James Hardie Industries (JHX) risk factors, FY2026 10-K

Business and Operational Risks

1. 01Our business is dependent on the residential and commercial construction markets
2. 02We operate in a competitive business environment, and increased competition in the building products industry or our inability to compete effectively could materially adversely affect our business
3. 03We may experience adverse fluctuations in the availability, quality and cost of raw materials and energy necessary to our business, which could have a material adverse effect on our business
4. 04Our business would suffer if we do not effectively manage our manufacturing processes, including adjusting production to meet demand, integrating new manufacturing facilities, realigning manufacturing facilities, achieving cost-savings initiatives and successfully introducing new technologies and products
5. 05Our business could be adversely affected if we fail to maintain product quality and product performance at an acceptable cost or if we incur significant losses, increased costs or harm to our reputation or brand as a result of product liability claims, excessive warranty obligations or product recalls
6. 06Changes to US or other countries’ immigration and labor policies, trade policies and tariff and import/export regulations or failure to comply with such regulations may have an adverse effect on our business, financial condition and results of operations
7. 07Our sales and results of operations may suffer if we do not maintain our relationships with, forecast the demand of and make timely deliveries to our key distributors or other customers
8. 08Natural disasters and widespread adverse climate changes that directly impact our plants, other facilities or suppliers could materially adversely affect our manufacturing or other operations and, thereby, harm our overall financial position, liquidity, results of operations and cash flows
9. 09Our quarterly operating results may fluctuate as a result of seasonality, changes in weather conditions, inventory recalibration in our channel and changes in product mix
10. 10We may fail to identify, manage, and complete acquisitions and subsequent integrations (including the integration of AZEK), divestitures, and other significant transactions, and we may be materially adversely impacted as a result
11. 11strategic transactions and distributions. Funding such transactions with our existing cash would reduce our liquidity
12. 12Increases in labor costs, potential labor disputes and work stoppages could adversely affect our business
13. 13Our use of artificial intelligence technologies may not be successful and may present business, compliance, and reputational risks
14. 14Geopolitical unrest and armed conflicts may cause economic conditions in the United States or abroad to deteriorate and exacerbate certain risks we face

Financial Risks

1. 15Because we have operations and financial obligations outside the United States and report our earnings in US dollars, unfavorable fluctuations in currency values and exchange rates could have a material adverse effect on our business
2. 16Our indebtedness could materially adversely affect our financial condition, including if we are not able to generate sufficient cash to service all of our indebtedness
3. 17The terms of the Credit Agreements may restrict our current and future operations, including our ability to respond to changes or to take certain actions
4. 18Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly

Legal and Regulatory Risks

1. 19Our ability to sell our products is influenced by legislation and regulations such as local building codes or federal standards which may hinder our ability to compete effectively in certain markets and to increase or maintain our current market share for our products
2. 20We may incur significant costs, including capital expenditures, in complying with applicable environmental and health and safety laws and regulations
3. 21Our business operations could suffer if we fail to adequately protect our intellectual property rights, and we may experience claims by third parties that we are violating their intellectual property rights
4. 22Privacy and data security concerns and regulation could result in additional costs and liabilities
5. 23As a result of the loss of our foreign private issuer status, we are considered a US domestic issuer and are no longer able to avail ourselves of the reduced disclosure requirements and other regulatory accommodations applicable to foreign private issuers
6. 24Our wholly-owned Australian Performing Subsidiary is required to make payments to a special purpose fund that provides compensation for Australian asbestos-related personal injury and death claims, which could materially adversely affect our financial position, liquidity, results of operations and cash flows
7. 25We may be subject to potential additional liabilities, such as claims for compensation or property remediation, because certain current and former companies of the James Hardie Group previously manufactured products that contained asbestos
8. 26The AFFA imposes certain non-monetary obligations
9. 27The complexity and long-term nature of the AFFA and related legislation and agreements may result in litigation as to their interpretation
10. 28We may have insufficient Australian taxable income to utilize tax deductions
11. 29Certain AFFA tax conditions may not be satisfied
12. 30However, we do not have a right to terminate the AFFA if, among other things, the tax conditions are not satisfied as a result of the actions of a member of the James Hardie Group

Risks Related to Ireland

1. 31Irish law contains provisions that could delay or prevent a change of control that may otherwise be beneficial to you
2. 32Our ability to pay dividends and conduct share buy-backs is dependent on Irish law and may be limited in the future if we are not able to maintain sufficient levels of distributable profits

Risks Related to Taxation

1. 33We are subject to risks related to taxation in multiple jurisdictions
2. 34Exposure to additional tax liabilities due to audits and reviews could materially adversely affect our business