Company: PRMB
Filing Date: 2025-02-07
Form Type: S-1/A
Source: 0001193125-25-022806
Chunk: 140

Company: Primo Brands Corp
Filing Date: 2025-02-07
Form: S-1/A
Chunk 140
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 and the
asset’s remaining useful life. The expected life and value of these long-lived assets is based on an evaluation of the competitive environment, history, and future prospects as appropriate. Primo Water did not record impairments of long-lived
assets during the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022.

Insurance Reserves

Primo Water maintains insurance retention programs under its general liability, auto liability, and workers’ compensation insurance
programs. Primo Water also carries excess coverage to mitigate catastrophic losses. Primo Water uses an independent third-party actuary to assist in determining its insurance reserves. Insurance reserves are accrued on an undiscounted basis based on
known claims and estimated incurred but not reported claims not otherwise covered by insurance. The estimates are developed utilizing standard actuarial methods and are based on historical claims experience and actuarial assumptions, including loss
development factors and expected ultimate loss selections. The inherent uncertainty of future loss projections could cause actual claims to differ from Primo Water’s estimates. Primo Water recorded insurance reserves of $67.0 million and
$58.7 million as of December 30, 2023 and December 31, 2022, respectively, within Accounts payable and accrued liabilities and Other long-term liabilities in the Consolidated Balance Sheets, of which $8.8 million and
$12.3 million, respectively, was covered by insurance and included as a component of Accounts receivable, net of allowance and Other long-term assets in the Consolidated Balance Sheets.

Income Taxes

Primo Water is
subject to income taxes in Canada as well as in numerous foreign jurisdictions. Significant judgments and estimates are required in determining the income 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