Company: PRMB
Filing Date: 2025-02-07
Form Type: S-1/A
Source: 0001193125-25-022806
Chunk: 338

Company: Primo Brands Corp
Filing Date: 2025-02-07
Form: S-1/A
Chunk 338
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 and move products between production facilities or from production
facilities to branch locations or storage facilities are recorded in cost of sales. Shipping and handling costs incurred to deliver products from our North America reporting segment branch locations to the
end-user consumer of those products are recorded in Selling, general and administrative (“SG&A”) expenses in the Consolidated Statements of Operations. Shipping and handling costs included in
SG&A were $456.5 million, $426.1 million, and $366.3 million for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022, respectively.

Other costs incurred in shipment of products from our production facilities to customer locations are reflected in Cost of sales in the
Consolidated Statements of Operations.

Selling, General and Administrative Expenses

We record all other expenses not charged to production as SG&A expenses.

F-77

Advertising costs are expensed at the commencement of an advertising campaign and are
recognized as a component of SG&A expenses in the Consolidated Statements of Operations. Advertising costs expensed were approximately $15.8 million, $15.6 million, and $14.1 million for the fiscal years ended December 30,
2023, December 31, 2022, and January 1, 2022, respectively.

Share-Based Compensation

We have in effect equity incentive plans under which Time-based RSUs, Performance-based RSUs,
non-qualified stock options and director share awards have been granted (as such terms are defined in Note 8 of the Consolidated Financial Statements). Share-based compensation expense for all share-based
compensation awards is based on the grant-date fair value. We recognize these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of two to three years, and account for
forfeitures when they occur.

The fair value of the Company’s Time-based RSUs, certain Performance-based RSUs and director share
awards are based on the closing market price of its common shares on the date of grant as stated on the NYSE. We estimate the fair value of non-qualified options as of the date of grant using the Black-Scholes
option pricing model. This model considers, among other factors, the expected life of the award, the expected volatility of the Company’s share price, and expected dividends. We estimate the fair value of certain Performance-based RSUs that
vest, in part, based on the