UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SD
SPECIALIZED DISCLOSURE REPORT
(Commission File Number) | (Exact Name of Registrant as Specified in Its Charter) (Address of Principal Executive Offices) (Zip Code) | (State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) |
1-9516 | ICAHN ENTERPRISES L.P. | Delaware | 13-3398766 |
767 Fifth Avenue, Suite 4700 New York, NY 10153 | |||
333-118021-01 | ICAHN ENTERPRISES HOLDINGS L.P. | Delaware | 13-3398767 |
767 Fifth Avenue, Suite 4700 New York, NY 10153 | |||
Peter Reck: (212) 702-4300 767 Fifth Avenue, Suite 4700, New York, NY 10153 |
(Name and telephone number, including area code, of the person to contact in connection with this report.) |
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
x | Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2014. |
Introduction
This Specialized Disclosure Report on Form SD (“Form SD”) of Icahn Enterprises L.P. (“Icahn Enterprises”) and Icahn Enterprises Holdings L.P. (“Icahn Enterprises Holdings”) and their consolidated subsidiaries has been prepared pursuant to Rule 13p-1 and Form SD promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") for the reporting period of January 1, 2014 to December 31, 2014. In this Form SD, (i) “the Company,” “we,” “us” and “our” refers to Icahn Enterprises L.P. and Icahn Enterprises Holdings L.P. and their subsidiaries and (ii) “Holding Company” refers solely to Icahn Enterprises and Icahn Enterprises Holdings.
Rule 13p-1 under the Exchange Act requires disclosure of certain information when a company manufactures or contracts to manufacture products for which “Conflict Minerals” are necessary to the functionality or production of those products. “Conflict Minerals” for the purposes of Rule 13p-1 are gold, columbite-tantalite (coltan), cassiterite, and wolframite (including their derivatives, tantalum, tin and tungsten, and other minerals or derivatives the U.S. Secretary of State may designate in the future). If Conflict Minerals are necessary to the functionality or production of one or more products that a company manufactures or contracts to manufacture, that company must investigate its supply chain in an effort to determine whether those Conflict Minerals originated in any of the “Covered Countries” under Rule 13p-1. The “Covered Countries” for the purposes of Rule 13p-1 are the Democratic Republic of the Congo (the DRC), the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.
Company Overview and Conflict Minerals Reporting
We are a diversified holding company owning subsidiaries currently engaged in the following continuing operating businesses: Investment, Automotive, Energy, Metals, Railcar, Gaming, Food Packaging, Real Estate and Home Fashion. We conduct our business principally through our consolidated subsidiaries. For more information regarding our business, see Part I of the Company’s most recent annual report on Form 10-K, which can be publicly accessed at www.ielp.com.
We conducted an analysis of our consolidated subsidiaries and identified two majority-owned subsidiaries - Federal-Mogul Holdings Corporation (“Federal-Mogul”) and American Railcar Industries, Inc. (“ARI”) - whose operations involve Conflict Minerals. Accordingly, the Conflict Minerals Reports (“CMR”) of Federal-Mogul and ARI have been attached to this Form SD as exhibits. The Holding Company does not have operations involving Conflict Minerals and therefore a CMR for the Holding Company is not required.
A copy of each of Federal-Mogul’s and ARI’s CMR is filed as Exhibit 1.01.1 and Exhibit 1.01.2, respectively, to this Form SD and is publicly available at www.ielp.com.
Federal-Mogul and ARI are each registrants subject to Rule 13p-1 under the Exchange Act and as such, have filed their respective Forms SD, which are publicly available on their respective websites at www.federalmogul.com and www.americanrailcar.com. In addition, a copy of each of Federal-Mogul’s and ARI’s conflict mineral policy can be publicly accessed at the respective websites of the companies.
Section 1 - Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report.
Item 1.02 Exhibit.
Copies of Federal-Mogul’s and ARI's Conflict Minerals Reports are filed as Exhibits 1.01.1 and 1.01.2, respectively, hereto and are publicly available at their respective websites at www.federalmogul.com and www.americanrailcar.com.
Section 2 - Exhibits
Item 2.01 Exhibits.
1.01.1 - Conflict Minerals Report of Federal-Mogul
1.01.2 - Conflict Minerals Report of ARI
SIGNATURE
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 hereunto duly authorized.
ICAHN ENTERPRISES L.P. | |||
(Registrant) | |||
By: | Icahn Enterprises G.P. Inc., its general partner | ||
By: | /s/ Peter Reck | ||
Peter Reck | |||
Chief Accounting Officer | |||
Date: June 1, 2015
ICAHN ENTERPRISES HOLDINGS L.P. | |||
(Registrant) | |||
By: | Icahn Enterprises G.P. Inc., its general partner | ||
By: | /s/ Peter Reck | ||
Peter Reck | |||
Chief Accounting Officer | |||
Date: June 1, 2015
EXHIBIT 1.01.1
Federal-Mogul Holdings Corporation
Conflict Minerals Report
For The Year Ended December 31, 2014
This conflict minerals report (“Conflict Minerals Report” or “CMR”) is presented in accordance with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (the “Rule”), for the year ended December 31, 2014. The Rule was adopted by the Securities and Exchange Commission (“SEC”) to implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals that are necessary to the functionality or production of their products. Conflict minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten, and gold (“3TG”). These requirements apply to registrants regardless of the geographic origin of the conflict minerals and whether or not they fund armed conflict.
1. | Reasonable Country of Origin Inquiry |
Federal-Mogul conducted an analysis of its products and found that certain of its products contain 3TG. Due to Federal-Mogul’s extensive network of suppliers and the varying tiers between Federal-Mogul’s direct suppliers and the 3TG mines, after conducting a reasonable country of origin inquiry, Federal-Mogul is unable to determine with certainty the origin of 3TG in its products and therefore the Company cannot exclude the possibility that some 3TG may have originated in the Democratic Republic of Congo or an adjoining country (the “Covered Countries”). Federal-Mogul also believes that 3TG in its products is not from recycled or scrap sources. Accordingly, the Company is required under the Rule to submit this CMR describing the due diligence exercised on the source and chain of custody of the Company’s conflict minerals.
This CMR is not audited as the Rule provides that if a registrant’s products are “DRC conflict undeterminable” in 2014, the CMR is not subject to an independent private sector audit.
2. | Company Overview |
This CMR has been prepared by management of Federal-Mogul. The information includes the activities of all majority-owned subsidiaries and variable interest entities that are required to be consolidated.
The Company is a leading global supplier of technology and innovation in vehicle and industrial products for fuel economy, emissions reduction and safety systems. The Company serves the world’s foremost original equipment manufacturers (“OEM”) and servicers (“OES”) (collectively “OE”) of automotive, light, medium and heavy-duty commercial vehicles, off-road, agricultural, marine, rail, aerospace, power generation and industrial equipment, as well as the worldwide aftermarket. The Company seeks to participate in both of these markets by leveraging its original equipment product engineering and development capability, manufacturing know-how, and expertise in managing a broad and deep range of replacement parts to service the aftermarket. The Company believes that it is uniquely positioned to effectively manage the life cycle of a broad range of products to a diverse customer base. Federal-Mogul is a leading technology supplier and a market share leader in several product categories. As of December 31, 2014, the Company had current OEM products included on more than 300 global vehicle platforms and more than 700 global powertrains used in light, medium and heavy-duty vehicles. The Company offers premium brands, OE replacement and entry/mid-level products for all aftermarket customers. Therefore, the Company can be first to the aftermarket with new products, service expertise and customer support. This broad range of vehicle and powertrain applications reinforces the Company’s belief in its unique market position.
The Company operates with two end-customer focused business segments. Powertrain focuses on original equipment products for automotive, heavy duty and industrial applications. Motorparts sells and distributes a broad portfolio of
products in the global aftermarket, while also serving OEMs with products including braking, chassis, wipers and other vehicle components. This organizational model allows for a strong product line focus benefitting both original equipment and aftermarket customers and enables the global Federal-Mogul teams to be responsive to customers’ needs for superior products and to promote greater identification with Federal-Mogul premium brands. Additionally, this organizational model enhances management focus to capitalize on opportunities for organic or acquisition growth, profit improvement, resource utilization and business model optimization in line with the unique requirements of the two different customer bases.
Powertrain offers its customers a diverse array of market-leading products for OE applications, including pistons, piston rings, piston pins, cylinder liners, valve seats and guides, ignition products, dynamic seals, bonded piston seals, combustion and exhaust gaskets, static gaskets and seals, rigid heat shields, engine bearings, industrial bearings, bushings and washers, plus element resistant systems protection sleeving products, acoustic shielding and flexible heat shields. Motorparts offers powertrain products manufactured by Powertrain, distributed through globally-recognized aftermarket brands to the independent aftermarket and also offers brake disc pads, brake linings, brake blocks, brake system components, chassis products, wipers, and other product lines to OE and aftermarket customers.
The Company has manufacturing facilities and/or distribution centers in 26 countries and, accordingly, the Company’s reporting segments derive sales from both domestic and international markets.
Supply Chain
Federal-Mogul’s highly engineered products are manufactured from a variety of raw materials and incorporate subcomponents which are distributed through a global supply chain. The Company has relationships with a considerable network of suppliers throughout the world, and Federal-Mogul has found that the majority of its suppliers are three tiers or more removed from smelter and refiner operations. Therefore, Federal-Mogul must rely on its direct suppliers to work with their upstream suppliers in order to provide information on the origin of 3TG contained in components and materials supplied to Federal-Mogul. While Federal-Mogul has incorporated disclosure requirements with respect to conflict minerals in its Restricted Substance Management Standard, and it is Federal-Mogul’s expectation that its suppliers will adopt policies and procedures with respect to conflict minerals, many of the Company’s agreements with suppliers have been in force for a number of years, and the Company cannot unilaterally impose new contract terms or flow-down requirements that would otherwise obligate such suppliers to comply with Federal-Mogul’s 3TG due diligence efforts. As Federal-Mogul enters in to new contracts with its suppliers, we will be adding provisions that require our suppliers to provide us with our requested 3TG information.
Because it is not practicable to conduct a survey of all Federal-Mogul suppliers, the Company has developed a risk-based approach to due diligence that focuses on products believed to contain 3TG based on specifications and other documentation (the “product-centric approach”), as well as suppliers thought to potentially provide Federal-Mogul with components and materials incorporating 3TG due to the nature of such components or materials (the “supplier-centric approach”). The Company believes this is a reasonable approach because the combined product-centric and supplier-centric approaches offers a certain level of corroboration in information received from suppliers as compared to information Federal-Mogul maintains on-hand, while also focusing on relevant suppliers.
Conflict Minerals Policy
The Company has adopted a conflict minerals policy which is publicly available on its website at http://www.federalmogul.com/en-US/Suppliers/Pages/ConflictMinerals.aspx.
For additional information about Federal-Mogul’s commitment to responsible sourcing and other human rights, see the Company’s Code of Conduct and Basic Working Conditions for Suppliers policy at http://www.federalmogul.com/en-US/Suppliers/Pages/Purchasing-Policies.aspx.
3. | Design of Due Diligence |
Federal-Mogul’s due diligence measures conform, in all material respects, with the due diligence framework presented by The Organisation for Economic Co-operation and Development (“OECD”) in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Second Edition (the “OECD Guidance”), including the related supplements for gold and for tin, tantalum and tungsten.
Due Diligence Activities With Respect to Products Manufactured During 2014
a. | Established a Strong Company Management System: |
Federal-Mogul has adopted a conflict minerals policy, which has been communicated to its suppliers and is publicly available on Federal-Mogul’s website.
Federal-Mogul’s purchasing department led the Company’s conflict minerals compliance program. However, early on, the Company identified other key roles within the organization requiring input into Federal-Mogul’s conflict minerals compliance program. Centralized program management resources were added to each business segment to direct and monitor progress of the product line purchasing and engineering groups responsible for carrying out the Company’s combined product-centric and supplier-centric 3TG diligence approaches. The Company’s executive management was briefed about the progress and results of the Company’s due diligence efforts on a regular basis. As necessary, Federal-Mogul also sought insight and guidance from representatives of the Company’s legal and engineering groups and from the Company’s executive management team.
As Federal-Mogul does not typically have direct relationships with 3TG smelters and refiners, the Company participated in several industry-wide initiatives in an effort to develop conflict-free supply chains, including: the Electronics Industry Citizenship Coalition-Global e-Sustainability Initiative’s (EICC-GeSI) Conflict-Free Sourcing Initiative (CFSI), the Automotive Industry Action Group’s (AIAG) Conflict Minerals Work Group, and the National Association of Manufacturers’ (NAM) Conflict Minerals Task Force. Controls included an integrity policy that outlines the expected behaviors of Federal-Mogul’s employees, the Code of Conduct and Basic Working Conditions for Suppliers policy that provides expected business practices for suppliers, and the disclosure requirements with respect to conflict minerals in Federal-Mogul’s Restricted Substance Management Standard.
Federal-Mogul’s due diligence process included a supplier-centric approach. The Company’s purchasing department is the primary interface with suppliers and had the responsibility of ensuring Federal-Mogul’s requirements concerning the Company’s conflict minerals policy were understood. Purchasing representatives engaged with suppliers to complete the EICC-GeSI Conflict Minerals Reporting Template (the “CMRT”). Further, purchasing personnel provided training to improve content and strengthen supplier knowledge of the Rule. Training materials and workshops were made available via the program managers when engagement with suppliers was required.
The Company established grievance mechanisms whereby employees, suppliers and other interested parties can report concerns or violations of Federal-Mogul’s policies. Such concerns or violations can be made via the Federal-Mogul helpline (which is described at http://www.federalmogul.com/en-US/Company/Pages/Integrity-Policy.aspx) or through a specific conflict minerals related e-mail address at conflictminerals@federalmogul.com.
b. | Identified and Assessed Risk in the Supply Chain: |
Federal-Mogul’s due diligence process for identifying the presence of 3TG included both a product-centric and a supply-centric approach. The combination and overlap of these approaches helped identify potential risks or red flags.
In the Company’s product-centric approach, the Company leveraged its technical infrastructure to: (a) identify where specifications required the use of 3TG that were necessary to the function of the product the Company manufactured or contracted to manufacture and (b) categorize relevant suppliers as high-importance based on independent engineering judgment that 3TG was likely to exist in a purchased product.
In Federal-Mogul’s supplier-centric approach, suppliers were expected to return a completed CMRT or provide information through the iPoint Conflict Minerals Platform (“iPCMP”), including all smelter and refiner information
for the designated minerals. Responses from suppliers were reviewed against internal criteria developed by the Company and the results of Federal-Mogul’s product-centric approach were used to determine if follow-up with a supplier was necessary. The Company maintained a dashboard with the relevant suppliers’ classification. This document also provided details on missing information or necessary follow-up with relevant suppliers.
The objective is to obtain the complete smelter information from these relevant suppliers, to encourage suppliers to implement due diligence measures, and to adhere to conflict-free sourcing policies. While improvements have been made by the Company’s supply base to provide more accurate and complete information, from the responses received from Federal-Mogul’s suppliers, it is clear that the majority of suppliers are still not able to provide a list of all smelters used to process 3TG contained in the components supplied to their customer-base, let alone specific information with respect to the 3TG sourcing in the components and materials supplied to Federal-Mogul.
Federal-Mogul is a member of the CFSI and will continue to work with that program and the Company’s industry peers to educate the supply base on proper due diligence measures so that the Company can understand the source and chain of custody of Federal-Mogul’s 3TG.
c. | Designed and Implemented a Strategy to Respond to Risks: |
Federal-Mogul has implemented a risk management plan which includes: requiring suppliers to respond to the CMRT or submit information through iPCMP; reviewing and verifying responses from suppliers and following-up on any discrepancies; assigning levels of risk to suppliers based on the results of Federal-Mogul’s product-centric and supplier-centric due diligence approaches; and reviewing any identified smelters against the CFSI smelters list to determine audit status. Executive management was briefed about the Company’s due diligence efforts on a regular basis.
As part of the Company’s risk management plan, to ensure suppliers understand the Company’s expectations for due diligence and completing the CMRT, Federal-Mogul conducted workshops and training with suppliers. Federal-Mogul exercised leverage over those relevant suppliers, and clearly communicated the expectation for them to adopt conflict-free sourcing policies as a risk mitigation practice.
d. | Carried out Independent Third Party Audit of Supply Chain Due Diligence at Identified Points in the Supply Chain: |
Federal-Mogul does not typically have a direct relationship with 3TG smelters and refiners and therefore does not perform or direct audits of these entities within Federal-Mogul’s supply chain. However, the Company supported audits conducted by third party auditors through Federal-Mogul’s participation in the CFSI and Federal-Mogul obtained information about the results of smelter audits, when available.
e. | Reported on Supply Chain Due Diligence: |
This CMR, Federal-Mogul’s conflict minerals policy, and further correspondence with suppliers on conflict minerals is available on the Company’s website at www.federalmogul.com. Additionally, this Conflict Minerals Report is filed with the SEC.
4. | Due Diligence Results |
After conducting due diligence on the source and chain of custody of the 3TG in Federal-Mogul’s products, the Company has concluded its products are “DRC conflict undeterminable”.
Survey Responses
Federal-Mogul reviewed supplier responses against specified criteria to determine which suppliers required further engagement from Federal-Mogul. Such criteria included untimely or incomplete responses as well as inconsistencies within the data reported in the CMRT. While the Company has worked directly with these suppliers to provide more accurate and complete responses, not all responses included the names and locations of smelters. Of the Motorparts
relevant suppliers, 81% have provided a CMRT response, of which: only 21% believe they have identified all smelters and only 29% state that they have a conflict minerals policy currently in place. Of the Powertrain relevant suppliers, 99% have provided a CMRT response, of which: approximately 63% believe they have identified all smelters and 74% state that they have a conflict minerals policy currently in place.
The majority of responses the Company received from its suppliers provided data at a company-level. For this reason, Federal-Mogul was unable to determine if the smelters or refiners were actually in the Company’s supply chain. For this same reason, Federal-Mogul cannot be certain that any 3TG reported by its suppliers were contained in components or parts Federal-Mogul purchased.
Efforts to Determine Mine or Location of Origin
As part of Federal-Mogul’s reasonable country of origin inquiry and Federal-Mogul’s due diligence efforts, Federal-Mogul requested its suppliers to complete the smelter information in the CMRT. To the extent information was provided by the Company’s suppliers, Federal-Mogul then leveraged the Conflict-Free Smelter Program (the flagship program of the CFSI) to determine the mines or locations of origin of the 3TG in the Company’s supply chain. As a subscribing member, Federal-Mogul participated in the CFSI activities. Federal-Mogul has also monitored and stayed abreast of the OECD implementation programs and the International Tin Research Institute Tin Supply Chain Initiative. The Company has determined that this process is the most reasonable in determining the mine or locations of origin.
Smelter and Refiners
Of Federal-Mogul’s suppliers reporting the existence of 3TG in their products, most reported at a company-level and not a part-level. Therefore, whether any 3TG was contained in components or parts the Company purchased, or whether an identifiable smelter impacted Federal-Mogul’s supply chain is not clear. The Company has therefore elected not to present the smelter and refiner names in this CMR. While not a comprehensive list as the Company continues to work with its relevant suppliers to determine a complete list of smelters and refiners, the following are believed to be the country locations for several identified smelters or refiners: Australia, Austria, Belgium, Bolivia, Brazil, Canada, Chile, China, Estonia, Germany, Hong Kong, India, Indonesia, Italy, Japan, Kazakhstan, Malaysia, Mexico, Netherlands, Peru, Philippines, Poland, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United States, Uzbekistan, and Vietnam.
5. | Steps to be Taken to Mitigate Risk |
Federal-Mogul intends to take the following steps to improve the due diligence conducted by the Company and to further mitigate any risk that the necessary 3TG in the Company’s products could benefit armed groups in the Covered Countries:
▪ | Include a conflict minerals flow-down clause in supplier agreements and/or the Company’s general terms and conditions of purchase. |
▪ | Continue to encourage suppliers to educate and train their lower tier suppliers to have a conflict-free sourcing policy. |
▪ | Continue to improve our reasonable country of origin inquiry and due diligence results and responses by working closely with our supply base. |
▪ | Continue to work with relevant trade associations to define and improve best practices, and continue to support the CFSI Conflict-Free Smelter Program in an effort to increase the number of verified smelters and refiners participating in such program. |
Forward-Looking Statements
Statements contained in this report, which are not historical fact, constitute “Forward-Looking Statements.” Actual results may differ materially due to numerous important factors that are described in Federal-Mogul’s most recent report to the SEC on Form 10-K, which may be revised or supplemented in subsequent reports to the SEC on Forms 10-Q and 8-K. Such factors include, but are not limited to, our intent to create an independent company following the
spin-off, revenue and growth expectation for the independent company or the Company following the spin-off, the expectation that the spin-off will be tax free, statements regarding the leadership, resources, potential, priorities, and opportunities for the independent company and the Company following a spin-off, failure to obtain regulatory approval for the spin-off or to satisfy any of the other conditions to the proposed spin-off, adverse effect on the market price of our common stock and on our operating results because of a failure to complete the proposed spin-off, negative effects of announcement or consummation of the proposed spin-off on the market price of the Company’s common stock, significant transaction costs and/or unknown liabilities, general economic and business conditions that affect the companies in connection with the proposed spin-off, unanticipated litigation or legal settlement expenses, changes in capital market conditions that may affect financing, the impact of the proposed spin-off on the companies’ employees, customers and suppliers, future opportunities that the Company’s board may determine present greater potential to increase shareholder value, the ability of the companies to operate independently following the spin-off, the Company’s ability to successfully integrate and achieve the anticipated synergies from recent acquisitions, fluctuations in domestic or foreign vehicle production, fluctuations in the demand for vehicles containing our products, the Company’s ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, the success of the Company’s original equipment and aftermarket segmentation and corresponding effects and general global and regional economic conditions. Federal-Mogul does not intend or assume any obligation to update any forward-looking statements.
* * * * *
EXHIBIT 1.01.2
American Railcar Industries, Inc.
Conflict Minerals Report
INTRODUCTION
This Conflict Minerals Report (“CMR”) of American Railcar Industries, Inc. (“ARI” or “the Company”) has been prepared pursuant to Rule 13p-1 and Form SD promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") for the reporting period from January 1, 2014 to December 31, 2014 (“the Reporting Period”).
Rule 13p-1 under the Exchange Act requires the disclosure of certain information when a company manufactures or contracts to manufacture products for which “Conflict Minerals” are necessary to the functionality or production of those products. The “Conflict Minerals” for the purposes of Rule 13p-1 are gold, columbite-tantalite (coltan), cassiterite, and wolframite (including their derivatives, tantalum, tin and tungsten, and other minerals or derivatives the U.S. Secretary of State may designate in the future). The “Covered Countries” for the purposes of Rule 13p-1 are the Democratic Republic of the Congo (“the DRC”), the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia, and Angola.
In accordance with Securities and Exchange Commission (“SEC”) guidance, this CMR is not audited.
As required by Rule 13p-1, this CMR relates to products (the “Covered Products”): (i) for which Conflict Minerals are necessary to the functionality or production of those products; (ii) that were manufactured, or contracted to be manufactured, by the Company; and (iii) for which the manufacture was completed during the Reporting Period. Based on its reasonable country of origin inquiry (“RCOI”) and the due diligence procedures outlined below, ARI identified certain externally sourced railcar components that are contained in ARI’s railcar products which contain necessary Conflict Minerals. These components constitute only a small portion of the materials content of the products made at ARI's manufacturing facilities.
RCOI
ARI conducted a good faith RCOI regarding the necessary Conflict Minerals used in its products. This good faith RCOI was designed to reasonably determine whether any of the necessary Conflict Minerals originated in the Covered Countries or came from recycled or scrap sources. RCOI procedures included evaluating ARI supplier responses to the Electronic Industry Citizenship Coalition/Global e-Sustainability Initiative Conflict Minerals Reporting Template (“the Template”). Where applicable, the Company also inquired and/or obtained supplier policies on Conflict Minerals and made follow-up inquiries with appropriate supplier personnel.
DUE DILIGENCE PROCESS
Design of Due Diligence
Based on the Company’s RCOI, the Company was also required to exercise due diligence on the source and chain of custody of the Conflict Minerals in its products. The design of the due diligence measures described below is intended to comply in all material respects with the Organization for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas: Second Edition, including the related supplements on gold, tin, tantalum and tungsten (collectively, “the OECD Guidance”). The OECD Guidance is an internationally recognized due diligence framework for identifying the source of Conflict
Minerals, which includes the following steps:
Step 1: Establish strong company management systems
Step 2: Identify and assess risks in the supply chain
Step 3: Design and implement a strategy to respond to identified risks
Step 4: Carry out independent third-party audit of smelter(s)/refiner(s) due diligence practices
Step 5: Report annually on supply chain due diligence
The OECD Guidance is written for the entire mineral supply chain and therefore ARI’s due diligence measures were tailored to include steps appropriate for “downstream” companies such as the Company.
Due Diligence Measures Performed
The Company’s supply chain is complex. Numerous third-parties are involved in the network that exists between ARI's suppliers and the original sources of any Conflict Minerals. Because the Company does not purchase Conflict Minerals directly from mines, smelters or refiners, it must rely on its suppliers to provide information regarding the origin of the Conflict Minerals in ARI's products. Given this context, the Company undertook the following measures to exercise due diligence on the source and chain of custody of the Conflict Minerals in its products for the Reporting Period:
(i) | ARI has established a management system to support its supply chain due diligence. |
a. | ARI maintains an organizational structure and communication process that is intended to establish a system of transparency over its supply chain. This system is meant to help ARI obtain critical information regarding the supply chain of Conflict Minerals used in its products. |
b. | ARI has a company policy regarding Conflict Minerals. This policy is publicly available on the Company’s website: www.americanrailcar.com. Employees, suppliers and other interested parties can contact ARI regarding its Conflict Minerals policy either in writing or by phone. |
c. | Authority and responsibility are assigned to a multi-disciplinary team comprised of ARI's Director of Purchasing, Manager of Financial Reporting, and Manager of Internal Audit (collectively, the “Conflict Minerals Committee”). The Conflict Minerals Committee receives periodic support from ARI's Vice President, Finance and Chief Accounting Officer and its General Counsel and reports all Conflict Minerals matters directly to the Senior Vice President, Chief Financial Officer and Treasurer. |
d. | ARI has distributed communications to its suppliers making them aware of Rule 13p-1 and ARI's related policies. Conflict Minerals provisions have been incorporated into supplier contracts and purchase orders through the Company's updated standard terms and conditions as published on its website. |
e. | ARI maintains business records relating to Conflict Minerals due diligence in accordance with the Company's existing processes. |
(ii) | ARI has taken steps to identify and assess risk in its supply chain. |
a. | ARI identified suppliers in its supply chain during the Reporting Period and sent those suppliers a copy of the Template (a “Survey”). As of April 30, 2015, a significant amount of Surveys were returned. Several follow-up reminders were sent to those suppliers who did not respond to the Survey. If a supplier did not respond to the Survey or the response was too general (i.e. declaration at company level instead of product level), ARI conducted a reasonable assessment of the composition of the suppliers’ product or materials in an effort to determine if the product or materials contained Conflict Minerals. ARI also reviewed Survey responses from suppliers that supplied similar products and materials to evaluate the consistency and accuracy of responses. |
b. | ARI also engaged in discussions with its immediate suppliers in an effort to identify the smelters/refiners of any Conflict Minerals in its supply chain during the Reporting Period. |
(iii) | ARI has designed and implemented a strategy to respond to identified risks. |
a. | ARI’s Conflict Minerals Committee monitors internal accountability with respect to the implementation of the supply chain due diligence process and reports its findings of the supply chain risk assessment to upper level management and the Audit Committee of ARI's Board of Directors. |
b. | ARI has designed and implemented a risk management plan that includes, but is not limited to, engaging in follow-up discussions with suppliers about the composition of their products and materials, requests for suppliers to complete Surveys, and working to incorporate Conflict Minerals language into ARI’s |
supplier contracts. If a supplier identifies that it has Conflict Minerals in the products or materials it supplies, ARI actively engages with that supplier to identify the locations of the smelter(s)/refiner(s) of those Conflict Minerals and to obtain a copy of their Conflict Mineral policies.
(iv) | ARI has determined reliance upon independent third-party audits of smelter/refiner due diligence practices by the Conflict Free Sourcing Initiative (CFSI) is appropriate. |
a. | ARI is a downstream company and is many steps removed from the smelters and refiners that produce the necessary Conflict Minerals contained in ARI’s products or components of ARI’s products. ARI does not purchase raw minerals or ores, and does not, to the best of its knowledge, directly purchase Conflict Minerals from any of the Covered Countries. Accordingly, ARI does not perform or direct audits of these entities’ supply chains of Conflict Minerals. However, ARI supports industry wide efforts and the development and implementation of independent third-party audits of smelters and refiners, such as the CFSI’s Conflict-Free Smelter Program. |
(v) | ARI complies with Step 5 of the OECD Guidance through its filing of this report (and the related Form SD) with the SEC and by making these materials publicly available on its website at www.americanrailcar.com. |
DUE DILIGENCE RESULTS AND RISK MITIGATION
Based on the information that was provided by the suppliers that ARI surveyed and otherwise obtained through the due diligence process, ARI believes that, to the extent reasonably determinable by ARI, the facilities that were used to process the Conflict Minerals contained in the Covered Products included 302 identified entities, of which 234 include facilities that are listed in the Template as “Known Smelters or Refineries”.
ARI believes that, to the extent reasonably determinable, the facilities that were used to process the Conflict Minerals contained in the Covered Products included the smelters and refiners listed in Annex I. This list includes only facilities that are Known Smelters or Refineries. ARI does not have sufficient information to determine all the facilities used to process those necessary Conflict Minerals or to determine the mines or countries of origin of the Conflict Minerals contained in the Covered Products or whether the Conflict Minerals in the Covered Products are from recycled or scrap sources. ARI’s efforts to determine the mine(s) or location of origin with the greatest possible specificity included the use of the due diligence measures described above.
The Company expects to take the following steps, among others, to improve its due diligence measures and to further mitigate the risk that the necessary Conflict Minerals contained in the Company’s supply chain benefit armed groups in the Covered Countries: (i) continue to engage with suppliers to obtain current, accurate, and complete information about the supply chain; (ii) encourage suppliers to implement responsible sourcing; and (iii) work to further incorporate Conflict Minerals provisions into supplier contracts and purchase orders through the Company's updated standard terms and conditions.
ARI has provided information as of the date of this report. Subsequent events, such as the inability or unwillingness of any suppliers, smelters or refiners to comply with ARI’s Conflict Minerals Policy Statement, may affect ARI’s future determinations under Rule 13p-1.
Website addresses are included in this report for reference only. Any information contained on ARI’s website is not incorporated by reference into this report.
FORWARD-LOOKING STATEMENTS
Certain statements in this report may be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “intends,” “expects,” “plans,” “believes,” “estimates,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to the Company's future plans, and any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on the Company's current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from these forward-
looking statements. As a result, these statements speak only as of the date they are made and we undertake no obligation to update or revise any forward-looking statement, except as required by federal securities laws.
ANNEX I
Metal | Smelter Name | Smelter Country |
Gold | Aida Chemical Industries Co. Ltd. | Japan |
Gold | Allgemeine Gold-und Silberscheideanstalt A.G. | Germany |
Gold | Almalyk Mining and Metallurgical Complex (AMMC) | Uzbekistan |
Gold | AngloGold Ashanti Córrego do Sítio Minerção | Brazil |
Gold | Argor-Heraeus SA | Switzerland |
Gold | Asahi Pretec Corporation | Japan |
Gold | Asaka Riken Co Ltd | Japan |
Gold | Atasay Kuyumculuk Sanayi Ve Ticaret A.S. | Turkey |
Gold | Aurubis AG | Germany |
Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | Philippines |
Gold | Bauer Walser AG | Germany |
Gold | Boliden AB | Sweden |
Gold | C. Hafner GmbH + Co. KG | Germany |
Gold | Caridad | Mexico |
Gold | CCR Refinery - Glencore Canada Corporation | Canada |
Gold | Cendres + Métaux SA | Switzerland |
Gold | Chimet S.p.A. | Italy |
Gold | China National Gold Group Corporation | China |
Gold | Chugai Mining | Japan |
Gold | Codelco | Chile |
Gold | Colt Refining | United States |
Gold | Daejin Indus Co. Ltd | Korea, Republic of |
Gold | DaeryongENC | Korea, Republic of |
Gold | Daye Non-Ferrous Metals Mining Ltd. | China |
Gold | Do Sung Corporation | Korea, Republic of |
Gold | Doduco | Germany |
Gold | Dowa | Japan |
Gold | Eco-System Recycling Co., Ltd. | Japan |
Gold | FSE Novosibirsk Refinery | Russian Federation |
Gold | Guangdong Jinding Gold Limited | China |
Gold | Heimerle + Meule GmbH | Germany |
Gold | Heraeus Ltd. Hong Kong | Hong Kong |
Gold | Heraeus Precious Metals GmbH & Co. KG | Germany |
Gold | Hunan Chenzhou Mining Group Co., Ltd. | China |
Gold | Hwasung CJ Co. Ltd | Korea, Republic of |
Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited | China |
Gold | Ishifuku Metal Industry Co., Ltd. | Japan |
Gold | Istanbul Gold Refinery | Turkey |
Gold | Japan Mint | Japan |
Gold | Jiangxi Copper Company Limited | China |
Gold | Johnson Matthey Inc | United States |
Gold | Johnson Matthey Ltd | Canada |
Gold | JSC Ekaterinburg Non-Ferrous Metal Processing Plant | Russian Federation |
Gold | JSC Uralelectromed | Russian Federation |
Gold | JX Nippon Mining & Metals Co., Ltd. | Japan |
Gold | Kazzinc Ltd | Kazakhstan |
Gold | Kennecott Utah Copper LLC | United States |
Gold | Kojima Chemicals Co., Ltd | Japan |
Gold | Korea Metal Co. Ltd | Korea, Republic of |
Gold | Kyrgyzaltyn JSC | Kyrgyzstan |
Gold | L' azurde Company For Jewelry | Saudi Arabia |
Gold | Lingbao Jinyuan Tonghui Refinery Co. Ltd. | China |
Gold | LS-NIKKO Copper Inc. | Korea, Republic of |
Gold | Luoyang Zijin Yinhui Metal Smelt Co Ltd | China |
Gold | Materion | United States |
Gold | Matsuda Sangyo Co., Ltd. | Japan |
Gold | Metalor Technologies (Hong Kong) Ltd | Hong Kong |
Gold | Metalor Technologies (Singapore) Pte. Ltd. | Singapore |
Gold | Metalor Technologies SA | Switzerland |
Gold | Metalor USA Refining Corporation | United States |
Gold | Met-Mex Peñoles, S.A. | Mexico |
Gold | Mitsubishi Materials Corporation | Japan |
Gold | Mitsui Mining and Smelting Co., Ltd. | Japan |
Gold | Moscow Special Alloys Processing Plant | Russian Federation |
Gold | Nadir Metal Rafineri San. Ve Tic. A.ª. | Turkey |
Gold | Navoi Mining and Metallurgical Combinat | Uzbekistan |
Gold | Nihon Material Co. LTD | Japan |
Gold | Ohio Precious Metals, LLC | United States |
Gold | Ohura Precious Metal Industry Co., Ltd | Japan |
Gold | OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet) | Russian Federation |
Gold | OJSC Kolyma Refinery | Russian Federation |
Gold | PAMP SA | Switzerland |
Gold | Penglai Penggang Gold Industry Co Ltd | China |
Gold | Prioksky Plant of Non-Ferrous Metals | Russian Federation |
Gold | PT Aneka Tambang (Persero) Tbk | Indonesia |
Gold | PX Précinox SA | Switzerland |
Gold | Rand Refinery (Pty) Ltd | South Africa |
Gold | Royal Canadian Mint | Canada |
Gold | Sabin Metal Corp. | United States |
Gold | SAMWON METALS Corp. | Korea, Republic of |
Gold | Schone Edelmetaal | Netherlands |
Gold | SEMPSA Joyería Platería SA | Spain |
Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd | China |
Gold | So Accurate Group, Inc. | United States |
Gold | SOE Shyolkovsky Factory of Secondary Precious Metals | Russian Federation |
Gold | Solar Applied Materials Technology Corp. | Taiwan |
Gold | Sumitomo Metal Mining Co., Ltd. | Japan |
Gold | Tanaka Kikinzoku Kogyo K.K. | Japan |
Gold | The Great Wall Gold and Silver Refinery of China | China |
Gold | The Refinery of Shandong Gold Mining Co. Ltd | China |
Gold | Tokuriki Honten Co., Ltd | Japan |
Gold | Tongling nonferrous Metals Group Co.,Ltd | China |
Gold | Torecom | Korea, Republic of |
Gold | Umicore Brasil Ltda | Brazil |
Gold | Umicore Precious Metals Thailand | Thailand |
Gold | Umicore SA Business Unit Precious Metals Refining | Belgium |
Gold | United Precious Metal Refining, Inc. | United States |
Gold | Valcambi SA | Switzerland |
Gold | Western Australian Mint trading as The Perth Mint | Australia |
Gold | Yamamoto Precious Metal Co., Ltd. | Japan |
Gold | Yokohama Metal Co Ltd | Japan |
Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation | China |
Gold | Zijin Mining Group Co. Ltd | China |
Tantalum | Conghua Tantalum and Niobium Smeltry | China |
Tantalum | Duoluoshan | China |
Tantalum | Exotech Inc. | United States |
Tantalum | F&X Electro-Materials Ltd. | China |
Tantalum | Gannon & Scott | United States |
Tantalum | Global Advanced Metals | United States |
Tantalum | Guangdong Zhiyuan New Material Co., Ltd. | China |
Tantalum | H.C. Starck Smelting GmbH & Co.KG | Germany |
Tantalum | Hengyang King Xing Lifeng New Materials Co., Ltd. | China |
Tantalum | Hi-Temp | United States |
Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd. | China |
Tantalum | Jiujiang Tanbre Co., Ltd. | China |
Tantalum | KEMET Blue Powder | United States |
Tantalum | King-Tan Tantalum Industry Ltd | China |
Tantalum | LSM Brasil S.A. | Brazil |
Tantalum | Metallurgical Products India (Pvt.) Ltd. | India |
Tantalum | Mineração Taboca S.A. | Brazil |
Tantalum | Mitsui Mining & Smelting | Japan |
Tantalum | Molycorp Silmet A.S. | Estonia |
Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. | China |
Tantalum | Plansee SE Liezen | Austria |
Tantalum | QuantumClean | United States |
Tantalum | RFH Tantalum Smeltry Co., Ltd | China |
Tantalum | Shanghai Jiangxi Metals Co. Ltd | China |
Tantalum | Solikamsk Magnesium Works OAO | Russian Federation |
Tantalum | Taki Chemicals | Japan |
Tantalum | Telex | United States |
Tantalum | Ulba | Kazakhstan |
Tantalum | Yichun Jin Yang Rare Metal Co., Ltd | China |
Tantalum | Zhuzhou Cement Carbide | China |
Tantalum | H.C. Starck GmbH | Germany |
Tantalum | H.C. Starck Ltd. | Japan |
Tin | Alpha | United States |
Tin | China Rare Metal Materials Company | China |
Tin | China Tin Group Co., Ltd. | China |
Tin | CNMC (Guangxi) PGMA Co. Ltd. | China |
Tin | Cooper Santa | Brazil |
Tin | CV Duta Putra Bangka | Indonesia |
Tin | CV Gita Pesona | Indonesia |
Tin | CV JusTindo | Indonesia |
Tin | CV Makmur Jaya | Indonesia |
Tin | CV Nurjanah | Indonesia |
Tin | CV Prima Timah Utama | Indonesia |
Tin | CV Serumpun Sebalai | Indonesia |
Tin | CV United Smelting | Indonesia |
Tin | Dowa | Japan |
Tin | EM Vinto | Bolivia |
Tin | Estanho de Rondônia S.A. | Brazil |
Tin | Fenix Metals | Poland |
Tin | Gejiu Kai Meng Industry and Trade LLC | China |
Tin | Gejiu Non-Ferrous Metal Processing Co. Ltd. | China |
Tin | Gejiu Zi-Li | China |
Tin | Gold Bell Group | China |
Tin | Huichang Jinshunda Tin Co. Ltd | China |
Tin | Jiangxi Nanshan | China |
Tin | Kai Unita Trade Limited Liability Company | China |
Tin | Linwu Xianggui Smelter Co | China |
Tin | Magnu's Minerais Metais e Ligas LTDA | Brazil |
Tin | Malaysia Smelting Corporation (MSC) | Malaysia |
Tin | Melt Metais e Ligas S/A | Brazil |
Tin | Metallo Chimique | Belguim |
Tin | Mineração Taboca S.A. | Brazil |
Tin | Minsur | Peru |
Tin | Mitsubishi Materials Corporation | Japan |
Tin | Novosibirsk Integrated Tin Works | Russian Federation |
Tin | O.M. Manufacturing (Thailand) Co., Ltd. | Thailand |
Tin | OMSA | Bolivia |
Tin | PT Alam Lestari Kencana | Indonesia |
Tin | PT Artha Cipta Langgeng | Indonesia |
Tin | PT Babel Inti Perkasa | Indonesia |
Tin | PT Babel Surya Alam Lestari | Indonesia |
Tin | PT Bangka Kudai Tin | Indonesia |
Tin | PT Bangka Putra Karya | Indonesia |
Tin | PT Bangka Timah Utama Sejahtera | Indonesia |
Tin | PT Bangka Tin Industry | Indonesia |
Tin | PT Belitung Industri Sejahtera | Indonesia |
Tin | PT BilliTin Makmur Lestari | Indonesia |
Tin | PT Bukit Timah | Indonesia |
Tin | PT DS Jaya Abadi | Indonesia |
Tin | PT Eunindo Usaha Mandiri | Indonesia |
Tin | PT Fang Di MulTindo | Indonesia |
Tin | PT HP Metals Indonesia | Indonesia |
Tin | PT Karimun Mining | Indonesia |
Tin | PT Koba Tin | Indonesia |
Tin | PT Mitra Stania Prima | Indonesia |
Tin | PT Pelat Timah Nusantara Tbk | Indonesia |
Tin | PT Prima Timah Utama | Indonesia |
Tin | PT Refined Bankgka Tin | Indonesia |
Tin | PT Sariwiguna Binasentosa | Indonesia |
Tin | PT Stanindo Inti Perkasa | Indonesia |
Tin | PT Sumber Jaya Indah | Indonesia |
Tin | PT Tambang Timah | Indonesia |
Tin | PT Timah (Persero), Tbk | Indonesia |
Tin | PT Tinindo Inter Nusa | Indonesia |
Tin | PT Yinchendo Mining Industry | Indonesia |
Tin | Rui Da Hung | Taiwan |
Tin | Soft Metais, Ltda. | Brazil |
Tin | Thaisarco | Thailand |
Tin | White Solder Metalurgia e Mineração Ltda. | Brazil |
Tin | Yunnan Chengfeng Non-ferrous Metals Co.,Ltd. | China |
Tin | Yunnan Tin Company, Ltd. | China |
Tin | PT Timah | Indonesia |
Tungsten | A.L.M.T. Corp. | Japan |
Tungsten | Chenzhou Diamond Tungsten Products Co., Ltd. | China |
Tungsten | Chongyi Zhangyuan Tungsten Co., Ltd. | China |
Tungsten | Dayu Weiliang Tungsten Co., Ltd. | China |
Tungsten | Fujian Jinxin Tungsten Co., Ltd. | China |
Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd. | China |
Tungsten | Ganzhou Jiangwu Ferrotungsten Co., Ltd. | China |
Tungsten | Ganzhou Non-ferrous Metals Smelting Co., Ltd. | China |
Tungsten | Ganzhou Seadragon W & Mo Co., Ltd. | China |
Tungsten | Global Tungsten & Powders Corp. | United States |
Tungsten | Guangdong Xianglu Tungsten Co., Ltd. | China |
Tungsten | H.C. Starck GmbH | Germany |
Tungsten | Hunan Chenzhou Mining Group Co., Ltd. | China |
Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. | China |
Tungsten | Japan New Metals Co., Ltd. | Japan |
Tungsten | Jiangxi Minmetals Gao'an Non-ferrous Metals Co., Ltd. | China |
Tungsten | Jiangxi Rare Earth & Rare Metals Tungsten Group Corp | China |
Tungsten | Jiangxi Tungsten Industry Group Co Ltd | China |
Tungsten | Jiangxi Xinsheng Tungsten Industry Co., Ltd. | China |
Tungsten | Kennametal Fallon | United States |
Tungsten | Kennametal Huntsville | United States |
Tungsten | Mitsubishi Materials Corporation | Japan |
Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. | Vietnam |
Tungsten | Vietnam Youngsun Tungsten Industry Co., Ltd | Vietnam |
Tungsten | Wolfram Bergbau und Hütten AG | Austria |
Tungsten | Wolfram Company CJSC | Russian Federation |
Tungsten | Xiamen Tungsten (H.C.) Co., Ltd. | China |
Tungsten | Xiamen Tungsten Co., Ltd. | China |
Tungsten | Xinhai Rendan Shaoguan Tungsten Co., Ltd. | China |