Company: PRMB
Filing Date: 2025-02-07
Form Type: S-1/A
Source: 0001193125-25-022806
Chunk: 138

Company: Primo Brands Corp
Filing Date: 2025-02-07
Form: S-1/A
Chunk 138
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assumptions used in its assessments, such as revenue growth rates, SG&A expenses, capital expenditures and discount rates, to reflect any significant changes in the business environment that could materially affect the fair value of Primo
Water’s reporting units. Based on the evaluations performed in 2023, Primo Water determined that the fair value of each of its reporting units exceeded their carrying amounts.

There are inherent uncertainties related to each of the above listed assumptions, and Primo Water’s judgment in applying them. Changes in
the assumptions used in its qualitative assessment could result in impairment charges that could be material to Primo Water’s consolidated financial statements in any given period.

Refer to Note 2 to Primo Water’s Consolidated Financial Statements for discussion regarding goodwill for the discontinued operations
entities.

Impairment Testing of Intangible Assets

Primo Water’s intangible assets with indefinite lives relate to trademarks acquired in the acquisition of businesses, and there are no
legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of these intangible assets. Primo Water’s trademarks with indefinite lives are not amortized, but rather are tested for impairment at least
annually or more frequently if it determines a triggering event has occurred during the year. Primo Water compares the carrying amount of the intangible assets to its fair value and when the carrying amount is greater than the fair value, Primo
Water recognizes an impairment loss. Primo Water’s intangible assets with indefinite lives relate primarily to trademarks acquired in the acquisition of Legacy Primo, trademarks acquired in the acquisition of DSS, one of the trademarks acquired
in the acquisition of Aquaterra, trademarks acquired in the acquisition of Mountain Valley, and trademarks acquired in the acquisition of Crystal Rock (collectively, the “Primo Water Trademarks”). These assets had an aggregate net book
value of $379.7 million as of December 30, 2023.

Primo Water assessed qualitative factors to determine whether the existence of
events or circumstances indicated that it was more likely than not that the fair value of the Primo Water Trademarks were less than their respective carrying value. The qualitative factors Primo Water assessed included macroeconomic conditions,
industry and market considerations, cost factors that would have a negative effect on earnings and cash flows, overall financial performance compared with forecasted projections in prior periods, and other relevant events, the impact of which are
all significant judgments and estimates. During the fourth quarter of 2023, Primo Water concluded that it