Company: PRMB
Filing Date: 2025-02-07
Form Type: S-1/A
Source: 0001193125-25-022806
Chunk: 141

Company: Primo Brands Corp
Filing Date: 2025-02-07
Form: S-1/A
Chunk 141
---
88

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 items to make period-over-period comparisons for its underlying operations before material charges.
Primo Water excludes these items to better understand trends in the business. Primo Water excludes the impact of foreign exchange to separate the impact of currency exchange rate changes from its results of operations.

Primo Water also utilizes EBITDA, which is GAAP net income (loss) before interest expense, net, expense (benefit) for income taxes, and
depreciation and amortization. Primo Water considers EBITDA to be an indicator of operating performance. Primo Water also uses EBITDA, as do analysts, lenders, investors, and others, because it excludes certain items that can vary widely across
different industries or among companies within the same industry. These differences can result in considerable variability