AIRM Air Methods Corp.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM SD

Specialized Disclosure Report

Air Methods Corporation

(Exact name of registrant as specified in its charter)

 

Crystal L. Gordon, Esq. General Counsel, Secretary and Senior Vice President (303) 792-7400

(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:

☒

Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2014.

 

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INFORMATION TO BE INCLUDED IN THE REPORT

 

Section 1 - Conflict Minerals Disclosure

 

Item 1.01 Conflict Minerals Disclosure and Report

 

The Company has concluded in good faith that during 2014:

 

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The Company manufactured and contracted to manufacture products as to which conflict minerals are necessary to the functionality or production of such products.

 

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Based on a reasonable country of origin inquiry, the Company knows or has reason to believe that a portion of its necessary conflict minerals originated or may have originated in one or more Covered Countries and knows or has reason to believe that those necessary conflict minerals may not be from recycle or scrap sources.

In accordance with Rule 13p-1, the Company has filed this Specialized Disclosure Form (Form SD) and the associated Conflict Minerals Report (the “Report”) and both reports will be posted to a publically available Internet site at www.airmethods.com.

Item 1.02 Exhibits

The Company has contemporaneously with this Form SD filed the Report, which is attached as Exhibit 1.01.

Section 2 - Exhibits

 

Item 2.01 Exhibits

 

List below the following exhibit filed as part of this report.

 

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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.

 

 

 

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CONFLICT MINERALS REPORT

This is the Conflict Minerals Report (the “Report”) of Air Methods Corporation (the “Company”) for the reporting period from January 1 to December 31, 2014,  in accordance with Rule 13p1-1 (17 CFR 240.13p-1) (“Rule 13p-1”) under Section 13(p) of the Securities Exchange Act of 1934 (the “Exchange Act”).  Please refer to Form SD for definitions of the terms used in this Report, unless otherwise defined herein.

This Report has not been subject to an independent private sector audit, nor is such an audit required under Rule 13p-1and the guidance of the Securities Exchange Commission.

1.	Company Background

The Company, a Delaware corporation, was established in 1982 and serves as the largest provider of air medical emergency transport services and systems throughout the United States of America.  As of December 31, 2014, the Company’s Air Medical Services Division provided air medical transportation services in 41 states to the general population as an independent service and to hospitals or other institutions under exclusive operating agreements.  The Company transports persons requiring intensive medical care from either the scene of an accident or general care hospitals to highly skilled trauma centers or tertiary care centers.  In addition, the Company’s Tourism Division provides helicopter tours and charter flights, primarily focusing on tours of the Grand Canyon and the Hawaiian Islands.

The Company’s United Rotorcraft Division designs, manufactures, and certifies modular medical interiors, multi-mission interiors, and other aerospace and medical transport products.  These interiors and other products range from basic life support to intensive care suites to advanced search and rescue systems.  With a full range of engineering, manufacturing, and certification capabilities, the United Rotorcraft Division has also designed and integrated aircraft communication, navigation, environmental control, structural, and electrical systems.  The United Rotorcraft Division’s manufacturing capabilities include avionics, electrical, composites, machining, welding, sheet metal, and upholstery.  The United Rotorcraft Division also offers quality assurance and certification services pursuant to its Federal Aviation Administration Parts Manufacturer Approvals and ISO9001:2000 certifications.

2.	Overview of Covered Products

 

As set forth in Section 1 of this Report, the Company is primarily a service provider.  The Company does manufacture certain products through its United Rotorcraft Division, and contracts for the manufacture of products with third-party suppliers.  In accordance with Section 13(p) of the Exchange Act and Rule 13p-1, the Company conducted a detailed internal review to determine whether the products manufactured or contracted to be manufactured by the Company contain conflict minerals necessary to the functionality or production of such products (“Covered Products”).  The Company identified the following categories of Covered Products:

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Modular medical interiors

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Multi-mission medical interiors

 

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Miscellaneous aerospace and medical transport products to include basic life support suites, intensive care suites and advanced search and rescue systems

The Company does not itself conduct any mining of conflict minerals, does not make purchases of raw ore or unrefined conflict minerals, and makes no purchases of products in the Democratic Republic of Congo or any of its adjoining countries (“Covered Countries”).

3.	Reasonable Country of Origin Inquiry

The Company then proceeded with a Reasonable Country of Origin Inquiry (“RCOI”) that employed a combination of measures to determine whether the necessary conflict minerals in the Company’s Covered Products originated from the Covered Countries.  The Company’s primary means of determining country of origin of necessary conflict minerals was by conducting a comprehensive survey of all 151 of the Company’s direct suppliers that could provide the Company with components or materials containing conflict minerals (“In-Scope Suppliers”); the Company determined that an additional 151 suppliers did not need to be surveyed because of the nature of the components and materials they sell to the Company.  The Company’s purchasing department has primary responsibility for the RCOI survey and maintains a detailed log of all RCOI survey efforts made.

The Company provided each In-Scope Supplier with a simple and clear form that it developed, called a Conflict Minerals Certification, providing multiple options with respect to whether conflict minerals are included in the In-Scope Supplier’s products and, if so, inquiries regarding origin.  The Conflict Minerals Certification is provided to all new suppliers as well, in order to ensure ongoing compliance.

Of the 151 In-Scope Suppliers who were surveyed through the RCOI, the Company received 122 responses, for an overall return rate of approximately 80.1%.  Seventy-eight of the In-Scope Suppliers who responded to the Company’s RCOI stated that their products do not contain conflict minerals, 36 stated that their products do contain conflict minerals, and eight refused to answer the Company’s survey.  Based on this data, the Company has confirmation that, at a minimum, approximately 23.8% of its In-Scope Suppliers provide it with materials and components that contain conflict minerals.  The Company is following up to encourage responses from the 29 In-Scope Suppliers who did not respond to the Company’s survey.

All of the In-Scope Suppliers whose products contain conflict minerals responded either that (i) such conflict minerals do not originate from the Covered Countries, or (ii) they are unable to determine the country of origin or such conflict minerals at this time.  Based on the information provided by its In-Scope Suppliers, the Company was able to identify a number of facilities that are listed in the Conflict Free Sourcing Initiative’s Conflict Minerals Reporting Template smelter reference list or in the United States Department of Commerce’s list of “all known conflict mineral processing facilities worldwide” (collectively, “Known Facilities”) that may have been used to process conflict minerals in the Company’s Covered Products.  Such Known Facilities are listed in Annex A attached to this Report.  It is difficult to confirm the accuracy of the information compiled in Annex A, as it was collected and transmitted through many levels of the supply chain for the Company’s products.  Information that was provided to the Company by its In-Scope Suppliers was not necessarily limited to facilities that have been confirmed to contribute necessary conflict minerals to a Company product.

 

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The Company continues to follow up with its In-Scope Suppliers based on their responses to the survey to attempt to identify the facilities used to process the conflict minerals used in its products, as well as the countries of origin of the conflict minerals used by those facilities.  As the Company’s engagement with its supply chain evolves, the Company’s list of facilities may change to reflect improvements in the quality of information provided to the Company.

4.	Due Diligence Program

To the extent its sourcing of conflict minerals could not be determined, the Company established and implemented a due diligence program both to determine the source and chain of custody of necessary conflict minerals contained in the products manufactured or contracted to be manufactured by the Company and to ensure that any conflict minerals sourced from the Covered Countries do not directly or indirectly benefit armed groups.

In establishing and conducting its due diligence, the Company utilized the Organisation for Economic Co-operation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“OECD Guidance”), an internationally recognized due diligence framework.

Based on the OECD Guidance, the Company took the following steps:

A.

Establishing a Conflict Minerals Policy Manual and Conflict Minerals Policies and Procedures.  As recommended by Step 1 of the OECD Guidance, the Company’s Conflicts Minerals Policy Manual sets forth the Company’s policy regarding use of conflict minerals in its products.  Specifically, it is the Company’s policy to refrain, to the extent possible, to do business with suppliers who supply or manufacture components, parts, or products containing conflict minerals from one or more Covered Countries unless such conflict minerals are sourced from socially and environmentally responsible sources that do not directly or indirectly benefit or finance armed groups in the Covered Countries.  The Company, where possible, will source from smelters and refiners validated as being conflict free, and require direct and indirect suppliers to do the same.

In addition, the Conflicts Minerals Policy Manual enumerates specific requirements for its suppliers regarding conflict minerals due diligence and use, and how the Company will respond to suppliers who violate the Company’s Conflict Minerals Policy Manual.  The Company has established specific corporate responsibilities to oversee and implement its Conflict Minerals Policies and Procedures, principally with the Company’s purchasing and legal departments.

B.

Risk Assessment and Response.  As recommended by Steps 2 and 3 of the OECD Guidance, the Company’s Conflict Minerals Policy Manual states clearly that any supplier violating the Company policy will be asked to commit to and implement a corrective action plan, based on the nature of the policy violation.  The Company’s Conflict Minerals Policy Manual further states that prolonged violations will result in possible termination of business.

 

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To implement this, the Company continues to incorporate its Conflict Minerals Compliance Program, including its evaluation of and follow-up regarding its Conflict Minerals Certifications, into its broader supplier control/vendor approval processes.  These rigorous procedures include a number of processes and tools, including vendor self-audit and periodic review by the Company’s purchasing and other departments.  The Company will continue to evaluate this Conflict Minerals Compliance Program throughout 2015 with the aim of making further improvements to its risk assessment and response process.

As of December 31, 2014, the Company did not identify any specific conflict minerals-related risks or violations of its Conflict Minerals Policy but continues to evaluate these risks through its engagement with suppliers.

C.

Audit of Supply Chain.  As the Company is a downstream company that does not have a direct relationship with any smelters or refiners, it is difficult to participate in any direct audits of such facilities.  However, the Company’s Policies and Procedures Manual establishes that the Company will obtain, in due course, independent private-sector audits if required under Rule 13p-1 and the guidance of the Securities Exchange Commission.  As stated above, the Company did not obtain such an audit for its 2014 due diligence, as an independent private-sector audit of the form contemplated by Rule 13p-1 was not required.

D.

Report on Supply Chain Due Diligence.  In accordance with Rule 13p-1 and Step 5 of the OECD Guidance, the Company will file this Report, the associated Form SD, and other information relevant to this issue to a publically available Internet site at www.airmethods.com.

5.	Determination

As a result of its due diligence efforts described above, the Company has determined in good faith that, for calendar year 2014, it does not have sufficient information to conclusively determine the countries of origin of the conflict minerals contained in its Covered Products or whether the conflict minerals in its Covered Products are from recycled or scrap sources.  In this light, the Company is continuing to implement a due diligence process that is designed to minimize the risk that its minerals supply chain could benefit or finance armed groups in the Covered Countries.

6.	Next Steps

In the next compliance period, the Company intends to take steps to continue with its RCOI efforts and to improve its due diligence process to identify the processing facilities and countries of origin of the conflict minerals used in its products, and mitigate the risk that its necessary conflict minerals benefit or finance armed groups in the Covered Countries.  Such steps include:

 

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Continuing to conduct follow-up inquiries with the Company’s In-Scope Suppliers that use conflict minerals in the products they provide to the Company in an effort to determine additional facilities that process conflict minerals and ultimately to identify the source(s) of such conflict minerals.

 

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If an In-Scope Supplier’s products contain conflict minerals that are sourced from a Covered Country, the Company will endeavor to promptly find an alternative supplier.

 

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If any products supplied to the Company can only be acquired through a single supplier and such products contain conflict minerals from any of the Covered Countries, the Company will discontinue its use of such products or, if this is not possible due to manufacturing, regulatory, or other constraints, continue using such products until an alternative source is found and qualified.

 

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ANNEX A

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