparison of the First Nine Months of 2003-04 with the First Nine Months of 2002-03

Net sales for the first nine months of fiscal 2003-04 were $878.8 million, up 7.2% from the $819.4 million reported in the same period of last year. Sales were positively impacted by net favorable currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, of approximately $52.4 million, when compared to the first nine months of last year.

Overall, changes in the Company's segment sales were mixed for the first nine months of the year. The European Operations segment finished higher in U.S. Dollars due to the favorable currency translation impact of $47.1 million recorded in the first nine months of the year, but declined by 1.0% in local currency from year-ago levels. In the Original Equipment segment, sales increased 2.0%. Sales improvements were generated in both the truck and automotive markets while the heavy duty & industrial market's revenue was impacted by weaker markets and customer and product rationalization strategies. The Distributed Products segment was virtually flat, lower only by 0.3%. Reduced Aftermarket revenues was the major contributor to the decline. This was offset by stronger sales in the electronics cooling market and marginal increases in the HVAC&R market.

Gross profit of 24.1% was down 0.8 percentage points from the first nine months of the previous year. Material costs, as a percentage of sales, was the largest driver in the reduction in gross profit. Gross profits, in dollars, grew in the European Operations and Original Equipment segment by 23.0% and 0.5%, respectively, while declining in the Distributed Products segment by 4.8%.

Selling, general and administrative expenses of $179.2 million, or 20.4% of sales, increased 0.4 percentage points when compared to the first nine months of last year. The impact of currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, contributed to approximately 40 percent of the overall increase. The largest items contributing to the remaining increase were wages, fringe benefits and other personnel-related benefits (in particular the acceleration of retirement-related benefits associated with the retirement of the Company's Chairman, Donald R. Johnson), offset in part by reductions in litigation costs.

Operating income of $32.8 million, or 3.7% of sales, was down 1.4 percentage points from the $41.4 million, or 5.1% of sales, in the first nine months of the previous year. The Original Equipment segment decreased 6.8% to $53.2 million from $57.1 million one year ago. Current year results were negatively impacted by continued pricing pressure, new program launch costs, higher warranty costs, and costs associated with a program scope change. The Distributed Products segment decreased 44.9% to $3.3 million from $6.0 million one year ago. The Company experienced weakness in both the aftermarket and electronics markets on a year-to-date basis. The European Operations segment increased 26.4% to $32.1 million from $25.4 million one year ago. Major influences were the stronger Euro in relation to the U.S. Dollar, and incremental warranty expenses, offset in part by savings from the restructuring in the heavy-duty business.

Interest expense declined $0.5 million, or 12.0% from the same nine month-period one year ago. Average outstanding debt levels for the nine months declined $42.6 million, or approximately 36.4% from the same period one year ago. The decline in the interest expense was less than the debt level decline primarily due to exchange rate fluctuations on Euro-denominated loans.

Net non-operating income increased by $8.6 million from the same nine-month period one year ago. The prior year included the sale of Modine's aftermarket operations in Canada, Modine of Canada, Ltd., resulting in a $1.7 million pre-tax loss. Royalty income was up $3.0 million from the first nine months of last year resulting primarily from manufacturers producing heat transfer products for the power generation industry. Also, the gain from the sale of property and equipment was up $1.8 million and favorable exchange gains on foreign currency transactions were up $1.7 million compared to the prior year. Equity in earnings of non-consolidated affiliates were up $0.2 million from the prior year.

The provision for income taxes in the first nine months was $13.8 million compared to last year's first nine months' amount of $15.0 million. The effective tax rate on earnings before the cumulative effect of accounting change of 33.2% declined by 3.1 percentage points from the 36.3% reported in the prior year. The primary reason for the overall reduction in the effective tax rate was the differential with respect to foreign tax rates and the related income mix in those foreign jurisdictions.

Net earnings were $27.9 million or $0.82 basic and diluted earnings per share for the first nine months of the year. This compares to earnings, before the cumulative effect of the accounting change for goodwill impairment, of $26.3 million, or $0.79 basic earnings per share and $0.78 diluted earnings per share, for the first nine months of the prior year. The prior year goodwill impairment charge resulted in a $(0.65) and $(0.64) reduction to basic and diluted earnings per share, respectively. Net earnings for the first nine months of the prior year, which include a $21.7 million after-tax charge for goodwill impairment reported as an accounting change, were $4.6 million, or $0.14 basic and diluted earnings per share. Return on shareholders' equity through the third quarter of the current fiscal year was 6.8%. Return on shareholders' equity is calculated by dividing net earnings recorded for the period by the average shareholders' equity. This result is then annualized to arrive at the return on sharehol ders' equity percentage.

Outlook for the Remainder of the Year

Third quarter record sales and notably improved earnings is the start of the projected stronger second half of the fiscal year. For the remainder of the fiscal year, management expects the positive contribution from the new business programs to continue, and anticipates the fourth quarter to produce another similar strong year-over-year performance. Modine is on target to achieve growth in both sales and earnings on a full year basis for the second consecutive year. The Company continues to be encouraged by improvements in certain key markets, primarily agriculture and construction, and truck. These forward-looking statements regarding sales, earnings, and operations are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. See "Important Factors and Assumptions Regarding Forward-Looking Statements" attached hereto as Exhibit 99 and incorporated herein by reference.

FINANCIAL CONDITION

Comparison between December 26, 2003 and March 31, 2003

Current assets

Cash and cash equivalents of $83.4 million increased $6.1 million from the March 31, 2003 balance. Cash provided by operating activities and the issuance of a small amount of common stock during the nine months exceeded capital expenditures, debt reductions and dividend payments.

Trade receivables of $170.6 million were up $9.3 million over year-end. The change in currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, was the primary reason for the increase. Record third quarter sales also influenced the increase in the trade receivable balance.

Inventory levels of $127.4 million decreased by $3.4 million from year-end. Factors influencing the change were seasonal fluctuations in the Distributed Products segment offset in part by increases in the European Operations segment primarily related to the stronger Euro in relation to the U.S. Dollar.

Deferred income taxes and other current assets declined by $4.1 million from year-end. The largest items contributing to the change were reductions in prepaid income tax assets and unbilled customer tooling, offset in part by an increase in prepaid insurance due to timing and duration of policy renewals, prepayments to customers, and increases in royalty receivables.

The current ratio remained unchanged at 2.2 to 1. Net working capital increased $3.7 million to $227.8 million. Major items influencing the change were higher cash and cash equivalents and higher trade receivables, together with a reduction in the current portion of long-term debt. These were offset in part by lower inventories and lower other current assets, together with an increase in accounts payables, accrued compensation and employee benefits, income taxes payable, and other current liabilities.


Noncurrent assets

Net property, plant and equipment, including property held for sale, of $386.2 million increased by $24.6 million over year-end. Capital expenditures and foreign currency translation during the nine months were higher than depreciation and retirements. Continued expenditures for a new assembly facility opened November 21, 2003 in Wackersdorf, Germany, and an administration building, technical center and wind tunnel facilities in Bonladen, Germany, along with tooling and other new equipment purchases primarily supporting the North American truck and automotive markets were among the larger capital expenditures during the first nine months. Outstanding commitments for capital expenditures were $31.0 million at December 26, 2003. More than 70 percent of the commitments relate to Modine's European operations. The outstanding commitments will be financed through a combination of funds generated from operations and third party borrowing as required.

Investments in unconsolidated affiliates of $27.3 million increased by $4.9 million from year-end. Equity earnings of affiliates were $1.7 million for the first nine months of fiscal 2004. The remainder of the change resulted from a favorable currency translation effect on Modine's Brazilian joint venture company, Radiadores Visconde, Ltda., and to a lesser extent from the Company's other equity investments.

Goodwill increased by $0.8 million to $32.4 million. This increase was the result of fluctuations in foreign currency exchange rates. Intangible assets decreased by $0.2, which is primarily amortization expense recorded in the first nine months of the current year.

Deferred charges and other noncurrent assets increased by $2.4 million. The net increase was primarily the result of continuing recognition of a change in deferred pension assets and to a lesser extent an increase in long-term deferred tax assets primarily related to the stronger euro in relation to the U.S. dollar.

Current Liabilities

Accounts payable and other current liabilities of $182.2 million were $9.1 million higher than in March 2003. Increase of warranty accruals related to North American and European Original Equipment customers, timing of payments for accrued compensation and employee benefits, and normal timing differences in the level of operating activity, offset in part by a reduction in interest payable, related to the retirement of debt, were responsible for changes in the various components. Accrued income taxes increased $4.6 million from timing differences in making estimated payments.

Debt

Outstanding debt decreased $9.2 million to $102.0 million from the March 2003 balance of $111.2 million. Domestic long-term debt decreased $9.8 million, including scheduled payments of $10.5 million, net of final settlements on previous acquisitions and equity investments and a $7.0 million early paydown on the credit line revolver. The remaining change in domestic long-term debt of $7.7 million was due to the increase in the U.S. Dollar value of the Euro-denominated loans. European long-term debt increased by $0.6 million, which included scheduled payments of $2.1 million offset by $2.7 million in currency translation due to the stronger Euro in relation to the U.S. Dollar. The balance of long-term debt due within the next twelve months stood at $3.3 million, while there was no outstanding short-term debt at the end of the quarter.

Consolidated available lines of credit increased $7.8 million in the first nine months to $151.4 million at December 26, 2003. Upon request to the agent bank an additional $50.0 million is available on the credit line revolver, bringing the total available up to $201.4 million. Domestically, Modine's unused lines of credit were increased to $139.0 million. Foreign unused lines of credit were $12.4 million, an increase of $0.8 million. Total debt as a percentage of shareholders' equity decreased from 21.0% at year-end to 18.1%.

Shareholders' Equity

Total shareholders' equity increased by $33.9 million to a total of $564.3 million. Retained earnings increased by $13.9 million. The additions to retained earnings included $27.9 million net earnings reported year-to-date, offset in part by $14.0 million in dividend payments. Net favorable foreign currency translation of $16.3 million was reported as the U.S. Dollar weakened against the Euro and the Brazilian Real during the first nine months. Also favorably impacting shareholders' equity was an increase in paid-in capital and common stock of $3.3 million. This increase resulted from the issuance of common stock used to satisfy stock option exercises and employee stock plan requirements. Also recognized in paid-in capital were the associated tax benefits resulting from stock option exercises.

The Company expects to meet its future operating and capital-expenditure needs primarily through a combination of current cash balances, internally generated funds and external financing arrangements. The Company expects to make scheduled debt repayments in fiscal 2004 with internally generated funds. The Company believes that its internally generated cash flow, together with access to external resources, will be sufficient to satisfy existing commitments and plans. In addition, management believes it is positioned to provide the necessary financial resources to take advantage of potential strategic business opportunities that arise within fiscal 2004.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, Modine is subject to market exposure from changes in foreign exchange rates, interest rates, credit risk, economic risk and commodity price risk.

Foreign Currency Risk

Modine is subject to the risk of changes in foreign currency exchange rates due to its operations in foreign countries. Modine has manufacturing facilities in Mexico, Taiwan, and throughout Europe. It also has equity investments in companies located in France, Japan and Brazil. Modine sells and distributes its products throughout the world. As a result, the Company's financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which the Company manufactures, distributes and sells it products. The Company's operating results are primarily exposed to changes in exchange rates between the U. S. Dollar and the European currencies, primarily the Euro. Changes in foreign currency exchange rates for the Company's foreign subsidiaries reporting in local currencies are generally reported as a component of shareholders' equity. The Company's other comprehensive loss decreased by $16.3 million for the nine mon ths ended December 26, 2003 and decreased by $20.5 million for the twelve months ended March 31, 2003. As of December 26, 2003 and March 31, 2003, the Company's foreign subsidiaries had net current assets (defined as current assets less current liabilities) subject to foreign currency translation risk of $93.9 million and $79.2 million, respectively. The potential decrease in the net current assets from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be approximately $9.4 million and $7.9 million, respectively. This sensitivity analysis presented assumes a parallel shift in foreign currency exchange rates. Exchange rates rarely move in the same direction. This assumption may overstate the impact of changing exchange rates on individual assets and liabilities denominated in a foreign currency. The Company has certain foreign-denominated long-term debt obligations that are sensitive to foreign currency exchange rates. The following table presents the future principal ca sh flows and weighted average interest rates by expected maturity dates. The fair value of long-term debt is estimated by discounting the future cash flows at rates offered to the Company for similar debt instruments of comparable maturities. The carrying value of the debt approximates fair value. As of December 26, 2003, the foreign-denominated long-term debt matures as follows:

Interest Rate Risk
Modine's interest rate risk policies are designed to reduce the potential volatility of earnings that could arise from changes in interest rates. The Company utilizes a mixture of debt maturities together with both fixed-rate and floating-rate debt to manage its exposure to interest rate variations related to its borrowings. The Company has not entered into any interest rate derivative instruments. The following table presents the future principal cash flows and weighted average interest rates by expected maturity dates. The fair value of long-term debt is estimated by discounting the future cash flows at rates offered to the Company for similar debt instruments of comparable maturities. The carrying value of the debt approximates fair value. As of December 26, 2003, long-term debt matures as follows:

Credit Risk
Credit risk is the possibility of loss from a customer's failure to make payment according to contract terms. The Company's principal credit risk consists of outstanding trade receivables. Prior to granting credit, each customer is evaluated, taking into consideration the borrower's financial condition, past payment experience and credit information. After credit is granted the Company actively monitors the customer's financial condition and developing business news. Approximately 56% of the trade receivables balance at December 26, 2003 was concentrated in the Company's top ten customers. Credit losses to customers in markets served by the Company have not been material.

Economic Risk
Economic risk is the possibility of loss resulting from economic instability in certain areas of the world. The Company is continuing to monitor economic conditions in Brazil and the effect on the Company's $15.3 million net investment in its 50 percent-owned affiliate. Year-to-date, the Brazilian Real has strengthened against the U.S. Dollar and appears to have become more stable. The Company is also continuing to monitor the economic conditions in the United States and elsewhere globally.


Commodity Price Risk
The Company is dependent upon the supply of certain raw materials and supplies in the production process and has from time to time entered into firm purchase commitments for copper, aluminum alloy, and natural gas. The Company does not use forward contracts to hedge against changes in certain specific commodity prices of the purchase commitments outstanding. The Company does maintain agreements with certain original equipment customers to pass through certain material price fluctuations in order to mitigate the economic risk.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission is recorded, processed, summarized and reported on a timely basis. The Company's principal executive officer and principal financial officer have reviewed and evaluated the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report (the "Evaluation Date"). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective in bringing to their attention on a timely basis material information relating to the Company required to be included in the Company's periodic filings under the Exchange Act.

There have not been any changes in the Company's internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the Company's most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the normal course of business, Modine and its subsidiaries are named as defendants in various lawsuits and enforcement proceedings by private parties, the Occupational Safety and Health Administration, the Environmental Protection Agency, other governmental agencies, and others in which claims, such as those relating to personal injury, property damage, or other alleged economic loss, are asserted against Modine. Modine is also subject to other liabilities that arise in the ordinary course of its business. Many of the pending damages claims are covered by insurance, and when appropriate Modine accrues for uninsured liabilities. While the outcomes of these matters, including those discussed below, are uncertain, Modine does not expect that any unrecorded liabilities that may result from these matters are reasonably likely to have a material effect on Modine's liquidity, financial condition or results of operations.

The Mitsubishi and Showa Litigation

Over the last 10 years Modine and Showa Denko (and Mitsubishi Motors in some cases) have instituted various lawsuits and legal proceedings against each other pertaining to Modine's PF® Parallel Flow Technology and Showa's SC condenser. On July 14, 2000, Modine and Showa reached a settlement and license agreement. The Agreement calls for cross-licensing of these technologies between the parties. As a result of the agreement and another with Mitsubishi Heavy Industries, Modine received, in the first and second quarters of fiscal 2001, payments totaling $17 million representing partial settlement for past infringement of Modine's PF technology. In March 2002, Modine received an unfavorable decision from the Japanese patent office Board of Appeals, and believed and reported that it would no longer receive royalty payments in Japan related to its PF technology. However, since July 2000, Modine has been receiving royalty payments from certain Japanese competitors related to its PF patents, which expire in 2006. In July 2002, the Company filed notice of its appeal of the March 2002 ruling with the Tokyo High Court. The Tokyo High Court affirmed the decision of the Japanese patent office Board of Appeals on February 3, 2004, invalidating the Company's PF patent in Japan. Royalties currently being paid by these Japanese companies will likely cease as the result of this decision. The timing of any cessation of royalty income would be primarily dependent upon any decision by Modine to commence a further appeal, and the date the adverse decision becomes final. Modine intends to review the decision of the Tokyo High Court and will make a decision on a further appeal after such review.

A final ruling in Japan does not affect Modine's royalty income outside of Japan. Modine will continue to collect royalties for PF products produced in the United States where, to date, its patents have been upheld.

In Europe, after oral hearings on July 2 and 3, 2003, the European Patent Office upheld the prior revocation of one and revoked a second of the Company's PF patents. As a result, Modine's PF technology cannot be asserted to be proprietary to the Company in Europe. This decision does not affect Modine's royalty income outside of Europe. Modine did not receive material amounts of royalty income for licenses in Europe prior to the July 2 and 3, 2003 decisions.

Modine continues to evaluate the costs and benefits associated with its strategies for protecting its PF technology. The Company has accrued the expected legal costs resulting from these litigation decisions. The Company did not make any additions to these accruals during the third quarter.

Modine v. Delphi

There were no material developments in this litigation during the third quarter.

Kawasaki Robotics (USA), Inc. v. Modine

There were no material developments in this litigation during the third quarter.

Under the rules of the Securities and Exchange Commission, certain environmental proceedings are not deemed to be ordinary or routine proceedings incidental to the Company's business and are required to be reported in the Company's annual and/or quarterly reports. The Company is not currently a party to any such proceedings, except as otherwise reported in Note 15 to the Notes to Consolidated Financial Statements (unaudited) herein.

Other previously reported legal proceedings have been settled or the issues resolved so as not to merit further reporting.

Item 6. Exhibits and Reports on Form 8-K.

(a)     Exhibits:

The following exhibits are included for information only unless specifically incorporated by reference in this report:

*Filed herewith.


(b)     Reports on Form 8-K:

The Company filed five reports on Form 8-K during and following the end of the third quarter, described as follows:

1.  October 15, 2003, announcing the financial results for the quarter ended September 26, 2003.

2.  October 15, 2003, announcing a quarterly dividend.

3.  October 16, 2003, amending Form 8-K filed on October 15, 2003, regarding second quarter financial results.

4.  January 21, 2004, announcing the financial results for the quarter ended December 26, 2003.

5.  January 21, 2004, announcing a quarterly dividend.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: February 6, 2004