Reynolds Consumer Products (REYN) risk factors, FY2024 10-K

Risks Related to Our Business, Growth and Profitability

1. 01Our success depends on our ability to anticipate and respond to changes in consumer preferences
2. 02We are dependent on maintaining satisfactory relationships with our major customers, and significant consolidation among our customers, or the loss of a significant customer, could decrease demand for our products or reduce our profitability
3. 03We operate in competitive markets
4. 04Loss of any of our key manufacturing facilities or of those of our key suppliers could have an adverse effect on our business
5. 05Our business has been and continues to be impacted by fluctuations in raw material, energy and freight costs, including the impact of tariffs and similar matters
6. 06Any interruption in our supply of raw materials could harm our business, financial condition and results of operations
7. 07Labor shortages and increased labor costs have had and could have a material adverse effect on our business and operations
8. 08Our brands are critical to our success
9. 09Our business could be impacted by changes in consumer lifestyle and environmental concerns, as well as current and future laws and regulations related to environmental matters
10. 10Our business is affected by economic downturns in the markets that we serve and in the regions that supply our raw materials
11. 11The estimates and assumptions on which our financial projections are based may prove to be inaccurate, which may cause our actual results to materially differ from such projections, which may adversely affect our future profitability, cash flows and stock price
12. 12Our profitability and cash flows could suffer if we are unable to generate cost savings in our manufacturing and distribution processes
13. 13We may incur liabilities, experience harm to our reputation and brands, or be forced to recall products as a result of real or perceived product quality or other product-related issues
14. 14We are affected by seasonality
15. 15Loss of our key management and other personnel, or an inability to attract new management and other personnel, could negatively impact our business, financial condition and results of operations
16. 16We may have difficulty acquiring or integrating product lines or businesses, which could impact our business, financial condition and results of operations
17. 17We may not be successful in obtaining, maintaining and enforcing sufficient intellectual property rights to protect our business, or in avoiding claims that we infringe on the intellectual property rights of others
18. 18Goodwill and indefinite-lived intangible assets are a material component of our balance sheet and impairments of these assets could have a significant impact on our results
19. 19Some of our workforce is covered by collective bargaining agreements, and our business could be harmed in the event of a prolonged work stoppage
20. 20Tax legislation initiatives or challenges to our tax positions could adversely affect our operations and financial condition
21. 21Impacts associated with a future pandemic and associated responses could adversely impact our business and results of operations

Risks Related to Liquidity and Indebtedness

1. 22We have significant debt, which could adversely affect our financial condition and ability to operate our business
2. 23These restrictions could adversely affect our financial condition and limit our ability to successfully implement our growth strategy
3. 24Market interest rates have increased and could continue to increase our interest costs

Legal, Regulatory and Compliance Risks

1. 25We are subject to governmental regulation and we may incur material liabilities under, or costs in order to comply with, existing or future laws and regulations
2. 26We could incur significant liabilities related to, and significant costs in complying with, environmental, health and safety laws, regulations and permits
3. 27ESG matters, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and impact our reputation
4. 28We depend on intellectual property rights licensed from third parties, and disputes regarding, or termination of, these licenses could result in loss of rights, which could harm our business
5. 29A cyber-attack or failure of one or more key information technology systems, operational technology systems, networks, processes, associated sites or service providers could have a material adverse impact on our business and reputation
6. 30Legal claims and proceedings could adversely impact our business
7. 31Our insurance coverage may not adequately protect us against business and operating risks

Risks Related to Stockholder Influence, Related Party Transactions and Governance

1. 32Substantial future sales by Packaging Finance Limited or others of our common stock, or the perception that such sales may occur, could depress the price of our common stock
2. 33Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock
3. 34Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders
4. 35We intend to continue to pay regular dividends on our common stock, but our ability to do so may be limited
5. 36We could incur significant liability if our separation from PEI Group fails to qualify as a tax-free transaction for U.S. federal income tax purposes
6. 37PFL controls the direction of our business and PFL’s concentrated ownership of our common stock may prevent our stockholders from influencing significant decisions
7. 38In addition, the concentration of PFL’s ownership could also discourage others from making tender offers, which could prevent holders from receiving a premium for their common stock
8. 39If we are no longer affiliated with PEI Group, we may be unable to continue to benefit from that relationship, which may adversely affect our operations and have a material adverse effect on us
9. 40We have entered, and may continue to enter, into certain related party transactions. There can be no assurance that we could not have achieved more favorable terms if such transactions had not been entered into with related parties, or that we will be able to maintain existing terms in the future
10. 41If PFL sells a controlling interest in our company to a third party in a private transaction, investors may not realize any change-of-control premium on shares of our common stock and we may become subject to the control of a presently unknown third party
11. 42We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, rely on exemptions from certain corporate governance requirements
12. 43PEI Group may compete with us, and its competitive position in certain markets may constrain our ability to build and maintain partnerships
13. 44Conflicts of interest may arise because certain of our directors may hold a board position with PEI Group entities
14. 45Our inability to resolve in a manner favorable to us any potential conflicts or disputes that arise between us and PEI Group, PFL or Rank with respect to our past and ongoing relationships may adversely affect our business and prospects
15. 46The resolution of any potential conflicts or disputes between us, PEI Group, PFL or Rank or their subsidiaries over these or other matters may be less favorable to us than the resolution we might achieve if we were dealing with an unaffiliated third party