Company: PRMB
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001193125-25-012325
Chunk: 59

Company: Primo Brands Corp
Filing Date: 2025-01-24
Form: S-1
Chunk 59
---

utilize any U.S. federal net operating carryforwards and disallowed interest expense carryforwards (the “Tax Attributes”) may become limited under Section 382 of the Code. The limitation applies if we experience an “ownership
change,” which is generally defined as a greater than 50 percentage point change (by value) in the ownership of our equity by certain stockholders over a rolling three-year period. The amount of the annual limitation is generally equal to the
product of the applicable long-term tax exempt-rate (as published by the IRS for the month in which the “ownership change” occurred) and the value of our outstanding stock immediately prior to the “ownership change.” If we have a
net unrealized built-in gain in our assets immediately prior to the “ownership change,” the annual limitation may be increased in certain situations. Similar provisions of state tax law may also
apply to limit the use of our state net operating loss carryforwards.

All of the U.S. federal net operating loss carryforwards
attributable to Primo Water are subject to pre-existing limitations under Section 382 of the Code that were triggered before any additional limitations arising in connection with the Transaction. We estimate those pre-existing limitations to result
in a limit on the utilization of net operating losses of Primo Water of approximately $6.3 million for the period from November 8, 2024 to December 31, 2024, of approximately $15.9 million for 2025, and of approximately $9.7 million for 2026
through 2029. Although we expect that an additional “ownership change” resulting in a Code Section 382 limitation on the U.S. tax attributes attributable to Primo Water was triggered as a result of the Transaction, we do not expect such
ownership change to meaningfully impact the annual utilization amount of such U.S. federal net operating losses, or of any disallowed interest expense carryforwards under Section 163(j) of the Code, of Primo Water that existed immediately prior to
the Transaction. We expect approximately $206.8 million of the Canadian net operating loss carryforwards attributable to Primo Water prior to the Transaction to have become non-deductible as a result of the Transaction. We have not completed a
study that would be necessary to determine whether an “ownership change” was triggered as a result of the Transaction with respect to the disallowed interest expense carryforwards attributable to BlueTriton prior to the Transaction, which
in turn