Exhibit 1.01
CONFLICT MINERALS REPORT
Reporting Period from January 1, 2017 to
December 31, 2017
LENNOX INTERNATIONAL INC.
This Conflict Minerals Report (this “Report”) of Lennox International Inc. (including its consolidated subsidiaries, the “Company”) has been prepared pursuant to Rule13p-1 and Form SD promulgated under the Securities Exchange Act of 1934 for the reporting period from January 1, 2017 to December 31, 2017 (the “Reporting Period”).
Forward-looking statements contained in this Report are made based on known events and circumstances at the time of release and, as such, are subject in the future to unforeseen uncertainties and risks. Statements in this Report which express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements, including statements related to the Company’s compliance efforts and expected actions identified in this Report. These forward-looking statements are subject to various risks, uncertainties and assumptions, including, among other matters, the Company’s customers’ requirements to use certain suppliers, the Company’s suppliers’ responsiveness and cooperation with the Company’s due diligence efforts, the Company’s ability to implement improvements in its conflict minerals program and the Company’s ability to identify and mitigate related risks in its supply chain. If one or more of these or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see the Company’s other filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form10-K for the year ended December 31, 2017 and subsequent Quarterly Reports on Form10-Q. The Company makes these statements as of the date of this disclosure, and undertakes no obligation to update them unless otherwise required by law.
Rule13p-1, through Form SD, requires the disclosure of certain information if a company manufactures or contracts to manufacture products for which certain “conflict minerals” (as defined below) are necessary to the functionality or production of such products. Form SD defines “conflict minerals” as: (i)(a) columbite-tantalite (or coltan, the metal ore from which tantalum is extracted), (b) cassiterite (the metal ore from which tin is extracted), (c) gold and (d) wolframite (the metal ore from which tungsten is extracted), or their derivatives, which are currently limited to tantalum, tin and tungsten; or (ii) any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the Congo or an “adjoining country,” as such term is defined in Form SD (collectively, the “Covered Countries”).
The Company’s operations may at times manufacture, or contract to manufacture, products for which conflict minerals are necessary to the functionality or production of those products (collectively, the “products”). For the Reporting Period, the Company reasonably determined that the following product groups contain conflict minerals: furnaces, air conditioners, air handlers, heat pumps, display cases, unit coolers, condensing units and controls.
I. | Reasonable Country of Origin Inquiry and Due Diligence: |
As required by Form SD, the Company has conducted a good faith reasonable country of origin inquiry (“RCOI”) regarding the conflict minerals included in the products described above during the Reporting Period, which the Company refers to as the “Subject Minerals,” to determine whether any such Subject Minerals originated in the Covered Countries and/or whether any of the Subject Minerals were from recycled or scrap sources. Where applicable, the Company has conducted additional due diligence regarding the sources of the Subject Minerals. The results of the Company’s RCOI regarding the Subject Minerals, as well as the Company’s additional due diligence regarding the sources of such Subject Minerals, are contained in this Report, which is publicly available at http://www.lennoxinternational.com under “Terms, Conditions and Disclosures.” The content on, or accessible through, any web site referred to in this Report is not incorporated by reference into this Report unless expressly noted.
The Company’s global supply chain is complex. The Company does not purchase conflict minerals directly from mines, smelters or refiners, and there are many third parties in the supply chain between the Company and the original sources of conflict minerals. In the course of its business operations, the Company may purchase materials and components containing conflict minerals, and those materials and components may, in turn, be included in the Company’s products. As a result, the Company necessarily relies on its direct material suppliers to provide information regarding the origin of any conflict minerals that are included in its products. In accordance with the Organisation for EconomicCo-operation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, including the related supplements for gold, tin, tantalum and tungsten, and related guidance provided by the SEC, the Company works with its direct material suppliers to identify, where possible, the smelters and/or refiners and countries of origin of the Subject Minerals. Additionally, the Company’s standard purchase order terms require suppliers to comply with all applicable laws. The Company also is committed to increasing transparency in its supply chain regarding the origin and traceability of conflict minerals.
As part of the Company’s RCOI and due diligence activities, employees of the Company’s global sourcing group identified 339 Tier 1 suppliers in its centralized Business Warehouse spend database of products during the Reporting Period that (i) were believed to possibly include conflict minerals and (ii) were used in the production of a product under product manufacturing and contract manufacturing arrangements. The Company, through a third party, contacted these 339 suppliers. Suppliers were asked to provide information regarding the sourcing of their Conflict Minerals, through the use of a Responsible Minerals Initiative (“RMI”) (formerly known as the Conflict-Free Sourcing Initiative) Conflict Minerals Reporting Template (“CMRT”) with the ultimate goal of identifying the smelters or refiners and associated mine countries of origin. Where a supplier was unable to provide a CMRT, the Company, through a third party, requested additional information from such supplier regarding its supply chain. The Company, through a third party, later sentfollow-up emails to the suppliers who had not responded, in order to remind thesenon-responders to respond to its requests regarding conflict minerals sourcing. The suppliers were given an April 6, 2018 deadline to respond. In total, 207 of the 339 suppliers contacted (or 61%) responded, but such suppliers did not provide the Company with sufficient information to fully determine the facilities used to process the Subject Minerals or fully determine the countries of origin for the Subject Minerals.
Based on the information obtained pursuant to the RCOI and due diligence process described above, the Company does not have sufficient information, with respect to the Reporting Period, to determine the known facility/smelter or country of origin of the Subject Minerals. For the Reporting Period, the Company identified over 270 facilities/smelters, as reported by the Covered Suppliers, as potential sources of Subject Minerals. The names of these facilities/smelters are included in Annex A hereto for reference. Although the Company received responses from certain Covered Suppliers in connection with its RCOI that listed smelter or refiner names, such Covered Suppliers are unable to accurately report which specific smelters were part of the supply chain for the Subject Minerals. For example, the majority of Covered Suppliers reported their sourcing results on a company-wide basis, rather than on a product-specific basis or were unable to determine the facility/smelter and/or country of origin for the Subject Minerals. A Covered Supplier’s failure to identify a specific facility/smelter and/or country of origin at any point in its supply chain will drive an equivalent response for the Company and, therefore, the Company is unable to report any known facilities/smelters and/or countries of origin for the Subject Minerals at this time. The Company continues to implement and refine its conflict minerals program to improve its supply chain transparency by obtaining more accurate and more complete information from its suppliers.
II. | Additional Information: |
This Report was not subjected to an independent private sector audit, as such audit was not required. The statements above are based on the information available at the time this Report was prepared, and a number of factors may change this information. The activities described above are continuing, and after December 31, 2017, the Company has continued to follow up with the suppliers described above and to verify any responses from those suppliers.
Within the Company’s supplier relationships, the Company seeks to manage its sourcing processes ethically, and to hold the Company and its suppliers to high standards of behavior. This means that the Company is committed to working with its suppliers to encourage responsible practices throughout the supply network. The Company expects to continue to improve its RCOI process and due diligence measures, including, but not limited to:
• | assessing the presence of conflict minerals in its supply chain; |
• | clearly communicating expectations with regard to transparency of supplier sourcing of conflict minerals; |
• | increasing the response rate for RCOI process; |
• | continuing to monitor and track the Company’s performance of risk mitigation and response rate for RCOI process; and |
• | continuing to compare RCOI results to information collected via independent conflict free smelter validation programs such as the Responsible Minerals Assurance Process assessment protocols established by the RMI. |
Annex A:
Gold | Abington Reldan Metals, LLC | |
Gold | Advanced Chemical Company | |
Gold | Aida Chemical Industries Co., Ltd. | |
Gold | Al Etihad Gold LLC | |
Gold | AllgemeineGold-und Silberscheideanstalt A.G. | |
Gold | Almalyk Mining and Metallurgical Complex (AMMC) | |
Gold | AngloGold Ashanti Corrego do Sitio Mineracao | |
Gold | Argor-Heraeus S.A. | |
Gold | Asahi Pretec Corp. | |
Gold | Asahi Refining Canada Ltd. | |
Gold | Asahi Refining USA Inc. | |
Gold | Asaka Riken Co., Ltd. | |
Gold | Atasay Kuyumculuk Sanayi Ve Ticaret A.S. | |
Gold | AU Traders and Refiners | |
Gold | Aurubis AG | |
Gold | Bangalore Refinery | |
Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | |
Gold | Boliden AB | |
Gold | C. Hafner GmbH + Co. KG | |
Gold | Caridad | |
Gold | CCR Refinery—Glencore Canada Corporation | |
Gold | Cendres + Metaux S.A. | |
Gold | Chimet S.p.A. | |
Gold | Chugai Mining | |
Gold | Daejin Indus Co., Ltd. | |
Gold | DayeNon-Ferrous Metals Mining Ltd. | |
Gold | Degussa Sonne / Mond Goldhandel GmbH | |
Gold | DODUCO Contacts and Refining GmbH | |
Gold | Dowa | |
Gold | DSC (Do Sung Corporation) | |
Gold | Eco-System Recycling Co., Ltd. | |
Gold | Elemetal Refining, LLC | |
Gold | Emirates Gold DMCC | |
Gold | Fidelity Printers and Refiners Ltd. | |
Gold | GCC Gujrat Gold Centre Pvt. Ltd. | |
Gold | Geib Refining Corporation | |
Gold | Gold Refinery of Zijin Mining Group Co., Ltd. | |
Gold | Great Wall Precious Metals Co., Ltd. of CBPM | |
Gold | Guangdong Jinding Gold Limited | |
Gold | Guoda Safina High-Tech Environmental Refinery Co., Ltd. | |
Gold | Hangzhou Fuchunjiang Smelting Co., Ltd. | |
Gold | HeeSung Metal Ltd. | |
Gold | Heimerle + Meule GmbH | |
Gold | Heraeus Metals Hong Kong Ltd. | |
Gold | Heraeus Precious Metals GmbH & Co. KG | |
Gold | Hunan Chenzhou Mining Co., Ltd. | |
Gold | HwaSeong CJ CO., LTD. | |
Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Co., Ltd. | |
Gold | Ishifuku Metal Industry Co., Ltd. | |
Gold | Istanbul Gold Refinery | |
Gold | Italpreziosi | |
Gold | Japan Mint | |
Gold | Jiangxi Copper Co., Ltd. | |
Gold | JSC EkaterinburgNon-Ferrous Metal Processing Plant | |
Gold | JSC Uralelectromed | |
Gold | JX Nippon Mining & Metals Co., Ltd. | |
Gold | Kazakhmys Smelting LLC | |
Gold | Kazzinc | |
Gold | Kennecott Utah Copper LLC | |
Gold | KGHM Polska Miedz Spolka Akcyjna | |
Gold | Kojima Chemicals Co., Ltd. | |
Gold | Korea Zinc Co., Ltd. | |
Gold | Kyrgyzaltyn JSC | |
Gold | Kyshtym Copper-Electrolytic Plant ZAO | |
Gold | L’azurde Company For Jewelry | |
Gold | Lingbao Gold Co., Ltd. | |
Gold | Lingbao Jinyuan Tonghui Refinery Co., Ltd. | |
Gold | L’Orfebre S.A. |
Gold | LS-NIKKO Copper Inc. | |
Gold | Luoyang Zijin Yinhui Gold Refinery Co., Ltd. | |
Gold | Marsam Metals | |
Gold | Materion | |
Gold | Matsuda Sangyo Co., Ltd. | |
Gold | Metalor Technologies (Hong Kong) Ltd. | |
Gold | Metalor Technologies (Singapore) Pte., Ltd. | |
Gold | Metalor Technologies (Suzhou) Ltd. | |
Gold | Metalor Technologies S.A. | |
Gold | Metalor USA Refining Corporation | |
Gold | MetalurgicaMet-Mex Penoles S.A. De C.V. | |
Gold | Mitsubishi Materials Corporation | |
Gold | Mitsui Mining and Smelting Co., Ltd. | |
Gold | MMTC-PAMP India Pvt., Ltd. | |
Gold | Modeltech Sdn Bhd | |
Gold | Morris and Watson | |
Gold | Morris and Watson Gold Coast | |
Gold | Moscow Special Alloys Processing Plant | |
Gold | Nadir Metal Rafineri San. Ve Tic. A.S. | |
Gold | Navoi Mining and Metallurgical Combinat | |
Gold | Nihon Material Co., Ltd. | |
Gold | Ogussa Osterreichische Gold- und Silber-Scheideanstalt GmbH | |
Gold | Ohura Precious Metal Industry Co., Ltd. | |
Gold | OJSC “The Gulidov KrasnoyarskNon-Ferrous Metals Plant” (OJSC Krastsvetmet) | |
Gold | OJSC Novosibirsk Refinery | |
Gold | PAMP S.A. | |
Gold | Pease & Curren | |
Gold | Penglai Penggang Gold Industry Co., Ltd. | |
Gold | Planta Recuperadora de Metales SpA | |
Gold | Prioksky Plant ofNon-Ferrous Metals | |
Gold | PT Aneka Tambang (Persero) Tbk | |
Gold | PX Precinox S.A. | |
Gold | Rand Refinery (Pty) Ltd. | |
Gold | Refinery of Seemine Gold Co., Ltd. | |
Gold | Remondis Argentia B.V. | |
Gold | Republic Metals Corporation | |
Gold | Royal Canadian Mint | |
Gold | Sabin Metal Corp. | |
Gold | Safimet S.p.A | |
Gold | SAFINA A.S. | |
Gold | Sai Refinery | |
Gold | Samduck Precious Metals | |
Gold | SAMWON METALS Corp. | |
Gold | SAXONIA Edelmetalle GmbH | |
Gold | Schone Edelmetaal B.V. | |
Gold | SEMPSA Joyeria Plateria S.A. | |
Gold | Shandong Tiancheng Biological Gold Industrial Co., Ltd. | |
Gold | Shandong Zhaojin Gold & Silver Refinery Co., Ltd. | |
Gold | Sichuan Tianze Precious Metals Co., Ltd. | |
Gold | Singway Technology Co., Ltd. | |
Gold | So Accurate Group, Inc. | |
Gold | SOE Shyolkovsky Factory of Secondary Precious Metals | |
Gold | Solar Applied Materials Technology Corp. | |
Gold | State Research Institute Center for Physical Sciences and Technology | |
Gold | Sumitomo Metal Mining Co., Ltd. | |
Gold | SungEel HiMetal Co., Ltd. | |
Gold | T.C.A S.p.A | |
Gold | Tanaka Kikinzoku Kogyo K.K. | |
Gold | The Refinery of Shandong Gold Mining Co., Ltd. | |
Gold | Tokuriki Honten Co., Ltd. | |
Gold | Tongling Nonferrous Metals Group Co., Ltd. | |
Gold | Tony Goetz NV | |
Gold | TOOTau-Ken-Altyn | |
Gold | Torecom | |
Gold | Umicore Brasil Ltda. | |
Gold | Umicore Precious Metals Thailand | |
Gold | Umicore S.A. Business Unit Precious Metals Refining |
Gold | United Precious Metal Refining, Inc. | |
Gold | Universal Precious Metals Refining Zambia | |
Gold | Valcambi S.A. | |
Gold | Western Australian Mint (T/a The Perth Mint) | |
Gold | WIELAND Edelmetalle GmbH | |
Gold | Yamakin Co., Ltd. | |
Gold | Yokohama Metal Co., Ltd. | |
Gold | Yunnan Copper Industry Co., Ltd. | |
Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation | |
Tantalum | Changsha South Tantalum Niobium Co., Ltd. | |
Tantalum | F&X Electro-Materials Ltd. | |
Tantalum | Global Advanced Metals Aizu | |
Tantalum | Global Advanced Metals Boyertown | |
Tantalum | Guangdong Rising RareMetals-EO Materials Ltd. | |
Tantalum | H.C. Starck Co., Ltd. | |
Tantalum | H.C. Starck Hermsdorf GmbH | |
Tantalum | H.C. Starck Inc. | |
Tantalum | H.C. Starck Ltd. | |
Tantalum | H.C. Starck Smelting GmbH & Co. KG | |
Tantalum | H.C. Starck Tantalum and Niobium GmbH | |
Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd. | |
Tantalum | Mitsui Mining and Smelting Co., Ltd. | |
Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. | |
Tantalum | Solikamsk Magnesium Works OAO | |
Tantalum | Taki Chemical Co., Ltd. | |
Tantalum | Ulba Metallurgical Plant JSC | |
Tin | Alpha | |
Tin | An Vinh Joint Stock Mineral Processing Company | |
Tin | Chenzhou Yunxiang Mining and Metallurgy Co., Ltd. | |
Tin | China Tin Group Co., Ltd. | |
Tin | CNMC (Guangxi) PGMA Co., Ltd. | |
Tin | CV Ayi Jaya | |
Tin | CV Dua Sekawan | |
Tin | CV Gita Pesona | |
Tin | CV Tiga Sekawan | |
Tin | CV United Smelting | |
Tin | CV Venus Inti Perkasa | |
Tin | Dowa | |
Tin | Electro-Mechanical Facility of the Cao Bang Minerals & Metallurgy Joint Stock Company | |
Tin | EM Vinto | |
Tin | Estanho de Rondonia S.A. | |
Tin | Fenix Metals | |
Tin | Gejiu Fengming Metallurgy Chemical Plant | |
Tin | Gejiu Jinye Mineral Company | |
Tin | Gejiu Kai Meng Industry and Trade LLC | |
Tin | GejiuNon-Ferrous Metal Processing Co., Ltd. | |
Tin | Gejiu Yunxin Nonferrous Electrolysis Co., Ltd. | |
Tin | Gejiu Zili Mining And Metallurgy Co., Ltd. | |
Tin | Guangdong HanheNon-Ferrous Metal Co., Ltd. | |
Tin | Guanyang Guida Nonferrous Metal Smelting Plant | |
Tin | HuiChang Hill Tin Industry Co., Ltd. | |
Tin | Huichang Jinshunda Tin Co., Ltd. | |
Tin | Jiangxi Ketai Advanced Material Co., Ltd. | |
Tin | Jiangxi New Nanshan Technology Ltd. | |
Tin | Magnu’s Minerais Metais e Ligas Ltda. | |
Tin | Malaysia Smelting Corporation (MSC) | |
Tin | Melt Metais e Ligas S.A. | |
Tin | Metallic Resources, Inc. | |
Tin | Metallo Belgium N.V. | |
Tin | Metallo Spain S.L.U. | |
Tin | Mineracao Taboca S.A. | |
Tin | Minsur | |
Tin | Mitsubishi Materials Corporation | |
Tin | Modeltech Sdn Bhd | |
Tin | Nghe TinhNon-Ferrous Metals Joint Stock Company | |
Tin | O.M. Manufacturing (Thailand) Co., Ltd. | |
Tin | O.M. Manufacturing Philippines, Inc. | |
Tin | Operaciones Metalurgical S.A. |
Tin | PT Aries Kencana Sejahtera | |
Tin | PT Artha Cipta Langgeng | |
Tin | PT ATD Makmur Mandiri Jaya | |
Tin | PT Babel Inti Perkasa | |
Tin | PT Bangka Prima Tin | |
Tin | PT Bangka Tin Industry | |
Tin | PT Belitung Industri Sejahtera | |
Tin | PT Bukit Timah | |
Tin | PT DS Jaya Abadi | |
Tin | PT Eunindo Usaha Mandiri | |
Tin | PT Inti Stania Prima | |
Tin | PT Karimun Mining | |
Tin | PT Kijang Jaya Mandiri | |
Tin | PT Lautan Harmonis Sejahtera | |
Tin | PT Menara Cipta Mulia | |
Tin | PT Mitra Stania Prima | |
Tin | PT Panca Mega Persada | |
Tin | PT Premium Tin Indonesia | |
Tin | PT Prima Timah Utama | |
Tin | PT Refined Bangka Tin | |
Tin | PT Sariwiguna Binasentosa | |
Tin | PT Stanindo Inti Perkasa | |
Tin | PT Sukses Inti Makmur | |
Tin | PT Sumber Jaya Indah | |
Tin | PT Timah (Persero) Tbk Kundur | |
Tin | PT Timah (Persero) Tbk Mentok | |
Tin | PT Tinindo Inter Nusa | |
Tin | PT Tommy Utama | |
Tin | Resind Industria e Comercio Ltda. | |
Tin | Rui Da Hung | |
Tin | Soft Metais Ltda. | |
Tin | Super Ligas | |
Tin | Thaisarco | |
Tin | Tuyen QuangNon-Ferrous Metals Joint Stock Company | |
Tin | White Solder Metalurgia e Mineracao Ltda. | |
Tin | Yunnan ChengfengNon-ferrous Metals Co., Ltd. | |
Tin | Yunnan Tin Company Limited | |
Tungsten | A.L.M.T. TUNGSTEN Corp. | |
Tungsten | Chenzhou Diamond Tungsten Products Co., Ltd. | |
Tungsten | Chongyi Zhangyuan Tungsten Co., Ltd. | |
Tungsten | Fujian Jinxin Tungsten Co., Ltd. | |
Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd. | |
Tungsten | Ganzhou Jiangwu Ferrotungsten Co., Ltd. | |
Tungsten | Ganzhou Seadragon W & Mo Co., Ltd. | |
Tungsten | Global Tungsten & Powders Corp. | |
Tungsten | Guangdong Xianglu Tungsten Co., Ltd. | |
Tungsten | H.C. Starck Smelting GmbH & Co. KG | |
Tungsten | H.C. Starck Tungsten GmbH | |
Tungsten | Hunan Chenzhou Mining Co., Ltd. | |
Tungsten | Hunan Chuangda Vanadium Tungsten Co., Ltd. Wuji | |
Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. | |
Tungsten | Hydrometallurg, JSC | |
Tungsten | Japan New Metals Co., Ltd. | |
Tungsten | Jiangwu H.C. Starck Tungsten Products Co., Ltd. | |
Tungsten | Jiangxi Gan Bei Tungsten Co., Ltd. | |
Tungsten | Jiangxi TongguNon-ferrous Metallurgical & Chemical Co., Ltd. | |
Tungsten | Jiangxi Xinsheng Tungsten Industry Co., Ltd. | |
Tungsten | Jiangxi Yaosheng Tungsten Co., Ltd. | |
Tungsten | Kennametal Fallon | |
Tungsten | Kennametal Huntsville | |
Tungsten | Malipo Haiyu Tungsten Co., Ltd. | |
Tungsten | Niagara Refining LLC | |
Tungsten | Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC | |
Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. | |
Tungsten | Vietnam Youngsun Tungsten Industry Co., Ltd. | |
Tungsten | Wolfram Bergbau und Hutten AG | |
Tungsten | Xiamen Tungsten (H.C.) Co., Ltd. | |
Tungsten | Xiamen Tungsten Co., Ltd. | |
Tungsten | Xinhai Rendan Shaoguan Tungsten Co., Ltd. |