Primo Brands Corp (PRMB) FY 2024 MD&A

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Objective

The following discussion provides an analysis of the Company’s financial condition, cash flows and results of operations from management's perspective and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Part II, Item 8 “Financial Statements And Supplementary Data” of this Annual Report. Our objective is to also provide discussion of events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or of future financial condition and to offer information that provides understanding of our financial condition, cash flows and results of operations.

Overview

Primo Brands is a leading North American branded beverage company with a focus on healthy hydration, delivering responsibly and domestically sourced diversified offerings across products, formats, channels, price points and consumer occasions, distributed in every state and Canada.

We have an extensive portfolio of highly recognizable, responsibly sourced and conveniently packaged branded beverages distributed across more than 200,000 retail outlets, including established billion-dollar brands (which are our brands that generate more than $1 billion in annual net sales), Poland Spring® and Pure Life®, premium brands like Saratoga® and Mountain Valley®, regional leaders such as Arrowhead®, Deer Park®, Ice Mountain®, Ozarka®, and Zephyrhills®, purified brands including Primo WaterTM and Sparkletts®, and flavored and enhanced brands like AC+ION® and Splash RefresherTM. These brands are sold directly across retail channels, including mass food, convenience, natural, drug, wholesale, distributors and home improvement, as well as food service accounts in North America. We also have extensive direct-to-consumer offerings with our industry-leading line-up of innovative water dispensers, which create customer and consumer connectivity through recurring water purchases across our Water Direct, Water Exchange and Water Refill businesses. Through our Water Direct business, we deliver responsibly sourced hydration solutions direct to home and business customers. Through our Water Exchange business, consumers can visit approximately 26,500 retail locations and purchase a pre-filled, multi-use bottle of water that can be exchanged after use for a discount on the next purchase. Through our Water Refill business, consumers have the option to refill empty multi-use bottles at approximately 23,500 self-service refill stations. We also offer water filtration units for home and business consumers across North America.

Trends and Factors Affecting Results of Operations

Evolving Customer Trends

We believe we are well-positioned to benefit from evolving consumer trends, as well as the continued acceleration of e-commerce. These favorable trends, combined with the broad appeal of our brands, provide us with a significant opportunity to drive the growth of our business.

•Ability to Increase Brand Awareness – Our ability to increase brand awareness has and will continue to contribute meaningfully to our performance. We focus on creating, capturing and retaining new demand by increasing our brand awareness while also increasing our value proposition to our customers. We aim to continue to increase our brand awareness through continued local community engagement, national media campaigns, growing our social community and innovating our packaging to make our brands and products visually appealing and distinctive from other bottled water brands.

•Product Innovation and Expansion – We see significant potential to grow our sales in underpenetrated, high-growth segments of the bottled water category, such as sparkling, flavored and enhanced waters, by leveraging the brand equity of our existing brands to develop new and innovative beverage offerings. Through the flexible production capabilities of our existing infrastructure and our extensive distribution and retail relationships, we believe we will be able to quickly develop, produce and commercialize new products. We intend to continue investing in innovations within our product portfolio, as well as the development and introduction of new products.

•E-commerce – Given the trend towards growth of sales through e-commerce websites and mobile commerce applications, including through subscription services and other direct-to-consumer businesses, the consumer is leveraging multiple methods of engagement including the digital marketplace.

Consolidation in the Retail Industry

Our industry has been affected by the trend toward consolidation in the retail channel. Many of our retail customers have consolidated in recent years, and this consolidation trend may continue. As a result, our retail customers may seek lower

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pricing and demand increased marketing or promotional expenditures from us. Large retailers are also increasingly using their distribution networks and economies of scale to introduce and develop private-label brands, such as those carried by supermarket chains, convenience store chains, drug store chains, mass merchants and club warehouses. See Item 1A. "Risk Factors — Risks Related to our Customers, Suppliers and Associates" in this Annual Report.

General Economic Conditions and Other Factors

Our operations and supplier relationships expose us to risks associated with disruptions to global supply chains, tariffs and the ongoing Russia/Ukraine and Israel/Hamas conflicts, all of which are likely to continue to create challenging conditions for our business through increased costs, lower consumer spending, volatility in financial markets or other impacts. While we have taken steps to minimize the impact of these increased costs, global supply chain disruption may deteriorate, which could adversely affect our business, financial condition, results of operations and cash flows.

The markets in which we operate are subject to some seasonal variations. Our water sales are generally higher during the warmer months. Our purchases of raw materials and related accounts payable fluctuate based upon the demand for our products. The seasonality of our sales volume causes our working capital needs to fluctuate throughout the year.

We conduct operations in Canada and we are subject to currency exchange risks to the extent that our costs are denominated in currencies other than those in which we earn revenues. As our financial statements are denominated in U.S. dollars, fluctuations in currency exchange rates between the U.S. dollar and the Canadian dollar have had, and will continue to have, an impact on our results of operations.

Ingredient and packaging costs represent a significant portion of our cost of sales. These costs are subject to global and regional commodity price trends. Our most significant commodities are polyethylene terephthalate (“PET”) resin, high-density polyethylene (“HDPE”) and polycarbonate bottles, caps and preforms, labels and cartons and trays. We attempt to manage our exposure to fluctuations in ingredient and packaging costs by entering into fixed price commitments for a portion of our ingredient and packaging requirements and implementing price increases as needed.

In 2024, our capital expenditures were devoted primarily to supporting growth in our business, maintaining existing facilities and making equipment upgrades.

Factors Affecting Comparability of Financial Information

BlueTriton - Primo Water Transaction

On November 8, 2024, Primo Brands consummated the transactions contemplated by the Arrangement Agreement in which Primo Brands became the surviving corporation, and Primo Water and BlueTriton became wholly-owned subsidiaries of Primo Brands (the “Transaction”). See Explanatory Note and Note 1 “Description of the Business” to the Consolidated Financial Statements contained in this Annual Report for additional information.

We accounted for the Transaction as a business combination in which BlueTriton was the accounting acquirer. Accordingly, assets acquired and liabilities assumed were measured at their acquisition date fair values as of November 8, 2024. Our consolidated results of operations include the results of Primo Water from November 9, 2024 through December 31, 2024.

Non-GAAP Financial Measures

We present certain non-GAAP measures in this Annual Report, including Adjusted EBITDA and measures derived therefrom, which are not required by, or presented in accordance with, U.S. GAAP. We define Adjusted EBITDA as net income (loss) before interest and financing expense, net, provision for (benefit from) income taxes, and depreciation and amortization, further adjusted for acquisition, integration and restructuring expenses, share-based compensation costs, unrealized loss (gain) on foreign exchange and commodity forwards, loss on disposal of property, plant and equipment, net, gain on extinguishment of debt, management fees, and other adjustments, net. This is an important metric that management uses as an analytical indicator to evaluate our performance, allocate resources, and measure leverage. We believe that Adjusted EBITDA is a useful metric for management,” investors, and analysts because it excludes certain items that can vary widely across different industries or among companies within the same industry, and it removes the impact of items that we do not believe are indicative of our core operating performance. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies, and we believe these adjustments allow for consistent comparison of our operating results over time and relative to our peers.

We use Adjusted EBITDA to supplement U.S. GAAP measures of performance in evaluating the effectiveness of our business strategies, and to establish annual budgets and forecasts. We also use Adjusted EBITDA to establish short-term incentive compensation for management.

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Adjusted EBITDA should be considered in addition to, and not as a substitute for or superior to, financial measures calculated in accordance with U.S. GAAP. It is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income (loss) or any other performance measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other businesses. This non-GAAP metric does not necessarily indicate whether cash flow will be sufficient or available to meet our cash requirements and may not be indicative of our historical operating results, nor are such measures meant to be predictive of our future results. In the future, we may incur expenses similar to the adjustments noted herein to calculate Adjusted EBITDA. However, the magnitude of such adjustments for the periods presented herein is not necessarily indicative of the magnitude of such adjustments in future periods. Our presentation of Adjusted EBITDA should not be construed as an inference that future results will be unaffected by unusual or non-recurring items.

Adjusted EBITDA has limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our operating results as reported under U.S. GAAP. Some of these limitations include that:

•Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary, to service interest on our indebtedness;

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and not all of these measures reflect cash requirements for such replacements;

•non-cash compensation is a key element of our long-term executive incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period;

•the fact that other companies in our industry may calculate these measures differently than we do, which limits their usefulness as comparative measures; and

•these measures do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations.

Furthermore, we compensate for the limitations described above by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only for supplemental purposes.

The following table reconciles net income (loss), the most directly comparable U.S. GAAP measure, to Adjusted EBITDA for the periods presented:

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Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

Consolidated Results

The following table sets forth our consolidated statements of operations data for the periods indicated:

The following table sets forth our consolidated Net sales by water type:

Net Sales

During the year ended December 31, 2024, net sales were $5,152.5 million, an increase of $453.8 million, or 9.7%, as compared to the year ended December 31, 2023, primarily related to $254.4 million of Primo Water sales as a result of the Transaction, as well as a 3.6% organic volume growth.

Cost of Sales

Cost of sales consists primarily of manufacturing, shipping and logistics, storage and handling, personnel costs and allocated facilities and overhead costs associated with products sold. Manufacturing costs consist primarily of raw materials, packaging costs and labor and utilities to convert raw materials into finished products.

During the year ended December 31, 2024, cost of sales was $3,530.9 million, an increase of $184.2 million, or 5.5%, as compared to the year ended December 31, 2023. The increase in costs is primarily driven by $170.9 million incurred as a result of the Primo Water sales increase due to the Transaction. We were able to significantly manage variable costs as the greater organic sales volume increase resulted in an insignificant increase in cost of sales, as a $33.1 million increase in factory labor, maintenance and overhead costs was largely offset by a year-over-year improvement in freight costs of $14.1 million and water sourcing of $11.5 million.

Gross Profit and Gross Margin

During the year ended December 31, 2024, gross profit was $1,621.6 million, an increase of $269.6 million, or 19.9%, as compared to the year ended December 31, 2023, and gross margin as a percentage of net sales was 31.5%, as compared to 28.8% during the year ended December 31, 2023, primarily driven by increased sales volumes allowing for better leveraging

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of our fixed costs, as well as the aforementioned beneficial freight and water sourcing efficiencies.

Selling, General and Administrative Expenses

Costs recorded in selling, general and administrative expenses include product marketing and advertising expenses, selling costs, including commissions, information technology (“IT”) and all other costs associated with corporate functions, oversight and support.

Selling, general and administrative expenses during the year ended December 31, 2024 were $1,050.6 million, an increase of $126.4 million, or 13.7%, as compared to the year ended December 31, 2023, primarily reflecting the post-Transaction increase of $70.2 million. Also contributing to the increase were higher underlying expenses, primarily a $30.1 million increase in selling costs including sales and promotional programs and a $18.4 million, or 9.3%, increase in marketing spend to help drive the increase in organic sales. These increases were partially offset by $18.8 million lower of IT spend when compared to the prior year.

Acquisition, Integration and Restructuring Expenses

Acquisition expenses include those costs associated with our acquisitions, as well as costs incurred on potential acquisitions. Integration and restructuring expenses mainly include IT implementation costs, costs incurred to achieve post-acquisition synergies and costs incurred on business optimization, among others.

During the year ended December 31, 2024, acquisition, integration and restructuring expenses were $204.1 million, an increase of $187.2 million, as compared to the year ended December 31, 2023, primarily as a result of the Transaction. We incurred expenses of $108.7 million leading up to, and as a result of, the Closing. Additionally, we have incurred $95.4 million related to integration initiatives, including severance charges and consulting fees, during the year ended December 31, 2024.

Other Operating Expense, Net

Other operating expense, net, includes primarily foreign exchange, unrealized mark-to-market adjustments for commodity forwards and other infrequent income or charges.

Other operating expense, net, during the year ended December 31, 2024 were $6.6 million, an increase of $1.7 million, as compared to the year ended December 31, 2023, primarily due to an unrealized loss of $1.8 million on commodity forwards and the negative impact of foreign exchange translation in the current period.

Interest and Financing Expense, Net

Interest and financing expense, net, primarily related to interest expense on our debt and finance leases, revolver commitment fees and costs associated with our debt, partially offset by interest income earned on cash and cash equivalents, including restricted cash.

During the year ended December 31, 2024, interest and financing expense, net, was $339.6 million, an increase of $51.5 million, or 17.9%, as compared to the year ended December 31, 2023, primarily relating to the $33.1 million of interest related to the addition of the 2024 Incremental Term Loans (as defined below) in March 2024, and $7.1 million incurred as a result of the addition of the 3.875% Senior Notes and the 4.375% Senior Notes as part of the Transaction.

Provision for Income Taxes

Income tax expense was $33.3 million, in 2024 compared to $25.1 million in 2023. The effective tax rate was 160.9% in 2024 compared to 21.3% in 2023.

The effective tax rate for 2024 increased from the effective tax rate from 2023 due primarily to non-deductible transaction costs, change in enacted rates, and related-party transactions from the merger. The effective tax rate for 2024 differs from the U.S. statutory rate primarily due to (a) significant permanent differences for which we have not recognized a tax benefit; (b) income in tax jurisdictions with lower statutory tax rate than the U.S.; and (c) losses in tax jurisdictions with existing valuation allowances.

Net (Loss) Income From Continuing Operations

The net loss from continuing operations for the year ended December 31, 2024 was $12.6 million, a reduction of $105.4 million as compared to net income from continuing operations of $92.8 million for the year ended December 31, 2023 due to the factors mentioned above.

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Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

Consolidated Results

The following table sets forth our consolidated statements of operations data for the periods indicated:

*Not meaningful

The following table sets forth our consolidated Net sales by water type:

Net Sales

During the year ended December 31, 2023, net sales were $4,698.7 million, an increase of $257.6 million, or 5.8%, as compared to the year ended December 31, 2022, primarily relating to the carryover impact of price increases taken throughout 2022, negatively impacted by a 2.3% decrease in volumes.

Cost of Sales

During the year ended December 31, 2023, cost of sales was $3,346.7 million, a decrease of $100.2 million, or 2.9%, as compared to the year ended December 31, 2022, primarily as result of 2.3% lower sales volumes, $26.5 million less depreciation and amortization due to the full depreciation of assets created as a result of purchase accounting, and favorable freight and packaging costs, primarily resin pricing, when compared to the prior year. The decrease was partially offset by higher costs per unit from increased storage and handling and, to a lesser degree, labor and overhead-related costs, when compared to the prior year.

Gross Profit and Gross Margin

During the year ended December 31, 2023, gross profit was $1,352.0 million, an increase of $357.8 million, or 36.0%, as compared to the year ended December 31, 2022, and gross margin as a percentage of net sales was 28.8%, as compared to 22.4% during the year ended December 31, 2022. The 640 basis point margin improvement was primarily the result of the

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8.1% revenue growth in price and mix, primarily driven by the benefit of price increases taken throughout 2022, as well as consistent beneficial freight and resin pricing.

Selling, General and Administrative Expenses

Selling, general and administrative expenses during the year ended December 31, 2023 were $924.2 million, an increase of $37.2 million, or 4.2%, as compared to the year ended December 31, 2022, primarily driven by a $30.4 million increase in spending on IT, and to a lesser extent administrative personnel costs, and recycling processing fees, partially offset by reductions in spending on marketing, sales and promotional programs, and legal fees when compared to the prior year.

Acquisition, Integration and Restructuring Expenses

During the year ended December 31, 2023, acquisition, integration and restructuring expenses were $16.9 million, a decrease of $66.9 million, or 79.8%, as compared to the year ended December 31, 2022, primarily as a result of a year over year decrease in IT implementation costs of $56.0 million and, to a lesser extent, lower severance costs during 2023.

Other Operating Expense, Net

Other operating expense, net, during the year ended December 31, 2023 were $4.9 million, an increase of $4.8 million, as compared to the year ended December 31, 2022, primarily due to unrealized loss of $3.6 million related to commodity forward contracts and an unrealized foreign exchange loss in the 2023 period.

Gain on Extinguishment of Debt

During the year ended December 31, 2022, we paid $47.0 million to repurchase $57.0 million in face value of 6.250% Senior Notes (as defined below), resulting in recorded gains of $8.7 million on extinguishment of debt, net of write-off of $1.3 million of capitalized debt issuance costs.

Interest and Financing Expense, Net

During the year ended December 31, 2023, interest and financing expense, net, was $288.1 million, an increase of $76.3 million, or 36.0%, as compared to the year ended December 31, 2022, primarily relating to an approximately 270 basis point increase in the average variable interest rate on the Term Loans (as defined herein), and to a lesser extent, due to outstanding revolver balances during the year ended December 31, 2023.

Provision for (Benefit from) Income Tax

Income tax expense was $25.1 million in 2023 compared to a benefit from income taxes of $53.1 million in 2022. The effective tax rate was 21.3% in 2023, compared to 29.5% in 2022.

The effective tax rate for 2023 decreased from the effective tax rate from 2022 due primarily to state enacted rate changes and research and development credits. The effective tax rate for 2023 differs from the U.S. statutory rate primarily due to (a) state enacted rate changes and (b) research and development tax credits.

Net Income (Loss) From Continuing Operations

The net income from continuing operations for the year ended December 31, 2023 was $92.8 million, an improvement of $219.5 million as compared to a net loss from continuing operations of $126.7 million for the year ended December 31, 2022, due to the factors mentioned above.

Liquidity and Capital Resources

Our principal liquidity requirements are for working capital and general corporate purposes, including capital expenditures and debt service, dividends and acquisitions. We have historically funded our operations and acquisitions primarily through debt financing and cash provided by operating activities.

We believe that a combination of cash generated from operating activities, and undrawn availability under the New Revolving Credit Facility (as defined below) will provide sufficient liquidity to support our working capital needs, planned growth and capital expenditure needs, service the ongoing principal and interest payments on our indebtedness, along with our other funding and investment requirements for the next 12 months and for the foreseeable future. However, we do not expect to generate sufficient cash from operations to repay at maturity the entirety of the then-outstanding balances of our debt. As a result, we will then be dependent upon our ability to refinance such indebtedness or access the credit markets or source additional equity investments to repay the outstanding balances of our indebtedness. Failure to raise significant amounts of funding to repay these obligations or to refinance on beneficial terms at maturity would adversely affect our financial condition. We may also require additional capital in the future to pursue attractive acquisition opportunities in our

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industry. In addition, our ability to service our indebtedness and to fund our other liquidity requirements will depend on our ability to generate and access cash in the future, which is subject to general economic, financial, contractual, competitive, legislative, regulatory and other factors, some of which are beyond our control, as well as the factors described in Part I, Item 1A. "Risk Factors” in this Annual Report.

As of December 31, 2024, we had $614.4 million of cash on hand (of which $0.7 million is restricted). We had access to $350.0 million of revolving loan commitments (availability of $283.6 million, net of gross availability adjustments of $14.8 million and outstanding letters of credit of $51.6 million) under the ABL Credit Facility and we had access to $350.0 million of revolving loan commitments (availability of $284.6 million, net of outstanding letters of credit of $65.4 million) under the Revolving Credit Facility (defined below). We, or our affiliates, may from time to time seek to repurchase or retire outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Any future repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity, contractual restrictions, and other factors. The amounts involved may be material.

The Refinancing Transactions

On January 27, 2025, we commenced separate private offers to exchange (collectively, the “Offers”) the three series of outstanding senior notes issued by either Primo Water Holdings Inc. (“Primo Issuer”) or Triton Water Holdings, Inc. (“Triton Water Holdings” and together with the Primo Issuer, the “Issuers”) (the “Existing Senior Notes”), for three new series of senior notes to be co-issued by the Issuers and cash. The Offers expired on February 25, 2025 and the remaining exchanges are expected to settle on February 28, 2025 (the “Final Settlement Date”). The Offers consisted of the following:

•an offer to exchange any and all of the €450,000,000 in aggregate principal amount of the Primo Issuer's outstanding 3.875% Senior Notes (as defined herein) for a combination of new 3.875% Senior Secured Notes due 2028 (the “New Secured Euro Notes”), to be co-issued by the Issuers, and cash;

•an offer to exchange any and all of the $750,000,000 in aggregate principal amount of the Primo Issuer's outstanding 4.375% Senior Notes (as defined herein) for a combination of new 4.375% Senior Secured Notes due 2029 (the “New Secured Dollar Notes” and, together with the New Secured Euro Notes, the “New Secured Notes”), to be co-issued by the Issuers, and cash; and

•an offer to exchange any and all of the $713,023,000 in aggregate principal amount of Triton Water Holdings' outstanding 6.250% Senior Notes (as defined herein) for a combination of new 6.250% Senior Notes due 2029 (the “New Unsecured Notes” and together with the New Secured Notes, the “New Notes”), to be co-issued by the Issuers, and cash.

In conjunction with the Offers, the Issuers solicited (collectively, the “Consent Solicitations”) consents from eligible holders of the Existing Senior Notes to (i) certain proposed amendments to eliminate substantially all of the restrictive covenants, certain of the default provisions, and certain other provisions contained in each indenture governing the applicable series of Existing Senior Notes (collectively, the “Proposed Amendments”) and (ii) with respect to the 3.875% Senior Notes and the 4.375% Senior Notes, release the note guarantee of each guarantor of each such series of notes. The Issuers were required to receive consents (the “Requisite Consents”) from eligible holders of the Existing Senior Notes representing a majority in aggregate principal amount of the applicable series of Existing Senior Notes outstanding to adopt the Proposed Amendments and effectuate the guarantor releases, in each case, with respect to the applicable series of Existing Senior Notes.

Pursuant to the Offers, the aggregate principal amounts of the Existing Senior Notes set forth below were validly tendered and accepted and subsequently cancelled:

•€439,237,000 aggregate principal amount of 3.875% Senior Notes;

•$746,331,000 aggregate principal amount of 4.375% Senior Notes; and

•$699,072,000 aggregate principal amount of 6.250% Senior Notes.

Following such cancellation, the aggregate principal amounts of the Existing Senior Notes set forth below remain outstanding as of February 12, 2025:

•€10,763,000 aggregate principal amount of 3.875% Senior Notes;

•$3,669,000 aggregate principal amount of the 4.375% Senior Notes; and

•$13,951,000 aggregate principal amount of 6.250% Senior Notes.

In connection with the early settlement of the Offers (the “Early Settlement”) on February 12, 2025 (the “Early Settlement Date”), the Issuers co-issued (i) €439,237,000 aggregate principal amount of New Secured Euro Notes, (ii) $746,331,000

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aggregate principal amount of New Secured Dollar Notes, and (iii) $699,072,000 aggregate principal amount of New Unsecured Notes.

As we received the Requisite Consents in connection with the Consent Solicitations, we effectuated the Proposed Amendments on the Early Settlement Date and, as a result, among other things, all shares of Class B common stock converted to Class A common stock and we are now deemed a “controlled company” within the meaning of the NYSE corporate governance standards. While we are a “controlled company” by such standards, we do not currently intend to rely on any of the related corporate governance exemptions. However, we may elect to rely on certain of these exemptions if they are available to us in the future.

Substantially concurrently with the issuance of the New Notes on the Early Settlement Date, we (i) repaid all amounts outstanding, and terminated commitments, under the ABL Credit Facility, (ii) repaid all amounts outstanding, and terminated commitments, under the Revolving Credit Facility, and (iii) entered into an amendment, which amended the credit agreement governing the Term Loans to, among other things, (x) reprice the Term Loans and to make related changes to effect such repricing, and (y) provide for a new revolving credit facility (the “New Revolving Credit Facility,” and the transactions referred to in clauses (i) through (iii), the “Credit Facilities Transactions,” and, the Credit Facilities Transactions, together with the Offers and Consent Solicitations, collectively, the “Refinancing Transactions”).

On the Early Settlement Date, the Company announced that the Issuers completed the early settlement of the exchange of Existing Senior Notes validly tendered and accepted by the Issuers for a combination of New Notes of the applicable series and cash.

Pursuant to the Offers, after the early tender date and on or prior to the expiration date, the additional aggregate principal amounts of the Existing Senior Notes set forth below were validly tendered and expected to be accepted and subsequently cancelled on the Final Settlement date:

•€2,640,000 aggregate principal amount of the 3.875% Senior Notes;

•$120,000 aggregate principal amount of the 4.375% Senior Notes; and

•$13,688,000 aggregate principal amount of the 6.250% Senior Notes.

Following such cancellation, the aggregate principal amounts of the Existing Senior Notes set forth below are expected to remain outstanding:

•€8,123,000 aggregate principal amount of the 3.875% Senior Notes;

•$3,549,000 aggregate principal amount of the 4.375% Senior Notes; and

•$263,000 aggregate principal amount of the 6.250% Senior Notes.

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Debt

The following table summarizes our total debt in the Consolidated Balance Sheets as of the periods presented (prior to the Refinancing Transactions described above):

______________________

1     The outstanding aggregate principal amounts of the 3.875% Senior Notes and the 4.375% Senior Notes are net of unamortized discounts of €8.6 million ($8.9 million at exchange rates in effect on December 31, 2024) and $40.0 million, respectively, as of December 31, 2024. Refer to the sections below for additional details related to the discounts.

Description of Certain Indebtedness

The following is a description of our current and former indebtedness. The following summary of certain provisions of these agreements that govern our existing indebtedness does not purport to be complete and may not contain all of the information that is important to you, and is subject to, and qualified in its entirety by reference to, all of the provisions of the corresponding agreements.

Amended Credit Agreement

Triton Water Holdings and Intermediate Holdings, both wholly-owned subsidiaries of the Company entered into a Term Loan Agreement (as amended, inclusive of the Fourth Amendment to the First Lien Credit Agreement, dated as of February 12, 2025, the “Amended Credit Agreement” and such loans thereunder, the “Term Loans”) on March 31, 2021 with a group of lenders and Morgan Stanley Senior Funding, Inc., as administrative and collateral agent, under which we borrowed term loans in an aggregate principal amount of $2,550.0 million. The Term Loans have a maturity date of March 31, 2028. In connection with the entry into the Term Loans, we incurred $80.3 million of debt issuance costs, which were recorded as a reduction of the carrying amount of the initial Term Loans and are being amortized using the effective interest method over a period of seven years, which represents the term to maturity of the Term Loans.

The Amended Credit Agreement permits us to incur incremental term loans in an aggregate amount not to exceed the greater of (i) $536.0 million and (ii) 1.0 multiplied by the pro forma consolidated adjusted EBITDA of BlueTriton for the most recently ended four full fiscal quarters, plus certain additional amounts, including unlimited amounts subject to, among other things, pro forma compliance with a first lien net leverage ratio, secured net leverage ratio or total net leverage ratio.

On December 9, 2021, Triton Water Holdings and Intermediate Holdings entered into the First Amendment to the Term Loans and incurred incremental term loans in an aggregate principal amount of $250.0 million with a maturity date of March 31, 2028. We recorded debt discounts of $3.6 million related to the First Amendment to the Amended Credit Agreement that are recorded as a reduction of the carrying amount of the incremental term loans and are being amortized using the effective interest method over the remaining term to maturity. The Amended Credit Agreement was amended by that certain Second Amendment to the BlueTriton Term Loan Credit Agreement on June 9, 2023, primarily to effectuate the transition of the interest rate benchmark from London Interbank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR").

On March 1, 2024, Triton Water Holdings and Intermediate Holdings entered into the Third Amendment to the Amended Credit Agreement and incurred incremental term loans in an aggregate principal amount of $400.0 million (the “2024

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Incremental Term Loans”) with a maturity date of March 31, 2028. In connection with the borrowing of the 2024 Incremental Term Loans, we incurred debt issuance and transaction costs of $5.1 million and debt discounts of $8.0 million; all of which are recorded as a reduction of the carrying amount of the 2024 Incremental Term Loans and are being amortized using the effective interest method over the remaining term to maturity.

The Term Loans will mature in March 2028 and amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount.

Interest Rate and Fees

The interest rate per annum applicable to loans under the Term Loans is, at our option, equal to (1) the base rate (which is the highest of (x) the overnight federal funds rate, plus 0.50%, (y) the prime rate on such day, and (z) the one-month SOFR published on such date, plus 1.00%), plus an applicable margin, or (2) one-, three- or six-month SOFR or, if available from all lenders, 12-month SOFR, or any shorter period less than one month (as may be consented to by each applicable lender thereunder), plus an applicable margin. The applicable margin for SOFR loans under the Amended Credit Agreement will be 2.25%. The Amended Credit Agreement is subject to a SOFR floor of 0.50%.

Prepayments

We may voluntarily prepay loans or reduce commitments under the Amended Credit Agreement, in whole or in part, subject to minimum amounts, with prior notice, but without premium or penalty (other than a 1.00% premium on any prepayment in connection with a repricing transaction prior to the date that is six months after the Early Settlement Date. We are required to prepay the Term Loans with 100% of the net cash proceeds of certain asset sales (such percentage subject to reduction based on the achievement of specific leverage ratios), 100% of the net cash proceeds of certain debt issuances, and 50% of excess cash flow (such percentage subject to reduction based on the achievement of specific leverage ratios), in each case, subject to certain reinvestment rights and other exceptions.

Amortization

The Term Loans are repayable in quarterly installments in an amount equal to approximately 1.0% per annum of the original principal amount of the Term Loans per year with the balance payable on the maturity date.

Covenant Compliance

Our Amended Credit Agreement contains customary covenants that include, among other things, restrictions on our ability and the ability of our restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, pay dividends or make other restricted payments, optionally prepay or modify terms of certain junior indebtedness, sell or otherwise transfer certain assets, or enter into transactions with affiliates (in each case subject to permitted exceptions). We were in compliance with these financial covenants as of December 31, 2024.

Events of Default

The Term Loans contains customary events of default, subject to grace periods and materiality thresholds, specified in the Amended Credit Agreement, including:

•failure to make payments when due;

•defaults under certain other indebtedness;

•noncompliance with covenants;

•representations and warranties being untrue in any material respect when made;

•bankruptcy or certain insolvency events;

•material judgments;

•invalidity of loan documentation or invalidity or non-perfection of the liens securing a material portion of collateral; and

•a “change of control” (as defined in the Amended Credit Agreement).

Guarantee and Security

The obligations under the Amended Credit Agreement are guaranteed by the Guarantors (as defined below). The Term Loans are secured by a first-priority lien on substantially all of the Issuers’ and the Guarantors’ current and fixed assets (subject to certain exceptions), subject to certain permitted liens.

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New Revolving Credit Facility

The New Revolving Credit Facility provides for revolving loans, swing line loans, and letters of credit in an aggregate amount of up to $750.0 million and will mature in February 2030 (subject to a springing maturity based on conditions set forth in the Amended Credit Agreement).

Interest Rate

The interest rate margin applicable to borrowings under the New Revolving Credit Facility will be, at our option, either (1) the base rate (which is the highest of (x) the overnight federal funds rate, plus 0.50%, (y) the prime rate on such day, and (z) the one-month SOFR published on such date, plus 1.00%), plus an applicable margin or (2) one-, three- or six-month SOFR or, if available from all lenders, 12-month SOFR or any period less than one month (as may be consented to by each applicable lender thereunder), plus an applicable margin. The applicable margin for SOFR loans under the New Revolving Credit Facility ranges from SOFR plus 1.50% to 2.25%, based on the achievement of certain first lien net leverage ratios. The New Revolving Credit Facility is subject to a SOFR floor of 0.00%.

Prepayments

The Company is required to make prepayments under the New Revolving Credit Facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the New Revolving Credit Facility exceeds the aggregate amount of commitments in respect of the New Revolving Credit Facility.

Covenant Compliance

The New Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on our ability and the ability of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances, or investments, pay dividends or make other restricted payments, sell or otherwise transfer assets, optionally prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, or change our line of business (in each case subject to permitted exceptions). The New Revolving Credit Facility requires the maintenance of (i) a first lien net leverage ratio of less than or equal to 5.00 to 1.00, with no step-downs, and a 0.50 to 1.00 step-up for any four fiscal quarter period in which a material acquisition is consummated, and (ii) a minimum interest coverage ratio of 2.00 to 1.00 at the end of each fiscal quarter.

ABL Credit Facility

Triton Water Holdings and Intermediate Holdings entered into the asset based lending (“ABL”) revolving credit agreement (the “ABL Credit Facility”) on March 31, 2021 with a group of lenders and Bank of America, N.A., as administrative agent and collateral agent, for up to $350.0 million of revolving loan commitments, up to $50.0 million of which was available as swingline loans and up to $75.0 million of which was available as letters of credit, which letters of credit shall expire not more than 12 months after the date of issuance (with options for auto renewal). The ABL Credit Facility had a maturity date of March 31, 2026. On the Early Settlement Date, we repaid all amounts outstanding and terminated commitments under the ABL Credit Facility.

Revolving Credit Facility

On March 6, 2020, Primo Water entered into a credit agreement among Primo Water, as parent borrower, Primo Issuer, and certain other subsidiary borrowers, certain other subsidiaries of Primo Water from time to time designated as subsidiary borrowers, Bank of America, N.A., as administrative agent and collateral agent, and the lenders from time to time party thereto (the “Revolving Credit Agreement”).

The Revolving Credit Agreement provided for a senior secured revolving credit facility in an initial aggregate committed amount of $350.0 million (the “Revolving Credit Facility”), which could be increased by incremental credit extensions from time to time in the form of term loans or additional revolving credit commitments. On the Early Settlement Date, we repaid all amounts outstanding and terminated commitments under the Revolving Credit Facility.

New Secured Notes

The New Secured Euro Notes and the New Secured Dollar Notes were issued pursuant to an indenture, dated as of February 12, 2025 (the “New Secured Notes Indenture”), by and among the Issuers, the guarantors party thereto, Wilmington Trust, National Association, as trustee and notes collateral agent, Deutsche Bank AG, London Branch, as paying agent, and Deutsche Bank Trust Company Americas, as Euro registrar.

The New Secured Euro Notes will bear interest at a rate of 3.875% per annum, which shall be payable semi-annually on April 30 and October 31 of each year, commencing on April 30, 2025. The New Secured Euro Notes will mature on October 31,

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2028. The New Secured Dollar Notes will bear interest at a rate of 4.375% per annum, which shall be payable semi-annually on April 30 and October 31 of each year, commencing on April 30, 2025.

The New Secured Dollar Notes will mature on April 30, 2029. Upon not less than 10 nor more than 60 days’ notice, the Issuers may redeem the New Secured Notes, at their option, in whole at any time or in part from time to time, subject to the payment of a redemption price, together with accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. The redemption price includes a call premium that varies from 0.969% to 0%, in the case of the New Secured Euro Notes, or from 2.188% to 0%, in the case of the New Secured Dollar Notes, in each case, depending on the year of redemption.

In connection with any tender offer, other offer to purchase, or exchange offer for the New Secured Notes, including pursuant to a change of control, alternate offer, or asset sale offer, each as defined in the New Secured Notes Indenture, if not less than 90.0% of the New Secured Notes of the applicable series outstanding are purchased or exchanged by the Issuers or a third party, the Issuers or such third party will have the right to redeem, purchase, or exchange, as applicable, all New Secured Notes of such series that remain outstanding following such purchase or exchange, as applicable, (i) in the case of a tender offer or other offer to purchase, at the price paid to holders of New Secured Notes of the applicable series in such purchase (excluding any early tender premium, to the extent paid in connection with a tender offer, or accrued and unpaid interest paid to such other holders) or (ii) in the case of an exchange offer, for the same consideration provided in such exchange offer, in each case, plus, to the extent not otherwise included in the consideration paid, accrued and unpaid interest, if any, to, but excluding, the date of redemption, purchase, or exchange. The holders of the New Secured Notes will also have the right to require the Issuers to repurchase their New Secured Notes upon the occurrence of a change in control at an offer price equal to 101.0% of the principal amount of the New Secured Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

The New Secured Notes will be guaranteed by the Company and substantially all of our material, wholly-owned domestic subsidiaries, subject to certain customary exceptions (together with the Company, the “Guarantors”). The New Secured Notes and related guarantees are the Issuers’ and Guarantors’ senior secured obligations. In addition, the New Secured Notes will be secured on a first lien basis by substantially all of the assets of each of the Issuers and such Guarantors, subject to certain customary exceptions, which liens shall be pari passu with the liens securing the Amended Credit Agreement (as defined below). The New Secured Indenture contains covenants that limit our (and our subsidiaries’) ability to, among other things: (i) incur additional debt or issue certain preferred stock; (ii) pay dividends, redeem stock, or make other distributions; (iii) make other restricted payments or investments; (iv) create liens on assets; (v) transfer or sell assets; (vi) create restrictions on payment of dividends or other amounts by us to our restricted subsidiaries; (vii) engage in mergers or consolidations; (viii) engage in certain transactions with affiliates; and (ix) designate our subsidiaries as unrestricted subsidiaries. Many of the covenants contained in the New Secured Indenture will not be applicable, and the guarantees of the New Secured Notes will be released, during any period when the New Secured Notes have an investment grade rating.

New Unsecured Notes

The New Unsecured Notes were issued pursuant to an indenture, dated as of February 12, 2025 (the “New Unsecured Notes Indenture”), by and among the Issuers, the guarantors party thereto, and Wilmington Trust, National Association, as trustee.

The New Unsecured Notes will bear interest at a rate of 6.250% per annum, which shall be payable semi-annually on April 1 and October 1 of each year, commencing on April 1, 2025. The New Unsecured Notes will mature on April 1, 2029.

Upon not less than 10 nor more than 60 days’ notice, the Issuers may redeem the New Unsecured Notes, at their option, in whole at any time or in part from time to time, subject to the payment of a redemption price, together with accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. The redemption price includes a call premium that varies from 3.125% to 0%, depending on the year of redemption.

In connection with any tender offer, other offer to purchase, or exchange offer for the New Unsecured Notes, including pursuant to a change of control, alternate offer, or asset sale offer, each as defined in the New Unsecured Notes Indenture, if not less than 90.0% of the New Unsecured Notes outstanding are purchased or exchanged by the Issuers or a third party, the Issuers or such third party will have the right to redeem, purchase, or exchange, as applicable, all New Unsecured Notes that remain outstanding following such purchase or exchange, as applicable, (i) in the case of a tender offer or other offer to purchase, at the price paid to holders of New Unsecured Notes in such purchase (excluding any early tender premium, to the extent paid in connection with a tender offer, or accrued and unpaid interest paid to such other holders) or (ii) in the case of an exchange offer, for the same consideration provided in such exchange offer, in each case, plus, to the extent not otherwise included in the consideration paid, accrued and unpaid interest, if any, to, but excluding, the date of redemption, purchase, or exchange. The holders of the New Unsecured Notes will also have the right to require the Issuers to repurchase their New

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Unsecured Notes upon the occurrence of a change in control at an offer price equal to 101.0% of the principal amount of the New Unsecured Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

The New Unsecured Notes will be guaranteed by the Guarantors. The New Unsecured Notes and related guarantees are the Issuers’ and Guarantors’ senior unsecured obligations. The New Unsecured Indenture contains covenants that limit our (and our subsidiaries’) ability to, among other things: (i) incur additional debt or issue certain preferred stock; (ii) pay dividends, redeem stock, or make other distributions; (iii) make other restricted payments or investments; (iv) create liens on assets; (v) transfer or sell assets; (vi) create restrictions on payment of dividends or other amounts by us to our restricted subsidiaries; (vii) engage in mergers or consolidations; (viii) engage in certain transactions with affiliates; and (ix) designate our subsidiaries as unrestricted subsidiaries. Many of the covenants contained in the New Secured Indenture will not be applicable, and the guarantees of the New Unsecured Notes will be released, during any period when the New Unsecured Notes have an investment grade rating.

Existing Senior Notes

6.250% Senior Notes

On March 31, 2021, Triton Water Holdings issued $770.0 million in aggregate principal amount of 6.250% Senior Notes due 2029 (the “6.250% Senior Notes”). BlueTriton incurred costs of $19.0 million related to the issuance of the 6.250% Senior Notes, which were recorded as a reduction of the carrying amount of the 6.250% Senior Notes and are being amortized using the effective interest method over a period of eight years, which represents the term to maturity of the 6.250% Senior Notes.

The 6.250% Senior Notes bear interest at 6.250% and interest is payable semi-annually on April 1 and October 1. The 6.250% Senior Notes mature on April 1, 2029.

During the year ended December 31, 2022, BlueTriton paid $47.0 million to repurchase $57.0 million in aggregate principal amount of 6.250% Senior Notes. As a result of these transactions, BlueTriton recorded gains of $8.7 million on extinguishment of debt, net of write-off of $1.3 million of capitalized debt issuance costs.

On February 7, 2025, Triton Water Holdings entered in that certain First Supplemental Indenture to the indenture governing the 6.250% Senior Notes (the “6.250% Notes Indenture”) to eliminate substantially all of the restrictive covenants, certain of the default provisions, and certain other provisions contained in the 6.250% Notes Indenture, which First Supplemental Indenture became operative upon the Early Settlement.

3.875% Senior Notes

On October 22, 2020, Primo Issuer.issued €450.0 million ($468.7 million at exchange rates in effect on December 31, 2024) of 3.875% senior notes due October 31, 2028 (the “3.875% Senior Notes”) to qualified purchasers in a private placement offering under Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to non-U.S. purchasers pursuant to Regulation S under the Securities Act and other applicable laws. The 3.875% Senior Notes will mature on October 31, 2028 and interest is payable semi-annually on April 30 and October 31 of each year commencing on April 30, 2021.

On February 7, 2025, the Primo Issuer and the trustee under the indenture governing the 3.875% Senior Notes (the “3.875% Notes Indenture”) entered into that certain Second Supplemental Indenture to the 3.875% Notes Indenture to eliminate substantially all of the restrictive covenants, certain of the default provisions, and certain other provisions contained in such indenture as well as to release the note guarantee of each guarantor of the 3.875% Senior Notes, which Second Supplemental Indenture became operative upon the Early Settlement.

4.375% Senior Notes

On April 30, 2021, Primo Issuer issued $750.0 million of 4.375% senior notes due April 30, 2029 (the “4.375% Senior Notes” and, together with the 3.875% Senior Notes and the 6.250% Senior Notes, the “Existing Senior Notes”) to qualified purchasers in a private placement offering under Rule 144A under the Securities Act, and outside the United States to non-U.S. purchasers pursuant to Regulation S under the Securities Act and other applicable laws. The 4.375% Senior Notes will mature on April 30, 2029 and interest is payable semi-annually on April 30th and October 31st of each year commencing on October 31, 2021.

On February 7, 2025, the Primo Issuer and the trustee under the indenture governing the 4.375% Senior Notes (the “4.375% Notes Indenture”) entered into that certain Second Supplemental Indenture to the 4.375% Notes Indenture to eliminate substantially all of the restrictive covenants, certain of the default provisions, and certain other provisions contained in such indenture as well as to release the note guarantee of each guarantor of the 4.375% Senior Notes, which Second Supplemental Indenture became operative upon the Early Settlement.

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Credit Ratings

Our objective is to maintain credit ratings that provide us with ready access to global capital and credit markets at favorable interest rates.

In January 2025, our credit ratings were updated for the impacts of the Transaction, which more accurately reflects our creditworthiness on a go-forward basis. As of January 31, 2025, our credit ratings were as follows:

Any downgrade of our credit ratings by either Moody’s or Standard and Poor's could increase our future borrowing costs or impair our ability to access capital markets on terms commercially acceptable to us or at all.

Foreign Exchange Forward Contract

As part of the Transaction, we acquired foreign exchange forward contracts with a notional amount of €450.0 million and a maturity date of October 31, 2025. We are utilizing the derivative financial instrument to hedge foreign exchange risk associated with the 3.875% Senior Notes.

Issuer Purchases of Equity Securities

Tax Withholding

During the year ended December 31, 2024, 333,560 shares were withheld from delivery to our employees to satisfy their tax obligations related to the vesting of equity-based awards. Please refer to Part II, Item 5. “Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in this Annual Report.

Dividend Payments

Dividend

Our Board of Directors declared a quarterly dividend of $0.09 per share of Class A common stock and Class B common stock in the last quarter of 2024 for an aggregate dividend of approximately $34.4 million. We intend to pay a regular quarterly dividend on our common stock subject to, among other things, the best interests of our stockholders, our results of operations, cash balances and future cash requirements, financial condition, statutory regulations and covenants set forth in agreements governing our debt above as well as other factors that the Board of Directors may deem relevant from time to time.

Additionally, on February 20, 2025, our Board of Directors declared a dividend of $0.10 per share of outstanding Class A common stock of the Company, payable in cash on March 24, 2025 to stockholders of record at the close of business on March 7, 2025.

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Cash Flows

The following table sets forth a summary of our cash flows for the periods indicated (in millions) as reported in our Consolidated Statements of Cash Flows in the accompanying Consolidated Financial Statements:

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

Net cash provided by operating activities from continuing operations was $463.8 million for the year ended December 31, 2024 as compared to $320.9 million for the year ended December 31, 2023, an increase of $142.9 million. Improvement in fiscal year 2024 was primarily due to working capital improvements including a reduction in cash used for accounts payable of $204.6 million and a $32.3 million increase in cash provided from trade receivable, partially offset by a net loss from continuing operations, driven primarily by Transaction related expenses.

Net cash provided by investing activities from continuing operations was $468.6 million for the year ended December 31, 2024, compared to a use of $217.6 million for the year ended December 31, 2023, an improvement of $686.2 million. The increase was primarily driven by the $665.9 million of cash acquired through the Transaction and a decline in capital expenditures as upgrades and capacity improvement projects executed since 2021 have been coming to completion.

Net cash used in financing activities from continuing operations for the year ended December 31, 2024 was $362.9 million, compared to $162.3 million for the year ended December 31, 2023, an increase of $200.6 million. The use of cash during fiscal year 2024 primarily related to the payment of dividends including: $448.6 million to the Sponsor Stockholder prior to the Transaction, $131.5 million in dividends to legacy Primo Water stockholders, and $35.7 million in dividends to Primo Brands' post-Transaction stockholders. Partially offsetting the aforementioned usages was the addition of the $400 million 2024 Incremental Term Loan in March 2024.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

Net cash provided by operating activities from continuing operations was $320.9 million for the year ended December 31, 2023 as compared to $108.3 million for the year ended December 31, 2022, an increase of $212.6 million. Improvement in fiscal year 2023 was primarily due to an improvement in net income of $219.5 million when compared to fiscal year 2022, partially offset by an increase in working capital usage.

Net cash used in investing activities from continuing operations was $217.6 million for the year ended December 31, 2023, compared to $319.4 million for the year ended December 31, 2022, a decrease of $101.8 million. The decrease was primarily related to lower capital expenditures to improve operations and expand capacity. In addition, the higher capital expenditures in fiscal year 2022 related to our initial IT platform implementation during that period.

Net cash used in financing activities from continuing operations for the year ended December 31, 2023 was $162.3 million, compared to $147.7 million for the year ended December 31, 2022, an increase of $14.6 million. The use of cash during fiscal year 2023 primarily related to the redemption of preferred stock of $183.6 million and payment of a dividend on preferred stock of $49.9 million and the scheduled principal payments of the Term Loans, partially offset by borrowings on the ABL

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Credit Facility. The use of cash during fiscal year 2022 related to the redemption of preferred stock of $66.4 million and payment of a dividend on preferred stock of $8.6 million, the repurchase and subsequent retirement of a portion of the 6.250% Senior Notes and the scheduled principal payments of the Term Loans.

Other Liquidity Matters

The following table shows the schedule of future payments under certain contracts, including debt agreements and guarantees, as of December 31, 2024 (prior to giving effect to the Refinancing Transactions):

1 The payments for the 3.875% Senior Notes and the 4.375% Senior Notes exclude the unamortized discounts of €8.6 million ($8.9 million at exchange rates in effect on December 31, 2024) and $40.0 million, respectively, as of December 31, 2024.

2 Purchase obligations consist of commitments for the purchase of subscriptions, utilities, services and supplies vital to the Company's operations and ability to serve its customers. These obligations represent the minimum contractual obligations expected under the normal course of business.

As a result of the Refinancing Transactions, the Company’s debt instruments have changed, however the aggregate payments due by period have not materially changed from the above, other than with respect to future interest payments. The ABL Credit Facility and Revolving Credit Facility, have been replaced by the $750 million New Revolving Credit Facility.

We have not provided for federal, state, and foreign deferred income taxes on the undistributed earnings of our subsidiaries. We expect that these earnings will be permanently reinvested by such subsidiaries except in certain instances where repatriation attributable to current earnings results in minimal or no tax consequences. A future change to our assertion that foreign earnings will be permanently reinvested could result in additional income taxes and/or withholding taxes payable, where applicable. Therefore, a higher effective tax rate could occur during the period of repatriation.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as “structured finance or special purpose entities,” which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Estimates

Our significant accounting policies and recently issued accounting pronouncements are described in Note 2 "Summary of Significant Accounting Policies" to the Consolidated Financial Statements included in this Annual Report. We believe the following represent our critical accounting policies:

Estimates

The preparation of the Consolidated Financial Statements included in this Annual Report in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of

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contingent assets and liabilities at the date of the financial statements and the amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Consolidated Financial Statements include estimates and assumptions that, in the opinion of management, were significant to the underlying amounts representing the future valuation of intangible assets, long-lived assets and goodwill, insurance reserves, realization of deferred income tax assets, and the resolution of tax contingencies.

Revenue Recognition

Our principal source of revenue is bottled water sales to customers primarily in the United States and Canada. Revenue is recognized when a customer obtains control of promised goods (the obligation), which may be upon shipment of goods or upon delivery to the customer as defined in the customer contract or purchase order. Revenue is recognized at an amount that reflects the consideration we expect to receive in exchange for those goods. Amounts collected from customers for sales taxes are excluded from the transaction price. We measure revenue based on the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct good to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when the customer receives the benefit of the performance obligation (we have only one obligation).

The nature of our contracts give rise to variable consideration including volume-based rebates, growth incentives, point of sale promotions, and other trade promotional discounts (sales incentives). For certain sales incentives, the accrual we record for the rebate or discount that will be granted to the customer requires significant estimation. The critical assumptions used in estimating the sales incentive accruals include our estimate of expected levels of performance and redemption rates, which requires judgement. These assumptions are developed based upon the historical performance of the customer's participation with similar types of promotions adjusted for current trends. These estimated sales incentives are included in the transaction price of our contracts with customers as a reduction within net sales and are included as either a reduction in accounts receivable if the customer is entitled to take a deduction on their payment, or as accrued sales incentives in accruals and other current liabilities if we anticipate needing to pay the customer.

Estimated discounts reflected in Trade receivables, net of allowance for expected credit losses were $61.8 million and $84.6 million as of December 31, 2024 and 2023, respectively. Accrued sales incentive obligations, recorded in Accruals and other current liabilities, were $39.8 million and $45.5 million as of December 31, 2024 and 2023, respectively.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and intangible assets with indefinite lives are not amortized, and as a result, impairment tests must be performed at least annually, or more frequently if events or circumstances indicate that an asset may be impaired. We perform our annual impairment test in the fourth quarter or more frequently if a triggering event has occurred. Goodwill is tested for impairment at the reporting unit level and indefinite-lived intangible assets are tested for impairment at the asset level.

Primo Brands operates through one operating segment which is also its sole reportable segment. Reporting units are determined based on one level below the operating segment level. In performing the goodwill impairment test we may first perform a qualitative assessment or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. For purposes of the annual test for the year ended December 31, 2024, we elected to perform a qualitative assessment for our two reporting units that existed prior to the Transaction to assess whether it was more likely than not that the fair value of these reporting units exceeded their respective carrying values. In performing these assessments, factors considered include macroeconomic, industry and market conditions, cost factors that would have a negative effect on earnings and cash flows, legal and regulatory environment, historical financial performance and significant changes in our operations or brand, the impact of which are all significant judgments and estimates. Based on these factors, management concluded that it was more likely than not that the fair values of our reporting units were greater than their respective carrying amounts, including goodwill, indicating no impairment during the year ended December 31, 2024. The goodwill resulting from the Transaction will be tested for impairment beginning in 2025 due to the proximity of the acquisition to year end.

Each year during the fourth quarter, we re-evaluate the assumptions used in our 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 our reporting units. Based on the evaluations performed in 2024, we determined that the fair value of each of our reporting units, including the goodwill resulting from the Transaction, exceeded their carrying amounts.

We had goodwill of $3,572.2 million on our Consolidated Balance Sheet as of December 31, 2024, which represents amounts for our two reporting units, including the goodwill resulting from the Transaction which will be included in the existing reporting units going forward.

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Our intangible assets with indefinite lives relate to trademarks and trade names 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.

We 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 trademarks and trade names that existed prior to the Transaction were less than their respective carrying value. The qualitative factors we assessed included macroeconomic, industry and market conditions, cost factors that would have a negative effect on earnings and cash flows, legal and regulatory environment, historical financial performance and significant changes in our operations or brand, the impact of which are all significant judgments and estimates. During the fourth quarter of 2024, we concluded that it was more likely than not that the fair value of the trademarks and trade names were more than their carrying value and therefore we were not required to perform any additional testing. The trademarks and trade names resulting from the Transaction will be tested for impairment beginning in 2025 due to the proximity of the acquisition to year end.

Intangible assets with indefinite lives have an aggregate book value of $1,279.8 million as of December 31, 2024.

There are inherent uncertainties related to each of the qualitative assumptions, and our judgment in applying them. Changes in the assumptions used in our qualitative assessment of goodwill and intangible assets could result in impairment charges that could be material to the consolidated financial statements in any given period.

Insurance Reserves

We are self-insured for workers’ compensation, property, automobile and general liability. The self-insurance claim liability is determined actuarially, at a minimum annually, based on claims filed and an estimate of claims incurred but not yet reported. Actuarial projections of the losses are employed due to variability in the liability estimates. The estimates used are derived from any inputs including the severity of claims, frequency and volume of claims, the development timeframe, settlement history and patterns, and cost trends. We have purchased stop-loss coverage from various insurers in order to limit our claims exposure. The insurance-related liabilities are not discounted. The balances of our self-insurance reserves were $153.3 million and $41.8 million for the years ended December 31, 2024 and 2023, respectively, of which $23.8 million and $9.8 million, respectively, was covered by insurance. Since recorded amounts are based on estimates, the ultimate cost of all incurred claims and related expenses may be more or less than the recorded liabilities.

Recently Issued Accounting Pronouncements

Refer to Note 2 "Summary of Significant Accounting Policies" in the Consolidated Financial Statements included in this Annual Report for a summary of recently adopted and recently issued accounting standards and their related effects or anticipated effects on our consolidated results of operations and financial condition.