<SEC-DOCUMENT>0001193125-14-221310.txt : 20140623
<SEC-HEADER>0001193125-14-221310.hdr.sgml : 20140623
<ACCEPTANCE-DATETIME>20140602103523
ACCESSION NUMBER:		0001193125-14-221310
CONFORMED SUBMISSION TYPE:	SD
PUBLIC DOCUMENT COUNT:		2
<RULE>
<RULE-NAME>13p-1
<ITEM>
<ITEM-NUMBER>1.01
<ITEM-PERIOD>20131231
</ITEM>
<ITEM>
<ITEM-NUMBER>1.02
<ITEM-PERIOD>20131231
</ITEM>
</RULE>
FILED AS OF DATE:		20140602
DATE AS OF CHANGE:		20140602

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LSB INDUSTRIES INC
		CENTRAL INDEX KEY:			0000060714
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL INORGANIC CHEMICALS [2810]
		IRS NUMBER:				731015226
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		SD
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-07677
		FILM NUMBER:		14882682

	BUSINESS ADDRESS:	
		STREET 1:		16 S PENNSYLVANIA
		CITY:			OKLAHOMA CITY
		STATE:			OK
		ZIP:			73101
		BUSINESS PHONE:		4052354546

	MAIL ADDRESS:	
		STREET 1:		16 SOUTH PENNSYLVANIA
		CITY:			OKLAHOMA CITY
		STATE:			OK
		ZIP:			73101
</SEC-HEADER>
<DOCUMENT>
<TYPE>SD
<SEQUENCE>1
<FILENAME>d738519dsd.htm
<DESCRIPTION>FORM SD
<TEXT>
<HTML><HEAD>
<TITLE>Form SD</TITLE>
</HEAD>
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 <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:4pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>UNITED STATES </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Washington, D.C. 20549 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>FORM SD
</B></P> <P STYLE="margin-top:10pt; margin-bottom:0pt; font-size:14pt; font-family:Times New Roman" ALIGN="center"><B>Specialized Disclosure Report </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:24pt; font-family:Times New Roman" ALIGN="center"><B>LSB
INDUSTRIES, INC. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Exact name of registrant as specified in its charter) </B></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" ALIGN="center">


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<TD VALIGN="top" ALIGN="center"><B>Delaware</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>1-7677</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>73-1015226</B></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top" ALIGN="center"><B>(State or other jurisdiction of incorporation)</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>(Commission File Number)</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>(IRS Employer Identification No.)</B></TD></TR>
</TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" ALIGN="center">


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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>16 South Pennsylvania Avenue,</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Oklahoma City, Oklahoma</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><B>73107</B></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top" ALIGN="center"><B>(Address of principal executive offices)</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>(Zip Code)</B></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Registrant&#146;s telephone number, including area code (405)&nbsp;235-4546 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">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: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#120;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January&nbsp;1 to December&nbsp;31, 2013. </TD></TR></TABLE>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Section&nbsp;1 &#150; Conflict Minerals Disclosure </B></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="top" ALIGN="left"><B>Item&nbsp;1.01</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Conflict Minerals Disclosure </B></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">LSB Industries, Inc. (the &#147;Company&#148;) has
conducted a good faith investigation of its current product lines and determined that certain components or parts of certain products within its Climate Control Business, which we refer to as our &#147;HVAC business&#148; in the Conflict Minerals
Report, contain tin, tungsten, tantalum and/or gold (3TG)&nbsp;(defined as &#147;conflict minerals&#148; by the U.S. Securities and Exchange Commission). The Company conducted reasonable due diligence as required by Rule&nbsp;13p-1 of the Securities
Exchange Act of 1934, as amended, including surveying its direct suppliers to try to determine the sources of these minerals, which the Company&#146;s business units purchase through a complex supply chain. The Company was unable to determine
whether the conflict minerals used in one or more of its products where such conflict minerals are necessary to such product(s) functionality or production originated from the Democratic Republic of the Congo or an adjoining country. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">A copy of our Conflict Minerals Report for the reporting period from January&nbsp;1 to December&nbsp;31, 2013, is filed as Exhibit 1.02 hereto
and is publicly available at: http://investors.lsbindustries.com. The content of such website is included for general information only and is not incorporated by reference in this Form SD. </P>
<P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="top" ALIGN="left"><B>Item&nbsp;1.02</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Exhibit </B></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">The Conflict Minerals Report for the reporting period from January&nbsp;1, 2013
to December&nbsp;31, 2013 is filed as Exhibit 1.02 hereto. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Section&nbsp;2 &#150; Exhibits </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Exhibit 1.02 &#150; Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">SIGNATURES </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">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. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3">LSB INDUSTRIES, INC.</TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
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<TD VALIGN="top">Date: June&nbsp;2, 2014</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Tony M. Shelby</TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top">Name:</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">Tony M. Shelby</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
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<TD VALIGN="top">Title:</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Executive Vice President of Finance and</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Chief Financial Officer</P></TD></TR>
</TABLE> <P STYLE="font-size:12pt; margin-top:0pt; margin-bottom:0pt">&nbsp;</P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.02
<SEQUENCE>2
<FILENAME>d738519dex102.htm
<DESCRIPTION>EX-1.02
<TEXT>
<HTML><HEAD>
<TITLE>EX-1.02</TITLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Exhibit 1.02 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>LSB Industries, Inc. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Conflict Minerals Report </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>For the reporting period from January&nbsp;1, 2013 to December&nbsp;31, 2013 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This Conflict Minerals Report (&#147;Report&#148;) of LSB Industries, Inc. (the &#147;Company,&#148; &#147;we,&#148; &#147;us&#148; or
&#147;our&#148;) is prepared pursuant to Rule 13p-1 and Form SD (&#147;Rule&#148;) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period January&nbsp;1, 2013 to December&nbsp;31, 2013. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products and the minerals
specified in the Rule are necessary to the functionality or production of those products. The specified minerals, which we collectively refer to in this Report as the &#147;Conflict Minerals,&#148; are gold, columbite-tantalite (coltan), cassiterite
and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten. The &#147;Covered Countries&#148; for purposes of the Rule and this Report are the Democratic Republic of the Congo (&#147;DRC&#148;), South Sudan, Uganda,
Rwanda, Burundi, Tanzania, Zambia and Angola. As described in this Report, certain of the Company&#146;s operations manufacture, or contract to manufacture, products, and Conflict Minerals are necessary to the functionality or production of those
products. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This Report relates to products (i)&nbsp;for which Conflict Minerals are necessary to the functionality or production of that
product, (ii)&nbsp;that were manufactured, or contracted to be manufactured by the Company, and (iii)&nbsp;for which the manufacture was completed during calendar year 2013. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Company Overview </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">LSB Industries, Inc. is
a manufacturing company operating primarily in two lines of business&#151;production of chemicals and production of heating, ventilation, air conditioning and heat pump products (&#147;HVAC&#148;). Our chemical business produces ammonium nitrate,
anhydrous ammonia, nitric acid, sulfuric acid, and other chemicals used by our customers in the agricultural, industrial and mining industries. Products designed and manufactured by our HVAC business are targeted for installation in new buildings,
renovation of existing buildings, and replacement of existing heating and air-conditioning systems. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Our products are more fully described
on our website, which can be accessed at www.lsbindustries.com. The content of our website that is referenced in this Report is for general information only and is not incorporated by reference in this Report. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Company&#146;s Products Covered by this Report </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company is several levels removed from the actual mining of Conflict Minerals. The Company does not make purchases of raw ore or unrefined
Conflict Minerals and makes no purchases in the DRC or adjoining countries. The Company is not a vertically integrated manufacturer and instead utilizes components produced by others in its products in the HVAC business. As a result, we manufacture
products which likely contain Conflict Minerals, due to the anticipated presence of such minerals in parts and components obtained from some of our suppliers. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Based upon an analysis of our product lines within our multiple business units that comprise our chemical and HVAC businesses, we have
determined that the products produced by our HVAC businesses are subject to the reporting requirements under the Rule. These products, which we refer to in this Report collectively as the &#147;Covered Products,&#148; are heating, ventilation and
air conditioning products consisting of geothermal and water source heat pumps, hydronic fan coils, large custom air handlers, modular geothermal and other chillers and related products. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>The Company&#146;s Due Diligence Process </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We have developed a management system for our Conflict Minerals identification and reporting obligations which includes the participation of
management in our HVAC business, personnel with responsibilities over Covered Products and component vendors, and our corporate legal personnel. Our legal department provides the Company&#146;s audit committee and senior executives the results of
the due diligence efforts. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company has conducted a good faith reasonable country of origin inquiry (&#147;RCOI&#148;) regarding the
Conflict Minerals. The good faith RCOI is designed to determine which suppliers utilized parts containing Conflict Minerals and whether any of the Conflict Minerals originated in the Covered Countries. The Company&#146;s due diligence measures
conform generally to the framework in the <I>Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Second Edition</I>, including the related
supplements on gold, tin, tantalum and tungsten (&#147;OECD Guidance&#148;). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company does not purchase Conflict Minerals from mines,
smelters or refiners. The Company&#146;s supply chain for the Covered Products is complex, and there are many third parties in the supply chain between the ultimate manufacturer of the Covered Products and the original sources of the Conflict
Minerals. As a result, the Company must rely on its suppliers to provide information regarding the origin of Conflict Minerals included in its Covered Products. The Company believes that smelters and refiners of the Conflict Minerals are best
situated to identify the sources of Conflict Minerals. The Company is, in conjunction with its vendors, actively undertaking the process to identify the smelters and refiners of Conflict Minerals in the Company&#146;s supply chain. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We identified vendors that manufacture or provide our HVAC business with supplies or materials that are components of our HVAC products. We
sent surveys to our identified component and outsourced manufacturing supply chain vendors for our HVAC products. When we initially engaged these vendors, we described the Rule and the Company&#146;s reporting requirements, and requested that each
complete a survey and related supplier certification. We subsequently adopted the EICC and GeSI Conflict Mineral Reporting Template (&#147;Reporting Template&#148;) in order to provide consistency for our vendors and our data collection process. We
intend to conduct our future surveys using the Reporting Template. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We implemented a mechanism to track communications with our vendors
and to follow-up with vendors to track progress in obtaining responses. After our review of the initial responses, we made further inquires of certain of our responsive vendors and used various communication strategies to establish a dialogue with
non-responsive vendors. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We continue to develop our program to utilize internal and external information to improve our supply chain
transparency system. We have adopted a Conflict Minerals contract provision which when practical will be incorporated into new supply contracts and purchase orders and inserted into existing contracts as they are renewed. We are in the process of
sending additional communications to our vendors to educate them regarding our policy and expectations, EICC&#146;s Conflict Minerals guidance and SEC rules. We believe that these efforts will further strengthen our engagement with suppliers. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Due Diligence Results </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Of the 121 suppliers and vendors that we surveyed, 67 responded or supplied relevant information on their website. Of those responding, 18
replied with undetermined Conflict Minerals data. Based on these responses, the Company has determined that some Conflict Minerals may be present in certain of its products due to the presence of such minerals in supplier parts. However, we are
unable to make a determination regarding the country of origin of such minerals, because none of these suppliers indicated DRC or specific smelter sourcing, and each of these suppliers indicated that they were continuing to obtain information and
collect data. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Based on the information obtained pursuant to the due diligence process, the Company does not have sufficient information
with respect to the Covered Products to determine the country of origin of the Conflict Minerals in the Covered Products, and as such, we have found that the Company&#146;s products containing Conflict Minerals are DRC conflict undetermined. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Company Policy </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company has a
Conflict Minerals Policy that is available on the website at www.lsbindustries.com under &#147;Investors&#148; in &#147;Conflict Minerals&#148;. The Conflict Minerals Policy includes a method for reporting violations of the policy. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Improving Due Diligence and Risk Mitigation </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company plans to undertake the following actions during 2014 to improve its due diligence and mitigate the risk that the necessary Conflict
Minerals in its products benefit or finance armed groups: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">1.</TD>
<TD ALIGN="left" VALIGN="top">The Company will continue to work with vendors who provided incomplete or insufficient information in an effort to obtain complete and accurate information in 2014. </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">2.</TD>
<TD ALIGN="left" VALIGN="top">The Company will request information and supporting data from each vendor providing parts to the Company that are subject to 2014 reporting requirements by utilizing the EEIC-GeSI Conflict Minerals Reporting Template;
and will pursue a completed template response that identifies material down to the smelter and mine. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">3.</TD>
<TD ALIGN="left" VALIGN="top">The Company will provide its Conflict Minerals Policy to suppliers as part of its EEIC-GeSI Conflict Minerals Reporting Template based supplier inquiry process for 2014. </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">4.</TD>
<TD ALIGN="left" VALIGN="top">The Company has adopted a Conflict Minerals clause to be included in its HVAC purchase order standard terms and conditions and is adding a Conflict Minerals clause to its agreement templates for incorporation in new
agreements. Current agreements will be reviewed and a Conflict Minerals clause will be added as practical. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">5.</TD>
<TD ALIGN="left" VALIGN="top">The Company will expand training to relevant employees regarding the Rule and the Company&#146;s Conflict Minerals Policy. </TD></TR></TABLE>
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