Company: PRMB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0002042694-25-000007
Chunk: 93

Company: Primo Brands Corp
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 93
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 goodwill and indefinite-lived intangible asset assessments and the incremental borrowing rate related to lease obligations.Revenue RecognitionThe Company’s principal source of revenue is bottled water sales to customers primarily in the United States. Revenue is recognized when a customer obtains control of promised goods (the obligation), which may be upon shipment of goods or upon delivery to the customer as defined in the customer contract or purchase order. Revenue is recognized at an amount that reflects the consideration the Company expects to receive in exchange for those goods. Amounts collected from customers for sales taxes are excluded from the transaction price. The Company measures revenue based on the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct good to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when the customer receives the benefit of the performance obligation (the Company has only one obligation). The nature of the Company’s contracts give rise to variable consideration including volume-based rebates, growth incentives, point of sale promotions, and other trade promotional discounts (sales incentives). For certain sales incentives, the accrual recorded by the Company for the rebate or discount that will be granted to the customer, requires significant estimation. The critical assumptions used in estimating the sales incentive accruals include the Company’s estimate of expected levels of performance and redemption rates, which requires judgment. These assumptions are developed based upon the historical performance of the customer's participation with similar types of promotions adjusted for current trends. These estimated sales incentives are included in the transaction price of the Company’s contracts with customers as a reduction within net sales and are included as either a reduction in accounts receivable if the customer is entitled to take a deduction on their payment, or as accrued sales incentives in accruals and other current liabilities if the Company anticipates needing to pay the customer.As of March 31, 2025 and December 31, 2024, estimated discounts reflected in Trade receivables, net of allowance for credit losses in the Condensed Consolidated Balance Sheets were $58.7 million and $61.8 million, respectively.As of March 31, 2025 and December 31, 2024, accrued sales incentive obligations reflected in Accruals and other current liabilities in the Condensed Consolidated Balance Sheets were $23.2 million and $39.8 million, respectively.

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Table of Contents

Fair Value MeasurementsFair value is defined as the price that would be received from