Company: PRMB
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001193125-25-012325
Chunk: 135

Company: Primo Brands Corp
Filing Date: 2025-01-24
Form: S-1
Chunk 135
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 tax expense in these jurisdictions. Primo Water’s income tax expense, deferred tax assets
and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid in the jurisdictions in which Primo Water operates.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In
evaluating Primo Water’s ability to recover its deferred tax assets within the jurisdiction from which they arise, Primo Water considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities,
projected future taxable income, tax planning strategies, and recent financial operations. In projecting future taxable income, Primo Water begins with historical results adjusted for the results of discontinued operations and changes in accounting
policies and incorporates assumptions including

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the amount of future Canadian and foreign pre-tax income, the reversal of temporary differences, and the implementation of feasible and prudent tax
planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates Primo Water is using to manage the underlying businesses. Changes in tax laws and rates
could also affect recorded deferred tax assets and liabilities in the future.

The calculation of Primo Water’s tax liabilities
involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across its global operations. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 740, Income Taxes (“ASC 740”) provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including
resolutions of any related appeals or litigation processes, based on the technical merits. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and
transition.

Primo Water recognizes tax liabilities in accordance with ASC 740 and adjusts these liabilities when its judgment changes as
a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from Primo Water’s current estimate of
the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

Non-GAAPMeasures

In this prospectus, Primo Water supplements its reporting of financial measures
determined in accordance with GAAP by utilizing certain non-GAAP financial measures that exclude certain