UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ___________________


                                    FORM 10-Q


(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the quarterly period ended September 28, 2003
                                       or
[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from _____________to_____________


                         Commission File Number: 1-12432


                      AMERICAN POWER CONVERSION CORPORATION
             (Exact name of registrant as specified in its charter)


                    MASSACHUSETTS                     04-2722013
           (State or Other Jurisdiction of         (I.R.S. Employer
            Incorporation or Organization)        Identification No.)


             132 FAIRGROUNDS ROAD, WEST KINGSTON, RHODE ISLAND 02892
                                  401-789-5735
          (Address and telephone number of principal executive offices)


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

                        YES [ X ]                NO [ ]


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

                        YES [ X ]                NO [ ]


  Registrant's Common Stock outstanding, $0.01 par value, at November 6, 2003 -
                               198,552,000 shares


                                        1
<PAGE>
                                                                       FORM 10-Q
                                                              September 28, 2003



             AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES

                                      INDEX


                                                                       Page No.

Part I - Financial Information:

 Item 1. Consolidated Condensed Financial Statements:
         Consolidated Condensed Balance Sheets -
         September 28, 2003 and December 31, 2002 (Unaudited)           3 - 4

         Consolidated Condensed Statements of Income -
         Three Months and Nine Months Ended
         September 28, 2003 and September 29, 2002 (Unaudited)            5

         Consolidated Condensed Statements of Cash Flows -
         Three Months and Nine Months Ended
         September 28, 2003 and September 29, 2002 (Unaudited)            6

         Notes to Consolidated Condensed Financial Statements
         (Unaudited)                                                    7 - 15

 Item 2. Management's Discussion and Analysis of Financial
         Condition and Results of Operations                           15 - 25

 Item 3. Quantitative and Qualitative Disclosures About
         Market Risk                                                      26

 Item 4. Controls and Procedures                                          26


Part II - Other Information:

 Item 1. Legal Proceedings                                             26 - 27

 Item 6. Exhibits and Reports on Form 8-K                                 27


Signatures                                                                28


Exhibit Index                                                             29


                                        2
<PAGE>
                                                                       FORM 10-Q
                                                              September 28, 2003

PART I - CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
             AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                      In thousands except per share amount
                                   (Unaudited)

                                     ASSETS

<CAPTION>
                                                   September 28,   December 31,
                                                           2003           2002
<S>                                                    <C>            <C>
Current assets:
Cash and cash equivalents                              $202,489       $209,322
Short term investments (Note 5)                         492,326        430,986
Accounts receivable, less allowance
  for doubtful accounts of
  $19,539 in 2003 and $17,855 in 2002                   265,499        237,079
Inventories:
  Raw materials                                         199,242        175,079
  Work-in-process and finished goods                    195,273        144,892
Total inventories                                       394,515        319,971

Prepaid expenses and
  other current assets                                   18,875         24,545
Assets held-for-sale (Notes 4 and 7)                         --          3,033
Deferred income taxes                                    50,040         51,606

Total current assets                                  1,423,744      1,276,542

Property, plant and equipment:
  Land, buildings and improvements                       69,735         64,190
  Machinery and equipment                               205,473        195,076
  Office equipment, furniture
    and fixtures                                         81,138         78,388
  Purchased software                                     34,783         32,513
                                                        391,129        370,167
Less accumulated depreciation
  and amortization                                      225,517        195,239
Net property, plant and equipment                       165,612        174,928

Long term investments (Note 5)                           64,413         56,293
Goodwill (Note 6)                                         6,679          6,679
Other intangibles, net (Note 6)                          53,189         61,257
Deferred income taxes                                    25,071         26,354
Other assets                                              2,498          2,527

Total assets                                         $1,741,206     $1,604,580
</TABLE>


See accompanying notes to consolidated condensed financial statements.

                                        3
<PAGE>
                                                                       FORM 10-Q
                                                              September 28, 2003

<TABLE>
             AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
                CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
                      In thousands except per share amount
                                   (Unaudited)

                      LIABILITIES AND SHAREHOLDERS' EQUITY

<CAPTION>
                                                   September 28,   December 31,
                                                           2003           2002
<S>                                                    <C>            <C>
Current liabilities:
Accounts payable                                       $119,232        $99,983
Accrued compensation                                     34,996         33,029
Accrued warranty (Note 8)                                11,565         27,183
Accrued sales and marketing programs                     28,833         22,405
Other accrued expenses                                   22,945         30,301
Deferred revenue                                         22,243         19,135
Income taxes payable                                     45,491         45,404

Total current liabilities                               285,305        277,440

Deferred tax liability                                   15,972         15,088

Total liabilities                                       301,277        292,528

Shareholders' equity
  (Notes 9, 10, 11 and 12):
Common stock, $0.01 par value;
  authorized 450,000 shares;
  issued 198,450 shares in 2003
  and 196,496 shares in 2002                              1,985          1,965
Additional paid-in capital                              155,791        131,827
Retained earnings                                     1,284,660      1,181,563
Treasury stock, 250 shares, at cost                      (1,551)        (1,551)
Accumulated other comprehensive loss                       (956)        (1,752)

Total shareholders' equity                            1,439,929      1,312,052

Total liabilities and shareholders' equity           $1,741,206     $1,604,580
</TABLE>


See accompanying notes to consolidated condensed financial statements.

                                        4
<PAGE>
                                                                       FORM 10-Q
                                                              September 28, 2003
<TABLE>
             AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                     In thousands except earnings per share
                                   (Unaudited)
<CAPTION>
                               Nine months ended           Three months ended
                          September 28, September 29, September 28, September 29,
                                  2003          2002          2003          2002
<S>                         <C>             <C>           <C>           <C>
Net sales (Note 13)         $1,034,172      $942,055      $393,701      $337,143

Cost of goods sold
  (Note 8)                     599,362       585,066       220,817       200,148

Gross profit                   434,810       356,989       172,884       136,995

Operating expenses:
Marketing, selling, general
  & administrative             228,893       197,114        79,969        66,871
Research & development          48,584        44,060        17,777        14,601
Total operating expenses       277,477       241,174        97,746        81,472

Operating income               157,333       115,815        75,138        55,523

Other income, net                7,380         7,585         2,195         3,239

Earnings before income taxes
  and cumulative effect
  of accounting change         164,713       123,400        77,333        58,762

Income taxes                    45,790        35,169        21,498        16,747

Earnings before cumulative
  effect of accounting
  change                       118,923        88,231        55,835        42,015

Cumulative effect of
  accounting change, net of
  income taxes of $15,459
  (Note 3)                          --        34,500            --            --

Net income                    $118,923       $53,731       $55,835       $42,015

Basic earnings per share:
Basic earnings per share
  before cumulative effect
  of accounting change           $0.60         $0.44         $0.28         $0.21
Cumulative effect of
  accounting change,
  net of tax                        --          0.17            --            --
Basic earnings per share         $0.60         $0.27         $0.28         $0.21
Basic weighted average
  shares outstanding           196,900       195,899       197,638       196,049

Diluted earnings per share:
Diluted earnings per share
  before cumulative effect
  of accounting change           $0.59         $0.44         $0.28         $0.21
Cumulative effect of
  accounting change,
  net of tax                        --          0.17            --            --
Diluted earnings per share       $0.59         $0.27         $0.28         $0.21
Diluted weighted average
  shares outstanding           200,434       196,804       201,649       196,631
</TABLE>


See accompanying notes to consolidated condensed financial statements.

                                        5
<PAGE>
                                                                       FORM 10-Q
                                                              September 28, 2003
<TABLE>
             AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  In thousands
                                   (Unaudited)
<CAPTION>
                               Nine months ended           Three months ended
                          September 28, September 29, September 28, September 29,
                                  2003          2002          2003          2002
<S>                           <C>            <C>           <C>           <C>

Cash flows from operating activities

Net income                    $118,923       $53,731       $55,835       $42,015
Adjustments to reconcile
  net income to net cash
  provided by operating
  activities:
Depreciation and amortization
  of property, plant and
  equipment                     26,635        30,349         9,040        10,211
Amortization of other
  intangibles                    8,934         8,850         2,981         2,948
Provision for
  doubtful accounts              3,920         3,459         2,756         1,071
Provision for inventories        3,100         8,710         1,200         1,710
Deferred income taxes            3,733       (17,280)       (1,024)       (2,257)
Cumulative effect of
  accounting change                 --        49,959            --            --
Restructuring charges               --         3,877            --            --
Other non-cash items, net          796         2,008          (346)          268
Changes in operating
  assets and liabilities:
    Accounts receivable        (32,340)       14,195       (46,196)      (22,497)
    Inventories                (77,644)       47,554        (9,657)        4,956
    Prepaid expenses and
      other current assets       5,670        (7,585)        4,661           290
    Other assets                  (837)           70          (193)          (95)
    Accounts payable            19,249        13,151        19,396        17,614
    Accrued expenses           (11,471)       16,016           828         6,482
    Income taxes payable            87        21,732        14,069        16,514
Net cash provided by
  operating activities          68,755       248,796        53,350        79,230

Cash flows from investing activities

Purchases of held-to-
  maturity securities       (2,271,487)     (776,922)     (873,548)     (466,420)
Maturities of held-to-
  maturity securities        2,189,494       461,360       822,103       342,015
Purchases of available-for-
  sale securities                 (598)      (25,635)         (146)         (206)
Maturities of available-for-
  sale securities               13,131        15,000        13,131        10,000
Capital expenditures           (14,286)      (13,529)       (5,251)       (5,081)
Disposals of property,
  plant and equipment               --         1,624            --         1,624
Net cash used in
  investing activities         (83,746)     (338,102)      (43,711)     (118,068)

Cash flow from financing activities

Proceeds from issuances
  of common stock               23,984         2,772        12,890           105
Dividends paid                 (15,826)           --       (15,826)           --
Net cash provided by (used
  in) financing activities       8,158         2,772        (2,936)          105

Net change in cash
  and cash equivalents          (6,833)      (86,534)        6,703       (38,733)
Cash and cash equivalents
  at beginning of period       209,322       288,210       195,786       240,409
Cash and cash equivalents
  at end of period            $202,489      $201,676      $202,489      $201,676


Supplemental cash flow disclosures

Cash paid during
  the period for:
Income taxes (net of refunds)  $41,563       $11,372        $9,521          $432
</TABLE>


NON-CASH TRANSACTIONS: In the first quarter of 2002, APC recorded a
restructuring charge that included a non-cash component of $3,877 (Note 4).


See accompanying notes to consolidated condensed financial statements.

                                        6
<PAGE>
                                                                       FORM 10-Q
                                                              September 28, 2003



             AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


  1.   Management Representation

The accompanying unaudited consolidated condensed financial statements should be
read in conjunction with the consolidated financial statements included in the
American Power Conversion Corporation, APC, Annual Report on Form 10-K for the
year ended December 31, 2002. In the opinion of management, the accompanying
unaudited consolidated condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly the
consolidated financial position and the consolidated results of operations and
cash flows for the interim periods. The results of operations for the interim
periods are not necessarily indicative of results to be expected for the full
year.


  2.   Principles of Consolidation

The accompanying consolidated condensed financial statements include the
financial statements of American Power Conversion Corporation and its wholly-
owned subsidiaries. All significant intercompany accounts and transactions are
eliminated in consolidation.


  3.   Change in Accounting Principle

On January 1, 2002, APC adopted Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets. Statement 142 requires that companies
no longer amortize goodwill and other intangible assets with indefinite lives,
but instead test goodwill impairment at least annually or more frequently if
impairment indicators arise. Statement 142 also requires completion of a two-
step transitional goodwill impairment test. In connection with completion of the
first step of its transitional analysis, APC identified two reporting units with
goodwill, Large Systems and Small Systems; these reporting units are also
reportable segments. APC then determined the carrying value of each reporting
unit by assigning the assets and liabilities, including existing goodwill and
other intangible assets, to these reporting units as of the date of adoption.
Completion of the first step of APC's analysis indicated impairment in the
carrying amount of its goodwill. APC's goodwill was primarily associated with
its Large Systems segment which consists primarily of uninterruptible power
supply (UPS), DC-power systems, and precision cooling products for data centers,
facilities, and communication applications. Conditions contributing to the
goodwill impairment included the ongoing softness in IT and communications
market product lines coupled with lower corporate investment for these types of
applications.

In connection with completion of the second step of its transitional analysis,
APC compared the carrying amount of reporting unit goodwill with the implied
fair value of reporting unit goodwill, both of which were measured as of the
date of adoption. The implied fair value of goodwill was determined by
allocating the fair value of the reporting unit to all of the assets (recognized
and unrecognized) and liabilities of the reporting unit in a manner similar to a
purchase price allocation, in accordance with the provisions of Statement of
Financial Accounting Standards No. 141, Business Combinations. The residual fair
value after this allocation was the implied fair value of the reporting unit
goodwill. Based on this second step, APC recorded a non-cash charge equal to the
goodwill balance associated with APC's Large Systems segment of approximately
$50 million (approximately $35 million on an after-tax basis). This charge was
recognized as the cumulative effect of a change in accounting principle net of
income taxes, included in APC's results as of January 1, 2002, and had no effect
on APC's liquidity. APC's remaining goodwill is associated with its Small
Systems segment. APC evaluates each of its reporting units with goodwill during
the fourth quarter of each fiscal year or more frequently if impairment
indicators arise.

                                        7
<PAGE>

  4.   Restructuring

In early 2002, APC announced global headcount reductions which impacted
personnel worldwide, principally in the U.S., U.K., Ireland, and the
Philippines, throughout a broad range of functions within the organization. The
majority of these terminations were the result of APC's decision to consolidate
its Philippines-based manufacturing operations, resulting in the closing of
APC's manufacturing facility in the province of Laguna. Such restructuring
actions were announced during the first quarter of 2002 and substantially
completed by the end of 2002.

In the first quarter of 2002, APC recorded $7.3 million of related restructuring
costs of which $4.8 million and $2.5 million were classified in cost of goods
sold and operating expenses, respectively. These costs included the effects of
approximately 941 employee terminations, principally 54% in manufacturing, 14%
in sales and 13% in R&D, based on severance agreements, as well as facilities
closures in the Philippines, U.S. and U.K., and the related impairment of
tangible assets, principally buildings and manufacturing equipment, based on
third party appraisal and market data. These costs were not allocated to APC's
operating segments, but rather were classified as indirect operating expenses
for segment reporting consistent with APC's classification for its internal
financial reporting; also refer to Note 13.

In connection with APC's decision to consolidate its Philippines-based
manufacturing operations, APC closed manufacturing facilities located in the
Philippines province of Laguna, in Maryland, and also in the U.K. APC marketed
its Philippines property with an intent to sell these assets in 2003. However,
the current real estate market has not been favorable and has not allowed APC to
complete this sale. In accordance with the provisions of Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-
Lived Assets, in the second quarter of 2003 the Philippines building and
equipment were reclassified at their fair values, which aggregated $3.0 million,
to held-for-use property, plant, and equipment and depreciation re-commenced.
APC sold a building in Maryland to a third party in October 2002. Also, in
connection with the closure of a leased facility in the U.K., APC recognized a
lease liability during the first quarter of 2002; this lease will expire in
2005.

A summary of the related 2002 restructuring liabilities during the first,
second, and third quarters of 2003 and 2002 is outlined below. APC expects all
such restructuring liabilities at September 28, 2003 to be fully paid in cash by
the end of 2005.

                                        8
<PAGE>

  4.   Restructuring (cont.)

<TABLE>
                                    2002 Restructuring Plans

<CAPTION>
In thousands            Restructuring                                     Restructuring
                        Liabilities at                                    Liabilities at
                           Beginning      Total      Non-cash     Cash       End of
                           of Quarter    Charges     Charges    Payments     Quarter
<S>                        <C>           <C>         <C>        <C>          <C>


Third Quarter 2003
Employee terminations          $25        $ --        $ --        $ --          $25
Facilities closure:
  U.K. lease                   558          --          --         (77)         481
                              $583        $ --        $ --        $(77)        $506

Second Quarter 2003
Employee terminations          $25        $ --        $ --        $ --          $25
Facilities closure:
  U.K. lease                   617          --          --         (59)         558
                              $642        $ --        $ --        $(59)        $583

First Quarter 2003
Employee terminations          $25        $ --        $ --        $ --          $25
Facilities closure:
  U.K. lease                   775          --          --        (158)         617
                              $800        $ --        $ --       $(158)        $642


Third Quarter 2002
Employee terminations         $224        $ --        $ --       $(161)         $63
Facilities closure:
  U.K. lease                   840          --          --          --          840
                            $1,064        $ --        $ --       $(161)        $903

Second Quarter 2002
Employee terminations       $1,582        $ --        $ --     $(1,358)        $224
Facilities closure:
  U.K. lease                   840          --          --          --          840
                            $2,422        $ --        $ --     $(1,358)      $1,064

First Quarter 2002
Employee terminations         $ --      $2,550        $ --       $(968)      $1,582
Impairment of Philippines
  manufacturing equipment       --       1,671      (1,671)         --           --
Impairment of Maryland
  building                      --       1,500      (1,500)         --           --
Impairment of U.K. assets       --         706        (706)         --           --
Termination of U.K. lease       --         840          --          --          840
Total facilities closures       --       4,717      (3,877)         --          840
                              $ --      $7,267     $(3,877)      $(968)      $2,422
</TABLE>

                                        9
<PAGE>

  5.   Investments

APC classifies as short term its investments with original maturities greater
than three months and less than or equal to one year, and as long term its
investments with remaining maturities greater than one year and less than or
equal to two years. APC has no investments with maturity dates greater than two
years. Available-for-sale securities are recorded at fair value with net
unrealized gains and losses reported, net of income taxes, in accumulated other
comprehensive income. Held-to-maturity securities are carried at amortized cost.
Management determines the appropriate classification of securities at the time
of purchase and re-evaluates such designation as of each balance sheet date.
Securities are classified as held-to-maturity when APC has the positive intent
and ability to hold such securities to maturity. There were no sales of
investment securities in the third quarters or first nine months of 2003 or
2002.


<TABLE>
<CAPTION>
In thousands                                Gross        Gross
                                         Unrealized   Unrealized
                            Amortized      Holding      Holding        Fair
                              Cost          Gains        Losses        Value
<S>                           <C>           <C>          <C>           <C>

At September 28, 2003

Available-for-sale
Bond funds                    $18,567        $288       $(525)        $18,330
Equity investments                433          --          --             433
                               19,000         288        (525)         18,763
Held-to-maturity
Certificates of deposit       205,063          --          --         205,063
Corporate bonds               241,116          61         (15)        241,162
Municipal bonds and notes      52,630           2          (9)         52,623
U.S. government agency
  securities                   39,167          88         (21)         39,234
                              537,976         151         (45)        538,082

                             $556,976        $439       $(570)       $556,845

At December 31, 2002

Available-for-sale
Bond funds                    $31,233        $114       $(449)        $30,898
Equity investments                398          --          --             398
                               31,631         114        (449)         31,296
Held-to-maturity
Certificates of deposit       134,602          --          --         134,602
Corporate bonds               153,501          78          --         153,579
Municipal bonds and notes     120,845          --          (6)        120,839
U.S. government agency
  securities                   47,035         203         (20)         47,218
                              455,983         281         (26)        456,238

                             $487,614        $395       $(475)       $487,534
</TABLE>

                                       10
<PAGE>

  6.   Goodwill and Other Intangible Assets

At each of September 28, 2003 and December 31, 2002, goodwill of $6.7 million
was associated with the Small Systems segment. Amortized intangible assets were
as follows:

<TABLE>
<CAPTION>
In thousands                       September 28, 2003        December 31, 2002
                    Weighted
Amortized            Average      Gross                     Gross
Intangible        Amortization   Carrying   Accumulated   Carrying   Accumulated
Assets               Period       Amount   Amortization    Amount   Amortization
<S>                  <C>         <C>           <C>        <C>           <C>

Technology           6 years     $80,508       $33,264    $80,642       $26,702
Customer lists       5 years       8,900         4,528      8,900         3,519
Tradenames           5 years       3,157         1,584      3,157         1,221

Total amortized
 intangible assets   6 years     $92,565       $39,376    $92,699       $31,442
</TABLE>

Aggregate amortization expense related to APC's other intangible assets for each
of the third quarters of 2003 and 2002 was $3.0 million, and for each of the
first nine months of 2003 and 2002 was $8.9 million. Estimated aggregate
amortization for each of the next five succeeding fiscal years is $12.0 million
for 2003, $11.6 million for 2004, $11.6 million for 2005, $11.6 million for
2006, and $9.4 million for 2007. There are no expected residual values related
to these intangible assets.


  7.   Long-lived Assets

In early 2002, APC announced its decision to consolidate its Philippines-based
manufacturing operations resulting in the closing of APC's manufacturing
facility in the province of Laguna. In the first quarter of 2002, in connection
with this action as well as the closure of manufacturing facilities in the U.S.
and U.K., APC recorded $3.9 million of asset impairment charges related to
buildings and equipment of which $3.4 million and $0.5 million were classified
in cost of goods sold and operating expenses, respectively. These impairment
charges were not allocated to APC's operating segments, but rather were
classified as indirect operating expenses for segment reporting consistent with
APC's classification for its internal financial reporting. At December 31, 2002,
a building and equipment held-for-sale, with an aggregate value of $3.0 million,
were stated at the lower of their fair values less estimated selling costs or
carrying amounts and depreciation was no longer being recognized. We marketed
this property with an intent to sell these assets in 2003. However, the current
real estate market has not been favorable and has not allowed us to complete
this sale. In accordance with the provisions of Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-
Lived Assets, in the second quarter of 2003 the building and equipment were
reclassified at their fair values, which aggregated $3.0 million, to held-for-
use property, plant, and equipment and depreciation re-commenced.

                                       11
<PAGE>

  8.   Warranty Liability and Product Recall

<TABLE>
<CAPTION>
In thousands  Product      Accruals for   Adjustments                 Product
             Warranty        Product      to Accruals                Warranty
            Liability at    Warranties        for                  Liability at
             Beginning    Issued During   Preexisting    Warranty     End of
             of Quarter    the Quarter     Warranties    Payments     Quarter
<S>           <C>             <C>           <C>           <C>            <C>
Third
Quarter
2003          $17,577         $7,342       $(5,500)      $(7,854)     $11,565

Second
Quarter
2003          $20,746         $5,629          $ --       $(8,798)     $17,577

First
Quarter
2003          $27,183         $6,965          $ --      $(13,402)     $20,746

Third
Quarter
2002           $7,628         $5,795          $ --       $(5,573)      $7,850

Second
Quarter
2002           $7,691         $4,529          $ --       $(4,592)      $7,628

First
Quarter
2002           $6,846         $6,115          $ --       $(5,270)      $7,691
</TABLE>

In early 2003, APC announced a product recall of Back-UPSr CS 350 and 500
models, due to potential safety issues. Prior to announcing the recall, APC
received eight reports worldwide of units overheating, resulting in the melting
of the unit's outer casing, six of which occurred in the United States. Three of
the reported incidents resulted in minor property damage; no injuries have been
reported. The total number of affected devices being recalled worldwide is
approximately 2.1 million with approximately 900,000 devices recalled in the
United States. The recall is limited to two specific models in APC's Back-UPS CS
product line, the Back-UPS CS 350 and the Back-UPS CS 500, in both 120-volt and
230-volt models. The affected units were manufactured between November 2000 and
December 2002 and were sold primarily through computer and electrical
distribution, catalog and retail outlets worldwide. In the fourth quarter of
2002, APC accrued a current liability and recognized additional warranty
expense, classified in cost of goods sold, of $19.6 million. Based upon repair
cost and return rate experience to-date as well as current estimates of
remaining costs to be incurred, APC expects the aggregate costs for the recall
to be less than originally estimated. To reflect this change, cost of goods sold
was reduced by $5.5 million in the third quarter of 2003. As of September 28,
2003, APC had incurred approximately 75% of currently estimated total recall
costs. Our estimation of remaining recall costs of $3.5 million, comprised of
$1.1 million for the U.S. and $2.4 million for international geographies,
continues to be subject to actual return rates and per unit repair costs which
can vary by country. We expect that future amounts will not differ materially
from our current estimates.


  9.   Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share is computed by dividing net income by the weighted average number of
common shares and dilutive potential common shares outstanding during the
period. Under the treasury stock method, the unexercised options are assumed to
be exercised at the beginning of the period or at issuance, if later. The
assumed proceeds are then used to purchase common shares at the average market
price during the period. Potential common shares for which inclusion would have
the effect of increasing diluted earnings per share (i.e., antidilutive) are
excluded from the computation.

<TABLE>
<CAPTION>
In thousands                  Nine months ended          Three months ended
                        September 28, September 29, September 28, September 29,
                                2003          2002          2003          2002
<S>                          <C>           <C>           <C>           <C>
Basic weighted average
  shares outstanding         196,900       195,899       197,638       196,049

Net effect of dilutive
  potential common shares
  outstanding based on the
  treasury stock method
  using the average
  market price                 3,534           905         4,011           582

Diluted weighted average
  shares outstanding         200,434       196,804       201,649       196,631

Antidilutive potential
  common shares excluded
  from the computation above   3,921         9,047         3,249        14,394
</TABLE>

                                       12
  <PAGE>

  10.  Shareholders' Equity

Changes in paid-in capital for the periods presented represent the issuances of
common stock resulting from the exercise of employee stock options.

On June 18, 2003, APC's Board of Directors approved initiation of a quarterly
cash dividend of $0.08 per share of common stock. The first quarterly dividend
of $15.8 million was paid September 15, 2003 to shareholders of record at the
close of business on August 25, 2003.


  11.  Comprehensive Income

The components of comprehensive income, net of tax, are as follows:

<TABLE>
<CAPTION>
In thousands                  Nine months ended          Three months ended
                        September 28, September 29, September 28, September 29,
                                2003          2002          2003          2002
<S>                         <C>            <C>           <C>           <C>
Net income                  $118,923       $53,731       $55,835       $42,015

Other comprehensive
  income (loss), net of tax:

Change in foreign currency
  translation adjustment         742         2,076          (526)          292

Net unrealized gain
  (loss) on investments,
  net of income taxes             54           (68)          180           (24)

Other comprehensive
  income (loss)                  796         2,008          (346)          268

Comprehensive income        $119,719       $55,739       $55,489       $42,283
</TABLE>


  12.  Stock-Based Compensation

At September 28, 2003, APC had four stock option plans and an employee stock
purchase plan, which are described more fully in Note 13 of Notes to
Consolidated Financial Statements in Item 8 of APC's Form 10-K for the year
ended December 31, 2002. As permitted by Statement of Financial Accounting
Standards No. 123 as amended by No. 148, Accounting for Stock-Based
Compensation, APC accounts for those plans under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations. No stock-based employee compensation cost is reflected
in net income as all options granted under those plans had an exercise price
equal to the market value of the underlying common stock on the date of grant.
The following table illustrates the effect on net income and earnings per share
if APC had applied the fair value recognition provisions of Statement 123 to
stock-based employee compensation:

<TABLE>
<CAPTION>
In thousands except
  per share amounts                      Nine months ended          Three months ended
                                   September 28, September 29, September 28, September 29,
                                           2003          2002          2003          2002
<S>                    <S>             <C>            <C>           <C>           <C>
Net income             As reported     $118,923       $53,731       $55,835       $42,015

Deduct: Total stock-
 based employee
 compensation expense
 determined under fair
 value based method for
 all awards, net of
 related tax effects   Pro forma        (16,511)      (18,362)       (5,612)       (6,121)
Net income             Pro forma       $102,412       $35,369       $50,223       $35,894

Basic earnings         As reported        $0.60         $0.27         $0.28         $0.21
 per share             Pro forma          $0.52         $0.18         $0.25         $0.18

Diluted earnings       As reported        $0.59         $0.27         $0.28         $0.21
 per share             Pro forma          $0.51         $0.18         $0.25         $0.18
</TABLE>

                                       13
<PAGE>

  13.  Operating Segment Information

Basis for presentation
APC operates primarily within one industry consisting of three reportable
operating segments by which it manages its business and from which various
offerings are commonly combined to develop a total solution for the customer.
These efforts primarily incorporate the design, manufacture and marketing of
power protection equipment and related software and accessories for computer,
communications and related equipment. APC's three segments are: Small Systems,
Large Systems and Other. Each of these segments address global markets. The
Small Systems segment develops power solutions for servers and networking
equipment commonly used in local area and wide area networks and for personal
computers and sensitive electronics; additional accessories and software
products are offered to enhance the management of these networks. The Large
Systems segment produces large system solutions that provide power and
availability solutions for data centers, facilities and communications
equipment. The Other segment principally consists of notebook computer
accessories, replacement batteries and Web-based services.

APC measures the profitability of its segments based on direct contribution
margin. Direct contribution margin includes research and development (R&D),
marketing and administrative expenses directly attributable to the segments and
excludes certain expenses which are managed outside the reportable segments.
Costs excluded from segment profit are indirect operating expenses, primarily
consisting of selling and corporate expenses, and income taxes. In addition,
APC's 2003 update to its 2002 product recall provision, as well as its 2002
restructuring charges, were not allocated to APC's operating segments, but
rather were classified as indirect operating expenses for segment reporting
consistent with APC's classification for its internal financial reporting.
Expenditures for additions to long-lived assets are not tracked or reported by
the operating segments, although depreciation expense is allocated to and
reported by the operating segments.

Summary operating segment information is as follows:

<TABLE>
<CAPTION>
In thousands                  Nine months ended          Three months ended
                        September 28, September 29, September 28, September 29,
                                2003          2002          2003          2002
<S>                       <C>             <C>           <C>           <C>

Segment net sales

Small Systems               $813,323      $760,747      $313,277      $270,697
Large Systems                163,390       134,845        59,800        49,314
Other                         51,461        41,277        18,264        15,380
Total segment net sales    1,028,174       936,869       391,341       335,391
Shipping and handling
  revenues                     5,998         5,186         2,360         1,752
Total net sales           $1,034,172      $942,055      $393,701      $337,143

Segment profits

Small Systems               $351,616      $313,554      $137,072      $116,650
Large Systems                  5,458       (16,192)        5,279          (813)
Other                         29,483        23,248        10,694         8,302
Total segment profits        386,557       320,610       153,045       124,139
Shipping and handling
  net costs                   20,287        13,761         7,378         5,994
Update to provision for
  product recall              (5,500)           --        (5,500)           --
Restructuring charges             --         7,267            --            --
Other indirect
  operating expenses         214,437       183,767        76,029        62,622
Other income, net              7,380         7,585         2,195         3,239
Earnings before
  income taxes              $164,713      $123,400       $77,333       $58,762
</TABLE>

                                       14
<PAGE>

  14.  Litigation

As previously reported in APC's Form 10-Q for the quarterly periods ended March
30, 2003 and June 29, 2003, on January 10, 2003, Powerware Corporation filed in
the United States District Court for the Eastern District of North Carolina (the
"Court") a complaint alleging infringement of three United States patents. On
May 7, 2003, Powerware Corporation filed with the Court an amended complaint
modifying its allegations of infringement regarding the Powerware Patents. APC
was served with the amended complaint on May 9, 2003. Powerware Corporation is
seeking unspecified damages and injunctive relief. On May 28, 2003, APC filed
its answer to the amended complaint and on June 17, 2003 APC filed its first
amended answer and counterclaims alleging infringement by Powerware Corporation
of three United States patents owned by APC. On July 3, 2003, Powerware
Corporation filed its answer to counterclaims.

As previously reported in APC's Form 10-Q for the quarterly period June 29,
2003, on June 24, 2003, SL Waber, Inc., petitioned the United States District
Court for the District of New Jersey (the "Court") to reopen the SL Waber, Inc.
v. American Power Conversion Corporation lawsuit originally filed by SL Waber,
Inc. on August 20, 1997 alleging infringement of two United States patents. In a
March 22, 1999 order, the Court dismissed one of the patents from the litigation
and, in response to APC's July 14, 1998 request that the United States Patent
and Trademark Office conduct a reexamination of the remaining patent,
administratively terminated the lawsuit pending the completion of the
reexamination. In its March 22, 1999 order, the Court granted SL Waber, Inc. the
right to petition the Court to reopen the case after the reexamination was
completed. The reexamination of the remaining patent was completed on June 3,
2003 and SL Waber, Inc. petitioned the Court on June 24, 2003 to reopen the
lawsuit. On July 9, 2003, the Court reopened the lawsuit. SL Waber, Inc. is
seeking unspecified damages and injunctive relief.

In addition, APC is involved in various other claims and legal actions arising
in the ordinary course of business.

While management currently believes that resolving all pending legal matters,
individually or in aggregate, will not have a material adverse impact on APC's
financial position, the litigation and other claims noted above are subject to
inherent uncertainties and management's view of these matters may change in the
future. Were an unfavorable final outcome to occur, there exists the possibility
of a material adverse impact on APC's financial position, cash flows and results
of operations for the period in which the effect becomes reasonably estimable.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS


COMPARISON OF THE THREE AND NINE MONTH PERIODS ENDED
SEPTEMBER 28, 2003 AND SEPTEMBER 29, 2002

Revenues

Total net sales were $393.7 million for the third quarter of 2003, an increase
of 16.8% compared to $337.1 million for the same period in 2002. Total net sales
for the first nine months of 2003 were $1.034 billion compared to $942.1 million
in 2002, an increase of 9.8%. These increases were attributable to higher net
sales in the third quarter and first nine months of 2003 across each of our
operating segments. In addition, improvements in the third quarter and first
nine months of 2003 over the comparable periods last year were enhanced in each
of the operating segments by the favorable pricing impact of a weakening U.S.
dollar, particularly in Europe. Net sales for products in the Small Systems
segment, which provides power protection, UPS, and management products for the
PC, server, and local area networking markets, were up 15.7% and 6.9% in the
third quarter and first nine months of 2003, respectively, from comparable 2002
levels. These improvements were driven by worldwide demand for APC's core UPSs,
specifically the Back-UPS and Smart-UPS families combined with increased sales
of rack enclosures and management solutions, partially offset by the cumulative
effect of pricing actions over the course of the past year.

                                       15
<PAGE>

Net sales for products in the Large Systems segment, consisting primarily of
UPS, DC-power systems, and precision cooling products for data centers,
facilities, and communication applications, increased 21.3% and 21.2% in the
third quarter and first nine months of 2003, respectively, from comparable 2002
levels. Strong net sales in the third quarter and first nine months of 2003 were
due principally to continued sales growth of our recently-introduced
InfraStruXureT along with growing service revenue and net sales of our precision
cooling products. Partially offsetting these improvements in our Large Systems
segment was the impact of continued weakness in our communications market
product lines. Net sales for products in the "Other" segment, consisting
principally of notebook computer accessories, replacement batteries and Web-
based services, were up 18.8% and 24.7% in the third quarter and first nine
months of 2003, respectively, from comparable 2002 levels due mainly to organic
growth of existing products, particularly replacement batteries, as well as
growth from new mobile accessory products.

Revenue performance was strong in all major geographies, led by the strong sales
internationally. On a geographic basis, the Americas (North and Latin America)
represented 52.3% of total third quarter 2003 revenues and were up 10.5% over
the same period in 2002. The Americas represented 51.2% of total revenues for
the first nine months of 2003 and were down 0.7% over the same period last year.
Europe, the Middle East and Africa (EMEA) represented 29.7% of total third
quarter 2003 revenues and was up 24.5% from the same period in 2002. EMEA
represented 30.6% of total revenues for the first nine months of 2003 and was up
26.5% from the same period last year. Finally, Asia was 17.9% of total third
quarter 2003 revenues, increasing 24.7% over the same period in 2002. Asia was
18.2% of total revenues for the first nine months of 2003, increasing 18.4% over
the same period last year. On a constant currency basis, EMEA was up 15.4% and
Asia increased 20.2% versus the third quarter of 2002, and EMEA was up 13.6% and
Asia increased 12.6% versus the first nine months of 2002. In the third quarter
and first nine months of 2003, EMEA's revenues would have been lower by $9
million and $30 million on a constant currency basis, respectively. Also, in the
third quarter and first nine months of 2003, JPAA's revenues would have been
lower by $3 million and $9 million on a constant currency basis, respectively.
We believe constant currency information is useful for an understanding of our
operating results. Revenues on a constant currency basis differ from revenues
presented in accordance with United States generally accepted accounting
principles.

Cost of Goods Sold

Total cost of goods sold was $220.8 million or 56.1% of total net sales in the
third quarter of 2003 compared to $200.1 million or 59.4% in the third quarter
of 2002. Total cost of goods sold was $599.4 million or 58.0% of total net sales
in the first nine months of 2003 compared to $585.1 million or 62.1% in the
first nine months of 2002. APC's total gross margin for the third quarter of
2003 was 43.9% of sales, approximately 330 basis points higher than the
comparable period in 2002. APC's total gross margin for the first nine months of
2003 was 42.0% of sales, approximately 410 basis points higher than the
comparable period last year. Gross margins for the third quarter and first nine
months of 2003 included the effects of a third quarter update of estimated costs
associated with the product recall of Back-UPS CS 350 and 500 models. Based upon
repair cost and return rate experience to-date as well as current estimates of
remaining costs to be incurred, we expect the aggregate costs for the recall to
be less than the $19.6 million originally estimated in the fourth quarter of
2002. To reflect this change, we reduced cost of goods sold by $5.5 million in
the third quarter of 2003. This reduction has not been allocated to our
operating segments, but rather has been classified as a reduction of indirect
operating expenses for segment reporting consistent with our classification for
internal financial reporting; also refer to Note 13 of Notes to Consolidated
Condensed Financial Statements in Item 1 of this Report. As of September 28,
2003, APC had incurred approximately 75% of currently estimated total recall
costs. Our estimation of remaining recall costs of $3.5 million, comprised of
$1.1 million for the U.S. and $2.4 million for international geographies,
continues to be subject to actual return rates and per unit repair costs which
can vary by country. We expect that actual future amounts will not differ
materially from our current estimates. Gross margin improvements in the third
quarter and first nine months of 2003 were also driven by margin improvements
across APC's operating segments, as well as higher volume production and a
favorable product mix that were partially offset by pricing changes.

Gross profits for the Small Systems segment improved in the third quarter and
first nine months of 2003 over the comparable periods in 2002, reflecting
product cost reductions, a favorable mix shift within the segment, and favorable
currency trends offset by the cumulative effect of pricing actions over the
course of the past year. Our product cost reductions accounted for approximately
170 basis points and 350 basis points, on a third quarter and year-to-date
basis, respectively, of the margin improvement in the segment and were driven
principally by material cost improvements.

                                       16
<PAGE>

Gross profits for the Large Systems segment improved substantially in the third
quarter and first nine months of 2003 over the comparable periods in 2002
principally due to a continual lowering of product costs, particularly lower
manufacturing costs resulting from volume efficiencies achieved through factory
consolidations, and capacity rationalization efforts that commenced in late
2001. Our product cost reductions accounted for approximately 1,040 basis points
and 1,140 basis points, on a third quarter and year-to-date basis, respectively,
of the margin improvement in the segment and were driven by material cost
improvements and, to a lesser extent, manufacturing cost efficiencies. Gross
profits for the "Other" segment improved in the third quarter and first nine
months of 2003 over the comparable periods in 2002 as a result of volume related
efficiencies in cost, including improved efficiencies of recently introduced
products, as well as a mix shift within the segment. In addition, gross profit
improvements in the third quarter and first nine months of 2003 over the
comparable periods last year were enhanced in each of the operating segments by
the favorable pricing impact of a weakening U.S. dollar, particularly in Europe.

Additionally, total gross margins for the first nine months of 2002 included the
effects of first quarter restructuring costs of $4.8 million associated with our
first quarter 2002 global headcount reductions. These actions impacted personnel
worldwide, principally in the U.S., U.K., Ireland, and the Philippines,
throughout a broad range of functions within the organization. The majority of
these terminations were the result of our decision to consolidate our
Philippines-based manufacturing operations These restructuring costs were the
result of events or assessments that occurred during the first quarter of 2002
and included the effects of approximately 941 employee terminations, principally
54% in manufacturing, 14% in sales and 13% in R&D, based on severance
agreements, as well as facilities closures, and the related impairment of
tangible assets, principally buildings and manufacturing equipment, based on
third party appraisal and market data. These costs have not been allocated to
our operating segments, but rather have been classified as indirect operating
expenses for segment reporting consistent with our classification for internal
financial reporting; also refer to Note 13 of Notes to Consolidated Condensed
Financial Statements in Item 1 of this Report. Our 2002 restructuring actions
were announced and substantially completed during 2002. APC's executive
management approved these actions for immediate implementation; substantially
all related restructuring costs were incurred in the first quarter of 2002, the
period in which the restructuring actions were first approved and implemented.
In connection with APC's decision to consolidate its Philippines-based
manufacturing operations, APC closed manufacturing facilities located in the
Philippines province of Laguna, in Maryland, and also in the U.K. APC marketed
its Philippines property with an intent to sell these assets in 2003. However,
the current real estate market has not been favorable and has not allowed APC to
complete this sale. In accordance with the provisions of Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-
Lived Assets, in the second quarter of 2003 the Philippines building and
equipment were reclassified at their fair values, which aggregated $3.0 million,
to held-for-use property, plant, and equipment and depreciation re-commenced.
APC sold a building in Maryland to a third party in October 2002. Also, in
connection with the closure of a leased facility in the U.K., APC recognized a
lease liability during the first quarter of 2002; this lease will expire in
2005. Due to the timing of the facilities closures and contractual or regulatory
obligations to certain workers, the financial benefits of these actions did not
commence until the second quarter of 2002 with most of the full benefit being
realized by the close of 2002. Ongoing operating expenses of the closed
facilities were approximately $20 million annually, substantially all of which
we expect will result in future annual savings. Also refer to Note 4 of Notes to
Consolidated Condensed Financial Statements in Item 1 of this Report.

Total inventory reserves at September 28, 2003 were $36.5 million compared to
$37.2 million at December 31, 2002. There were no inventory charges, other than
our standard provisioning, during the third quarters and first nine months of
2003 and 2002. Our reserve estimate methodology involves quantifying the total
inventory position having potential loss exposure. Loss exposure generally
results from several business factors, including product or component
discontinuance, unplanned changes in demand, product design changes, and factory
transitions. Quantifying such loss exposure is the result of combining the cost
of inventories specifically identified as having little or no opportunity for
sale or use (thus available for physical disposition) plus the cost of
inventories having a high risk of no future sale or use based upon an analysis
of on-hand quantities compared to historical and anticipated future sale or use.
We maintain an on-going business process for the physical disposition of
inventories previously identified. Inventory write-offs occur at the time of
physical disposition. Inventories, once reserved, are not written back up as
such reserve adjustments are considered to be a permanent decrease to the cost
basis of the excess or obsolete inventory.

                                       17
<PAGE>

Segment Results (Also refer to Note 13 of Notes to Consolidated Condensed
Financial Statements in Item 1 of this Report for important information
regarding APC's reportable segments)

Net sales for products in the Small Systems segment, which provides power
protection, UPS, and management products for the PC, server, and local area
networking markets, were up 15.7% and 6.9% in the third quarter and first nine
months of 2003, respectively, from comparable 2002 levels. These improvements
were driven by demand for APC's core UPSs, specifically the Back-UPS and Smart-
UPS families worldwide combined with increased sales of rack enclosures and
management solutions, partially offset by the cumulative effect of pricing
actions over the course of the past year. Gross profits for the Small Systems
segment improved in the third quarter and first nine months of 2003 over the
comparable periods in 2002, reflecting product cost reductions, a favorable mix
shift within the segment, and favorable currency trends offset by the cumulative
effect of pricing actions over the course of the past year. Our product cost
reductions accounted for approximately 170 basis points and 350 basis points, on
a third quarter and year-to-date basis, respectively, of the margin improvement
in the segment and were driven principally by material cost improvements.

Net sales for products in the Large Systems segment, consisting primarily of
UPS, DC-power systems, and precision cooling products for data centers,
facilities, and communication applications, increased 21.3% and 21.2% in the
third quarter and first nine months of 2003, respectively, from comparable 2002
levels. Strong net sales for the third quarter and first nine months of 2003
were due principally to continued sales growth of our recently-introduced
InfraStruXureT along with growing service revenue and net sales of our precision
cooling products. Partially offsetting these improvements in our Large Systems
segment was the impact of continued weakness in our communications market
product lines. Gross profits for the Large Systems segment improved
substantially in the third quarter and first nine months of 2003 over the
comparable periods in 2002, principally due to a continual lowering of product
costs, particularly lower manufacturing costs resulting from volume efficiencies
achieved through factory consolidations, and capacity rationalization efforts
that commenced in late 2001. Our product cost reductions accounted for
approximately 1,040 basis points and 1,140 basis points, on a third quarter and
year-to-date basis, respectively, of the margin improvement in the segment and
were driven by material cost improvements and, to a lesser extent, manufacturing
cost efficiencies.

Net sales for products in the "Other" segment, consisting principally of
notebook computer accessories, replacement batteries and Web-based services,
were up 18.8% and 24.7% in the third quarter and first nine months of 2003,
respectively, from comparable 2002 levels due mainly to organic growth of
existing products, particularly replacement batteries, as well as growth from
new mobile accessory products. Gross profits for the "Other" segment improved in
the third quarter and first nine months of 2003 over the comparable periods in
2002 as a result of volume related efficiencies in cost, including improved
efficiencies of recently introduced products, as well as a mix shift within the
segment.

In addition, revenue and gross profit improvements in the third quarter and
first nine months of 2003 over the comparable periods last year were enhanced in
each of the operating segments by the favorable pricing impact of a weakening
U.S. dollar, particularly in Europe.

Operating Expenses

Operating expenses include marketing, selling, general and administrative (SG&A)
and R&D expenses.

SG&A expenses were $80.0 million or 20.3% of net sales for the third quarter of
2003 compared to $66.9 million or 19.8% of net sales for the third quarter of
2002. SG&A expenses were $228.9 million or 22.1% of net sales for the first nine
months of 2003 compared to $197.1 million or 20.9% of net sales for the first
nine months of 2002. We continue to commit resources to support our sales and
marketing objectives, particularly efforts relating to our recently-introduced
InfraStruXure. The increases in total spending in the third quarter and first
nine months of 2003 reflect increased levels of investment in sales staffing to
support new markets and products, as well as marketing and promotional programs.
The allowance for doubtful accounts at September 28, 2003 was 6.9% of accounts
receivable, compared to 7.0% at December 31, 2002. Accounts receivable balances
outstanding over 60 days represented 11.2% of total receivables at September 28,
2003, down slightly from 11.7% at December 31, 2002. We continue to experience
strong collection performance. Write-offs of uncollectible accounts represent
less than 1% of net sales. A majority of international customer balances
continue to be covered by receivables insurance.

                                       18
<PAGE>

R&D expenses were $17.8 million or 4.5% of net sales and $14.6 million or 4.3%
of net sales for the third quarters of 2003 and 2002, respectively. R&D expenses
were $48.6 million or 4.7% of net sales and $44.1 million or 4.7% of net sales
for the first nine months of 2003 and 2002, respectively. We continue to commit
resources to support our investment in research and development. We believe that
continued product innovation through development is necessary for our existing
products to remain competitive in our markets, as well as creating opportunities
from new product introductions. The increases in total R&D spending primarily
reflect increased numbers of software and hardware engineers and costs
associated with new product development and engineering support.

Other Income, Net and Income Taxes

Other income in the third quarters and first nine months of 2003 and 2002 is
comprised principally of interest income. Although average cash balances
available for investment rose during the third quarter and first nine months of
2003, interest income decreased versus the comparable periods last year due to
lower short term interest rates during 2003.

At September 28, 2003, APC had $759.2 million of total cash and investments. We
manage APC's cash and investment balances to preserve principal and liquidity
while maximizing our return on the total investment portfolio. We diversify our
investment portfolio by investing in multiple types of investment-grade
securities with multiple investment brokers. Based on APC's investment portfolio
and interest rates at September 28, 2003, a 100 basis point increase or decrease
in interest rates would have resulted in an increase or decrease of
approximately $8 million in our annual interest income.

Our effective income tax rate was approximately 27.8% and 28.5% for the third
quarters and first nine months ended September 28, 2003 and September 29, 2002,
respectively. The decrease from 2002 to 2003 is due to the tax savings from an
increasing portion of taxable earnings being generated from APC's operations in
jurisdictions currently having lower income tax rates than the present U.S.
statutory income tax rate. This shift resulted partially from our product
transitions to lower cost, lower tax, manufacturing locations.


LIQUIDITY AND CAPITAL RESOURCES

Working capital at September 28, 2003 was $1.138 billion compared to $999.1
million at December 31, 2002. APC has been able to increase its working capital
position as the result of continued positive operating results and despite
internally financing the capital investment required to expand its operations.
Our cash, cash equivalents and short-term investments position increased to
$694.8 million at September 28, 2003 from $640.3 million at December 31, 2002.
This improvement during the first nine months of 2003 was offset in part by
increased investment in working capital, particularly inventories, as well as
funding 2003 expenses related to our recent product recall and the third quarter
2003 payment of our first cash dividend of eight cents per share, or
approximately $15.8 million.

Worldwide inventories were $394.5 million at September 28, 2003 compared to
$320.0 million at December 31, 2002. Although inventory levels rose 2% during
the third quarter of 2003, days of on-hand inventory declined during this period
by 15 days. The first half 2003 inventory build was primarily related to
anticipation of increased demand patterns during the second half of the year
which result from typical seasonal factors and, to a lesser extent, increased
on-hand inventories needed to support the in-house manufacture of select
products previously manufactured by a third party subcontractor. There were no
inventory charges, other than APC's standard provisioning, during the third
quarters or first nine months of 2003 and 2002. Inventory levels as a percentage
of quarterly sales were 100% in the third quarter of 2003, down from 116% in the
second quarter of 2003, and compared to 87% in the third quarter of 2002.

We announced a product recall of Back-UPS CS 350 and 500 models in early 2003
due to potential safety issues. Prior to announcing the recall, APC received
eight reports worldwide of units overheating, resulting in the melting of the
unit's outer casing, six of which occurred in the United States. Three of the
reported incidents resulted in minor property damage; no injuries have been
reported. The total number of affected devices being recalled worldwide is
approximately 2.1 million with approximately 900,000 devices recalled in the
United States. The recall is limited to two specific models in APC's Back-UPS CS
product line, the Back-UPS CS 350 and the Back-UPS CS 500, in both 120-volt and
230-volt models. The affected units were manufactured between November 2000 and
December 2002 and were sold primarily through computer and electrical
distribution, catalog and retail outlets worldwide.

                                       19
<PAGE>

Our methodology for estimating costs associated with this product recall
involved estimating future costs to be incurred to replace the recalled products
based on expected returns and the costs to conduct the recall, particularly
repair and transportation costs. Our repair and transportation cost estimates
include costing for component parts and inside labor; we also obtained third
party cost quotes for outside labor and freight. In the fourth quarter of 2002,
we accrued a current liability and recognized additional warranty expense which
is classified in cost of goods sold. Based upon repair cost and return rate
experience to-date as well as current estimates of remaining costs to be
incurred, we expect the aggregate costs for the recall to be less than the $19.6
million originally estimated in the fourth quarter of 2002. To reflect this
change, we reduced cost of goods sold by $5.5 million in the third quarter of
2003. As of September 28, 2003, APC had incurred approximately 75% of currently
estimated total recall costs. Our estimation of remaining recall costs of $3.5
million, comprised of $1.1 million for the U.S. and $2.4 million for
international geographies, continues to be subject to actual return rates and
per unit repair costs which can vary by country. We expect that actual future
amounts will not differ materially from our current estimates.

At September 28, 2003 and December 31, 2002, we had available for future
borrowings $65.0 million under an unsecured line of credit agreement at a
floating interest rate equal to the bank's cost of funds rate plus 0.625% and an
additional $6.0 million under an unsecured line of credit agreement with a
second bank at similar interest rates. No borrowings were outstanding under
these facilities during the third quarters or first nine months of 2003 and
2002, or at September 28, 2003 and December 31, 2002. APC had no significant
financial commitments, other than those required in the normal course of
business, during the third quarters or first nine months of 2003 and 2002, or at
September 28, 2003 and December 31, 2002.

During the third quarters of 2003 and 2002, our capital expenditures, net of
capital grants, amounted to approximately $5.3 million and $5.1 million,
respectively. During the first nine months of 2003 and 2002, our capital
expenditures, net of capital grants, amounted to approximately $14.3 million and
$13.5 million, respectively. Our capital expenditures consisted primarily of
manufacturing and office equipment and purchased software applications, as well
as buildings and improvements. Our capital spending remains focused on funding
additional equipment needs and existing factories as well as continuing
investment in information technologies. Substantially all of APC's net capital
expenditures were financed from available operating cash. We had no material
capital commitments during the third quarters or first nine months of 2003 and
2002, or at September 28, 2003 and December 31, 2002.

We have agreements with the Industrial Development Authority of Ireland,
otherwise known as the IDA. Under these agreements, we receive grant monies for
costs incurred for machinery, equipment and building improvements for our Galway
and Castlebar facilities. These grants are equal to 40% and 60%, respectively,
of such costs up to a maximum of $13.1 million for Galway and $1.3 million for
Castlebar. Such grant monies are subject to our meeting certain employment goals
and maintaining operations in Ireland until termination of the respective
agreements.

On June 18, 2003, APC's Board of Directors approved initiation of a quarterly
cash dividend of $0.08 per share of common stock to be financed from available
operating cash. The first quarterly dividend of $15.8 million was paid September
15, 2003 to shareholders of record at the close of business on August 25, 2003.
It is the intention of the Board of Directors to pay a comparable quarterly
dividend on a going forward basis contingent upon continued capital availability
and a determination that cash dividends continue to be in the best interests of
APC and its shareholders.

APC has historically generated annual cash flows from operating activities as a
result of strong operating results and, at times, improvement in working
capital. Management currently believes that APC's cash flow from operations will
continue to be sufficient to support its operations and capital requirements,
even if economic conditions deteriorate. We believe that current internal cash
flows together with available cash, available credit facilities or, if needed,
the proceeds from the sale of additional equity, will be sufficient to support
anticipated capital spending, dividend payments, and other working capital
requirements for the foreseeable future.

Foreign Currency Activity

We invoice our customers in various currencies. Realized and unrealized
transaction gains or losses are included in the results of operations and are
measured based upon the effect of changes in exchange rates on the actual or
expected amount of functional currency cash flows.

                                       20
<PAGE>

At September 28, 2003, our unhedged foreign currency accounts receivable, by
currency, were as follows:

              <TABLE>
              <CAPTION>
              In thousands           Foreign
                                     Currency       US Dollars
              <S>                   <C>                <C>
              European Euros           36,042          $41,452
              Japanese Yen          2,885,283          $25,896
              Swiss Francs             19,001          $14,075
              British Pounds            6,916          $11,483
              </TABLE>

We also had non-trade receivables denominated in Irish Pounds of approximately
US$0.8 million, liabilities denominated in various European currencies of
approximately US$44.1 million, and liabilities denominated in Japanese Yen of
approximately US$8.9 million.

We continually review our foreign exchange exposure and consider various risk
management techniques, including the netting of foreign currency receipts and
disbursements, rate protection agreements with customers/vendors and derivatives
arrangements, including foreign exchange contracts. We presently do not utilize
rate protection agreements or derivative arrangements.


CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations
are based upon the accompanying consolidated condensed financial statements,
which have been prepared in accordance with United States generally accepted
accounting principles. The preparation of these financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. The U.S. Securities and Exchange Commission has defined
critical accounting policies as those that are both most important to the
portrayal of our financial condition and results and which require our most
difficult, complex or subjective judgments or estimates. Based on this
definition, we have identified the policies below as critical to our business
operations and the understanding of our results of operations. The impact and
any associated risks related to these policies on our business operations is
discussed throughout Management's Discussion and Analysis of Financial Condition
and Results of Operations where such policies affect our reported and expected
financial results. For all financial statement periods presented, there have
been no material modifications to the application of these critical accounting
policies. For a detailed discussion on the application of these and other
accounting policies, also refer to Note 1 of Notes to Consolidated Financial
Statements in Item 8 of American Power Conversion Corporation's Annual Report on
Form 10-K for the year ended December 31, 2002.

On an on-going basis, we evaluate the judgments and estimates underlying all of
our accounting policies, including those related to revenue recognition, product
returns, bad debts, inventories, impairment of long-lived assets, deferred tax
valuation allowances, restructuring reserves and contingencies, and litigation.
We base our estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Materially
different results in the amount and timing of our actual results for any period
could occur if we made different judgments or utilized different estimates.
Actual results may differ from those estimates.

Our critical accounting policies are as follows:

Revenue Recognition

We follow very specific and detailed guidelines in measuring revenue; however,
certain judgments affect the application of our revenue policy. Revenue results
are difficult to predict, and any shortfall in revenue or delay in recognizing
revenue could cause our operating results to vary significantly from quarter to
quarter. In general, revenue is recognized when title has passed at the time of
delivery of product for all of our operating segments as stipulated by the
delivery terms for the sales transactions. In addition, prior to revenue
recognition, we require persuasive evidence of the arrangement, that the price
is fixed or determinable, and that collectibility is reasonably assured.
Installation is not applicable for Small Systems and Other segment products
based on the nature of the products sold. Generally, revenue associated with
Large Systems sales is also recognized at the time of delivery pursuant to the
delivery terms, as we do not perform installation. Delivery terms vary, but
often include origin-based terms (e.g., FOB Shipping Point and Ex-works) and
destination-based terms (e.g., DDU/DDP (delivered duty unpaid/delivered duty
paid)).

                                       21
<PAGE>

Certain Large Systems product lines and, at times, one product line included in
the Small Systems segment require electrical hardwire installation or duct
installation which is performed by the customer or their contracted licensed
contractor/electrician. Since we do not perform the installation, revenue
recognition at the time of delivery is proper as customer acceptance of the unit
is not required. Also, payment by the customer is not contingent upon
installation of the product.

We offer additional services to customers depending on the type of product the
customer has purchased, including on-site services, installation consulting
services, remote monitoring services, power audit services, and network
integration services. Revenue is recognized at the time services are provided or
is deferred and recognized over the service period (where applicable). The fair
value of these services are based upon the rates that we charge customers in
separately negotiated transactions and such services are not essential to the
functionality of the delivered product.

For all sales, except those completed over the Internet, we use a binding
purchase order as evidence of an arrangement. For sales over the Internet, we
use a credit card authorization as evidence of an arrangement. Sales through
certain customers are evidenced by a master agreement governing the relationship
together with binding purchase orders on a transaction by transaction basis.

Our arrangements do not generally include acceptance clauses. However, if an
arrangement includes a customer specified acceptance provision, acceptance
generally occurs at our factory prior to delivery. As we introduce new products
in 2003 and beyond, we anticipate that installation and customer acceptance
provisions may become more common, and therefore increasingly significant for
determining delivery and performance and consequently our entitlement to
recognize revenue.

Estimating Valuation Allowances and Accrued Liabilities - Allowances for Sales
Returns, Doubtful Accounts, Inventory Obsolescence and Product Recall, and
Assessment of the Probability of the Outcome of our Current Litigation

Significant management judgments that affect the application of our revenue
policy also include estimates of potential future product returns related to
current period product revenue. We analyze historical returns, current economic
trends, and channel inventories when evaluating the adequacy of the sales
returns and other allowances. Significant management judgments and estimates
must be made and used in connection with establishing the sales returns and
other allowances in any accounting period. Material differences may result in
the amount and timing of our revenue for any period if management made different
judgments or utilized different estimates.

We provide limited rights of return to distributors and retailers for our Small
Systems product lines. We provide appropriate reserves for returns at the time
that related revenue is recognized, based on historical patterns of returns and
contractual provisions in accordance with the provisions of Statement of
Financial Accounting Standards No. 48, Revenue Recognition When Right of Return
Exists, and U.S. Securities and Exchange Commission Staff Accounting Bulletin
No. 101. Returns of Large Systems products generally do not occur. Historically,
returns have represented approximately 3% of gross sales and have not differed
significantly from prior estimates.

Similarly, we must make estimates of the uncollectability of our accounts
receivables. Management specifically analyzes accounts receivable balances in
view of customer credit-worthiness, customer concentrations, historical bad
debts, current economic trends, and changes in our customer payment terms when
evaluating the adequacy of the allowance for doubtful accounts. A majority of
international customer balances continue to be covered by receivables insurance.

Our inventory reserve estimate methodology involves quantifying the total
inventory position having potential loss exposure. Loss exposure generally
results from several business factors, including product or component
discontinuance, unplanned changes in demand, product design changes, and factory
transitions. Quantifying such loss exposure is the result of combining the cost
of inventories specifically identified as having little or no opportunity for
sale or use (thus available for physical disposition) plus the cost of
inventories having a high risk of no future sale or use based upon an analysis
of on-hand quantities compared to historical and anticipated future sale or use.
We maintain an on-going business process for the physical disposition of
inventories previously identified. Inventory write-offs occur at the time of
physical disposition. Inventories, once reserved, are not written back up as
such reserve adjustments are considered to be a permanent decrease to the cost
basis of the excess or obsolete inventory. If actual market conditions are less
favorable than those projected by management, additional inventory write-downs
may be required.

                                       22
<PAGE>

In early 2003, we announced a product recall of Back-UPS CS 350 and 500 models.
Our methodology for estimating costs associated with this product recall
involved estimating future costs to be incurred to replace the recalled products
based on expected returns and the costs to conduct the recall, particularly
repair and transportation costs. Our repair and transportation cost estimates
include costing for component parts and inside labor. We also obtained third
party cost quotes for outside labor and freight. Our repair and transportation
cost estimates include costing for component parts and inside labor; we also
obtained third party cost quotes for outside labor and freight. In the fourth
quarter of 2002, we accrued a current liability and recognized additional
warranty expense which is classified in cost of goods sold. Based upon repair
cost and return rate experience to-date as well as current estimates of
remaining costs to be incurred, we expect the aggregate costs for the recall to
be less than the $19.6 million originally estimated in the fourth quarter of
2002. To reflect this change, we reduced cost of goods sold by $5.5 million in
the third quarter of 2003. As of September 28, 2003, APC had incurred
approximately 75% of currently estimated total recall costs. We believe the
accounting estimate related to our product recall costs is a critical accounting
estimate because our estimation of remaining recall costs of $3.5 million,
comprised of $1.1 million for the U.S. and $2.4 million for international
geographies, continues to be subject to actual return rates and per unit repair
costs which can vary by country. Actual return rates may vary significantly
among different geographies. The most significant risks associated with our
return rate assumptions include varying degrees of product recall regulation by
geography as well as varying consumer awareness levels and access to timely
recall information. Actual per unit repair cost includes principally
transportation costs which will be influenced by the proximity of customer
locations to the service center location as well as the priority level of
delivery requirements. We expect that actual future amounts will not differ
materially from our current estimates.

We are, and may in the future become, involved in litigation involving our
business, products or operations. For pending claims for which there is an
estimable range of loss greater than zero, we record the best estimate of
liability within the range. If no point within the range is considered the best
estimate, we record the minimum estimated liability. Because of uncertainties
related to the identifiable range of loss on any pending claims, we may be
unable to make a reasonable estimate of the liability that could result from an
unfavorable outcome. As additional information becomes available, we assess the
potential liability related to our pending claims and revise our estimates. Such
revisions in our estimates of the potential liability could materially impact
our results of operation and financial position. The litigation process is
uncertain and includes the risk of an unexpected, unfavorable result. We may be
materially adversely impacted by any such litigation.

Valuation of Long-lived Tangible and Intangible Assets including Goodwill

We assess the impairment of long-lived tangible and intangible assets including
goodwill on an ongoing basis and whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Should our assessment
suggest impairment, we would determine recoverability based on an estimate of
future undiscounted cash flows resulting from our use of the asset and its
eventual disposition. Factors we consider that could trigger an impairment
review include the following:

 -- significant underperformance relative to expected historical or projected
    future operating results;
 -- significant changes in the manner of our use of the acquired assets or the
    strategy for our overall business;
 -- significant negative industry or economic trends; and
 -- significant technological changes, which would render equipment and
    manufacturing process, obsolete.

On January 1, 2002, we adopted Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets. With the adoption of Statement 142,
we implemented the necessary reclassifications in order to conform to the new
criteria in Statement of Financial Accounting Standards No. 141, Business
Combinations, for recognition of intangible assets apart from goodwill.

                                       23
<PAGE>

Statement 142 requires that companies no longer amortize goodwill and other
intangible assets with indefinite lives, but instead test goodwill impairment at
least annually or more frequently if impairment indicators arise. Statement 142
also requires completion of a two-step transitional goodwill impairment test. In
connection with completion of the first step of our transitional analysis, we
identified two reporting units with goodwill, Large Systems and Small Systems;
these reporting units are also reportable segments. We then determined the
carrying value of each reporting unit by assigning the assets and liabilities,
including existing goodwill and other intangible assets, to these reporting
units as of the date of adoption. Completion of the first step of our analysis
indicated impairment in the carrying amount of our goodwill. Our goodwill was
primarily associated with our Large Systems segment which consists primarily of
UPS, DC-power systems, and precision cooling products for data centers,
facilities, and communication applications. Conditions contributing to the
goodwill impairment included the ongoing softness in IT and communications
market product lines coupled with lower corporate investment for these types of
applications.

In connection with completion of the second step of our transitional analysis,
we compared the carrying amount of reporting unit goodwill with the implied fair
value of reporting unit goodwill, both of which were measured as of the date of
adoption. The implied fair value of goodwill was determined by allocating the
fair value of the reporting unit to all of the assets (recognized and
unrecognized) and liabilities of the reporting unit in a manner similar to a
purchase price allocation, in accordance with the provisions of Statement 141.
The residual fair value after this allocation is the implied fair value of the
reporting unit goodwill. Based on this second step, we recorded a non-cash
charge equal to the goodwill balance associated with our Large Systems segment
of approximately $50 million (approximately $35 million on an after-tax basis).
This charge was recognized as the cumulative effect of a change in accounting
principle net of income taxes, included in APC's results as of January 1, 2002,
and had no effect on our liquidity. Our remaining goodwill is associated with
our Small Systems segment. We evaluate each of our reporting units with goodwill
during the fourth quarter of each fiscal year or more frequently if impairment
indicators arise.

Accounting for Income Taxes

As part of the process of preparing our consolidated condensed financial
statements, we are required to estimate our income taxes in each of the
jurisdictions in which we operate. This process involves estimating our actual
current tax exposure together with assessing temporary differences resulting
from differing treatment of items, such as deferred revenue, for tax and
accounting purposes. These differences result in deferred tax assets and
liabilities, which are included within our consolidated balance sheet. We must
then assess the likelihood that our deferred tax assets will be recovered from
future taxable income. Expectations about future taxable income incorporate
numerous assumptions about actions, elections and strategies to minimize income
taxes in future years. Our ability to take such actions, make preferred
elections and implement tax-planning strategies may be adversely impacted by
enacted changes in tax laws and/or tax rates, as well as successful challenges
by tax authorities resulting from differing interpretations of tax laws and
regulations.

To the extent we believe that recovery of deferred tax assets is not likely, we
must establish a valuation allowance. To the extent we establish a valuation
allowance or increase this allowance in a period, we must include an expense
within the tax provision in the consolidated statements of income. Significant
management judgment is required in determining our provision for income taxes,
our deferred tax assets and liabilities and any valuation allowance recorded
against our net deferred tax assets. At September 28, 2003 and December 31,
2002, we provided a valuation allowance on certain of our deferred tax assets,
primarily consisting of net operating losses generated for the start up of
Brazilian operations, because of uncertainty regarding their realizability. The
valuation allowance is based on our estimates of taxable income by jurisdiction
in which we operate and the period over which our deferred tax assets will be
recoverable. In the event that actual results differ from these estimates or we
adjust these estimates in future periods we may need to establish an additional
valuation allowance which could materially impact our financial position and
results of operations.

                                       24
<PAGE>

RECENTLY ISSUED ACCOUNTING STANDARD

In May 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This Statement
establishes standards for classification and measurement of certain financial
instruments with characteristics of both liabilities and equity. Statement 150
is effective immediately for financial instruments entered into or modified
after May 31, 2003, and otherwise effective for interim periods beginning after
June 15, 2003. Statement 150 does not apply to APC since APC does not currently
possess the financial instruments covered by this Statement.


FACTORS THAT MAY AFFECT FUTURE RESULTS

This document contains forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. All statements in this
document that do not describe historical facts, such as statements concerning
APC's future plans or prospects are forward-looking statements. All forward-
looking statements are not guarantees and are subject to risks and uncertainties
that could cause actual results to differ from those projected.

The factors that could cause actual results to differ materially include the
following:  Costs incurred by APC for the recent product recall are greater than
or less than currently anticipated; impact on order management and fulfillment,
financial reporting and supply chain management processes as a result of APC's
reliance on a variety of computer systems, including Oracle 11i which was
implemented in the first quarter 2001 and is periodically upgraded; the effect
on our business, our suppliers, our customers, or the economy resulting from
travel, supply-chain or general business disruptions from Severe Acute
Respiratory Syndrome (SARS); the impact of foreign currency exchange rate
fluctuations; the impact on demand, component availability and pricing, and
logistics, and the disruption of Asian manufacturing operations that result from
labor disputes, war, acts of terrorism or political instability; ramp up,
expansion and rationalization of global manufacturing capacity; the discovery of
a latent defect in any of APC's products; APC's ability to effectively align
operating expenses and production capacity with the current demand environment;
general worldwide economic conditions, and, in particular, the possibility that
the PC and related markets decline more dramatically than currently anticipated;
growth rates in the power protection industry and related industries, including
but not limited to the PC, server, networking, telecommunications and enterprise
hardware industries; competitive factors and pricing pressures; product mix
changes and the potential negative impact on gross margins from such changes;
changes in the seasonality of demand patterns; inventory risks due to shifts in
market demand; component constraints, shortages and quality; risk of nonpayment
of accounts receivable; the uncertainty of the litigation process including risk
of an unexpected, unfavorable result of current or future litigation; and the
risks described from time to time in APC's filings with the Securities and
Exchange Commission.

We caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date they are made. We disclaim any
obligation to publicly update or revise any such statements to reflect any
change in our expectations or in events, conditions, or circumstances on which
any such statements may be based, or that may affect the likelihood that actual
results will differ from those set forth in the forward-looking statements.

For a discussion of these and other risk factors, please refer to Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on Form 10-K for the year ended
December 31, 2002.

                                       25
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We, in the normal course of business, are exposed to market risks relating to
fluctuations in foreign currency exchange rates. The information required under
this section related to such risks is included in the Foreign Currency Activity
section of Management's Discussion and Analysis of Financial Condition and
Results of Operations in Item 2 of this Report and is incorporated herein by
reference.

We, in the normal course of business, are also exposed to market risks relating
to fluctuations in interest rates and the resulting rates of return on
investments in marketable securities. The information required under this
section related to such risks is included in the Other Income, Net section of
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 2 of this Report and is incorporated herein by reference.


ITEM 4. CONTROLS AND PROCEDURES

  (A)  Disclosure controls and procedures

Our chief executive officer and our chief financial officer, after evaluating
the effectiveness of APC's "disclosure controls and procedures" (as defined in
the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of the end
of the period covered by this report, have concluded that our disclosure
controls and procedures were adequate and designed to ensure that material
information relating to us and our consolidated subsidiaries would be made known
to them by others within those entities.

  (B)  Changes in internal controls over financial reporting

There were no significant changes in our internal controls or, to our knowledge,
in other factors that could significantly affect our internal controls
subsequent to the period covered by this report.



PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

As previously reported in APC's Form 10-Q for the quarterly periods ended March
30, 2003 and June 29, 2003, on January 10, 2003, Powerware Corporation filed in
the United States District Court for the Eastern District of North Carolina (the
"Court") a complaint alleging infringement of three United States patents. On
May 7, 2003, Powerware Corporation filed with the Court an amended complaint
modifying its allegations of infringement regarding the Powerware Patents. APC
was served with the amended complaint on May 9, 2003. Powerware Corporation is
seeking unspecified damages and injunctive relief. On May 28, 2003, APC filed
its answer to the amended complaint and on June 17, 2003 APC filed its first
amended answer and counterclaims alleging infringement by Powerware Corporation
of three United States patents owned by APC. On July 3, 2003, Powerware
Corporation filed its answer to counterclaims.

As previously reported in APC's Form 10-Q for the quarterly period June 29,
2003, on June 24, 2003, SL Waber, Inc., petitioned the United States District
Court for the District of New Jersey (the "Court") to reopen the SL Waber, Inc.
v. American Power Conversion Corporation lawsuit originally filed by SL Waber,
Inc. on August 20, 1997 alleging infringement of two United States patents. In a
March 22, 1999 order, the Court dismissed one of the patents from the litigation
and, in response to APC's July 14, 1998 request that the United States Patent
and Trademark Office conduct a reexamination of the remaining patent,
administratively terminated the lawsuit pending the completion of the
reexamination. In its March 22, 1999 order, the Court granted SL Waber, Inc. the
right to petition the Court to reopen the case after the reexamination was
completed. The reexamination of the remaining patent was completed on June 3,
2003 and SL Waber, Inc. petitioned the Court on June 24, 2003 to reopen the
lawsuit. On July 9, 2003, the Court reopened the lawsuit. SL Waber, Inc. is
seeking unspecified damages and injunctive relief.

                                       26
<PAGE>

In addition, APC is involved in various other claims and legal actions arising
in the ordinary course of business.

While management currently believes that resolving all pending legal matters,
individually or in aggregate, will not have a material adverse impact on APC's
financial position, the litigation and other claims noted above are subject to
inherent uncertainties and management's view of these matters may change in the
future. Were an unfavorable final outcome to occur, there exists the possibility
of a material adverse impact on APC's financial position, cash flows and results
of operations for the period in which the effect becomes reasonably estimable.



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


  (A)  Exhibits


Exhibit No. 3.01 Articles of Organization of APC, as amended, previously filed
                 as an exhibit to APC's Quarterly Report on Form 10-Q for the
                 fiscal quarter ended June 27, 1999 and incorporated herein by
                 reference (File No. 1-12432)

Exhibit No. 3.02 By-Laws of APC, as amended and restated, previously filed as an
                 exhibit to APC's Annual Report on Form 10-K for the fiscal year
                 ended December 31, 1998 and incorporated herein by reference
                 (File No. 1-12432)

Exhibit No. 31.1 Certification of Rodger B. Dowdell, Jr., Chief Executive
                 Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
                 Securities Exchange Act of 1934, as adopted pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

Exhibit No. 31.2 Certification of Donald M. Muir, Chief Financial Officer,
                 pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
                 Exchange Act of 1934, as adopted pursuant to Section 302 of the
                 Sarbanes-Oxley Act of 2002 (filed herewith)

Exhibit No. 32.1 Certification of Rodger B. Dowdell, Jr., Chief Executive
                 Officer, pursuant to Rule 13a-14(b) and Rule 15d-14(b) of the
                 Securities Exchange Act of 1934,  as adopted pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

Exhibit No. 32.2 Certification of Donald M. Muir, Chief Financial Officer,
                 pursuant to Rule 13a-14(b) and Rule 15d-14(b) of the Securities
                 Exchange Act of 1934,  as adopted pursuant to Section 906 of
                 the Sarbanes-Oxley Act of 2002 (filed herewith)


  (B)  Reports on Form 8-K


On July 31, 2003, APC filed a Current Report on Form 8-K with the Securities and
Exchange Commission ("SEC") which furnished, pursuant to Item 12, APC's July 31,
2003 press release announcing its financial results for the fiscal quarter ended
June 29, 2003. Also reported, pursuant to Item 11, was the temporary suspension
of trading under APC's employee benefit plans.



                                       27

<PAGE>



                                                                       FORM 10-Q
                                                              September 28, 2003









                                   SIGNATURES


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


                      AMERICAN POWER CONVERSION CORPORATION

                             Date: November 12, 2003


                               /s/ Donald M. Muir

                                 Donald M. Muir
Senior Vice President, Finance and Administration, Treasurer and Chief Financial
                                     Officer
                  (Principal Accounting And Financial Officer)


                                       28
<PAGE>

                                                                       FORM 10-Q
                                                              September 28, 2003



             AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit    Description                                                      Page
Number                                                                       No.
<S>     <C>                                                                  <C>
3.01    Articles of Organization of APC, as amended, previously filed
        as an exhibit to APC's Quarterly Report on Form 10-Q for the
        fiscal quarter ended June 27, 1999 and incorporated herein by
        reference (File No. 1-12432)

3.02    By-Laws of APC, as amended and restated, previously filed as an
        exhibit to APC's Annual Report on Form 10-K for the fiscal year
        ended December 31, 1998 and incorporated herein by reference
        (File No. 1-12432)

31.1    Certification of Rodger B. Dowdell, Jr., Chief Executive Officer,     30
        pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
        Exchange Act of 1934, as adopted pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002  (filed herewith)

31.2    Certification of Donald M. Muir, Chief Financial Officer, pursuant    31
        to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act
        of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002  (filed herewith)

32.1    Certification of Rodger B. Dowdell, Jr., Chief Executive Officer,     32
        pursuant to Rule 13a-14(b) and Rule 15d-14(b) of the Securities
        Exchange Act of 1934, as adopted pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002  (filed herewith)

32.2    Certification of Donald M. Muir, Chief Financial Officer, pursuant    33
        to Rule 13a-14(b) and Rule 15d-14(b) of the Securities Exchange Act
        of 1934, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002  (filed herewith)
</TABLE>

                                       29
<PAGE>
                                                                    Exhibit 31.1
                                  CERTIFICATION



I, Rodger B. Dowdell, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Power
Conversion Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     b) [Paragraph omitted in accordance with SEC transition instructions
contained in SEC Release 34-47986.]

     c) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

     b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.

 Date: November 12, 2003


/s/ Rodger B. Dowdell, Jr.

Rodger B. Dowdell, Jr.
Chairman, President and Chief Executive Officer



                                       30

<PAGE>

                                                                    Exhibit 31.2

                                  CERTIFICATION



I, Donald M. Muir, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Power
Conversion Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     b) [Paragraph omitted in accordance with SEC transition instructions
contained in SEC Release 34-47986.]

     c) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

     b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.

Date: November 12, 2003


/s/ Donald M. Muir

Donald M. Muir
Senior Vice President, Finance and Administration,
Treasurer and Chief Financial Officer


                                       31
<PAGE>
                                                                    Exhibit 32.1








                                  CERTIFICATION





In connection with the Quarterly Report of American Power Conversion Corporation
(the "Company") on Form 10-Q for the period ending September 28, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Rodger B. Dowdell, Jr., Chairman, President and Chief Executive Officer of
the Company, certify, pursuant to 18 U.S.C.  1350, as adopted pursuant to  906
of the Sarbanes-Oxley Act of 2002, that:

   (1)   The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

   (2)   The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.




/s/ Rodger B. Dowdell, Jr.

Rodger B. Dowdell, Jr.
Chairman, President and Chief Executive Officer

November 12, 2003


The foregoing certification is being furnished solely pursuant to section 906 of
the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of a separate
disclosure document.


                                       32
<PAGE>
                                                                    Exhibit 32.2








                                  CERTIFICATION





In connection with the Quarterly Report of American Power Conversion Corporation
(the "Company") on Form 10-Q for the period ending September 28, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Donald M. Muir, Senior Vice President, Finance and Administration, Treasurer
and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
1350, as adopted pursuant to  906 of the Sarbanes-Oxley Act of 2002, that:

   (1)   The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

   (2)   The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.




/s/ Donald M. Muir

Donald M. Muir
Senior Vice President, Finance and Administration,
Treasurer and Chief Financial Officer

November 12, 2003


The foregoing certification is being furnished solely pursuant to section 906 of
the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of a separate
disclosure document.


                                       33