California Transparency in Supply Chains Act Disclosure

WaterFurnace, Inc. (WaterFurnace) will not tolerate human trafficking or slavery in its operations or its suppliers' operations. WaterFurnace encourages all of its procurement employees to be vigilant regarding human trafficking and slavery in WaterFurnace's supply chain and to report any suspected human trafficking or slavery to the Legal Department or Human Resources Department. The company will not retaliate against employees who report suspected human trafficking or slavery in the WaterFurnace supply chain.

The following disclosures are made pursuant to the California Transparency in Supply Chains Act of 2010 (hereinafter the "Act"), Section 1714.43 of the California Civil Code, which became effective in 2012.

To what extent, if any, does WaterFurnace:

1. (1) Engage in verification of product supply chains to evaluate and address risks of human trafficking and slavery?

   At this time, WaterFurnace Procurement does not engage in verification of product supply chains to evaluate and address risks of human trafficking and slavery.

2. (2) Conduct audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.

   While WaterFurnace employees conduct periodic site visits and audits certain suppliers, WaterFurnace does not specifically audit suppliers for compliance with company standards for human trafficking and slavery. If there is any reason to suspect that a supplier is not complying with human trafficking and slavery standards, WaterFurnace would take immediate steps to address the matter with the supplier.

3. (3) Require direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.

   To ensure that our contractors and suppliers respect and enforce our company standards, we include a clause in the commercial agreement governing our contractual relationship with suppliers, which stipulates that our suppliers must abide by our Supplier Business Code of Conduct. Further, WaterFurnace requires suppliers to (1) be in compliance with all applicable laws and regulations, (2) be responsive to inquiries of Conflict Minerals and (3) provide annual certification that they comply with applicable laws regarding slavery and human trafficking.

4. (4) Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.

   WaterFurnace employees are required to acknowledge and adhere to its Business Conduct and Ethics Code (the "Code") which provides that WaterFurnace has a zero-tolerance policy for modern slavery and human trafficking violations. The Code also requires that employees abide by the applicable laws and regulations in each country in which WaterFurnace does business and report any suspected violations.

5. (5) Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.

   WaterFurnace provides training for members of its supply chain workforce to recognize and mitigate human trafficking and slavery risks in the supply chain.