Allison Transmission Holdings, Inc.
Conflict Minerals Report
For the Year Ended December 31, 2015
This Conflict Minerals Report for the year ended December 31, 2015 is presented to comply with Rule 13p-1 (“Rule 13p-1”) under the Securities Exchange Act of 1934, as amended. Rule 13p-1 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 and imposes certain reporting obligations on SEC registrants who manufacture or contract to manufacture products that contain conflict minerals which are necessary to the functionality or production of their products. “Conflict minerals” are defined as tantalum, tin, tungsten and gold. These requirements apply to registrants whatever the geographic origin of the conflict minerals and whether or not they fund armed conflict in the Democratic Republic of Congo (“DRC”) or an adjoining country (together with the DRC, the “Covered Countries”). This Conflict Minerals Report has not been subject to an independent private sector audit.
Allison Transmission Holdings, Inc. and its subsidiaries (“Allison”, “we,” “us” or “our”) design and manufacture fully-automatic transmissions for medium- and heavy-duty commercial vehicles, medium- and heavy-tactical U.S. defense vehicles and hybrid-propulsion systems for transit buses. We generate our net sales primarily from the sale of transmissions, transmission parts, support equipment, defense kits, engineering services and extended transmission coverage to a wide array of original equipment manufacturers, distributors and the U.S. government.
We conducted an analysis of our products and found that conflict minerals are necessary to the production or functionality of our commercial, defense and hybrid products.
A complete description of our products can be found in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on February 19, 2016.
2. Reasonable Country of Origin Inquiry
We conducted a good faith reasonable country of origin inquiry (“RCOI”) to determine whether the necessary conflict minerals originated in the Covered Countries. As a company engaged in the design and manufacture of commercial and defense fully-automatic transmissions and hybrid-propulsion systems for transit buses, we are several levels removed from the actual mining of conflict minerals. We do not make purchases of raw ore or unrefined conflict minerals and we conduct no purchasing activities in the Covered Countries. In order to determine whether conflict minerals used in the manufacture of our products originated in the Covered Countries, we relied on our direct suppliers to provide information on the origin of the conflict minerals contained in components and materials supplied to us, including sources of conflict minerals that are supplied to them from their suppliers.
Scope of RCOI. Our RCOI included conducting an inquiry of each of our direct suppliers using Conflict-Free Sourcing Initiative’s (“CFSI”) Conflict Minerals Reporting Template (“CMRT”) to identify the smelters and refiners responsible for processing the conflict minerals.
To assist in collecting data from and engaging with our suppliers, we engaged a third party data collection and software vendor to conduct outreach and training as well as archive the completed supplier responses. As part of our supply-chain survey, we received representations from our suppliers regarding the source of conflict minerals and compared the smelters and refiners identified in the CMRT responses against the list of smelter and refiner facilities which have been identified as conflict free by programs such as CFSI’s Conflict Free Smelter Program for conflict minerals. In an effort to obtain the highest practical response rate, our process included multiple rounds of communication and follow-up through mail, email and telephone calls. We created and maintained a database of this information.
RCOI Results. Of our direct suppliers, 100% were within the scope of our RCOI. We received responses from more than 85% of our direct suppliers. We reviewed the responses against criteria developed to determine which responses required additional engagement with our suppliers, including incomplete responses and inconsistencies within the data reported. We worked with these suppliers to obtain a revised response or additional clarity regarding their submission.
3. Due Diligence
We conducted due diligence on the source and chain of custody of the conflict minerals that are included in our products and for which, based on our RCOI, we have not been able to determine whether the conflict minerals may have originated in the Covered Countries and may not have come from recycled or scrap sources.
Design of Due Diligence. Allison’s due diligence procedures were designed to conform with the Organisation of Economic Co-Operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, which is an internationally recognized due diligence framework. Our due diligence process included:
Establishing Company Management Systems. We adopted a conflict minerals policy that governs the supply-chain of conflict minerals from the Covered Countries. In addition, we organized an internal management team to support our supply chain due diligence efforts. This cross-functional team, led by our Chief Compliance Officer and a team of subject matter experts from relevant functional areas, oversees our conflict minerals due diligence process. Senior management and the Audit Committee of our Board of Directors are briefed about the results of our due diligence efforts on a regular basis.
Identifying and Assessing Risk in the Supply Chain. Through our RCOI process, we sent all of our direct suppliers a CMRT to obtain information about the source of any conflict minerals. Our efforts largely focused on confirming the accuracy and quality of the representations our direct suppliers made regarding the source and chain of custody of their conflict minerals and comparing the smelters and refiners identified in the CMRT responses against the list of smelter and refiner facilities which have been identified as “conflict free”.
Designing and Implementing a Strategy to Respond to Risks. Our conflict minerals team is responsible for identifying and responding to risks in our supply chain. In addition, we monitor and track information received from suppliers, including a list of smelters and refiners identified through CMRT responses.
Supporting Independent Third-Party Audits of Supply Chain. We do not have a direct relationship with the conflict minerals smelters and refiners; therefore, we rely on the CFSI’s Conflict-Free Smelter Program to manage and report results of the independent third-party audits and the related certifications.
Reporting on Supply Chain Due Diligence. This conflict minerals report is being filed with the SEC as an exhibit to our specialized disclosure report on Form SD and is available on our website at www.allisontransmission.com.
4. Due Diligence Results.
Because we have not received sufficient and complete responses from all suppliers and many of the supplier responses provided data at a company level rather than at a product level, we do not have sufficient information to conclusively determine the countries of origin or chain of custody of conflict minerals in our products. Based the CMRT responses from our direct suppliers and our own due diligence efforts, we believe that, to the best of our knowledge, the smelters and refiners listed in Annex A to this conflict minerals report may have been used to process the conflict minerals contained in our products.
5. Future Due Diligence Measures.
As we further develop our due diligence program in calendar year 2016, we intend to implement the following steps to improve the information gathered from our due diligence efforts and to further mitigate the risk that our necessary conflict minerals do not benefit armed groups:
• include language in new or renewed supplier contracts that requires the supplier to support our conflict minerals program;
• engage with suppliers to increase the response rate, completeness and accuracy of supply-chain surveys;
• inform suppliers identified as sourcing from non-conflict free smelters to move towards using conflict free smelters within a reasonable time frame, depending on the criticality of the specific part and the availability of alternative suppliers;
• continue to refine due diligence efforts to identify and address gaps in data in order to arrive at an accurate list of smelters and refiners; and
• monitor relevant trade associations and the OECD to evaluate best practices in determining whether products contain conflict minerals.
Smelter List and Country of Origin List
Metal Smelter Name (* indicates CFSI Compliant Conflict-Free Smelter, ** indicates CFSI Active Smelter)
Gold Advanced Chemical Company **
Gold Aida Chemical Industries Co. Ltd.*
Gold Al Etihad Gold Refinery DMCC
Gold Allgemeine Gold-und Silberscheideanstalt A.G.*
Gold Almalyk Mining and Metallurgical Complex (AMMC)**
Gold AngloGold Ashanti Córrego do Sítio Minerção*
Gold Argor-Heraeus SA*
Gold Asahi Pretec Corp*
Gold Asaka Riken Co Ltd*
Gold Atasay Kuyumculuk Sanayi Ve Ticaret A.S.
Gold Aurubis AG*
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 + Métaux SA**
Gold Chimet S.p.A.*
Gold Chugai Mining
Gold Daejin Indus Co., Ltd.**
Gold Daye Non-Ferrous Metals Mining Ltd.
Gold Do Sung Corporation**
Gold Doduco*
Gold Dowa*
Gold Eco-System Recycling Co., Ltd.*
Gold Emirates Gold DMCC*
Gold Faggi Enrico S.p.A.**
Gold Fidelity Printers and Refiners Ltd.
Gold FSE Novosibirsk Refinery*
Gold Gansu Seemine Material Hi-Tech Co., Ltd.
Gold Geib Refining Corporation**
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 Heimerle + Meule GmbH*
Gold Heraeus Ltd. Hong Kong*
Gold Heraeus Precious Metals GmbH & Co. KG*
Gold Hunan Chenzhou Mining Group Co., Ltd.
Gold Hwasung CJ Co., Ltd.
Gold Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited*
Gold Ishifuku Metal Industry Co., Ltd.*
Gold Istanbul Gold Refinery*
Gold Japan Mint*
Gold Jiangxi Copper Company Limited*
Gold Johnson Matthey Inc*
Gold Johnson Matthey Ltd*
Gold JSC Ekaterinburg Non-Ferrous Metal Processing Plant*
Gold JSC Uralectromed*
Gold JX Nippon Mining & Metals Co., Ltd*
Gold Kaloti Precious Metals
Gold Kazakhmys Smelting LLC
Gold Kazzinc Ltd*
Gold Kennecott Utah Copper LLC*
Gold Gold Kojima Chemicals Co., Ltd*
Gold Korea Zinc Co. Ltd.**
Gold Kyrgyzaltyn JSC
Gold L' azurde Company For Jewelry
Gold Lingbao Gold Company Limited
Gold Lingbao Jinyuan Tonghui Refinery Co., Ltd.
Gold LS-NIKKO Copper Inc.*
Gold Luoyang Zijin Yinhui Gold Refinery
Co., Ltd. Gold Materion*
Gold Matsuda Sangyo Co., Ltd.*
Gold Met-Mex Peñoles, S.A.*
Gold Metalor Technologies (Hong Kong) Ltd*
Gold Metalor Technologies (Singapore) Pte. Ltd.*
Gold Metalor Technologies (Suzhou) Ltd.**
Gold Metalor Technologies SA*
Gold Metalor USA Refining Corporation*
Gold Mitsubishi Materials Corporation*
Gold Mitsui Mining and Smelting Co., Ltd.*
Gold MMTC-PAMP India Pvt., Ltd.*
Gold Morris and Watson
Gold Moscow Special Alloys Processing Plant*
Gold Gold Navoi Mining and Metallurgical Combinat**
Gold Nihon Material Co. LTD*
Gold Ögussa Österreichische Gold- und Silber-Scheideanstalt GmbH*
Gold Ohio Precious Metals, LLC*
Gold Ohura Precious Metal Industry Co., Ltd*
Gold OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet)*
Gold PAMP SA*
Gold Penglai Penggang Gold Industry Co., Ltd.
Gold Prioksky Plant of Non-Ferrous Metals*
Gold PT Aneka Tambang (Persero) Tbk*
Gold PX Précinox SA*
Gold Rand Refinery (Pty) Ltd*
Gold Republic Metals Corporation*
Gold Royal Canadian Mint*
Gold Sabin Metal Corp.
Gold Samduck Precious Metals**
Gold SAMWON METALS Corp.
Gold SAXONIA Edelmetalle GmbH**
Gold Schone Edelmetaal*
Gold SEMPSA Joyería Platería SA*
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 Sumitomo Metal Mining 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 Torecom**
Gold Umicore Brasil Ltda*
Gold Umicore Precious Metals Thailand*
Gold Umicore SA Business Unit Precious Metals Refining*
Gold United Precious Metal Refining, Inc.*
Gold Valcambi SA*
Gold Western Australian Mint trading as The Perth Mint*
Gold WIELAND Edelmetalle GmbH**
Gold YAMAMOTO PRECIOUS METAL CO., LTD.*
Gold Yokohama Metal Co Ltd*
Gold Yunnan Copper Industry Co Ltd
Gold Zhongyuan Gold Smelter of Zhongjin Gold Corporation*
Gold Zijin Mining Group Co. Ltd*
Tantalum Changsha South
Tantalum Niobium Co., Ltd.*
Tantalum Conghua Tantalum and Niobium Smeltry*
Tantalum D Block Metals, LLC*
Tantalum Duoluoshan*
Tantalum Exotech Inc.*
Tantalum F&X Electro-Materials Ltd.*
Tantalum FIR Metals & Resource Ltd.*
Tantalum Global Advanced Metals Boyertown*
Tantalum Global Advanced Metals*
Tantalum Guangdong Zhiyuan New Material Co., Ltd.*
Tantalum H.C. Starck Co., Ltd.*
Tantalum H.C. Starck GmbH Goslar*
Tantalum H.C. Starck GmbH Laufenburg*
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 Hengyang King Xing Lifeng New Materials Co., Ltd.*
Tantalum Hi-Temp* Tantalum Jiangxi Dinghai Tantalum & Niobium Co., Ltd.* Tantalum JiuJiang JinXin Nonferrous Metals Co., Ltd.*
Tantalum Jiujiang Tanbre Co., Ltd.*
Tantalum Jiujiang Zhongao Tantalum & Niobium Co., Ltd.*
Tantalum KEMET Blue Metals*
Tantalum Kemet Blue Powder*
Tantalum King-Tan Tantalum Industry Ltd* Tantalum LSM Brasil S.A.* Tantalum Metallurgical Products India (Pvt.) Ltd.*
Tantalum Mineração Taboca S.A.*
Tantalum Mitsui Mining & Smelting*
Tantalum Molycorp Silmet A.S.*
Tantalum Ningxia Orient Tantalum Industry Co., Ltd.*
Tantalum Plansee SE Liezen* Tantalum Plansee SE Reutte*
Tantalum QuantumClean* Tantalum Resind Indústria e Comércio Ltda.*
Tantalum RFH Tantalum Smeltry Co., Ltd* Tantalum Solikamsk Metal Works* Tantalum Taki Chemicals* Tantalum Telex*
Tantalum Tranzact, Inc.* Tantalum Ulba*
Tantalum XinXing HaoRong Electronic Material Co., Ltd.*
Tantalum Yichun Jin Yang Rare Metal Co., Ltd.*
Tantalum Zhuzhou Cement Carbide* Tin Alpha*
Tin An Vinh Joint Stock Mineral Processing Company**
Tin Chenzhou Yunxiang Mining Smelting Company LTD**
Tin China Tin Group Co., Ltd.*
Tin CNMC (Guangxi) PGMA Co. Ltd. Tin Cooper Santa*
Tin CV Ayi Jaya* Tin CV Gita Pesona* Tin CV JusTindo*
Tin CV Nurjanah*
Tin CV Serumpun Sebalai* 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 Elmet S.L.U. (Metallo Group)*
Tin EM Vinto*
Tin Estanho de Rondônia S.A.
Tin Fenix Metals*
Tin Gejiu Jin Ye Mineral Co., Ltd.**
Tin Gejiu Kai Meng Industry and Trade LLC**
Tin Gejiu Non-Ferrous Metal Processing Co. Ltd.*
Tin Gejiu Yunxin Nonferrous Electrolysis Co., Ltd.**
Tin Gejiu Zi-Li Tin Huichang Jinshunda Tin Co. Ltd
Tin Jiangxi Ketai Advanced Material Co., Ltd.*
Tin Jiangxi Nanshan Tin Linwu Xianggui Ore Smelting Co., 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-CHIMIQUE N.V. (MC)*
Tin Mineração Taboca S.A.* Tin Minsur*
Tin Mitsubishi Materials Corporation*
Tin Nghe Tinh Non-Ferrous Metals Joint Stock Company**
Tin O.M. Manufacturing (Thailand) Co., Ltd.*
Tin O.M. Manufacturing Philippines, Inc.*
Tin Operaciones Metalurgical S.A.*
Tin Phoenix Metal Ltd.**
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 BilliTin Makmur Lestari*
Tin PT Bukit Timah*
Tin PT Cipta Persada Mulia*
Tin PT DS Jaya Abadi*
Tin PT DS Jaya Abadi**
Tin PT Eunindo Usaha Mandiri*
Tin PT Inti Stania Prima*
Tin PT Karimun Mining**
Tin PT Mitra Stania Prima*
Tin PT Panca Mega Persada*
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 Tambang Timah*
Tin PT Timah (Persero) Tbk Mentok*
Tin PT Tinindo Inter Nusa*
Tin PT Tirus Putra Mandiri Tin PT Tommy Utama*
Tin PT Wahana Perkit Jaya*
Tin Resind Indústria e Comércio Ltda.*
Tin Rui Da Hung* Tin Soft Metais, Ltda.* Tin Thaisarco*
Tin Tuyen Quang Non-Ferrous Metals Joint Stock Company**
Tin VQB Mineral and Trading Group JSC*
Tin White Solder Metalurgia e Mineração Ltda.*
Tin Yunnan Chengfeng Non-ferrous Metals Co.,Ltd.**
Tin Yunnan Tin Company, Ltd.* Tungsten A.L.M.T. Corp.*
Tungsten Asia Tungsten Products Vietnam Ltd.*
Tungsten Chenzhou Diamond Tungsten Products Co., Ltd.*
Tungsten Chongyi Zhangyuan Tungsten Co Ltd*
Tungsten Dayu Jincheng Tungsten Industry Co., Ltd.
Tungsten Dayu Weiliang Tungsten Co., Ltd.
Tungsten Fujian Jinxin Tungsten Co., Ltd.*
Tungsten Ganxian Shirui New Material Co., Ltd.
Tungsten Ganzhou Huaxing Tungsten Products Co., Ltd.*
Tungsten Ganzhou Jiangwu Ferrotungsten Co., Ltd.*
Tungsten Ganzhou Non-ferrous Metals Smelting Co., Ltd.
Tungsten Ganzhou Non-ferrous Metals Smelting Co., Ltd.**
Tungsten Ganzhou Seadragon W & Mo Co., Ltd.*
Tungsten Ganzhou Yatai Tungsten Co., Ltd.*
Tungsten Global Tungsten & Powders Corp.*
Tungsten Guangdong Xianglu Tungsten Co., Ltd.*
Tungsten H.C. Starck GmbH*
Tungsten H.C. Starck Smelting GmbH & Co.KG*
Tungsten Hunan Chenzhou Mining Group Co., Ltd.*
Tungsten Hunan Chuangda Vanadium Tungsten Co., Ltd. Wuji*
Tungsten Hunan Chun-Chang Nonferrous Smelting & Concentrating 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 Minmetals Gao'an Non-ferrous Metals Co., Ltd.
Tungsten Jiangxi Xinsheng Tungsten Industry Co., Ltd.**
Tungsten Jiangxi Xiushui Xianggan Nonferrous Metals 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 Hütten AG*
Tungsten Wolfram Company CJSC Tungsten Xiamen Tungsten (H.C.) Co., Ltd.* Tungsten Xiamen Tungsten Co., Ltd*
Tungsten Xinhai Rendan Shaoguan Tungsten Co., Ltd.*
Country of Origin List 3
Angola France Portugal Argentina Germany Republic of Congo Australia Guyana Russia Austria Hungary Rwanda Belgium India Sierra Leone Bolivia Indonesia Singapore Brazil Ireland Slovakia Burundi Israel South Africa Cambodia Japan South Korea Canada Kazakhstan South Sudan Central African Republic Kenya Spain Chile Laos Suriname China Luxembourg Switzerland Colombia Madagascar Taiwan Côte D'Ivoire Malaysia Tanzania Czech Republic Mongolia Thailand Democratic Republic of Congo Mozambique Uganda Djibouti Myanmar United Kingdom Ecuador Namibia United States of America Egypt Netherlands Vietnam Estonia Nigeria Zambia Ethiopia Peru Zimbabwe
3 The CFSI generally does not specify individual countries of origin of the conflict minerals processed by compliant smelters and refiners and thus we were not able to determine with certainty the specific countries of origin of the conflict minerals processed by the listed compliant smelters and refiners. In addition, for some of the listed compliant smelters and refiners, origin information is not disclosed. The list is based on the country of origin data provided to the CFSI for compliant smelters only.
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