Note 14: Product Warranties, Operating Leases and Other Commitments

Product warranties: Modine provides product warranties for various product lines, with warranty periods generally ranging from one to five years. The Company accrues for estimated future warranty costs in the period in which the sale is recorded, and warranty expense estimates are based on the best information available using analytical and statistical analysis of both historical and current claim data. These expenses are adjusted when it becomes probable that expected claims will differ from initial estimates recorded at the time of the sale.

Changes in accrued warranty costs were as follows:

Years ended March 31	2013			2012

Balance, April 1	$	11.4		$	14.7
Accruals for warranties issued		4.9			6.6
Accruals (reversals) related to pre-existing warranties		2.7			(1.1	)
Settlements		(6.1	)		(8.4	)
Effect of exchange rate changes		(0.3	)		(0.4	)
Balance, March 31	$	12.6		$	11.4

Operating leases: Modine leases various facilities and equipment under operating leases. Rental expense for these leases totaled $11.3 million in fiscal 2013, $9.0 million in fiscal 2012 and $8.8 million in fiscal 2011.

Future minimum rental commitments at March 31, 2013 under non-cancelable operating leases are as follows:

Years ending March 31

2014	$	6.5
2015		4.5
2016		3.0
2017		2.2
2018		1.8
2019 and beyond		4.3
Total future minimum rental commitments	$	22.3

Indemnification agreements: From time to time, the Company provides indemnification agreements related to the sale or purchase of an entity or facility. These indemnification agreements cover customary representations and warranties typically provided in conjunction with such transactions, including income, sales, excise or other tax matters, environmental matters and other third-party claims. The indemnification periods provided generally range from less than one year to fifteen years. In addition, standard indemnification provisions reside in many commercial agreements to which the Company is a party and relate to responsibility in the event of potential third-party claims. The fair value of the Company's outstanding indemnification obligations at March 31, 2013 is not material.

Commitments: At March 31, 2013, the Company had capital expenditure commitments of $11.9 million. Significant commitments include tooling and equipment expenditures for new and renewal platforms with customers in Europe and North America along with new program launches in Asia. The Company utilizes inventory arrangements with certain vendors in the normal course of business under which the vendors maintain inventory stock at the Company's facilities or at outside facilities. Title passes to the Company at the time goods are withdrawn for use in production. The Company has agreements with the vendors to use the material within a specific period of time. In some cases, the Company bears the risk of loss for the inventory because Modine is required to insure the inventory against damage and/or theft. This inventory is included within the Company's consolidated balance sheets as raw materials inventory.