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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON , D . C . 20549
DIVISION OF
CORPORATION FINANCE
September 25,
2019
Lance Mitchell
Chief Executive Officer
Reynolds Consumer Products Inc.
1900 W. Field Court
Lake Forest, Illinois 60045
Re: Reynolds Consumer Products Inc.
Draft Registration Statement on Form S-1
Filed August 29, 2019
CIK No. 0001786431
Dear Mr. Mitchell:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1 Filed August 29, 2019
Prospectus Cover Page, page i
1. You disclose here and in the Listing section on page 135 that you "have
applied" to list
your Class A common stock under the symbol "REYN". In the List section
on page 17
you disclose that you "intend to apply" to list your Class A common
stock under the
symbol "REYN". Please revise to make your disclosures consistent.
Prospectus Summary, page 1
2. We note that you intend to affect a split of your common stock prior to
the closing of the
offering. To the extent you intend to do this prior to the
effectiveness of your Form S-1,
we remind you that in accordance with SAB Topic 4:C, you will need to
revise your
Lance Mitchell
FirstNameConsumer Products Inc.
Reynolds LastNameLance Mitchell
Comapany 25, 2019
September NameReynolds Consumer Products Inc.
September 25, 2019 Page 2
Page 2
FirstName LastName
financial statements and your disclosures throughout the filing to
give effect to the
expected stock split. A signed, dated, and unrestricted auditor s
report must be included in
the filing prior to effectiveness. See Rule 2-02 of Regulation S-X.
Risk Factors
Our amended and restated certificate of incorporation . . ., page 35
3. We note that your forum selection provision identifies the federal
district courts of the
United States of America for the resolution of any complaint asserting
a cause of action
arising under the federal securities laws. Please disclose whether
this provision applies to
actions arising under the Securities Act or Exchange Act. In that
regard, we note that
Section 27 of the Exchange Act creates exclusive federal jurisdiction
over all suits brought
to enforce any duty or liability created by the Exchange Act or the
rules and regulations
thereunder, and Section 22 of the Securities Act creates concurrent
jurisdiction for federal
and state courts over all suits brought to enforce any duty or
liability created by the
Securities Act or the rules and regulations thereunder. If the
provision applies to Securities
Act claims, please also revise your prospectus to state tthat
investors cannot waive
compliance with the federal securities laws and the rules and
regulations thereunder. If
this provision does not apply to actions arising under the Securities
Act or Exchange Act,
please also ensure that the exclusive forum provision in the governing
documents states
this clearly, or tell us how you will inform investors in future
filings that the provision
does not apply to any actions arising under the Securities Act or
Exchange Act. Please
ensure that your disclosure on page 35 is consistent with your
disclosure on page 134.
Use of Proceeds, page 45
4. You disclose that the offering proceeds will be used to repay debt.
Please set forth the
interest rate and maturity of the indebtedness. Also, if the debt was
incurred within the
past year, describe the use of the proceeds of the indebtedness other
than short-term
borrowing used for working capital. Refer to Instruction 4 of Item 504
of Regulation S-K.
Dividend Policy, page 46
5. Please clarify whether your board can declare a dividend payable to
holders of a single
class of common stock or whether any dividend declared is payable
equally to holders
of Class A and Class B common stock.
Unaudited Pro Forma Combined Financial Data, page 54
6. Please note that once you have provided the pro forma financial
information, we will need
sufficient time to review such information and may have additional
comments based on
your compliance with Article 11 of Regulation S-X.
Lance Mitchell
FirstNameConsumer Products Inc.
Reynolds LastNameLance Mitchell
Comapany 25, 2019
September NameReynolds Consumer Products Inc.
September 25, 2019 Page 3
Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
62
7. We note your disclosure that you intend to continually reinvent and
optimize your
business through your Reyvolution initiatives and that such
initiatives are expected to
continue to positively impact your business on a go forward basis. We
further note that it
appears you have incurred certain Business Rationalization costs
related to your Canada
operations for the three fiscal years presented based on your
disclosures on page 20. It is
not clear if such costs were part of your overall Reyvolution
initiatives and whether
similar type costs are expected to continue to be incurred in the
future. Given that such
initiatives have been a material focus in mitigating cost inflation
related to labor and
benefits among other things, please identify the nature of your cost
reduction initiatives. If
these initiatives represent exit or disposal activities referred to in
ASC 420, please
provide the disclosures required by SAB Topic 5:P.4. We also remind
you that to the
extent there are any material impairments associated with such
activities, your disclosures
should also highlight such impairments including discussing whether
there are any known
material adverse trends impacting your businesses. See Item 303(a)(3)
of Regulation S-K
and Section 501.12.b.3 of the Financial Reporting Codification for
guidance.
8. We note your disclosure that the decrease in your interest expense of
$42 million or 13%
when comparing your results for the year ended December 31, 2018 and
December 31,
2107 were driven by changes in interest rates and outstanding
principal balances. Given
the material change in your interest expense between the periods
presented, please further
expand your disclosure to provide a more robust analysis of the
underlying drivers behind
the change in your interest expense. In that regard, it would appear
that a discussion
around your weighted average interest rates and weighted average
outstanding balances
would better help investors understand the material impacts to your
interest expense
between the periods presented. Please refer to Item 303(a)(3) of
Regulation S-K and
Section 501.12 of the Financial Reporting Codification for guidance.
Critical Accounting Policies, page 81
9. We note that you view your revenue recognition policies related to
your sales incentives
as a critical accounting policy. Please further expand your
disclosures to quantify the
impact of your sales incentives on your results of operations for each
of the periods
presented including any outstanding accrual balances as of December
31, 2018 and 2017.
If such incentive programs are not considered material, please state
as such.
Executive Compensation, page 112
10. We note that there are a number of blanks in this section. Please fill
in the blanks in your
next amendment.
Lance Mitchell
Reynolds Consumer Products Inc.
September 25, 2019
Page 4
Certain Relationships and Related Party Transactions
Transactions to be Entered into in Connection with this Offering, page 124
11. We note that you will enter into a number of agreements in connection
with this offering.
Please file all material agreements as exhibits to your registration
statement.
Class A and B Common Stock, page 130
12. Describe the "certain transfers" that will not result in Class B
common stock automatically
converting into Class A common stock.
Note 2 - Summary of Signifcant Accounting Policies, page F-9
13. We note your reference to your Reyvolution initiatives in Management's
Discussion and
Analysis. If these initiatives represent exit or disposal activities
referred to in ASC 420,
please provide your accounting for the related costs and obligations
as well as the
disclosures required by ASC 420- 10-50.
General
14. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
15. Please identify the underwriter(s) of the offering in the next
amendment.
You may contact Ameen Hamady (Staff Accountant) at (202) 551-3891 or Al
Pavot
(Staff Accountant) at (202) 551-3738 if you have questions regarding comments
on the financial
statements and related matters. Please contact Sherry Haywood (Staff Attorney)
at (202) 551-
3345 or Asia Timmons-Pierce (Special Counsel) at (202) 551-3754 with any other
questions.
Sincerely,
FirstName LastNameLance Mitchell
Division of
Corporation Finance
Comapany NameReynolds Consumer Products Inc.
Office of
Manufacturing and
September 25, 2019 Page 4 Construction
FirstName LastName