UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
SPECIALIZED DISCLOSURE REPORT
Xylem Inc.
(Exact name of the registrant as specified in its charter)
| Indiana | 001-35229 | 45-2080495 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation or organization) | File Number) | Identification No.) |
| 1 International Drive, Rye Brook, New York | 10573 | |
| (Address of principle executive offices) | (Zip code) | |
| Claudia S. Toussaint | 914-323-5700 | |
(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, 2015. |
Section 1 – Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
Xylem Inc. (the “Company”) has filed a copy of its Conflict Minerals Report for the calendar year ended December 31, 2015 as Exhibit 1.01 to this Specialized Disclosure Form (Form SD). The Conflict Minerals Report is publicly available on the Company’s website at www.xyleminc.com under “Investors – Financial Information – SEC Filings.”
Item 1.02 Exhibit
The Company’s Conflict Minerals Report for calendar year 2015 is filed as Exhibit 1.01 to this Form and is incorporated by reference.
Section 2 - Exhibits
Item 2.01 Exhibits
Exhibit 1.01 – Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form SD.
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 duly authorized undersigned.
| Date: May 31, 2016 | XYLEM INC. | |||||
| /s/ Claudia S. Toussaint | ||||||
| Claudia S. Toussaint Senior Vice President, General Counsel & Corporate Secretary | ||||||
Exhibit 1.01
Xylem Inc.
Conflict Minerals Report
For the Year Ended December 31, 2015
Xylem Inc. (the “Company”) has prepared this Report for the year ended December 31, 2015 to satisfy the requirements of Rule 13p-1 of the Securities Exchange Act of 1934 relating to conflict minerals (the “Rule”). The Rule creates a reporting requirement for Securities and Exchange Commission (SEC) registrants whose manufactured products contain conflict minerals that are necessary to the functionality or production of their products. For purposes of the Rule and this Report, “conflict minerals” are limited to cassiterite, columbite-tantalite (coltan), gold, wolframite, or their derivatives, tin, tantalum and tungsten.
Company and Product Overview
Xylem is a world leader in the design, manufacturing, and application of highly engineered technologies for the water industry. We are a leading equipment and service provider for water and wastewater applications with a broad portfolio of products and services addressing the full cycle of water, from collection, distribution and use, to the return of water to the environment. We sell our products in approximately 150 countries through a balanced distribution network consisting of our direct sales force and independent channel partners.
We manage our business in two segments, Water Infrastructure and Applied Water. Our Water Infrastructure segment focuses on the transportation, treatment and testing of water, offering a range of products including water and wastewater pumps, treatment and testing equipment, and controls. Our Applied Water segment encompasses the uses of water and focuses on the residential, commercial, industrial and agricultural markets, offering a wide range of products including pumps, valves, heat exchangers, controls and dispensing equipment systems.
We have manufacturing facilities in numerous countries producing thousands of parts. Our facilities procure materials and products globally and regionally, which are resold or assembled into our products.
There are multiple tiers in our supply chain and we do not have a direct relationship with smelters and refiners. We rely on our direct suppliers to provide information on the existence of, and the origin of, any conflict minerals contained in components and materials supplied to us, including the sources of any conflict minerals that are supplied to them from lower-tier suppliers. Our direct suppliers similarly rely on information provided by their suppliers.
Reasonable Country of Origin Inquiry
We determined that conflict minerals are necessary to the functionality and production of some of our products. Accordingly, we conducted a reasonable country of origin inquiry (RCOI) to determine whether the conflict minerals may have originated in the Democratic Republic of the Congo or an adjoining country (collectively, the “Covered Countries”) and whether the conflict minerals may have come from recycled or scrap sources.
We conducted an engineering analysis of the products we manufacture or contract to manufacture to identify products and components used in our manufacturing process that contain, or had a high probability of containing, conflict minerals. Our engineering departments then worked with sourcing departments across the Company to identify the associated direct suppliers (the “in-scope suppliers”).
We conducted a survey of 3160 in-scope suppliers using the Conflict Minerals Reporting Template (the “Template”) maintained by the Conflict-Free Sourcing Initiative (CFSI). The Template was developed to facilitate disclosure and communication of information regarding smelters and refiners. It includes questions regarding a supplier’s conflict-free policy, engagement with its direct suppliers, the origin of conflict minerals included in the supplier’s products, supplier due diligence and a list of the smelters and refiners in the supply chains of the supplier and its suppliers.
Based on our RCOI, we exercised further due diligence on the source and chain of custody of the conflict minerals contained in components and products provided by our in-scope suppliers, as required by the Rule.
Due Diligence
Our conflict minerals supply chain due diligence program was designed to conform, in all material respects, to the framework in The Organization for Economic Co-operation and Development’s (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, 2nd Edition and the related supplements for gold, tin, tantalum and tungsten (the “OECD Guidance”). We integrated the five steps recommended by the OECD Guidance as follows:
Step 1: Establish Strong Management Systems
Conflict Minerals Policy Statement
We adopted a Conflict Minerals Policy Statement that applies to all of our suppliers and is publicly available on our website at www.xyleminc.com under “Sustainability – Governance and Ethics – Conflict Minerals Policy Statement.”
Internal Team
We established a cross-functional team to implement and manage our conflict minerals compliance program. The team, led by our procurement group, includes representatives from our business and subject matter experts in the fields of engineering, information technology, legal, operations and procurement.
Control Systems
Our controls include our Code of Conduct and our Supplier Code of Conduct, which outline expected behaviors for our employees and suppliers. In addition, we added a compliance clause to new and renewed supplier contracts, setting forth our expectation that suppliers provide the product content information the Company needs to comply with our conflict minerals reporting obligations.
Grievance Mechanism
We have a Helpline that provides employees and suppliers with a mechanism to report violations or concerns related to our policies, including our Conflict Minerals Policy Statement and our Supplier Code of Conduct.
Step 2: Identify and Assess Risk in the Supply Chain
We adopted the CFSI’s approach, which attempts to trace the origin of the conflict minerals provided to us by identifying smelters, refiners or recyclers and scrap supplier sources. As discussed above, we surveyed 3160 in-scope suppliers using the Template in an effort to identify the origin, source, and chain of custody of conflict minerals contained in our products.
We conducted multiple rounds of follow-up with suppliers who were not responsive to our survey, primarily by email, but also by telephone. We received and processed responses from over 80% of our in-scope suppliers, and reviewed the responses against risk-assessment criteria to determine which supplier responses required further engagement. These criteria included untimely or incomplete responses, as well as inconsistencies with in data reported. Our follow-up process included a “red flag” identification and resolution process. We also followed up with suppliers to clarify responses or to obtain additional information, as needed.
Step 3: Design and Implement a Strategy to Respond to Identified Risks
As discussed under Step 2 above, we review survey responses against risk-assessment criteria, and work to resolve any red flags or inconsistencies identified. Risks are evaluated on a case-by-case basis; this flexible approach enables us to provide a risk-appropriate response.
Step 4: Independent Third-Party Audits of Supply Chain Due Diligence
We do not have a direct relationship with smelters or refiners and we do not perform or direct audits of smelters or refiners. We have leveraged the due diligence conducted on smelters and refiners through the CFSI’s Conflict-Free Smelter Program (the “CFSP”). The CFSP uses an independent third-party audit to identify smelters and refiners that have systems in place to assure sourcing of only conflict-free materials.
Step 5: Report on Supply Chain Due Diligence
We report annually on our conflict minerals due diligence program in our Form SD filed with the SEC and this related Report, which are publicly available on our website at www.xyleminc.com under “Investors – Financial Information – SEC Filings.”
Results of our RCOI and Due Diligence
Of the 3160 in-scope suppliers surveyed, approximately 80% responded by completing the Template or providing another form of conflict minerals statement or response regarding the source or origin of the conflict minerals contained in the materials or products supplied to the Company. Some of our in-scope suppliers reported that they had identified scrap or recycled sources of conflict minerals in their supply chains. We have a wide supplier base with varying levels of resources and sophistication and many of our suppliers are not themselves subject to the Rule. The majority of the responses we received provided information at the company or division level and/or did not contain conclusive information. Many suppliers were unable to provide the smelters or refiners used for materials supplied to us.
Based on the information obtained through our RCOI and the due diligence processes described above, for the year ended December 31, 2015, we do not have sufficient information to determine the country of origin for all of the conflict minerals used to manufacture our products. We have provided a list of smelters and refiners that may have been used to process conflict minerals in the Company’s supply chain as an Annex to this Report. The list includes facilities that have been certified by the CFSI as compliant with the relevant CFSP assessment protocol as of May 19, 2016 and is based on information reported by some of the Company’s in-scope suppliers. While the list is not comprehensive, it may also be over-inclusive, containing some smelters or refiners that are not in the Company’s supply chain.
Continuous Improvement Efforts to Mitigate Risks
To improve our conflict minerals program and mitigate related risk, we will continue to:
| • | Engage with suppliers in an effort to improve the quality of the information we receive and to increase the volume of product-specific responses. |
| • | Work with suppliers who provide incomplete or inconsistent information. |
| • | Refine our scoping approach, so that our efforts will be directed at the most relevant subset of our supply base. |
| • | Communicate to suppliers our expectations regarding compliance with the Company’s Conflict Minerals Policy Statement. |
| • | Conduct due diligence to improve the traceability of the minerals in our products and the overall transparency of our supply chain. |
Forward-Looking Statements
This Report contains “forward-looking statements” that are based on our current expectations and assumptions. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Forward-looking statements include any statements that are not historical and includes the statements made under the heading “Continuous Improvement Efforts to Mitigate Risks”. All forward-looking statements made in this Report are based on information available to the Company as of the date of this Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and its present expectations. These risks and uncertainties include, but are not limited to, the continued implementation of satisfactory traceability and other compliance measures by the Company and by our direct and indirect suppliers on a timely basis, or at all, and also include those risks set out under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015 and with subsequent filings we make with the SEC.
ANNEX
| METAL | SMELTER/REFINER | FACILITY LOCATION | ||
| Gold | Aida Chemical Industries Co. Ltd. | JAPAN | ||
| Gold | Allgemeine Gold- und Silberscheideanstalt A.G. | GERMANY | ||
| Gold | AngloGold Ashanti Córrego do Sítio Mineração | BRAZIL | ||
| Gold | Argor-Heraeus SA | SWITZERLAND | ||
| Gold | Asahi Pretec Corp | JAPAN | ||
| Gold | Asahi Refining Canada Limited | CANADA | ||
| Gold | Asaka Riken Co Ltd | JAPAN | ||
| Gold | Aurubis AG | GERMANY | ||
| Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | PHILIPPINES | ||
| Gold | Boliden AB | SWEDEN | ||
| Gold | C. Hafner GmbH + Co. KG | GERMANY | ||
| Gold | CCR Refinery - Glencore Canada Corporation | CANADA | ||
| Gold | DODUCO GmbH | GERMANY | ||
| Gold | Dowa | JAPAN | ||
| Gold | Eco-System Recycling Co., Ltd. | JAPAN | ||
| Gold | Elemetal Refining, LLC | UNITED STATES | ||
| Gold | Heimerle & Meule | GERMANY | ||
| 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 | JSC Ekaterinburg Non-Ferrous Metal Processing Plant | RUSSIAN FEDERATION | ||
| Gold | JSC Uralectromed | RUSSIAN FEDERATION | ||
| Gold | Kazzinc | KAZAKHSTAN | ||
| Gold | Kennecott Utah Copper LLC | UNITED STATES | ||
| Gold | Kojima Chemicals Co. Ltd | JAPAN | ||
| Gold | LS-Nikko Copper Inc. | KOREA | ||
| 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 USA Refining Corporation | UNITED STATES | ||
| Gold | METALÚRGICA MET-MEX PEÑOLES, S.A. DE C.V | MEXICO | ||
| Gold | Mitsubishi Materials Corporation | JAPAN | ||
| Gold | Mitsui Mining and Smelting Co., Ltd. | JAPAN | ||
| Gold | MMTC-PAMP India Pvt., Ltd. | INDIA | ||
| Gold | Moscow Special Alloys Processing Plant | RUSSIAN FEDERATION | ||
| Gold | Nadir Metal Rafineri San. Ve Tic. A.S. | TURKEY | ||
| Gold | Nihon Material Co. LTD | JAPAN | ||
| Gold | Ohura Precious Metal Industry Co., Ltd | JAPAN | ||
| Gold | OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastsvetmet) | RUSSIAN FEDERATION | ||
| Gold | PAMP SA | SWITZERLAND | ||
| 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 | Republic Metals Corporation | UNITED STATES | ||
| Gold | Royal Canadian Mint | CANADA | ||
| Gold | Schone Edelmetaal | NETHERLANDS | ||
| Gold | SEMPSA Joyeria Plateria SA | SPAIN | ||
| Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd | CHINA | ||
| Gold | Sichuan Tianze Precious Metals Co., Ltd. | CHINA | ||
| Gold | Singway TeCHINAology Co., Ltd. | TAIWAN | ||
| Gold | Sumitomo Metal Mining Co. Ltd. | JAPAN | ||
| Gold | SOE Shyolkovsky Factory of Secondary Precious Metals | RUSSIAN FEDERATION | ||
| Gold | Solar Applied Materials TeCHINAology Corp. | TAIWAN | ||
| Gold | Tanaka Kikinzoku Kogyo K.K. | JAPAN | ||
| Gold | Tokuriki Honten Co. Ltd | JAPAN | ||
| Gold | Umicore BRAZILsil 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 | Yamamoto Precious Metal Co., Ltd. | JAPAN | ||
| Gold | Yokohama Metal Co Ltd | JAPAN | ||
| Tantalum | Changsha South Tantalum Niobium Co., Ltd. | CHINA | ||
| Tantalum | Conghua Tantalum and Niobium Smeltry | CHINA | ||
| Tantalum | D Block Metals, LLC | UNITED STATES | ||
| Tantalum | Duoluoshan | CHINA | ||
| Tantalum | Exotech Inc. | UNITED STATES | ||
| Tantalum | F&X Electro—Materials Ltd. | CHINA | ||
| Tantalum | FIR Metals & Resource Ltd. | CHINA | ||
| Tantalum | Global Advanced Metals Aizu | JAPAN | ||
| Tantalum | Global Advanced Metals Boyertown | UNITED STATES | ||
| Tantalum | Guangdong Zhiyuan New Material Co., Ltd. | CHINA | ||
| Tantalum | H.C. Starck Co., Ltd. | THAILAND | ||
| Tantalum | H.C. Starck GmbH Goslar | GERMANY | ||
| Tantalum | H.C. Starck GmbH Laufenburg | GERMANY | ||
| Tantalum | H.C. Starck Hermsdorf GmbH | GERMANY | ||
| Tantalum | H.C. Starck Inc. | UNITED STATES | ||
| Tantalum | H.C. Starck Ltd. | JAPAN | ||
| Tantalum | H.C. Starck Smelting GmbH & Co.KG | GERMANY | ||
| Tantalum | Hengyang King Xing Lifeng New Materials Co., Ltd. | CHINA | ||
| Tantalum | Hi-Temp Specialty Metals, Inc. | USA | ||
| Tantalum | Jiangxi Dinghai Tantalum & Niobium Co., Ltd. | CHINA | ||
| Tantalum | JiuJiang JinXin Nonferrous Metals Co. Ltd. | CHINA | ||
| Tantalum | JiuJiang Tambre Co. Ltd. | CHINA | ||
| Tantalum | Jiujiang Zhongao Tantalum & Niobium Co., Ltd. | CHINA | ||
| Tantalum | KEMET Blue Metals | MEXICO | ||
| Tantalum | KEMET Blue Powder | UNITED STATES | ||
| Tantalum | King-Tan Tantalum Industry Ltd | CHINA | ||
| Tantalum | LMS 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 | Plansee SE Reutte | AUSTRIA | ||
| Tantalum | QuantumClean | UNITED STATES | ||
| Tantalum | Resind Indústria e Comércio Ltda. | BRAZIL | ||
| Tantalum | RFH Tantalum Smeltry Co., Ltd. | CHINA | ||
| Tantalum | Solikamsk Magnesium Works OAO | RUSSIAN FEDERATION | ||
| Tantalum | Taki Chemicals | JAPAN | ||
| Tantalum | Telex | USA | ||
| Tantalum | Tranzact, Inc. | UNITED STATES | ||
| Tantalum | Ulba Matallurgical Plant JSC | KAZAKHSTAN | ||
| Tantalum | XinXing HaoRong Electronic Material Co., Ltd. | CHINA | ||
| Tantalum | Yichun Jin Yang Rare Metal Co., Ltd. | CHINA | ||
| Tantalum | Zhuzhou Cement Carbide | CHINA | ||
| Tin | Alpha | UNITED STATES | ||
| Tin | Bangka Tin, Mantok, PT Timah (Persero) TBK | INDONESIA | ||
| Tin | Cooper Santa | BRAZIL | ||
| Tin | CV Ayi Jaya | INDONESIA | ||
| Tin | CV Gita Pesona | INDONESIA | ||
| Tin | CV Prima Timah Utama | INDONESIA | ||
| Tin | CV Serumpun Sebalai | INDONESIA | ||
| Tin | CV United Smelting | INDONESIA | ||
| Tin | CV Venus Inti Perkasa | INDONESIA | ||
| Tin | Rui Da Hung | TAIWAN | ||
| Tin | Dowa | JAPAN | ||
| Tin | Elmet S.L.U. (Metallo Group) | SPAIN | ||
| Tin | EM Vinto | BOLIVIA | ||
| Tin | Fenix Metals | POLAND | ||
| Tin | Geiju Non-Ferrous Metal Processing Co. Ltd. | CHINA | ||
| Tin | Magnu’s Minerais Metais e Ligas LTDA | BRAZIL | ||
| Tin | Malaysia Smelting Corp | MALAYSIA | ||
| Tin | Melt Metais e Ligas S/A | BRAZIL | ||
| Tin | Metallo-Chimique N.V. | BELGIUM | ||
| Tin | Mineracao Taboca S.A. | BRAZIL | ||
| Tin | Minsur | PERU | ||
| Tin | Mitsubishi Materials Corporation | JAPAN | ||
| Tin | O.M. Manufacturing (Thailand) Co., Ltd. | THAILAND | ||
| Tin | O.M. Manufacturing Philippines, Inc. | PHILIPPINES | ||
| Tin | Operaciones Metalurgical S.A. | BOLIVIA | ||
| Tin | PT Artha Cipta Langgeng | INDONESIA | ||
| Tin | PT Refined Bangka Tin | INDONESIA | ||
| Tin | PT Tambang Timah | INDONESIA | ||
| Tin | Yunnan Tin Company, Ltd. | CHINA | ||
| Tungsten | Ganzhou Seadragon W & Mo Co., Ltd. | CHINA | ||
| Tungsten | Ganzhou Yatai Tungsten Co., Ltd. | CHINA | ||
| Tungsten | H.C. Starck GmbH | GERMANY | ||
| Tungsten | H.C. Starck Smelting GmbH & Co.KG | GERMANY | ||
| Tungsten | Hunan Chuangda Vanadium Tungsten Co., Ltd. Wuji | CHINA | ||
| Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. | CHINA | ||
| Tungsten | Hydrometallurg, JSC | RUSSIAN FEDERATION | ||
| Tungsten | Jiangxi Gan Bei Tungsten Co., Ltd. | CHINA | ||
| Tungsten | Jiangxi Minmetals Gao’an Non-ferrous Metals Co., Ltd. | CHINA | ||
| Tungsten | Jiangxi Xiushui Xianggan Nonferrous Metals Co., Ltd. | CHINA | ||
| Tungsten | Malipo Haiyu Tungsten Co., Ltd. | CHINA | ||
| Tungsten | Niagara Refining LLC | UNITED STATES | ||
| Tungsten | Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC | VIETNAM | ||
| Tungsten | Vietnam Youngsun Tungsten Industry Co., Ltd | VIETNAM | ||
| Tungsten | Xiamen Tungsten (H.C.) Co., Ltd. | CHINA | ||
| Tungsten | Xinhai Rendan Shaoguan Tungsten Co., Ltd. | CHINA | ||