What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-05-27 compared with 2025-05-21 · 511 added, 431 removed, 931 unchanged (50% of the section changed)

7 unchanged sentences

Restructuring expenses

Gain on sale of assets

Impairment charge

Loss (gain) on sale of assets

Operating income

Interest expense

Pension termination charge

Other expense – net

Earnings before income taxes

(Provision) benefit for income taxes

Provision for income taxes

Net earnings attributable to noncontrolling interest

7 unchanged sentences

(In millions)

Other comprehensive income (loss):

Other comprehensive income (loss), net of income taxes:

Foreign currency translation

Defined benefit plans, net of income taxes of ($ 1.4 ), $ 1.6 , and $ 1.1 million

Cash flow hedges, net of income taxes of ($ 0.2 ), ($ 0.2 ), and $ 0 million

Defined benefit plans

Cash flow hedges

Total other comprehensive income (loss)

45 unchanged sentences

Depreciation and amortization

Impairment charge

Loss (gain) on sale of assets

Pension termination charge

Stock-based compensation expense

Deferred income taxes

Gain on sale of assets

Changes in operating assets and liabilities:

7 unchanged sentences

Expenditures for property, plant and equipment

Payments for business acquisitions

Purchase of TMGcore, Inc.

technology and related assets (see Note 2)

Payments for business acquisitions, net of cash acquired

Purchase of technology and related assets (see Note 2)

Proceeds from (payments for) disposition of assets

3 unchanged sentences

Repayments of debt

(Repayments) borrowings on bank overdraft facilities – net

(Repayments) borrowings on bank overdrafts – net

Purchases of treasury stock

Dividends paid to noncontrolling interest

Net cash (used for) provided by financing activities

Net cash provided by (used for) financing activities

Effect of exchange rate changes on cash

21 unchanged sentences

Balance, March 31, 2025

Other comprehensive loss

Other comprehensive income

Stock options and awards

11 unchanged sentences

In addition, the Company is a leading provider of engineered heat transfer systems and high-quality heat transfer components for use in on- and off-highway original equipment manufacturer (“OEM”) vehicular applications.

The Company’s primary product groups include i) data center cooling;

ii) heat transfer;

iv) air-cooled;

v) liquid-cooled;

and vi) advanced solutions.

Acquisitions and dispositions

The Company accounts for acquired businesses using the acquisition method.

Under the acquisition method, the Company records assets acquired and liabilities assumed at their respective fair values.

If the assets acquired do not constitute a business, the Company accounts for the transaction as an asset acquisition.

For asset purchases, the Company allocates the purchase price to the underlying assets based on their relative fair values.

During fiscal 2024, the Company acquired Scott Springfield Mfg.

Inc., a Canadian-based manufacturer of air handling units, and substantially all of the net operating assets of Napps Technology Corporation, a Texas-based manufacturer of air- and water-cooled chillers, condensing units and heat pumps.

In addition, the Company purchased intellectual property related to liquid immersion cooling technology from TMGcore, Inc.

Also during fiscal 2024, the Company sold three automotive businesses based in Germany and two coatings facilities in the United States.

See Note 2 for information regarding the Company’s acquisitions and dispositions.

The Company’s primary product groups include i) Data Centers;

ii) Heat Transfer Solutions;

iii) HVAC Technologies;

iv) Heavy-Duty Equipment;

and v) On-Highway Applications.

Basis of presentation

8 unchanged sentences

The majority of the Company’s revenue is recognized at a point in time, based upon shipment terms.

A portion of the Company’s revenue is recognized over time, based upon estimated progress towards satisfaction of the contractual performance obligations.

See Note 3 for additional information.

1 unchanged sentence

The Company records shipping and handling costs incurred upon the shipment of products to its customers in cost of sales, and related amounts billed to these customers in net sales.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Trade accounts receivable

The Company records trade receivables at the invoiced amount.

Trade receivables do not bear interest if paid according to the original terms.

The Company maintains an allowance for credit losses, representing its estimate of expected losses associated with its trade accounts receivable.

The Company bases its estimate using historical loss experience and considers the aging of the receivables and risks specific to customers where appropriate.

At March 31, 2025 and 2024, the allowance for credit losses was $ 1.8 million and $ 2.7 million, respectively.

The changes to the Company’s allowance for credit losses during fiscal 2025 and 2024 were not material and primarily consisted of current-period provisions, write-offs charged against the allowance, recoveries collected, and foreign currency translation.

The Company enters into supply chain financing programs from time to time to sell accounts receivable, without recourse, to third-party financial institutions.

Sales of accounts receivable are reflected as a reduction of accounts receivable on the consolidated balance sheets and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows.

During fiscal 2025, 2024, and 2023, the Company sold $ 7.9 million, $ 130.2 million, and $ 150.6 million, respectively, of accounts receivable to accelerate cash receipts.

During fiscal 2025, 2024, and 2023, the Company recorded costs totaling $ 0.1 million, $ 1.6 million, and $ 1.2 million, respectively, related to selling accounts receivable in the consolidated statements of operations.

The Company provides product warranties for specific product lines and accrues for estimated future warranty costs in the period in which the sale is recorded.

9 unchanged sentences

At March 31, 2026 and 2025, customer-owned tooling receivables totaled $ 2.6 million and $ 6.9 million, respectively.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Stock-based compensation

The Company recognizes stock-based compensation using the fair value method.

Accordingly, compensation expense for stock options, restricted stock and performance-based stock awards is calculated based upon the fair value of the instruments at the time of grant and is recognized as expense over the respective vesting periods.

Accordingly, compensation expense for restricted stock, stock options and performance-based stock awards is calculated based upon the fair value of the instruments at the time of grant and is recognized as expense over the respective vesting periods.

See Note 5 for additional information.

2 unchanged sentences

During fiscal 2026, 2025 and 2024, research and development costs totaled $ 29.3 million, $ 34.9 million, and $ 42.0 million, respectively.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Translation of foreign currencies

20 unchanged sentences

The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Trade accounts receivable

The Company records trade receivables at the invoiced amount.

Trade receivables typically do not bear interest if paid according to the original terms.

The Company maintains an allowance for credit losses, representing its estimate of expected losses associated with its trade accounts receivable.

The Company bases its estimate using historical loss experience and considers the aging of the receivables and risks specific to customers where appropriate.

At March 31, 2026 and 2025, the allowance for credit losses was $ 3.5 million and $ 1.8 million, respectively.

The changes to the Company’s allowance for credit losses during fiscal 2026 and 2025 were not material and primarily consisted of current-period provisions, write-offs charged against the allowance, recoveries collected, and foreign currency translation.

The Company enters into supply chain financing programs from time to time to sell accounts receivable, without recourse, to third-party financial institutions.

During fiscal 2026, 2025 and 2024, the Company sold $ 2.2 million, $ 7.9 million, and $ 130.2 million, respectively, of accounts receivable to accelerate cash receipts.

During fiscal 2024, the Company recorded costs totaling $ 1.6 million related to selling accounts receivable in the consolidated statements of operations.

During fiscal 2026 and 2025, costs related to selling accounts receivable were not significant.

The Company values inventories using a first-in, first-out or weighted-average basis, at the lower of cost and net realizable value.

10 unchanged sentences

See Note 16 for additional information.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company does not amortize goodwill;

3 unchanged sentences

See Note 14 for additional information.

Impairment of held and used long-lived assets

The Company evaluates long-lived assets, including property, plant and equipment and intangible assets, for impairment whenever conditions or events indicate that those assets may be impaired.

Impairment of long-lived assets

The Company evaluates held and used long-lived assets, including property, plant and equipment and intangible assets, for impairment whenever conditions or events indicate that those assets may be impaired.

The Company considers factors such as operating losses, declining financial outlooks and market conditions when evaluating the need for an impairment analysis.

3 unchanged sentences

Fair value is generally based upon appraised value, estimated salvage value, or selling prices under negotiation, as applicable.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Assets held for sale

6 unchanged sentences

In addition, the Company ceases to record depreciation for assets held for sale.

In fiscal 2026, the Company recorded a non-cash impairment charge of $ 4.1 million related to assets held for sale.

See Note 2 for additional information.

13 unchanged sentences

See Note 20 for additional information.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Supplier finance programs

12 unchanged sentences

Obligations outstanding – end of period

S upplemental cash flow information

Years ended March 31,

Interest paid

Income taxes paid

See Note 16 for supplemental cash flow information related to the Company’s leases.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

New accounting guidance

Segment reporting disclosures

In November 2023, the Financial Accounting Standards Board (“FASB”) issued new disclosure guidance for reportable segments.

The new guidance requires disclosure of significant segment expenses, which are expenses that are (i) significant to the segment, (ii) regularly provided to the chief operating decision maker (“CODM”) and (iii) included in the reported measure of segment profit or loss.

In addition, the new guidance requires companies to disclose the title and position of their CODM and expand interim disclosures to include the majority of the annual segment disclosures.

The definition of and method for determining reportable segments is unchanged.

The Company adopted this guidance for its fiscal 2025 annual financial statements.

See Note 22 for additional information on the Company’s reportable segments.

Disaggregation of Income Statement Expenses

2 unchanged sentences

The Company is currently evaluating the new disclosures, but does not expect the guidance will have a material impact on its consolidated financial statements.

Acquisitions and Dispositions

The Company accounts for acquired businesses using the acquisition method and records assets acquired and liabilities assumed at their respective fair values.

The excess of the purchase price over the allocated amount is recorded as goodwill.

Fiscal 2026 Acquisitions

The Company acquired three businesses during fiscal 2026:

AbsolutAire, Inc.

(“AbsolutAire”), LBW Holding Corp.

White”), and Climate by Design International (“Climate by Design”).

Since the date of each acquisition, the Company has reported the financial results of these businesses within the Climate Solutions segment.

During fiscal 2026, the operating results for the acquired companies were not material.

The Company has not presented supplemental pro forma financial information for these acquisitions since they are not material, individually or in the aggregate, to the Company’s consolidated financial statements.

On April 1, 2025, the Company acquired substantially all of the net operating assets of AbsolutAire for consideration totaling $ 11.3 million.

AbsolutAire is a Michigan-based manufacturer of direct-fired heating, ventilation, and make-up air systems.

This acquisition supports the Company’s growth strategy by expanding its heating and indoor air quality product portfolios and also broadens its customer base in the commercial, industrial, food service, and warehousing sectors.

During fiscal 2026, the Company included net sales of $ 24.8 million within its consolidated statement of operations attributable to AbsolutAire.

The Company’s allocation of the purchase price for its acquisition of AbsolutAire was as follows:

Trade accounts receivable

Property, plant and equipment

Intangible assets

Accounts payable

Accrued compensation and employee benefits

Other liabilities

Purchase price

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

Acquisitions and Dispositions

Acquisition of Scott Springfield Mfg.

On March 1, 2024, the Company acquired all of the issued and outstanding shares in the capital of Scott Springfield Mfg.

(“Scott Springfield Manufacturing”) for consideration totaling $ 184.1 million.

Upon finalization of the working capital adjustment during fiscal 2025, the Company paid an additional $ 2.4 million to the seller.

Based in Calgary, Canada, Scott Springfield Manufacturing is a leading manufacturer of air handling units to customers in the data center, telecommunications, healthcare, and aerospace markets.

This acquisition expanded the Company’s product offerings and customer base in the high-growth data center and indoor air quality markets in the U.S.

Since the date of the acquisition, the Company has reported the financial results of the Scott Springfield Manufacturing business within the Climate Solutions segment.

For fiscal 2024 and 2025, the Company included net sales of $ 7.9 million and $ 241.7 million, respectively, within its consolidated statements of operations attributable to Scott Springfield Manufacturing.

During fiscal 2024 and 2025, the Company recorded $ 2.1 million and $ 0.4 million, respectively, of costs directly related to the acquisition and integration of Scott Springfield Manufacturing as SG&A expenses within its consolidated statements of operations.

The fiscal 2024 costs principally consisted of fees for i) transaction advisors, ii) legal, accounting, and other professional services, and iii) incremental costs directly associated with integration activities.

The fiscal 2025 costs principally consisted of costs associated with integration activities.

In addition, the Company charged $ 1.6 million to cost of sales during both fiscal 2024 and 2025 in connection with an inventory fair value adjustment.

The Company completed its accounting for the acquisition of Scott Springfield Manufacturing during fiscal 2025 and allocated the purchase price of $ 184.1 million to the identifiable tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values as of the acquisition date.

The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $ 72.6 million, none of which is expected to be deductible for income tax purposes.

During the first quarter of fiscal 2025, the Company completed its market and trade name analyses and recorded a measurement period adjustment to reduce the fair value of the trade name intangible asset by $ 9.6 million.

This adjustment resulted in a corresponding decrease in the deferred income tax liability of $ 2.2 million and a $ 7.4 million increase to the $ 65.2 million of goodwill preliminarily recorded as of March 31, 2024.

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

Specifically, the goodwill recorded as part of the acquisition includes Scott Springfield Manufacturing’s workforce and anticipated future revenue and cost synergies.

The Company’s purchase price allocation for its acquisition of Scott Springfield Manufacturing was as follows:

The Company recorded $ 2.2 million of intangible assets, including customer relationship and trade name assets.

The Company is amortizing the acquired intangible assets using a weighted-average life of approximately eleven years .

The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $ 1.1 million, which is expected to be deductible for income tax purposes.

On May 31, 2025, the Company acquired all of the issued and outstanding shares of L.B.

White for consideration totaling $ 110.5 million ($ 107.7 million net of cash acquired).

The Company primarily utilized its revolving credit facility to fund the purchase price.

Headquartered in Wisconsin, with additional manufacturing and distribution operations in Georgia, L.B.

White is a leading provider of specialty heating solutions, including direct-fired forced air, radiant, indirect-fired, and electric heating solutions, for the agriculture, construction, and special event industries.

White holds a leading position in the swine and poultry agricultural heating markets in North America and is a market leader in portables heating.

This acquisition expands the Company’s product portfolio and also broadens its network into adjacent heating markets.

During fiscal 2026, the Company included net sales of $ 63.8 million within its consolidated statement of operations attributable to L.B.

The Company’s allocation of the purchase price for its acquisition of L.B.

White was as follows:

Cash and cash equivalents

7 unchanged sentences

Purchase price

The Company engaged third-party valuation specialists to assist in estimating the fair value of assets acquired.

The third-party valuations utilized assumptions developed by management and other information compiled by management, including, but not limited to, future expected cash flows.

The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $ 27.1 million, none of which is expected to be deductible for income tax purposes.

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

The goodwill recorded as part of the acquisition includes L.B.

White’s workforce and anticipated future revenue and cost synergies.

Below is a summary of the methodologies and significant assumptions used within the third-party valuations for estimating the fair value of certain classes of acquired assets.

The fair values were primarily based upon significant inputs that are not observable in the market and thus represent Level 3 measurements.

See Note 4 for information regarding Level 3 fair value measurements.

The Company determined the fair value of acquired work-in-process and finished goods inventory using both the comparative sales and cost of reproduction valuation methods.

For raw materials acquired, the Company estimated the cost of replacement.

In total, the Company wrote-up acquired inventory by $ 1.0 million and charged it to cost of sales during fiscal 2026 as the underlying inventory was sold.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

The following unaudited supplemental pro forma information presents the Company’s consolidated results of operations as though the acquisition of Scott Springfield Manufacturing had occurred at the beginning of fiscal 2023.

This pro forma financial information is presented for illustrative purposes only and is not considered to be indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated or the operating results that may be obtained in the future.

Years ended March 31,

Net earnings attributable to Modine

The supplemental pro forma financial information above is based upon the Company’s historical results and the historical results of Scott Springfield Manufacturing, which have been translated from Canadian dollars to U.S.

dollars using the historical average foreign exchange rates.

The proforma information includes adjustments for:

(i) annual amortization and depreciation expense totaling approximately $ 19.0 million for fiscal 2023 and approximately $ 8.0 million for fiscal 2024 for acquired tangible and intangible assets, (ii) estimated annual interest expense of approximately $ 6.0 million resulting from acquisition-related borrowings, and (iii) the estimated income tax impacts related to the pro forma adjustments, considering the statutory tax rates within Canada.

In addition, the pro forma financial information assumes that both $ 2.0 million of acquisition-related transaction costs, not including costs for integration-related activities, and $ 3.2 million of inventory purchase accounting adjustments were incurred during fiscal 2023.

The pro forma financial information does not reflect any expected revenue or cost synergies.

Purchase of TMGcore, Inc.

intellectual property

In January 2024, the Company purchased intellectual property and other specific assets from TMGcore, Inc., a specialist in single- and two-phase liquid immersion cooling technology for data centers for $ 12.0 million.

The Company allocated $ 11.4 million of the purchase price to acquired technology and the remaining $ 0.6 million to property, plant, and equipment.

Acquisition of Napps Technology Corporation

On July 1, 2023, the Company acquired substantially all of the net operating assets of Napps Technology Corporation (“Napps”), a Texas-based manufacturer of air- and water-cooled chillers, condensing units and heat pumps, for consideration totaling $ 5.8 million.

The Company paid $ 4.8 million during fiscal 2024 and paid the remaining $ 1.0 million to the seller during fiscal 2025.

The Company has reported the financial results of the Napps business within the Climate Solutions segment since the date of the acquisition.

For fiscal 2024 and 2025, the Company included net sales of $ 4.5 million and $ 10.8 million, respectively, within its consolidated statements of operations attributable to Napps.

Disposition of two coatings facilities

In September 2023, the Company sold two coatings facilities, located in California and Florida, to Protecall, LLC.

Sales from these two businesses, which provided aftermarket application services, totaled $ 6.4 million in fiscal 2023.

As a result of this transaction, the Company wrote-off $ 0.7 million of goodwill attributable to the disposed businesses and recorded a gain on sale of less than $ 0.1 million during fiscal 2024.

Property, plant and equipment:

The Company valued the land and facilities acquired using the cost approach.

The cost approach included consideration of recent sales of comparable land parcels and estimated replacement costs for structures and site improvements, adjusting such values for estimated depreciation as of the acquisition date.

The cost approach relies on assumptions regarding replacement costs and the age and estimated remaining useful lives of the assets.

For personal property, which primarily consists of machinery and equipment assets, the Company utilized the market valuation approach that considers values for similar assets on secondary equipment markets.

The fair value of property, plant and equipment will be recognized as depreciation expense in the Company’s results of operations over the expected remaining useful lives of the assets.

Intangible assets:

The Company determined the fair value of acquired intangible assets by using variations of the income approach.

These methods generally forecast expected future net cash flows associated with each of the identified intangible assets and adjust the forecasts to present value by applying a discount rate intended to reflect risk factors associated with the cash flows and the time value of money.

Acquired intangible assets were as follows:

Gross Carrying Value

Weighted- Average Useful Life

Customer relationships

Total intangible assets acquired

Customer relationships represent the estimated fair value of L.B.

White’s business relationships with existing customers, the majority of which are dealers and/or distributors in the agriculture and portable heating markets.

The fair value of customer relationships was determined using the multi-period excess earnings method, in which the value is derived by projecting the future anticipated after-tax cash flows attributable to the customer relationships.

Key inputs used in the valuation included future revenue growth rates, customer attrition rates, and discount rates.

The Company determined the estimated fair value of the acquired L.B.

White trade name using the relief-from-royalty method, which applies an assumed royalty rate to revenue expected to be derived under the acquired trade name.

The fair value was estimated to be the present value of the royalties saved because the Company owns the trade name.

Climate by Design

On July 1, 2025, the Company acquired Climate by Design for $ 64.4 million ($ 63.4 million net of cash acquired).

The Company primarily utilized its revolving credit facility to fund the purchase price.

Based in Minnesota, Climate by Design specializes in desiccant dehumidification technology and critical process air handlers.

This acquisition supports the Company’s growth strategy by expanding its commercial indoor air quality product portfolio.

During fiscal 2026, the Company included $ 30.5 million of net sales within its consolidated statement of operations attributable to Climate by Design.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

Disposition of Germany automotive businesses

The Company’s allocation of the purchase price for its acquisition of Climate by Design was as follows:

Cash and cash equivalents

Trade accounts receivable

Property, plant and equipment

Intangible assets

Accounts payable

Accrued compensation and employee benefits

Other liabilities

Purchase price

The Company engaged third-party valuation specialists to assist in estimating the fair value of assets acquired.

The third-party valuations utilized assumptions developed by management and other information compiled by management, including, but not limited to, future expected cash flows.

The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $ 23.6 million.

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

The goodwill recorded as part of the acquisition includes Climate by Design’s workforce and anticipated future revenue and cost synergies.

Goodwill is expected to be deductible for income tax purposes.

Below is a summary of the methodologies and significant assumptions used within the third-party valuations for estimating the fair value of certain classes of acquired assets.

The fair values were primarily based upon significant inputs that are not observable in the market and thus represent Level 3 measurements.

See Note 4 for information regarding Level 3 fair value measurements.

The Company estimated the fair value of acquired work-in-process and finished goods inventory using both the comparative sales and cost of reproduction valuation methods.

For raw materials acquired, the Company estimated the cost of replacement.

The Company wrote-up acquired inventory by $ 0.3 million.

The Company charged the write-up to cost of sales during fiscal 2026 as the underlying inventory was sold.

Intangible assets:

The Company estimated the fair value of acquired intangible assets by using variations of the income approach.

Acquired intangible assets were as follows:

Gross Carrying Value

Weighted- Average Useful Life

Customer relationships

Acquired technology

Total intangible assets acquired

Customer relationships represent the estimated fair value of Climate by Design’s business relationships with existing customers.

The fair value of customer relationships was estimated using the multi-period excess earnings method, in which the value is derived by projecting the future anticipated after-tax cash flows attributable to the customer relationships.

Key inputs used in the valuation included future revenue growth rates, customer attrition rates, and discount rates.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company estimated the fair value of the acquired Climate by Design technology using the relief-from-royalty method, considering estimated royalties that would hypothetically be paid to use the technology.

The Company estimated the fair value of the acquired Climate by Design trade name using the relief-from-royalty method, which applies an assumed royalty rate to revenue expected to be derived under the acquired trade name.

The fair value was estimated to be the present value of the royalties saved because the Company owns the trade name.

Fiscal 2024 Acquisitions

The Company acquired the Scott Springfield Mfg.

(“Scott Springfield Manufacturing”) and Napps Technology Corporation (“Napps”) businesses during fiscal 2024.

In addition, the Company purchased intellectual property and related assets from TMGcore, Inc.

Scott Springfield Manufacturing

On March 1, 2024, the Company acquired all of the issued and outstanding shares in the capital of Scott Springfield Manufacturing for consideration totaling $ 184.1 million.

Upon finalization of the working capital adjustment during fiscal 2025, the Company paid an additional $ 2.4 million to the seller.

Based in Calgary, Canada, Scott Springfield Manufacturing is a leading manufacturer of air handling units to customers in the data center, telecommunications, healthcare, and aerospace markets.

This acquisition expanded the Company’s product offerings and customer base in the high-growth data center and indoor air quality markets in the U.S.

Since the date of the acquisition, the Company has reported the financial results of the Scott Springfield Manufacturing business within the Climate Solutions segment.

On July 1, 2023, the Company acquired substantially all of the net operating assets of Napps, a Texas-based manufacturer of air- and water-cooled chillers, condensing units and heat pumps, for consideration totaling $ 5.8 million.

The Company paid $ 4.8 million during fiscal 2024 and paid the remaining $ 1.0 million to the seller during fiscal 2025.

The Company has reported the financial results of the Napps business within the Climate Solutions segment since the date of the acquisition.

TMGcore, Inc.

intellectual property

In January 2024, the Company purchased intellectual property and other related assets from TMGcore, Inc., a specialist in single- and two-phase liquid immersion cooling technology for data centers for $ 12.0 million.

During fiscal 2022, the Company sold its Austrian automotive business.

To facilitate the closing of this sale, the Company provided the buyer with a loan facility.

During the fourth quarter of fiscal 2026, the Company and the buyer settled the loan facility for less than the principal balance outstanding.

As a result, the Company recorded a loss of $ 3.9 million during fiscal 2026 to write-off the remaining loan receivable.

The Company has reported this loss within the loss on sale of assets line on its consolidated statement of operations.

In October 2023, the Company sold three automotive businesses based in Germany (the “disposal group”) to affiliates of Regent, L.P.

2 unchanged sentences

The Company reported the $ 4.0 million gain on the gain on sale of assets line within the consolidated statement of operations.

Prior to the disposition, the Company reported the financial results of the disposal group within its Performance Technologies segment.

Net sales of the disposal group included within the Company’s consolidated statements of operations for fiscal 2024 and 2023 totaled $ 54.2 million and $ 79.0 million, respectively.

Pending disposition of facilities in Germany

In December 2024, the Company signed a definitive agreement to sell its technical service center and administrative support facility in Germany to a real estate investment firm for € 11.5 million ($ 12.4 million).

Earlier in fiscal 2025, the Company closed the technical service center and reduced headcount in light of the sale of three automotive businesses in Germany during fiscal 2024.

The Company expects the sale transaction will close during the first half of fiscal 2026, subject to remaining closing conditions.

The Company expects to record a gain on sale, net of costs to sell, of approximately $ 3.0 million when the transaction is completed.

As of March 31, 2025, the Company classified $ 8.2 million of building and related assets expected to transfer to the buyer as held for sale and presented them within other current assets on its consolidated balance sheet.

Fiscal 2026 acquisition of AbsolutAire, Inc.

On April 1, 2025, the Company acquired substantially all of the net operating assets of AbsolutAire, Inc.

(“AbsolutAire”).

The Company paid $ 11.2 million upon transaction closing.

The final purchase price is pending and may be adjusted for net working capital.

AbsolutAire is a Michigan-based manufacturer of direct-fired heating, ventilation, and make-up air systems.

AbsolutAire had annual sales of approximately $ 25.0 million in 2024 and will be reported within the Company’s Climate Solutions segment beginning in the first quarter of fiscal 2026.

Prior to the disposition, the Company reported the financial results of the disposal group within the Performance Technologies segment.

Net sales of the disposal group included within the Company’s consolidated statement of operations for fiscal 2024 totaled $ 54.2 million.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Pending Reverse Morris Trust transaction

In January 2026, the Company and Gentherm Incorporated (“Gentherm”) announced that they had entered into definitive agreements whereby the Company will spin-off and simultaneously combine its Performance Technologies segment businesses with Gentherm in a Reverse Morris Trust transaction.

Gentherm, a Michigan-based corporation, is a global leader of innovative thermal management and pneumatic comfort technologies.

The transaction is intended to establish Gentherm as a scaled leader in thermal management.

The Company will retain its Climate Solutions segment businesses, creating a pure-play climate solutions company focused on the data center and commercial HVAC&R markets.

Under the terms of the agreements, at the time of the spin-off of its Performance Technologies segment businesses, the Company’s shareholders will receive newly-issued Gentherm stock, representing ownership of approximately 40 percent of the combined company.

In addition, immediately prior to transaction closing, the Company is to receive cash proceeds of $ 210.0 million, subject to adjustment.

Based upon the Gentherm stock price, the transaction was valued at approximately $ 1.0 billion when the Company entered into the agreement.

The Company anticipates this transaction will close by the end of calendar 2026, subject to approval by Gentherm’s shareholders and other closing conditions, including regulatory approvals.

Under the Reverse Morris Trust structure, the transaction is intended to be generally tax-free for U.S.

federal income tax purposes for the Company and its shareholders.

Since the pending spin-off does not constitute a sale under U.S.

GAAP, the Company has not classified the assets and liabilities of its Performance Technologies segment as held for sale on its March 31, 2026 consolidated balance sheet.

However, the Company expects to classify the Performance Technologies segment as a discontinued operation starting in the period the transaction is completed.

Pending sale of facilities in Germany

In fiscal 2025, the Company signed a definitive agreement to sell its technical service center and administrative support facility in Germany to a real estate investment firm.

The Company closed the technical service center earlier in fiscal 2025 and reduced headcount in light of the sale of three automotive businesses in Germany during fiscal 2024.

During fiscal 2026 and based upon a lower expected selling price of approximately $ 5.0 million in light of market and other transaction-specific factors, the Company estimated an implied loss in excess of the building and related assets’ carrying value.

As a result, the Company recorded a non-cash impairment charge of $ 4.1 million during fiscal 2026.

As of March 31, 2026 and 2025, the Company classified $ 4.6 million and $ 8.2 million, respectively, of building and related assets as held for sale and presented them within other current assets on its consolidated balance sheets.

The Company expects the sale transaction will close during fiscal 2027.

Revenue Recognition

4 unchanged sentences

For the limited number of customer contracts that provide an enforceable right to payment for performance completed to date, the Company recognizes revenue over time based upon its estimated progress toward satisfaction of the performance obligations.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company records an allowance for credit losses and accrues for estimated warranty costs at the time of sale.

3 unchanged sentences

As the Company expects to receive payment from its customers within one year from the time of sale, it disregards the effects of the time value of money in its determination of the transaction price.

The Company has not disclosed the value of unsatisfied performance obligations because the revenue associated with customer contracts for which the original expected performance period is greater than one year is immaterial.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The following is a description of the Company’s principal revenue-generating activities:

1 unchanged sentence

The Climate Solutions segment provides energy-efficient, climate-controlled solutions and components for a wide array of applications.

The Climate Solutions segment sells data center cooling solutions, heat transfer products, and HVAC&R products.

Data center cooling products include IT cooling solutions, including precision air conditioning units for data center applications;

computer room air conditioning and computer room air handler units;

hybrid fan coils;

condensing units;

and liquid cooling solutions for high-density computing, including coolant distribution units and immersion solutions.

Heat transfer products include heat exchanger coils and coating products that extend the life of equipment and components by protecting against corrosion.

Heating products include unit heaters, roof-mounted direct- and indirect-fired makeup air units, duct furnaces, infrared units and perimeter heating products.

Indoor air quality products include ventilation and air conditioning products, such as single packaged unit ventilators, modular chillers, air handler units, condensing units and ceiling cassettes.

Refrigeration products include evaporator unit coolers, remote condensers and fluid, gas, dry, and brine coolers.

In addition, the segment provides products to the industrial power generation markets.

The Climate Solutions segment has aligned its teams around three product groups:

i) Data Centers, ii) Heat Transfer Solutions and iii) HVAC Technologies.

The Data Centers business provides sustainable cooling solutions for data center customers.

Data center products include chillers, dry coolers, precision air handling units, computer room air conditioning and air handler units, fan walls, rear-door heat exchangers, coolant distribution units (“CDU”) and immersion solutions.

The Heat Transfer Solutions business provides heat exchanger coils, anti-corrosion coating products, commercial and industrial refrigeration products and power generation and transmission cooling solutions.

The HVAC Technologies business provides a wide array of commercial and residential heating products, including unit heaters, roof-mounted makeup air units, duct furnaces, infrared units, and perimeter heating products.

In addition, the HVAC Technologies business sells indoor air quality products for schools and commercial applications.

For the majority of its sales, individual customer purchase orders represent the Climate Solutions segment’s contract with its customers and the segment recognizes revenue when it transfers control over its products to its customers, based upon shipment terms.

3 unchanged sentences

Performance Technologies

The Performance Technologies segment provides products and solutions that enhance the performance of customer applications and develops solutions that provide mission critical energy for a variety of end market applications.

The Performance Technologies segment designs and manufactures products and solutions using air-cooled and liquid-cooled technology for vehicular, stationary power, and industrial applications.

In addition, the Performance Technologies segment provides advanced thermal solutions to zero-emission and hybrid commercial vehicle and off-highway customers.

Air-cooled products consist primarily of powertrain cooling products, such as radiators, condensers, engine cooling modules, charge air coolers, fan shrouds, and surge tanks;

and cooling module generator sets.

Liquid-cooled products include engine oil coolers, EGR coolers, liquid charge air coolers, transmission and retarder oil coolers, chillers, and condensers.

The segment’s advanced solutions include battery thermal management systems, electronics cooling packages, and battery chillers.

The Performance Technologies segment has aligned its teams around two product groups:

i) Heavy-Duty Equipment and ii) On-Highway Applications.

The Heavy-Duty Equipment business provides heat exchangers and cooling modules for off-highway markets, including agricultural and construction.

In addition, the Heavy-Duty Equipment business sells cooling module generator sets that provide mission-critical stationary power.

The On-Highway Applications business provides heat exchangers and cooling systems for commercial vehicle, automotive, bus and specialty vehicle customers.

In addition to products for traditional powertrains, the On-Highway Applications business provides products and solutions for zero-emission and hybrid vehicles.

While the Performance Technologies segment provides customized production and service parts to customers under multi-year agreements, these agreements typically do not contain contractually-guaranteed volumes to be purchased by the customer.

8 unchanged sentences

Each segment’s revenue is disaggregated by product group and by geographic location.

Effective April 1, 2024, the Company moved its Coatings business, which was previously managed by and reported within the Performance Technologies segment, under the leadership of the Climate Solutions segment.

See Note 22 for additional segment financial information.

The disaggregated revenue information presented in the tables below for fiscal 2024 and 2023 has been recast to be comparable with the fiscal 2025 presentation.

Effective April 1, 2025, and in connection with the Company’s strategic transformation and application of 80/20 principles, the Company realigned its segment teams around five market-based product groups, as summarized above.

Accordingly, the disaggregated revenue information presented in the tables below reflect the current product group structure.

The fiscal 2025 and 2024 information has been recast to be comparable with the fiscal 2026 presentation.

Year ended March 31, 2026

Product groups:

Data center cooling

Heat transfer

Liquid-cooled

Advanced solutions

Heat Transfer Solutions

HVAC Technologies

Heavy-Duty Equipment

On-Highway Applications

Inter-segment sales

2 unchanged sentences

Product groups:

Data center cooling

Heat transfer

Liquid-cooled

Advanced solutions

Heat Transfer Solutions

HVAC Technologies

Heavy-Duty Equipment

On-Highway Applications

Inter-segment sales

5 unchanged sentences

Product groups:

Data center cooling

Heat transfer

Liquid-cooled

Advanced solutions

Heat Transfer Solutions

HVAC Technologies

Heavy-Duty Equipment

On-Highway Applications

Inter-segment sales

6 unchanged sentences

Contract liabilities

Contract assets, included within other current assets in the consolidated balance sheets, primarily consist of capitalized costs related to customer-owned tooling contracts, wherein the customer has guaranteed reimbursement, and assets recorded for revenue recognized over time, which represent the Company’s rights to consideration for work completed but not yet billed.

The $ 0.4 million increase in contract assets during fiscal 2025 primarily resulted from an increase in contract assets for revenue recognized over time, partially offset by a decrease in capitalized costs related to customer-owned tooling contracts.

Contract liabilities, included within other current liabilities in the consolidated balance sheets, consist of payments received in advance of satisfying performance obligations under customer contracts, including contracts for data center cooling products and customer-owned tooling.

The $ 44.3 million decrease in contract liabilities during fiscal 2025 primarily resulted from the Company’s satisfaction of performance obligations under contracts that had required advanced payments, largely associated with long inventory lead times.

Contract assets, included within other current assets in the consolidated balance sheets, primarily consist of assets recorded for revenue recognized over time, which represent the Company’s rights to consideration for work completed but not yet billed, and capitalized costs related to customer-owned tooling contracts, wherein the customer has guaranteed reimbursement.

The $ 30.3 million increase in contract assets during fiscal 2026 primarily resulted from an increase in contract assets for revenue recognized over time, partially offset by a decrease in capitalized costs related to the Company’s fulfillment of its performance obligations.

Contract liabilities primarily consist of customer deposits.

During March 2026, the Company entered into a long-term capacity agreement with one of its strategic data center customers.

In connection with this agreement, the Company received a $ 165.0 million up-front deposit from the customer to support the Company’s investments necessary to meet the planned sales volume.

In addition, the contract liabilities include payments received in advance of satisfying performance obligations under customer contracts, including contracts for data center products and customer-owned tooling.

The $ 159.4 million increase in contract liabilities during fiscal 2026 primarily resulted from the aforementioned up-front deposit to support production capacity expansion.

Contract liabilities are included within other current and noncurrent liabilities on the Company’s consolidated balance sheets.

As of March 31, 2026, contract liabilities included within other current and noncurrent liabilities totaled $ 23.9 million and $ 170.6 million, respectively.

As of March 31, 2025, contract liabilities included within other current and noncurrent liabilities totaled $ 33.2 million and $ 1.9 million, respectively.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Fair Value Measurements

6 unchanged sentences

● Level 3 – Model-derived valuations in which one or more significant inputs are not observable.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

When available, the Company uses quoted market prices to determine fair value and classifies such measurements as Level 1.

12 unchanged sentences

At March 31, 2026 and 2025, the fair values of the investments and obligations for the Company’s deferred compensation plans each totaled $ 8.3 million and $ 6.1 million, respectively.

Plan assets related to the Company’s pension plans were classified as follows:

March 31, 2025

Money market investments

Fixed income securities

government and agency securities

Fair value excluding investments measured at net asset value

Investments measured at net asset value

Total fair value

During fiscal 2026 and in connection with the previously-announced plan termination, the Company terminated its primary U.S.

pension plan, and as a result, has no plan assets as of March 31, 2026.

See Note 18 for additional information.

Plan assets related to the Company’s pension plans, as of March 31, 2025, were classified as follows:

March 31, 2025

1 unchanged sentence

Fixed income securities

Pooled equity funds

government and agency securities

Fair value excluding investment measured at net asset value

Investments measured at net asset value

Total fair value

3 unchanged sentences

The Company determined the fair value of money market investments to approximate their net asset values, without discounts for credit quality or liquidity restrictions, and classified them within Level 2 of the valuation hierarchy.

The Company determined the fair value of pooled equity funds based upon quoted prices from active markets and classified them within Level 1 of the valuation hierarchy.

The Company determined the fair value of fixed income securities and U.S.

1 unchanged sentence

The Company classified these assets within Level 2 of the valuation hierarchy.

As of March 31, 2025 and 2024, the Company held no Level 3 assets within its pension plans.

As a practical expedient, the Company valued certain investments, including pooled equity, fixed income and real estate funds, using their net asset value (“NAV”) per unit, and therefore, has not classified these investments within the fair value hierarchy.

As of March 31, 2025 the Company no longer has investments valued at NAV.

As of March 31, 2025, the Company held no Level 3 assets within its pension plans.

Stock-Based Compensation

The Company’s stock-based incentive programs consist of the following:

The Company’s stock-based compensation programs consist of the following:

(i) a long-term incentive plan (“LTIP”) for officers and other executives that authorizes grants of stock awards, stock options, and performance-based awards granted for retention and performance, (ii) a discretionary equity program for other management and key employees, and (iii) stock awards for non-employee directors.

2 unchanged sentences

In fiscal 2026, 2025 and 2024, the Company granted performance-based stock awards and restricted stock awards.

In fiscal 2023, the Company granted performance cash awards, restricted stock awards, and stock options.

At present, the Company settles equity-based grants through newly issued shares of common stock.

3 unchanged sentences

The Company recorded stock-based compensation expense of $ 22.1 million, $ 26.4 million, and $ 10.8 million in fiscal 2026, 2025 and 2024, respectively.

During fiscal 2025, in connection with restructuring actions, the Company modified certain stock-based awards for a limited number of employees to permit accelerated vesting, resulting in $ 6.0 million of incremental stock-based compensation expense.

During fiscal 2026 and 2025, in connection with restructuring actions, the Company modified certain stock-based awards for a limited number of employees to permit accelerated vesting, resulting in $ 2.1 million and $ 6.0 million, respectively, of incremental stock-based compensation expense.

Restricted stock

4 unchanged sentences

Based upon the terms of the annual awards, restricted stock awards vest 33 percent, 33 percent, and 34 percent per year for three years , respectively.

Restricted stock awards granted to non-employee directors in fiscal 2025 vest one year from the date of grant.

Restricted stock awards granted to non-employee directors vest one year from the date of grant.

A summary of restricted stock activity for fiscal 2026 was as follows:

2 unchanged sentences

Non-vested balance, end of year

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Stock options

1 unchanged sentence

The grant date fair value of stock options that vested during fiscal 2026, 2025 and 2024, was $ 0.7 million, $ 1.0 million, and $ 1.2 million, respectively.

As of March 31, 2025, the total compensation expense not yet recognized related to non-vested stock options was $ 0.1 million and the weighted-average period in which the remaining expense is expected to be recognized was 0.2 years.

The Company estimated the fair value of option awards on the date of grant using the Black-Scholes option valuation model and the following assumptions:

Year ended March 31, 2023

Fair value of options

Expected life of awards in years

Risk-free interest rate

Expected volatility of the Company’s stock

Expected dividend yield on the Company’s stock

As of March 31, 2026, the Company has no unvested stock option awards.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Stock options expire no later than 10 years after the grant date and have an exercise price equal to the fair market value of Modine’s common stock on the date of grant.

The Company did no t grant options in fiscal 2026, 2025 or 2024.

Based upon the terms of the fiscal 2023 awards, stock options vest 33 percent, 33 percent, and 34 percent per year for three years , respectively.

A summary of stock option activity for fiscal 2026 was as follows:

14 unchanged sentences

Proceeds from stock options exercised

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Restricted stock – performance-based stock awards

The Company granted performance-based stock awards in fiscal 2026, 2025 and 2024.

The Company granted performance-based cash awards in fiscal 2023 in lieu of performance-based stock awards.

For performance-based stock awards, the Company values the awards using the closing market price of its common shares on the date of grant.

The Company recorded $ 16.7 million and $ 4.5 million of compensation expense related to performance-based stock awards in fiscal 2025 and 2024, respectively.

During fiscal 2023 all performance-based awards were cash-based, therefore, the Company did no t recognize compensation expense related to performance-based stock awards.

At March 31, 2025, the Company had $ 21.6 million of total unrecognized compensation expense related to non-vested performance-based stock awards, which is expected to be recognized over a weighted-average period of 1.7 years.

The Company recorded $ 16.3 million, $ 16.7 million, and $ 4.5 million of compensation expense related to performance-based stock awards in fiscal 2026, 2025 and 2024, respectively.

At March 31, 2026, the Company had $ 20.4 million of unrecognized compensation expense related to non-vested performance-based stock awards, which it expects to recognize over a weighted-average period of 1.6 years.

Shares earned under the performance portion of the incentive program are based upon the attainment of certain financial targets over a three -year period and are issued after the end of that three -year performance period, if the performance targets have been achieved.

The performance metrics for the performance-based awards granted in fiscal 2026, 2025 and 2024 are based upon both a target three -year average consolidated cash flow return on invested capital and a target three -year average growth in consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”) at the end of the three -year performance period, commencing with the fiscal year of grant.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Restructuring Activities

3 unchanged sentences

Other restructuring and repositioning expenses

During fiscal 2026, restructuring and repositioning expenses primarily consisted of severance expenses.

The severance charges were primarily recorded in Europe and North America and include severance related to targeted headcount reductions intended to reduce SG&A and operational expenses.

In addition, as part of its transformational initiatives supported by 80/20 principles, the Company is taking steps to optimize its supply chain and manufacturing footprint in order to support its expansion of manufacturing capacity in the U.S.

for data center products and to improve profit margins.

These repositioning activities have included transferring the production for certain product lines among its facilities.

During fiscal 2025, restructuring and repositioning expenses primarily consisted of severance expenses in Europe and North America within the Performance Technologies segment and included targeted headcount reductions intended to reduce SG&A and operational expenses.

In addition, the Company recorded severance expenses in the Climate Solutions segment, primarily related to the pending closure of a production facility in Italy.

As part of its transformational initiatives supported by 80/20 principles, the Company is taking steps to optimize the efficiency of its manufacturing footprint and processes in order to improve profit margins across both of its business segments.

Other restructuring and repositioning expenses include costs to transfer production and warehousing for certain product lines among its facilities.

In addition, the Company recorded severance expenses in the Climate Solutions segment, primarily related to the closure of a production facility in Italy.

Other restructuring and repositioning expenses include costs to transfer production and warehousing for certain product lines among its facilities, related to the Company’s transformational initiatives.

During fiscal 2024, restructuring and repositioning expenses primarily consisted of severance expenses in the Performance Technologies segment related to the closure of its European technical service center.

In addition, the Company incurred equipment transfer costs within the Climate Solutions and Performance Technology segments related to its transformational initiatives.

During fiscal 2023, restructuring and repositioning expenses primarily consisted of severance expenses for targeted headcount reductions in both the Climate Solutions and Performance Technologies segments.

In addition, the Performance Technologies and Climate Solutions segments incurred equipment transfer costs in Europe and closure costs related to a previously-leased facility in the U.S., respectively.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company accrues severance in accordance with its written plans, procedures, and relevant statutory requirements.

3 unchanged sentences

Additions (a)

Disposition (b)

Effect of exchange rate changes

Ending balance

(a) The fiscal 2025 amount excludes $ 6.0 million of non-cash severance-related costs resulting from the accelerated vesting of certain stock-based compensation awards in connection with restructuring actions.

(b) The Company sold three automotive businesses based in Germany during fiscal 2024.

See Note 2 for additional information regarding the sale.

In May 2025, the Company approved additional headcount reductions in the Performance Technologies segment and, as a result, expects to record approximately $ 4.0 million of severance expenses during the first quarter of fiscal 2026.

(a) The fiscal 2026 and 2025 amounts exclude $ 2.1 million and $ 6.0 million, respectively, of non-cash severance-expense resulting from the accelerated vesting of certain stock-based compensation awards in connection with restructuring actions.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Other Income and Expense

5 unchanged sentences

Total other expense – net

(a) Foreign currency transactions primarily consist of foreign currency transaction gains and losses on the re-measurement or settlement of foreign currency-denominated assets and liabilities, including transactions denominated in a foreign currency and intercompany loans, along with gains and losses on foreign currency exchange contracts.

(b) Net periodic benefit cost for the Company’s pension and postretirement plans is exclusive of service cost.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

and foreign components of earnings before income taxes and the provision or benefit for income taxes consisted of the following:

(a) Foreign currency transactions primarily consist of foreign currency transaction gains and losses on the re-measurement or settlement of foreign currency-denominated assets and liabilities, including intercompany loans and transactions denominated in a foreign currency, along with gains and losses on certain foreign currency exchange contracts.

(b) Net periodic benefit cost for the Company’s pension and postretirement plans is exclusive of service cost and the $ 116.1 million pension termination charge recorded in fiscal 2026.

See Note 18 for additional information.

and foreign components of earnings before income taxes and the provision for income taxes consisted of the following:

Years ended March 31,

Components of earnings before income taxes:

Components of earnings (loss) before income taxes:

United States

Total earnings before income taxes

Years ended March 31,

Income tax provision (benefit):

Total income tax provision (benefit)

Total current provision

Total deferred (benefit) provision

Total provision for income taxes

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The reconciliation between the U.S.

federal statutory rate and the Company’s effective tax rate was as follows:

federal statutory income tax rate and the Company’s effective tax rate was as follows:

Years ended March 31,

Statutory federal tax

State taxes, net of federal benefit

Taxes on non-U.S.

earnings and losses

Valuation allowances

Tax credits and benefits

federal statutory income tax rate

State taxes, net of federal benefit (a)

Effect of cross-border tax laws (b):

Foreign-derived intangible income

Tax rate or law changes

Uncertain tax positions, net of settlements

Notional interest deductions

Dividends and taxable foreign inclusions

tax effects on foreign branch income

Disposition of businesses (c)

Nontaxable or nondeductible:

Nondeductible compensation

Stock-based compensation awards

Changes in valuation allowances

Pension termination (d)

Foreign tax effects:

Changes in valuation allowances

Expiration of attribute carryforward

Withholding tax

Other foreign jurisdictions

Changes in unrecognized tax benefits

Effective tax rate

The Company’s effective tax rate in fiscal 2025 was higher than the prior year, primarily due to the absence of a $ 3.1 million tax benefit recorded in fiscal 2024 related to the sale of three automotive businesses based in Germany and an unfavorable impact of foreign currency exchange rates, partially offset by changes in the mix and amount of foreign and U.S.

The $ 3.1 million tax benefit in fiscal 2024 is presented within the dividends and taxable foreign inclusions line in the table above;

see Note 2 for information regarding the sale of the three automotive businesses.

The Company’s fiscal 2023 effective tax rate was favorably impacted by an income tax benefit related to the reversal of a valuation allowance on deferred tax assets in the U.S, as described below.

(a) State taxes in California and Mississippi make up the majority of the tax effect in this category.

(b) Includes the impact of tax credits.

federal taxes resulting from the sale of three businesses in Germany during fiscal 2024.

In total, the Company recorded a $ 3.1 million tax benefit during fiscal 2024 related to the sale.

(d) Represents the detriment to U.S.

federal taxes related to the Company’s termination of its primary U.S.

pension plan that resulted from disproportionate income tax effects in accumulated other comprehensive loss.

In total, the income tax benefit related to the fiscal 2026 pension termination charge was $ 13.1 million.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

As of March 31, 2026 and 2025, income tax liabilities included within other current liabilities on the Company’s consolidated balance sheets totaled $ 37.0 million and $ 16.4 million, respectively.

Cash paid for income taxes, net of refunds, consisted of the following:

Years ended March 31,

state and local (a)

United Kingdom

Other foreign

Total foreign

Total income taxes paid, net

(a) No single state or local jurisdiction accounts for more than 5 percent of total income taxes paid.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes the permanent extension of certain provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing.

It also includes modifications to the international tax framework.

The legislation has multiple effective dates, with certain provisions impacting the Company through fiscal 2027.

The Company began recognizing the impacts of the OBBBA for the provisions currently enacted during the second quarter of fiscal 2026, including the provision regarding domestic research costs.

During fiscal 2026, impacts associated with provisions of the OBBBA on state deferred taxes and the utilization of foreign tax credits increased the income tax provision by $ 5.8 million.

The Company is continuing to assess provisions that are expected to impact future periods.

The Company records valuation allowances against its net deferred tax assets to the extent it determines it is more likely than not that such assets will not be realized in the future.

2 unchanged sentences

In addition, the Company considers the duration of statutory carryforward periods and historical financial results.

Based upon its analyses during fiscal 2025 and 2024, the Company recorded net increases to deferred tax asset valuation allowances totaling $ 0.9 million and $ 5.4 million, respectively.

Based upon its analyses during fiscal 2023, the Company reversed the valuation allowance related to certain deferred tax assets in the U.S.

and, as a result, recorded an income tax benefit of $ 57.3 million.

The Company had previously maintained a full valuation allowance against net deferred tax assets in the U.S.

since fiscal 2021.

During fiscal 2023, the Company determined it was more likely than not that these deferred tax assets in the U.S.

would be realized after consideration of both positive and negative objectively verifiable evidence.

The Company placed substantial weight on its fiscal 2022 and 2023 earnings, which resulted in a significant cumulative three-year income position.

The Company also considered forecasted future earnings in certain key businesses.

The Company maintained, however, a valuation allowance on the portion of the deferred tax assets in the U.S.

related to certain federal and state tax attributes that are not expected to be realized prior to expiration.

In addition, the Company recorded net tax expense to increase other deferred tax asset valuation allowances by $ 3.6 million.

At March 31, 2025, valuation allowances against deferred tax assets in the U.S.

and in certain foreign jurisdictions totaled $ 42.6 million and $ 25.0 million, respectively.

The Company will maintain the valuation allowances in each applicable tax jurisdiction until it determines it is more likely than not the deferred tax assets will be realized, thereby eliminating the need for a valuation allowance.

4 unchanged sentences

(In millions, except per share amounts)

As of March 31, 2026, 2025, and 2024, the Company’s deferred tax asset valuation allowances totaled $ 68.1 million, $ 67.6 million, and $ 63.0 million, respectively.

The net $ 0.5 million increase during fiscal 2026 was primarily attributable to an increase in net operating losses in Germany and foreign currency impacts.

These increases were partially offset by a decrease in deferred tax assets in the U.S.

related to certain federal and state tax credits, which were utilized prior to expiration, and a decrease in net operating losses in Hungary due to expiration.

The $ 4.6 million net increase during fiscal 2025 was primarily attributable to an increase in net operating losses in Germany.

The tax effects of temporary differences that gave rise to deferred tax assets and liabilities were as follows:

7 unchanged sentences

Research and experimental expenditures

Deferred revenue liabilities

Other, principally accrued liabilities

10 unchanged sentences

Beginning balance

Gross increases - tax positions in prior period

Gross decreases - tax positions in prior period

3 unchanged sentences

The Company’s liability for unrecognized tax benefits as of March 31, 2026 was $ 10.1 million and, if recognized, $ 8.2 million would have an effective tax rate impact.

The Company does not expect a significant change in unrecognized tax benefits during fiscal 2026.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.

During fiscal 2026, 2025 and 2024, interest and penalties accrued on the consolidated balance sheets and included within income tax expense in the consolidated statements of operations were not significant.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world.

3 unchanged sentences

For Italy, fiscal 2021 through fiscal 2025 remain subject to examination.

For Canada, fiscal 2024 remains subject to examination.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

For Canada, fiscal 2024 and fiscal 2025 remain subject to examination.

At March 31, 2026, the Company had federal and state tax credits of $ 42.8 million that, if not utilized against U.S.

20 unchanged sentences

For fiscal 2026, 2025 and 2024, there were no securities that were anti-dilutive.

For fiscal 2023, the calculation of diluted earnings per share excluded 0.5 million and 0.2 million of stock options and restricted stock awards, respectively, because they were anti-dilutive.

Cash, Cash Equivalents and Restricted Cash

3 unchanged sentences

Total cash, cash equivalents and restricted cash

Restricted cash, which is reported within other current assets and other noncurrent assets in the consolidated balance sheets, consists primarily of deposits for contractual guarantees or commitments required for rents, import and export duties, and commercial agreements.

Restricted cash, which is reported within other current assets on the consolidated balance sheets, consists primarily of deposits for contractual guarantees or commitments required for rents, import and export duties, and commercial agreements.

MODINE MANUFACTURING COMPANY

14 unchanged sentences

Net property, plant and equipment

The March 31, 2025 property, plant and equipment in the table above exclude amounts classified as held for sale.

The March 31, 2026 and 2025 property, plant and equipment in the table above exclude amounts classified as held for sale.

See Note 2 for additional information.

9 unchanged sentences

Total intangible assets

In connection with its acquisitions of three businesses during fiscal 2026, the Company recorded customer relationship, trade name, and acquired technology intangible assets totaling $ 48.1 million, $ 15.7 million, and $ 3.5 million, respectively.

See Note 2 for additional information.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

During fiscal 2025, the Company recorded a measurement period adjustment to reduce the fair value of the acquired Scott Springfield Manufacturing trade name by $ 9.6 million.

This purchase accounting adjustment also resulted in an increase in goodwill.

See Note 2 for additional information.

The Company recorded $ 21.0 million, $ 27.4 million, and $ 9.2 million of amortization expense during fiscal 2026, 2025 and 2024, respectively.

The Company estimates that it will record approximately $ 21.0 million, $ 21.0 million, $ 20.0 million, $ 19.0 million, and $ 19.0 million of annual amortization expense in fiscal 2027 through 2031, respectively.

The Company has recast the March 31, 2024 and 2023 goodwill balances to be comparable with the current segment structure.

As a result of the segment realignment in fiscal 2025, which is discussed in Note 22, the Company’s goodwill now resides entirely within the Climate Solutions segment.

There was no impact to goodwill within the underlying reporting units as a result of the segment realignment.

The Company’s goodwill currently resides entirely within the Climate Solutions segment.

The following table presents a roll forward of the carrying value of goodwill from March 31, 2024 to March 31, 2026.

Balance, March 31, 2024

Acquisitions (a)

Dispositions (b)

Acquisition adjustment (a)

Effect of exchange rate changes

Balance, March 31, 2025

Acquisition adjustment (a)

Acquisitions (a)

Effect of exchange rate changes

Balance, March 31, 2026

(a) During fiscal 2024, the Company recorded $ 65.2 million and $ 1.0 million of goodwill in connection with its acquisitions of Scott Springfield Manufacturing and Napps, respectively.

During fiscal 2025, the Company recorded a measurement period adjustment to reduce the fair value of the acquired Scott Springfield Manufacturing trade name.

(a) During fiscal 2025, the Company recorded a measurement period adjustment to reduce the fair value of the acquired Scott Springfield Manufacturing trade name.

This purchase accounting adjustment resulted in a $ 7.4 million increase in goodwill.

See Note 2 for additional information.

(b) The Company wrote-off $ 0.7 million of goodwill in connection with the sale of two coatings facilities.

During fiscal 2026, the Company recorded $ 27.1 million, $ 23.6 million, and $ 1.1 million of goodwill in connection with its acquisition of L.B.

White, Climate by Design, and AbsolutAire, respectively.

See Note 2 for additional information.

The Company tests goodwill for impairment annually or more frequently if events or circumstances change that would, more likely than not, reduce the fair value of a reporting unit below its carrying value.

During fiscal 2025, the Company voluntarily changed the date of its annual impairment test to February 28, from March 31, as it allows additional time for preparation and review of the annual impairment assessment.

The Company determined the change in the goodwill impairment assessment date did not represent a material change to the method of applying the associated accounting guidance.

The change in the date of the annual impairment test date did not result in the delay, acceleration or avoidance of an impairment charge.

To test goodwill for impairment, the Company determines the fair value of each reporting unit based upon the present value of estimated future cash flows and compares the fair value of each reporting unit with its carrying value.

The Company’s determination of fair value involves judgment and the use of estimates and assumptions, including assumptions regarding the revenue growth rates and operating profit margins used to calculate estimated future cash flows and risk-adjusted discount rates.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

As a result of its annual goodwill impairment tests performed as of February 28, 2026, the Company determined that the fair value of each of its reporting units exceeded their respective book values.

4 unchanged sentences

The Company records a liability for product warranty obligations at the time of sale and adjusts the warranty accruals if it becomes probable that expected claims will differ from previous estimates.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Changes in accrued warranty costs were as follows:

3 unchanged sentences

Adjustments to pre-existing warranties

Acquisition of business (a)

Disposition of businesses (a)

Business acquisitions (a)

Effect of exchange rate changes

Ending balance

(a) The Company acquired Scott Springfield Manufacturing during fiscal 2024.

The Company sold three automotive businesses based in Germany during fiscal 2024.

See Note 2 for additional information.

(a) See Note 2 for additional information on acquisitions during fiscal 2026.

Indemnification agreements

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This inventory is included within the Company’s consolidated balance sheets as raw materials inventory.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company has entered into purchase commitments for information technology services, primarily related to implementation and support for cloud infrastructure, data analytics, and AI-enablement services.

In total, the Company expects to spend approximately $ 30.0 million in connection with these purchase commitments from fiscal 2027 through fiscal 2030.

The Company determines if an arrangement is a lease at contract inception.

1 unchanged sentence

The Company uses the lease term within its determination of the appropriate lease classification, either as an operating lease or as a finance lease, and to calculate straight-line lease expense for its operating leases.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

16 unchanged sentences

The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Lease assets and liabilities

17 unchanged sentences

(a) Finance lease ROU assets were recorded net of accumulated amortization of $ 4.8 million and $ 4.2 million as of March 31, 2026 and 2025, respectively.

The increases in operating lease ROU assets and liabilities in fiscal 2025 primarily resulted from the commencement of new facility leases.

The Company is increasing its production capacity to support organic growth opportunities, including within its Data Center Cooling business.

The increases in operating lease ROU assets and liabilities in fiscal 2026 primarily resulted from the commencement of new manufacturing facility leases within the Climate Solutions segment.

The Company is increasing its production capacity to support organic growth opportunities within its Data Centers business.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Components of lease expense

8 unchanged sentences

Total lease expense

(a) In fiscal 2025, 2024, and 2023 operating lease expense included short-term lease expense of $ 7.3 million, $ 5.4 million, and $ 5.7 million respectively.

(a) During fiscal 2026, 2025 and 2024, operating lease expense included short-term lease expense of $ 12.0 million, $ 7.3 million, and $ 5.4 million, respectively.

Variable lease expense was not significant.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Supplemental cash flow information

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Finance leases

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Maturity of lease liabilities

Future minimum rental payments for leases with initial non-cancellable lease terms in excess of one year were as follows at March 31, 2025:

Future minimum lease payments for leases with initial non-cancellable lease terms in excess of one year were as follows at March 31, 2026:

Operating Leases

3 unchanged sentences

Present value of lease liabilities

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

In July 2025, the Company executed an amended and restated credit agreement with a syndicate of banks for a multi-currency $ 400.0 million revolving credit facility and a $ 200.0 million term loan facility maturing in July 2030.

In addition, the credit agreement provides for shorter-duration swingline loans.

This credit agreement modified the Company’s then existing revolving credit and term loan facilities, which would have matured in October 2027.

In connection with the credit agreement modification, the Company incurred $ 2.3 million of debt issuance costs, which will be amortized as interest expense over the term of the debt.

In December 2025, the Company further amended the credit agreement primarily to increase the borrowing capacity under the revolving credit facility by $ 150.0 million to $ 550.0 million.

Long-term debt consisted of the following:

1 unchanged sentence

March 31, 2025

5.9 % Senior Notes

Revolving credit facility

5.9 % Senior Notes

5.8 % Senior Notes

Finance lease obligations

3 unchanged sentences

Long-term debt, including the current portion of long-term debt, matures as follows:

2031 & beyond

The Company maintains a credit agreement with a syndicate of banks that provides for a multi-currency $ 275.0 million revolving credit facility and U.S.

dollar- and euro-denominated term loan facilities maturing in October 2027.

In addition, the credit agreement provides for shorter-duration swingline loans.

Borrowings under the revolving credit, swingline and term loan facilities bear interest at variable rates, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below.

At March 31, 2025, the weighted-average interest rate for revolving credit facility borrowings and the term loans was 5.8 and 5.4 percent, respectively.

2032 and beyond

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Borrowings under the revolving credit, swingline and term loan facility bear interest at variable rates, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below.

At March 31, 2026, the weighted-average interest rate for revolving credit facility borrowings and the term loan was 5.0 and 5.1 percent, respectively.

Based upon the terms of the credit agreement, the Company classifies borrowings under its revolving credit and swingline facilities as long-term and short-term debt, respectively, on its consolidated balance sheets.

At March 31, 2025, the Company’s borrowings under its revolving credit facility totaled $ 30.0 million and domestic letters of credit totaled $ 6.2 million.

At March 31, 2025, the Company had no borrowings under the swingline facility.

At March 31, 2026, the Company’s borrowings under its revolving credit facility and swingline facilities totaled $ 150.0 million and $ 2.5 million, respectively, and domestic letters of credit totaled $ 6.1 million.

As a result, available borrowing capacity under the Company’s revolving credit facility was $ 391.4 million as of March 31, 2026.

At March 31, 2024, the Company’s borrowings under its revolving credit and swingline facilities totaled $ 90.0 million and $ 2.0 million, respectively.

At March 31, 2025, the Company had no borrowings under the swingline facility and $ 30.0 million of borrowings under the revolving credit facility.

In addition, short-term debt as of March 31, 2026 includes $ 5.0 million of overdraft borrowings in the U.S.

The Company also maintains credit agreements for its foreign subsidiaries.

The outstanding short-term borrowings related to these foreign credit agreements totaled $ 9.3 million and $ 10.0 million at March 31, 2025 and 2024, respectively.

Indebtedness under the Company’s credit agreement and Senior Notes is secured by liens on substantially all domestic assets.

The outstanding short-term borrowings related to these foreign credit agreements totaled $ 9.3 million at March 31, 2025.

There were no short-term borrowings related to these agreements at March 31, 2026.

Indebtedness under the Company’s credit agreement and Senior Notes is secured by liens on substantially all domestic assets, excluding real estate.

These agreements require compliance with various covenants that may limit the Company’s ability to incur additional indebtedness;

3 unchanged sentences

In addition, the agreements may require prepayment in the event of certain asset sales.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Financial covenants within its credit agreements include a leverage ratio, which requires the Company to limit its consolidated indebtedness, less a portion of its cash balances, both as defined by the credit agreements, to no more than three and one-quarter times consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”.) The Company must also maintain a ratio of Adjusted EBITDA of at least three times consolidated interest expense.

Financial covenants within its credit agreements include a leverage ratio, which requires the Company to limit its consolidated indebtedness, less a portion of its cash balances, both as defined by the credit agreements, to no more than three and one-half times consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”).

The Company must also maintain a ratio of Adjusted EBITDA of at least three times consolidated interest expense.

As of March 31, 2026, the Company was in compliance with its debt covenants.

3 unchanged sentences

Refer to Note 4 for the definition of a Level 2 fair value measurement.

Cash payments for interest during fiscal 2026, 2025 and 2024, totaled $ 30.2 million, $ 26.0 million, and $ 23.3 million, respectively.

Pension and Employee Benefit Plans

5 unchanged sentences

subsidiaries have government-required defined contribution plans in place, under which they contribute a percentage of employee earnings into accounts, consistent with local laws.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Statutory termination plans

4 unchanged sentences

Pension plans

The Company maintains non-contributory defined benefit pension plans that cover eligible domestic employees.

These plans are closed to new participants.

The primary domestic plan covers most domestic employees hired on or before December 31, 2003 and provides benefits based primarily upon years of service and average compensation for salaried and some hourly employees.

Benefits for other hourly employees are based upon a monthly retirement benefit amount.

Currently, the Company’s domestic pension plans do not include increases in annual earnings or future service in calculating the average annual earnings and years of credited service under the pension plan benefit formula.

During fiscal 2026, the Company completed the termination of its primary U.S.

pension plan.

The Company contributed $ 14.9 million to fully fund the plan and settled all future obligations under it through a combination of lump-sum payments to participants and the purchase of irrevocable annuity contracts.

As a result, the Company recorded a non-cash pension termination charge of $ 116.1 million during fiscal 2026 to recognize actuarial losses that were previously included within accumulated other comprehensive loss on its consolidated balance sheet.

Prior to the plan termination in fiscal 2026, the U.S.

plan covered most domestic employees hired on or before December 31, 2003 and provided benefits based primarily upon years of service and average compensation for salaried and some hourly employees.

Certain non-U.S.

subsidiaries of the Company also have legacy defined benefit plans which cover a smaller number of active employees and are substantially unfunded.

subsidiaries of the Company have legacy defined benefit plans which cover a small number of active employees and are substantially unfunded.

The primary non-U.S.

plans are maintained in Germany and Italy and are closed to new participants.

The Company previously maintained certain pension plans in Germany that conveyed to the buyer of the Germany automotive businesses during fiscal 2024;

The Company previously maintained pension plans in Germany that conveyed to the buyer of the Germany automotive businesses during fiscal 2024;

see Note 2 for additional information.

The Company contributed $ 6.5 million to its U.S.

pension plans during fiscal 2025.

In connection with funding relief provisions within the American Rescue Plan Act of 2021, the Company made $ 0.9 million cash contributions to its U.S.

pension plans during fiscal 2024 and no cash contributions in fiscal 2023.

As described above, the Company contributed $ 14.9 million to its U.S.

pension plan during fiscal 2026.

The Company contributed $ 6.5 million and $ 0.9 million to its U.S.

pension plans during fiscal 2025 and 2024, respectively.

In addition, the Company contributed $ 1.3 million, $ 1.1 million, and $ 1.8 million to its non-U.S.

1 unchanged sentence

These contributions are reported within the change in other liabilities in the consolidated statements of cash flows.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

In June 2024, the Company approved the termination of its primary U.S.

pension plan, subject to approvals from the Internal Revenue Service and the Pension Benefit Guaranty Corporation.

The Company intends to offer certain participants the option to receive their pension benefits in the form of a lump-sum distribution prior to purchasing annuity contracts to transfer its remaining obligations under the plan.

In connection with the plan termination, the Company expects to make additional cash contributions in the range of $ 15.0 million to $ 20.0 million to fully fund the plan, on a plan termination basis, and to record non-cash pension settlement charges totaling approximately $ 115.0 million to $ 125.0 million during fiscal 2026.

The timing and amount of the final cash contributions and settlement charges could materially differ from the Company’s estimates due to the nature and timing of participant settlements, prevailing market and economic conditions, the duration of the termination process, or other factors.

Postretirement plans

3 unchanged sentences

The Company’s net periodic income for its postretirement plans in fiscal 2026, 2025 and 2024 was $ 0.3 million, $ 0.3 million, and $ 0.4 million, respectively.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Measurement date

5 unchanged sentences

Interest cost

Actuarial loss (gain)

Actuarial (gain) loss

Benefits paid

Disposition of Germany automotive businesses

Pension termination settlement

Effect of exchange rate changes

4 unchanged sentences

Benefits paid

Pension termination settlement

Employer contributions

4 unchanged sentences

Noncurrent liability

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

As of March 31, 2026, 2025 and 2024, the benefit obligation associated with the Company’s non-U.S.

1 unchanged sentence

The $ 0.1 million decrease in the benefit obligation associated with non-U.S.

pension plans as of March 31, 2025, compared with the prior year, was primarily due to employer contributions and net actuarial gains during the year totaling $ 2.0 million, partially offset by service and interest cost totaling $ 0.6 million.

In fiscal 2024, the $ 8.2 million decrease was primarily due to the sale of the Germany automotive businesses and employer contributions for benefits paid to plan participants which decreased the obligation by $ 7.4 million and $ 1.8 million, respectively, and to a lesser extent, the impact of foreign currency exchange rates.

The decreases were partially offset by service and interest cost and net actuarial losses during the year totaling $ 0.8 million and $ 0.5 million, respectively.

pension plans as of March 31, 2026, compared with the prior year, was primarily due to employer contributions of $ 1.3 million and net actuarial gains during the year totaling $ 0.5 million, partially offset by service and interest cost totaling $ 0.7 million and the impact of foreign currency exchange rates.

In fiscal 2025, the $ 1.2 million decrease was primarily due to employer contributions and net actuarial gains during the year totaling $ 2.0 million, partially offset by service and interest cost totaling $ 0.6 million.

The accumulated benefit obligation for pension plans was $ 11.9 million and $ 180.2 million as of March 31, 2026 and 2025, respectively.

The benefit obligation as of March 31, 2025 includes the estimated settlement liability for the U.S.

plan in connection with the pending plan termination.

The estimated settlement liability includes the Company’s estimates regarding the percentage of participants who will elect a lump sum payment and for annuity pricing.

The net actuarial loss related to the pension plans recognized in accumulated other comprehensive loss was $ 122.0 million and $ 117.9 million as of March 31, 2025 and 2024, respectively.

As of March 31, 2026, these pension plans had a net actuarial gain of $ 0.5 million recognized in accumulated other comprehensive loss, compared with a net actuarial loss of $ 122.0 million as of March 31, 2025.

The changes were driven by the aforementioned U.S.

pension plan termination in fiscal 2026.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Costs for the Company’s global pension plans included the following components:

5 unchanged sentences

Settlements (a)

Pension termination charge (b)

Net periodic benefit cost

Other changes in benefit obligation recognized in other comprehensive income:

Net actuarial (loss) gain

Amortization of net actuarial loss (b)

Net actuarial gain (loss)

Amortization of net actuarial loss (c)

Pension termination charge (b)

Total recognized in other comprehensive income (loss)

1 unchanged sentence

pension plans.

(b) The fiscal 2024 amount includes $ 0.6 million of net actuarial gains written-off as a result of the sale of the Germany automotive businesses.

(b) The Company recognized $ 116.1 million of net actuarial losses during fiscal 2026 related to the termination of its primary U.S.

pension plan.

(c) The fiscal 2024 amount includes $ 0.6 million of net actuarial gains written-off as a result of the sale of the Germany automotive businesses.

See Note 2 for additional information on the sale of these businesses.

The Company amortized $ 4.6 million, $ 3.9 million, and $ 5.7 million of net actuarial loss in fiscal 2025, 2024, and 2023, respectively.

Exclusive of the $ 0.6 million written-off in fiscal 2024 upon the sale of the Germany automotive businesses referenced above, less than $ 1.0 million of the amortization was attributable to the Company’s non-U.S.

pension plans in each of these years.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company used a discount rate of 5.6 % and 5.5 % as of March 31, 2026 and 2025, respectively, for determining its benefit obligations under its U.S.

10 unchanged sentences

pension obligations.

Plan assets in the Company’s U.S.

pension plans comprise 100 percent of the Company’s world-wide pension plan assets.

The Company establishes its pension plan investment guidelines considering market conditions, its tolerance for risk, and cash requirements.

In connection with the upcoming plan termination, the Company has adjusted its investment portfolio to both protect the plan’s funded status and to match the maturities of the plan assets with the anticipated funding requirements for the upcoming lump-sum offering and future benefit payments.

During fiscal 2025, 2024 and 2023, the Company’s pension plans did not directly own shares of Modine common stock.

Historically, prior to its termination, the primary U.S.

pension plan held 100 percent of the Company’s world-wide pension plan assets.

During the last three fiscal years, the Company’s pension plans did not directly own shares of Modine common stock.

The Company’s U.S.

pension plan weighted-average asset allocations at the measurement dates of March 31, 2025 and 2024 were as follows:

Target allocation

pension plan weighted-average asset allocations at the measurement date of March 31, 2025 were as follows:

Debt securities

Cash and cash equivalents

Equity securities

Real estate investments

The expected rate of return on U.S.

plan assets is based upon historical return experience and forward-looking return expectations for major asset class categories.

For fiscal 2025, 2024, and 2023 U.S.

pension plan expense, the expected rate of return on plan assets was 5.5 percent, 6.5 percent, and 7.0 percent, respectively.

For fiscal 2026 U.S.

pension plan expense, the Company has assumed a rate of return on plan assets of 5.5 percent.

Estimated pension benefit payments for the Company’s global pension plans during the next ten fiscal years are shown below.

In connection with the pending U.S.

pension plan termination, the Company expects to make payments for lump sums to certain participants and for annuity contracts during fiscal 2026.

Estimated Pension

Benefit Payments

pension plan expense, prior to the termination of the plan, the expected rate of return on plan assets was 5.5 percent.

For fiscal 2025 and 2024 U.S.

pension plan expense, the expected rate of return on plan assets was 5.5 percent and 6.5 percent, respectively.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

Estimated pension benefit payments for the Company’s global pension plans are shown below.

Estimated Pension

Benefit Payments

Derivative Instruments

18 unchanged sentences

Gains and losses on these foreign currency contracts are offset by foreign currency gains and losses associated with the related assets and liabilities.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The fair value of the Company’s derivative financial instruments recorded in the consolidated balance sheets were as follows:

7 unchanged sentences

Other current liabilities

Foreign exchange contracts

Other current assets

Derivatives not designated as hedges:

1 unchanged sentence

Other current liabilities

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The amounts associated with derivative financial instruments that the Company designated for hedge accounting during the years ended March 31 were as follows:

7 unchanged sentences

Cost of sales

Total (losses) gains

Total gains (losses)

The amounts associated with derivative financial instruments that the Company did not designate for hedge accounting were as follows:

3 unchanged sentences

Foreign exchange contracts

Other expense – net

Other income (expense) – net

Total gains (losses)

Risks, Uncertainties, Contingencies and Litigation

2 unchanged sentences

The Company sells a broad range of products that provide thermal solutions to customers operating throughout the world.

In fiscal 2026, one global technology customer within the Climate Solutions segment accounted for approximately 11 percent of the Company’s total sales.

In fiscal 2025 and 2024, no customers accounted for more than ten percent of the Company’s total sales.

1 unchanged sentence

At March 31, 2026 and 2025, 53 percent and 43 percent, respectively, of the Company’s trade accounts receivable were due from the Company’s top ten customers.

These customers operate primarily in the data center cooling, commercial vehicle, off-highway, commercial air conditioning and refrigeration, and automotive and light vehicle markets.

These customers operate primarily in the data center, commercial vehicle, off-highway, commercial air conditioning and refrigeration, and automotive and light vehicle markets.

The Company generally does not require collateral or advanced payments from its customers.

The Company has not experienced significant credit losses to customers in the markets served.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company manages credit risk through its focus on the following:

1 unchanged sentence

● Accounts receivable – performing periodic customer credit evaluations and actively monitoring their financial condition and applicable business news;

● Pension assets – ensuring that investments within pension plans provide appropriate diversification, monitoring of investment teams, ensuring that portfolio managers adhere to the Company’s investment policies and directives, and ensuring that exposure to high risk investments is limited;

● Insurance – ensuring that insurance providers maintain financial ratings that are acceptable to the Company.

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Counterparty risk

8 unchanged sentences

The Company’s accruals for environmental matters totaled $ 12.7 million and $ 15.8 million at March 31, 2026 and 2025, respectively.

During fiscal 2024, the Company increased its remediation accrual related to a former manufacturing facility in the U.S.

by $ 1.0 million.

As additional information becomes available regarding environmental matters, the Company will re-assess the liabilities and revise the estimated accruals, if necessary.

16 unchanged sentences

Realized gains - net (b)

Unrecognized net pension gain in disposed businesses (c)

Total other comprehensive income (loss)

Balance March 31, 2024

Benefit Plans

Balance March 31, 2023

Other comprehensive income (loss) before reclassifications

2 unchanged sentences

Realized gains - net (b)

Unrecognized net pension gain in disposed businesses (c)

Total other comprehensive income (loss)

Balance March 31, 2025

Other comprehensive income (loss) before reclassifications

Reclassifications:

Amortization of unrecognized net loss (a)

Pension termination charge (d)

Realized losses - net (b)

Income taxes (e)

Total other comprehensive income (loss)

Balance March 31, 2026

(a) Amounts are included in the calculation of net periodic benefit cost for the Company’s defined benefit plans, which include pension and other postretirement plans.

See Note 18 for additional information about the Company’s pension plans.

(b) Amounts represent net gains and losses associated with cash flow hedges that were reclassified to net earnings See Note 19 for additional information regarding derivative instruments.

(b) Amounts represent net gains and losses associated with cash flow hedges that were reclassified to net earnings.

See Note 19 for additional information regarding derivative instruments.

(c) As a result of the sale of three automotive businesses based in Germany, the Company wrote-off $ 0.6 million of net actuarial gains related to the disposal group’s pension plan.

See Note 2 for additional information regarding the sale.

Segment and Geographic Information

The Company’s Climate Solutions segment provides energy-efficient, safe, climate-controlled solutions and components for a wide range of critical applications.

The Climate Solutions segment sells data center cooling solutions, heat transfer products, and HVAC&R products to customers in North America, EMEA, and Asia.

The Company’s Performance Technologies segment designs and manufactures air- and liquid-cooled heat exchangers for vehicular, stationary power, and industrial applications.

In addition, the Performance Technologies segment provides advanced thermal solutions to zero-emission and hybrid commercial vehicle and automotive customers.

See Note 3 for additional information regarding net sales by product groups within each segment.

(d) During fiscal 2026, the Company recognized $ 116.1 million of net actuarial losses related to the termination of its primary U.S.

pension plan.

See Note 18 for additional information.

(e) Income taxes related to defined benefit plans include a $ 13.1 million benefit related to the pension termination charge described above.

See Note 8 for additional information.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

Under this refined organizational structure, the Coatings business is better aligned with the Climate Solution’s Heat Transfer Products business, which serves similar heating, ventilating, air conditioning, and refrigeration markets and customers.

The Company believes that unifying these complementary businesses is allowing it to better focus resources on targeted growth opportunities and more efficiently apply 80/20 principles to optimize profit margins and cash flow.

Segment financial information for the prior years has been recast to conform to the current presentation.

Segment and Geographic Information

The Company’s Climate Solutions segment provides energy-efficient, safe, climate-controlled solutions and components for a wide range of critical applications.

The Climate Solutions segment sells data center products, heat transfer solutions, and HVAC technologies products to customers in North America, EMEA, and Asia.

The Company’s Performance Technologies segment designs and manufactures heat exchangers and cooling systems for heavy-duty equipment and on-highway applications.

In addition, the Performance Technologies segment sells cooling module generator sets that provide mission-critical stationary power.

See Note 3 for additional information regarding net sales by product groups within each segment.

The Company’s chief operating decision maker (“CODM”), its President and Chief Executive Officer, reviews the separate financial results for each of its operating segments.

The CODM uses segment operating income as a measure of profit and loss to evaluate the financial performance of each segment and as the basis for allocating company resources.

The tables below present net sales and significant expense categories for each of the Company’s segments that are regularly provided to the CODM.

The CODM uses segment operating income as a measure of profit and loss to evaluate the financial performance of each segment and as a basis for allocating company resources.

Effective April 1, 2026, the Company reorganized its Climate Solutions segment and split it into two separate operating segments:

1) Data Centers and 2) Commercial HVAC.

The Company believes that managing these businesses independently will allow it to better deploy its 80/20 strategy focused on capitalizing on growth opportunities, particularly in the Data Centers business, and optimizing profit margins and cash flow.

Beginning for fiscal 2027, the Company will report three operating segments:

1) Data Centers;

2) Commercial HVAC and 3) Performance Technologies.

The tables below present net sales and significant expense categories for the Company’s operating segments that are regularly provided to the CODM.

Net sales for Corporate and eliminations primarily represent the elimination of inter-segment sales.

7 unchanged sentences

Restructuring expenses

Impairment charge

Loss on sale of assets

Operating income

6 unchanged sentences

Restructuring expenses

Gain on sale of assets

Operating income

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Year ended March 31, 2024

5 unchanged sentences

Restructuring expenses

Gain on sale of assets

Operating income

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

SG&A expenses at Corporate include legal, finance, general corporate and central services expenses and other costs that are either not directly attributable to an operating segment or not considered when the CODM evaluates segment performance.

14 unchanged sentences

Total depreciation and amortization expense

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The following is a summary of net sales by geographic area, based upon the location of the selling unit:

2 unchanged sentences

United Kingdom

MODINE MANUFACTURING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The following is a summary of property, plant and equipment by geographic area:

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Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Realizability of certain domestic deferred tax assets

As discussed in Notes 1 and 8 to the consolidated financial statements, the Company establishes a valuation allowance if it is more likely than not that a deferred tax asset, or portion thereof, will not be realized.

In making this assessment, the Company considers expectations of future taxable income based on historical financial results, the duration of statutory carryforward periods and tax planning strategies.

Valuation allowances as of March 31, 2025 were $67.6 million, a portion of which are related to certain deferred tax assets in the U.S.

We identified the evaluation of the realizability of certain domestic deferred tax assets, specifically certain federal carryforward assets, as a critical audit matter.

Subjective auditor judgment was required to evaluate the realizability of certain federal carryforward assets because of the complexity of U.S.

tax laws and regulations and the need to involve tax professionals with specialized skills and knowledge.

Acquisition date fair value of certain customer relationship intangible assets

As discussed in Notes 2 and 13 to the consolidated financial statements, on May 31, 2025, the Company acquired all of the issued and outstanding shares of LBW Holding Corp.

for consideration totaling $110.5 million.

The Company accounts for the acquired business using the acquisition method of accounting by recording assets acquired and liabilities assumed at their respective fair values.

As part of the transaction, the Company acquired customer relationship intangible assets with an acquisition date fair value of $38.5 million, which was determined using the multi-period excess earnings method.

We identified the assessment of the acquisition date fair value of certain customer relationship intangible assets as a critical audit matter.

Subjective auditor judgment was required to evaluate certain assumptions used to determine the acquisition date fair value, specifically, future revenue growth rates, customer attrition rate, and discount rate.

Changes in these assumptions could have an impact on the forecasted future cash flows used in the multi-period excess earnings method and the resulting fair value of the customer relationship intangible assets.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s deferred tax asset valuation allowance process, including controls related to the evaluation of the realizability of the federal carryforward assets.

We evaluated whether the federal carryforward assets were more likely than not to be realized in the future by assessing the ability to generate income based on historical financial results, the history of utilization of the carryforward assets, and the length of the carryforward period and time until expiration of the tax attribute.

We evaluated the reasonableness of management’s projections of future profitability considering the historical profitability of the Company.

We involved tax professionals with specialized skills and knowledge, who assisted in assessing the Company’s application of U.S.

tax laws and regulations to utilize the federal carryforward assets and evaluating the realizability of the federal carryforward assets.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition date valuation process over certain customer relationship intangible assets.

This included certain controls over the development of the assumptions listed above.

We evaluated future revenue growth rates and the customer attrition rate by comparing them to historical results.

We involved valuation professionals with specialized skills and knowledge, who assisted us in evaluating:

the customer attrition rate by comparing the economic life of the customer relationship to comparable industry transactions

the discount rate by comparing it against a discount rate range that was independently developed using publicly available data for comparable entities.

We have served as the Company’s auditor since 2022.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data