Company: PRMB
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001193125-25-012325
Chunk: 118

Company: Primo Brands Corp
Filing Date: 2025-01-24
Form: S-1
Chunk 118
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 judgment and complexity.

Revenue Recognition

BlueTriton’s principal source of revenue is bottled water sales to customers primarily in the United States and Canada. 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 BlueTriton expects to receive in exchange for those goods. Amounts collected from customers for sales taxes are excluded from the transaction price. BlueTriton 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 (BlueTriton has only one obligation).

The nature of BlueTriton’s contracts gives 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 BlueTriton records 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 BlueTriton’s estimate of expected levels of performance and redemption rates, which requires judgement. 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 BlueTriton’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 BlueTriton anticipates needing to pay the
customer. Estimated discounts reflected in trade receivables, net of credit losses were $84.6 million and $97.7 million at December 31, 2023 and 2022, respectively. Accrued sales incentive obligations, recorded in accruals and other
current liabilities, were $45.5 million and $63.5 million at December 31, 2023 and 2022, respectively.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and intangible assets with indefinite lives are not amortized, and as