The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
Notes to the Consolidated Financial Statements
Unaudited
Note 1 Business and Recent Accounting Pronouncements
Description of Business
As used herein, Cott, the Company, our Company, Cott Corporation, we,
us, or our refers to Cott Corporation, together with its consolidated subsidiaries. With the acquisition of DS Services of America, Inc. (DSS) in December 2014, we combined a leading provider in the
direct-to-consumer beverage services industry with our traditional business, one of the worlds largest producers of beverages on behalf of retailers, brand owners and distributors. We now have the largest volume-based national presence in the
U.S. home and office delivery (HOD) industry for bottled water and one of the five largest national market share positions in the U.S. office coffee services (OCS) and filtration services industries. We reach over 1.5 million
customers (approximately 60% commercial and 40% residential) through over 2,000 routes located across our national network supported by national sales and distribution facilities, as well as a fleet of over 2,000 vehicles. Our broad portfolio allows
us to offer, on a direct-to-consumer basis, a variety of bottled water, coffee, brewed tea, water dispensers, coffee and tea brewers and filtration equipment. With the ability to cover approximately 90% of U.S. households, in terms of geography, we
believe we have the broadest distribution network in the direct-to-consumer beverage services industry in the United States, which enables us to efficiently service residences and small and medium size businesses, as well as national corporations,
universities and government agencies.
Basis of Presentation
The accompanying interim unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and
Article 10 of Regulation S-X and in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair statement of our results of operations for the interim periods reported and of our financial condition as of the date of the interim balance sheet have been included. The consolidated balance sheet as of January 2, 2016 included
herein was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2016 (2015 Annual Report). This Quarterly Report on Form 10-Q should be read in
conjunction with the annual audited consolidated financial statements and accompanying notes in our 2015 Annual Report. The accounting policies used in these interim consolidated financial statements are consistent with those used in the annual
consolidated financial statements.
The presentation of these interim consolidated financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
Recently Issued Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (FASB) in the form of Accounting Standards Updates
(ASUs) or the issuance of new standards to the FASBs Accounting Standards Codification (ASC). The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be
either not applicable or are expected to have minimal impact on these consolidated financial statements.
Update ASU 2014-09 Revenue from
Contracts with Customers (Topic 606)
In May 2014, the FASB amended its guidance regarding revenue recognition and created a new Topic
606, Revenue from Contracts with Customers. The objectives for creating Topic 606 were to remove inconsistencies and weaknesses in revenue recognition, provide a more robust framework for addressing revenue issues, provide more useful information to
users of the financial statements through improved disclosure requirements, simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer, and improve comparability of revenue recognition
practices across entities, industries, jurisdictions and capital markets. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve the core principle, an entity should apply the following steps: 1) identify the contract(s) with a customer; 2) identify the performance
obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations in the contract; and 5) recognize revenue when (or as) the entity satisfies a performance obligation. For public
entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments may be applied retrospectively to each prior reporting period presented or
retrospectively with the cumulative effect of initially applying the amendment recognized at the date of initial application. We are currently assessing the impact of adoption of this standard on our consolidated financial statements.
8
Update ASU 2016-02 Leases (Topic 842)
In February 2016, the FASB issued an update to its guidance on lease accounting. This update revises accounting for operating leases by a
lessee, among other changes, and requires a lessee to recognize a liability to make lease payments and an asset representing its right to use the underlying asset for the lease term in the balance sheet. The distinction between finance and operating
leases has not changed and the update does not significantly change the effect of finance and operating leases on the consolidated statements of operations and the consolidated statements of cash flows. Additionally, this update requires both
qualitative and specific quantitative disclosures. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption
permitted. At adoption, this update will be applied using a modified retrospective approach. We are currently assessing the impact of adoption of this standard on our consolidated financial statements.
Update ASU 2016-09 Compensation - Stock Compensation (Topic 718)
In March 2016, the FASB amended its guidance to simplify several areas of accounting for share-based compensation arrangements. The amendments
in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the consolidated statements of cash flows, an accounting policy election for forfeitures, the amount an
employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the consolidated statements of cash flows. The amendments in this update are effective for fiscal years beginning
after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the
area covered in this update. We are currently assessing the impact of adoption of this standard on our consolidated financial statements.
Note 2Acquisitions
HOD Water Business Acquisitions
During the three months ended April 2, 2016, the Company acquired two HOD water businesses for an aggregate cash purchase price of $1.2
million. The Company has accounted for these transactions as business combinations in accordance with GAAP. These tuck-in acquisitions support the Companys ongoing objective of leveraging its assets and further strengthening its customer
density. Net assets, including goodwill, acquired have been allocated to the DSS reporting segment. All of the goodwill recorded is expected to be tax deductible.
Aquaterra Acquisition
On January
4, 2016 (the Acquisition Date), the Company acquired 100% of the share capital of Aquaterra Corporation (Aquaterra) pursuant to a Share Purchase Agreement dated December 7, 2015 (the Aquaterra Acquisition).
Aquaterra operates a Canadian direct-to-consumer HOD bottled water and OCS business. The aggregate purchase price paid by the Company in the Aquaterra Acquisition was approximately C$62 million (approximately U.S. $44.5 million). The purchase price
was paid at closing in cash and is subject to a customary post-closing adjustment for net working capital.
This acquisition supports our
strategy to become a more diversified beverage provider across multiple channels and geographies, as well as our continuing consolidation of the higher margin HOD bottled water and OCS categories. The Company has accounted for this transaction as a
business combination in accordance with authoritative accounting guidance.
The purchase consideration of $44.5 million was allocated to
the assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date. A preliminary allocation of the purchase price has been made to major categories of assets and liabilities based on managements
estimates. The table below presents the preliminary purchase price allocation of the estimated acquisition date fair values of the assets acquired and the liabilities assumed:
|
|
|
|
|
(in millions of U.S. dollars)
|
|
Acquired Value
|
|
Cash
|
|
$
|
1.3
|
|
Accounts receivable
|
|
|
6.2
|
|
Inventories
|
|
|
2.1
|
|
Prepaid expenses and other current assets
|
|
|
1.3
|
|
Property, plant & equipment
|
|
|
13.4
|
|
Goodwill
|
|
|
19.2
|
|
Intangible and other assets
|
|
|
17.4
|
|
Accounts payable and accrued liabilities
|
|
|
(15.8
|
)
|
Long-term debt
|
|
|
(0.3
|
)
|
Other long-term liabilities
|
|
|
(0.3
|
)
|
|
|
|
|
|
Total
|
|
$
|
44.5
|
|
|
|
|
|
|
9
The fair values of acquired property, plant & equipment, identifiable intangible assets and
deferred taxes are provisional pending validation and receipt of the final valuations for those assets. In addition, consideration for potential loss contingencies are still under review.
The amount of revenues and net loss related to the Aquaterra Acquisition included in the Companys consolidated statement of operations
for the period from the Acquisition Date through April 2, 2016 were $14.2 million and $0.1 million, respectively. During the three months ended April 2, 2016, the Company incurred $0.2 million of acquisition related costs associated with the
Aquaterra Acquisition, which are included in acquisition and integration expenses in the consolidated statements of operations.
Intangible Assets
In our
preliminary determination of the fair value of the intangible assets, we considered, among other factors, the best use of acquired assets, analysis of historic financial performance and estimates of future performance of Aquaterras products.
The estimated fair values of identified intangible assets were calculated considering market participant expectations and using an income approach and estimates and assumptions provided by Aquaterras and our management. The following table
sets forth the components of identified intangible assets associated with the Aquaterra Acquisition and their estimated weighted average useful lives:
|
|
|
|
|
|
|
|
|
|
|
Estimated Fair
|
|
|
Estimated
|
|
(in millions of U.S. dollars)
|
|
Market Value
|
|
|
Useful Life
|
|
Customer relationships
|
|
$
|
10.0
|
|
|
|
12 years
|
|
Trademarks and trade names
|
|
|
6.7
|
|
|
|
Indefinite
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
16.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships represent future projected revenue that will be derived from sales to existing
customers of Aquaterra.
Trademark and trade names represent the future projected cost savings associated with the premium and brand image
obtained as a result of owning the trademark or trade name as opposed to obtaining the benefit of the trademark or trade name through a royalty or rental fee.
Goodwill
The principal
factor that resulted in recognition of goodwill was that the purchase price for the Aquaterra Acquisition was based in part on cash flow projections assuming the reduction of administration costs and the integration of acquired customers and
products into our operations, which is of greater value than on a standalone basis. The goodwill recognized as part of the Aquaterra Acquisition was allocated to the DSS reporting segment, none of which is expected to be tax deductible.
Note 3Share-based Compensation
During the three months ended April 2, 2016, the Company granted 377,196 Performance-based RSUs, 197,605 Time-based RSUs and
1,138,934 Stock Options.
The Performance-based RSUs are restricted share units with performance-based vesting granted under the Amended
and Restated Cott Corporation Equity Incentive Plan (the Equity Incentive Plan). These Performance-based RSUs vest at the end of the performance period, or the last day of our 2018 fiscal year. The shares ultimately awarded will be based
upon the performance percentage, which can range from 0% to 200% of the awards granted. The Performance-based RSUs ultimately awarded upon vesting are based primarily on the Companys achievement of a specified level of cumulative pre-tax
income for the performance period. The grant date fair value of $11.22 per share for the Performance-based RSUs was based on the closing market price of the Companys common shares on the date of grant on the New York Stock Exchange
(NYSE).
10
The Time-based RSUs are restricted share units with time-based vesting granted under the Equity
Incentive Plan. The Time-based RSUs vest ratably in three equal annual installments on the first, second and third anniversaries of the date of grant and are based upon a service condition. The grant date fair value of $11.22 per share for the
Time-based RSUs was based on the closing market price of the Companys common shares on the date of grant on the NYSE.
The Stock
Options are non-qualified stock options granted under the Equity Incentive Plan and will vest ratably in three equal installments on the first, second and third anniversaries of the date of grant, are based upon a service condition and have a ten
year contractual term. The fair value of $2.92 per option for the Stock Options was based on the estimate of fair value on the date of grant using the Black-Scholes option pricing model and related assumptions.
The Companys share-based compensation expense was $2.4 million for the three months ended April 2, 2016 and April 4, 2015, and was
recorded in selling, general and administrative (SG&A) expenses in our consolidated statements of operations.
Note 4Income Taxes
Income tax benefit was $9.0 million on pre-tax loss of $10.9 million for the three months ended April 2, 2016, as compared
to an income tax benefit of $9.4 million on pre-tax loss of $10.6 million for the three months ended April 4, 2015. This is the result of recognizing income tax benefit of pre-tax losses in certain jurisdictions that is not offset by income tax
expense in other jurisdictions with pre-tax income.
As we have significant global permanent book to tax differences that exceed our
estimated income before taxes on an annual basis, small changes in our estimated income before taxes or changes in year to date income before taxes between jurisdictions can cause material fluctuations in our estimated effective tax rate on a
quarterly basis. We have therefore calculated our quarterly income tax provision for the fiscal quarters ended April 2, 2016 and April 4, 2015 on a discrete basis for the United States rather than using the estimated annual effective tax rate for
the year, in accordance with ASC 740,
Income Taxes
.
Note 5Common Shares and Net Loss Per Common Share
Common Shares
On March 9, 2016, we completed a public offering, on a bought deal basis, of 12,765,000 common shares at a price of $11.80 per share for total
gross proceeds to us of $150.6 million (the 2016 Offering). We incurred and recorded $6.0 million of underwriter commissions, $0.8 million in professional fees and a $1.7 million deferred tax benefit to common share capital in connection
with the 2016 Offering. The net proceeds of the 2016 Offering were used to repay a portion of the borrowings under our asset based lending facility (ABL facility), to finance potential acquisitions and for general corporate purposes.
Net Loss Per Common Share
Basic net loss per common share is calculated by dividing net loss attributed to Cott Corporation by the weighted average number of common
shares outstanding during the periods presented. Diluted net loss per common share is calculated by dividing diluted net loss attributed to Cott Corporation by the weighted average number of common shares outstanding adjusted to include the effect,
if dilutive, of the exercise of in-the-money stock options, Performance-based RSUs, Time-based RSUs and convertible preferred shares issued as part of the acquisition of DSS (Convertible Preferred Shares) during the periods presented.
The dilutive effect of the Convertible Preferred Shares was calculated using the if-converted method. In applying the if-converted method, the Convertible Preferred Shares are assumed to have been converted at the beginning of the period (or at the
time of issuance, if later). Set forth below is a reconciliation of the numerator and denominator for the diluted net loss per common share computations for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
(in millions of U.S. dollars)
|
|
April 2, 2016
|
|
|
April 4, 2015
|
|
Net loss attributed to Cott Corporation
|
|
$
|
(3.3
|
)
|
|
$
|
(6.0
|
)
|
Plus:
|
|
|
|
|
|
|
|
|
Accumulated dividends on Convertible Preferred Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss attributed to Cott Corporation (numerator)
|
|
$
|
(3.3
|
)
|
|
$
|
(6.0
|
)
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
(in thousands)
|
|
April 2, 2016
|
|
|
April 4, 2015
|
|
Weighted-average common shares outstanding - basic
|
|
|
113,267
|
|
|
|
93,196
|
|
Dilutive effect of Stock Options
|
|
|
|
|
|
|
|
|
Dilutive effect of Performance-based RSUs
|
|
|
|
|
|
|
|
|
Dilutive effect of Time-based RSUs
|
|
|
|
|
|
|
|
|
Dilutive effect of Convertible Preferred Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - diluted (denominator)
|
|
|
113,267
|
|
|
|
93,196
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes anti-dilutive securities excluded from the computation of diluted net loss per
common share for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
(in thousands)
|
|
April 2, 2016
|
|
|
April 4, 2015
|
|
Stock Options
|
|
|
2,892
|
|
|
|
1,801
|
|
Performance-based RSUs
1
|
|
|
2,003
|
|
|
|
1,546
|
|
Time-based RSUs
|
|
|
733
|
|
|
|
849
|
|
Convertible Preferred Shares
|
|
|
|
|
|
|
18,480
|
|
1.
|
Performance-based RSUs represent the number of shares expected to be issued based primarily on the estimated achievement of cumulative pre-tax income targets for
these awards.
|
Note 6Segment Reporting
Our broad portfolio of products include bottled water, coffee, brewed tea, water dispensers, coffee and tea brewers,
filtration equipment, carbonated soft drinks (CSDs), 100% shelf stable juice and juice-based products, clear, still and sparkling flavored waters, energy drinks and shots, sports products, new age beverages, ready-to-drink teas, liquid
enhancers, freezables, ready-to-drink alcoholic beverages, hot chocolate, coffee, malt drinks, creamers/whiteners, cereals and beverage concentrates.
Our business operates through four reporting segments: DSS, Cott North America, Cott U.K. and All Other (which includes our Mexico operating
segment, Royal Crown International operating segment and other miscellaneous expenses). We refer to our Cott North America, Cott U.K. and All Other reporting segments together as our traditional business. Our corporate oversight function
(Corporate) is not treated as a segment; it includes certain general and administrative costs that are not allocated to any of the reporting segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 2, 2016
|
|
|
|
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
Cott
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
DSS
|
|
|
America
|
|
|
U.K.
|
|
|
Other
|
|
|
Corporate
|
|
|
Eliminations
|
|
|
Total
|
|
Revenue, net
1
|
|
$
|
257.3
|
|
|
$
|
313.3
|
|
|
$
|
120.6
|
|
|
$
|
13.6
|
|
|
$
|
|
|
|
$
|
(6.4
|
)
|
|
$
|
698.4
|
|
Depreciation and amortization
|
|
|
28.4
|
|
|
|
18.3
|
|
|
|
5.5
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
52.5
|
|
Operating income (loss)
|
|
|
5.7
|
|
|
|
0.6
|
|
|
|
9.9
|
|
|
|
2.5
|
|
|
|
(4.0
|
)
|
|
|
|
|
|
|
14.7
|
|
Additions to property, plant & equipment
|
|
|
17.8
|
|
|
|
9.4
|
|
|
|
2.0
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
29.5
|
|
As of April 2, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
2
|
|
|
1,580.1
|
|
|
|
930.0
|
|
|
|
387.4
|
|
|
|
30.1
|
|
|
|
|
|
|
|
|
|
|
|
2,927.6
|
|
1.
|
Intersegment revenue between Cott North America and the other reporting segments was $6.4 million for the three months ended April 2, 2016.
|
2.
|
Excludes intersegment receivables, investments and notes receivable.
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 4, 2015
|
|
|
|
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
Cott
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
DSS
|
|
|
America
|
|
|
U.K.
|
|
|
Other
|
|
|
Corporate
|
|
|
Eliminations
|
|
|
Total
|
|
Revenue, net
1
|
|
$
|
240.3
|
|
|
$
|
328.7
|
|
|
|
132.2
|
|
|
$
|
13.0
|
|
|
$
|
|
|
|
$
|
(4.4
|
)
|
|
$
|
709.8
|
|
Depreciation and amortization
|
|
|
30.2
|
|
|
|
21.3
|
|
|
|
5.5
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
57.4
|
|
Operating (loss) income
|
|
|
(1.5
|
)
|
|
|
7.2
|
|
|
|
3.9
|
|
|
|
1.6
|
|
|
|
(4.5
|
)
|
|
|
|
|
|
|
6.7
|
|
Additions to property, plant & equipment
|
|
|
18.4
|
|
|
|
7.2
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27.3
|
|
As of January 2, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
2
|
|
|
1,513.1
|
|
|
|
943.1
|
|
|
|
402.5
|
|
|
|
28.6
|
|
|
|
|
|
|
|
|
|
|
|
2,887.3
|
|
1.
|
Intersegment revenue between Cott North America and the other reporting segments was $4.4 million for the three months ended April 4, 2015.
|
2.
|
Excludes intersegment receivables, investments and notes receivable.
|
For the three months ended April 2, 2016, sales to Walmart accounted for 18.2% of our total revenue (April 4, 201518.6%), 2.5% of our
DSS reporting segment revenue (April 4, 20152.6%), 34.3% of our Cott North America reporting segment revenue (April 4, 201534.0%), 11.1% of our Cott U.K. reporting segment revenue (April 4, 201511.6%), and 1.6% of our All Other
reporting segment revenue (April 4, 20154.8%).
Credit risk arises from the potential default of a customer in meeting its financial
obligations to us. Concentrations of credit exposure may arise with a group of customers that have similar economic characteristics or that are located in the same geographic region. The ability of such customers to meet obligations would be
similarly affected by changing economic, political or other conditions. We are not currently aware of any facts that would create a material credit risk.
Revenues by channel by reporting segment were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 2, 2016
|
|
|
|
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
Cott
|
|
|
All
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
DSS
|
|
|
America
|
|
|
U.K.
|
|
|
Other
|
|
|
Eliminations
|
|
|
Total
|
|
Revenue, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private label retail
|
|
$
|
16.9
|
|
|
$
|
248.5
|
|
|
$
|
51.0
|
|
|
$
|
0.5
|
|
|
$
|
(0.4
|
)
|
|
$
|
316.5
|
|
Branded retail
|
|
|
24.3
|
|
|
|
26.8
|
|
|
|
36.6
|
|
|
|
0.8
|
|
|
|
(0.3
|
)
|
|
|
88.2
|
|
Contract packaging
|
|
|
|
|
|
|
31.4
|
|
|
|
28.3
|
|
|
|
4.7
|
|
|
|
(2.1
|
)
|
|
|
62.3
|
|
Home and office bottled water delivery
|
|
|
162.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162.0
|
|
Office coffee services
|
|
|
31.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.5
|
|
Concentrate and other
|
|
|
22.6
|
|
|
|
6.6
|
|
|
|
4.7
|
|
|
|
7.6
|
|
|
|
(3.6
|
)
|
|
|
37.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
257.3
|
|
|
$
|
313.3
|
|
|
$
|
120.6
|
|
|
$
|
13.6
|
|
|
$
|
(6.4
|
)
|
|
$
|
698.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 4, 2015
|
|
|
|
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
Cott
|
|
|
All
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
DSS
|
|
|
America
|
|
|
U.K.
|
|
|
Other
|
|
|
Eliminations
|
|
|
Total
|
|
Revenue, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private label retail
|
|
$
|
15.6
|
|
|
$
|
267.5
|
|
|
$
|
60.5
|
|
|
$
|
1.2
|
|
|
$
|
(0.3
|
)
|
|
$
|
344.5
|
|
Branded retail
|
|
|
19.7
|
|
|
|
27.1
|
|
|
|
41.2
|
|
|
|
1.1
|
|
|
|
(0.4
|
)
|
|
|
88.7
|
|
Contract packaging
|
|
|
|
|
|
|
25.7
|
|
|
|
28.4
|
|
|
|
4.0
|
|
|
|
(0.2
|
)
|
|
|
57.9
|
|
Home and office bottled water delivery
|
|
|
149.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
149.6
|
|
Office coffee services
|
|
|
32.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.0
|
|
Concentrate and other
|
|
|
23.4
|
|
|
|
8.4
|
|
|
|
2.1
|
|
|
|
6.7
|
|
|
|
(3.5
|
)
|
|
|
37.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
240.3
|
|
|
$
|
328.7
|
|
|
$
|
132.2
|
|
|
$
|
13.0
|
|
|
$
|
(4.4
|
)
|
|
$
|
709.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 7Inventories
The following table summarizes inventories as of April 2, 2016 and January 2, 2016:
|
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
April 2, 2016
|
|
|
January 2, 2016
|
|
Raw materials
|
|
$
|
97.5
|
|
|
$
|
95.3
|
|
Finished goods
|
|
|
124.2
|
|
|
|
118.4
|
|
Resale items
|
|
|
13.1
|
|
|
|
15.8
|
|
Other
|
|
|
19.9
|
|
|
|
19.9
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
254.7
|
|
|
$
|
249.4
|
|
|
|
|
|
|
|
|
|
|
Note 8Intangibles and Other Assets
The following table summarizes intangibles and other assets as of April 2, 2016 and January 2, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
|
January 2, 2016
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
(in millions of U.S. dollars)
|
|
Cost
|
|
|
Amortization
|
|
|
Net
|
|
|
Cost
|
|
|
Amortization
|
|
|
Net
|
|
Intangibles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not subject to amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights
1
|
|
$
|
45.0
|
|
|
|
|
|
|
$
|
45.0
|
|
|
$
|
45.0
|
|
|
|
|
|
|
$
|
45.0
|
|
Trademarks
|
|
|
190.2
|
|
|
|
|
|
|
|
190.2
|
|
|
|
183.1
|
|
|
|
|
|
|
|
183.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangibles not subject to amortization
|
|
|
235.2
|
|
|
|
|
|
|
|
235.2
|
|
|
|
228.1
|
|
|
|
|
|
|
|
228.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subject to amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
|
|
671.2
|
|
|
|
255.6
|
|
|
|
415.6
|
|
|
|
663.9
|
|
|
|
241.0
|
|
|
|
422.9
|
|
Trademarks
|
|
|
32.8
|
|
|
|
28.1
|
|
|
|
4.7
|
|
|
|
33.0
|
|
|
|
28.1
|
|
|
|
4.9
|
|
Information technology
|
|
|
57.1
|
|
|
|
31.7
|
|
|
|
25.4
|
|
|
|
54.0
|
|
|
|
29.1
|
|
|
|
24.9
|
|
Other
|
|
|
7.5
|
|
|
|
4.6
|
|
|
|
2.9
|
|
|
|
7.8
|
|
|
|
4.5
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangibles subject to amortization
|
|
|
768.6
|
|
|
|
320.0
|
|
|
|
448.6
|
|
|
|
758.7
|
|
|
|
302.7
|
|
|
|
456.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Intangibles
|
|
|
1,003.8
|
|
|
|
320.0
|
|
|
|
683.8
|
|
|
|
986.8
|
|
|
|
302.7
|
|
|
|
684.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing costs
|
|
|
12.7
|
|
|
|
8.8
|
|
|
|
3.9
|
|
|
|
12.6
|
|
|
|
8.5
|
|
|
|
4.1
|
|
Deposits
|
|
|
10.5
|
|
|
|
0.4
|
|
|
|
10.1
|
|
|
|
10.3
|
|
|
|
0.4
|
|
|
|
9.9
|
|
Other
|
|
|
14.9
|
|
|
|
1.8
|
|
|
|
13.1
|
|
|
|
15.2
|
|
|
|
1.6
|
|
|
|
13.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Assets
|
|
|
38.1
|
|
|
|
11.0
|
|
|
|
27.1
|
|
|
|
38.1
|
|
|
|
10.5
|
|
|
|
27.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Intangibles & Other Assets
|
|
$
|
1,041.9
|
|
|
$
|
331.0
|
|
|
$
|
710.9
|
|
|
$
|
1,024.9
|
|
|
$
|
313.2
|
|
|
$
|
711.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Relates to the 2001 acquisition of intellectual property from Royal Crown Company, Inc., including the right to manufacture our concentrates, with all related
inventions, processes, technologies, technical and manufacturing information, know-how and the use of the Royal Crown brand outside of North America and Mexico.
|
14
Amortization expense of intangibles and other assets was $19.2 million for the three months ended
April 2, 2016 and April 4, 2015, respectively.
The estimated amortization expense for intangibles over the next five years is:
|
|
|
|
|
(in millions of U.S. dollars)
|
|
|
|
Remainder of 2016
|
|
$
|
53.8
|
|
2017
|
|
|
63.8
|
|
2018
|
|
|
56.8
|
|
2019
|
|
|
48.0
|
|
2020
|
|
|
41.7
|
|
Thereafter
|
|
|
184.5
|
|
|
|
|
|
|
Total
|
|
$
|
448.6
|
|
|
|
|
|
|
Note 9Accounts Payable and Accrued Liabilities
The following table summarizes accounts payable and accrued liabilities as of April 2, 2016 and January 2, 2016:
|
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
April 2, 2016
|
|
|
January 2, 2016
|
|
Trade payables
|
|
$
|
221.0
|
|
|
$
|
227.2
|
|
Accrued compensation
|
|
|
35.9
|
|
|
|
49.8
|
|
Accrued sales incentives
|
|
|
25.3
|
|
|
|
25.2
|
|
Accrued interest
|
|
|
21.0
|
|
|
|
12.2
|
|
Payroll, salaries and other taxes
|
|
|
13.4
|
|
|
|
13.3
|
|
Accrued deposits
|
|
|
32.5
|
|
|
|
28.6
|
|
Other accrued liabilities
|
|
|
71.6
|
|
|
|
81.3
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
420.7
|
|
|
$
|
437.6
|
|
|
|
|
|
|
|
|
|
|
Note 10Accumulated Other Comprehensive (Loss) Income
Changes in accumulated other comprehensive (loss) income (AOCI) by component for the three months ended April 2,
2016 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
|
|
Gains and Losses
|
|
|
Pension
|
|
|
Currency
|
|
|
|
|
|
|
on Derivative
|
|
|
Benefit
|
|
|
Translation
|
|
|
|
|
(in millions of U.S.
dollars)
1
|
|
Instruments
|
|
|
Plan Items
|
|
|
Adjustment Items
|
|
|
Total
|
|
Beginning balance January 2, 2016
|
|
$
|
(4.7
|
)
|
|
$
|
(10.1
|
)
|
|
$
|
(61.4
|
)
|
|
$
|
(76.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OCI before reclassifications
|
|
|
1.5
|
|
|
|
|
|
|
|
(3.2
|
)
|
|
|
(1.7
|
)
|
Amounts reclassified from AOCI
|
|
|
(1.0
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period OCI
|
|
|
0.5
|
|
|
|
0.1
|
|
|
|
(3.2
|
)
|
|
|
(2.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance April 2, 2016
|
|
$
|
(4.2
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
(64.6
|
)
|
|
$
|
(78.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
All amounts are net of tax. Amounts in parentheses indicate debits.
|
15
The following table summarizes the amounts reclassified from AOCI for the three months ended
April 2, 2016 and April 4, 2015, respectively.
|
|
|
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
For the Three Months Ended
|
|
|
Affected Line Item in the Statement
|
Details About AOCI
Components
1
|
|
April 2, 2016
|
|
|
April 4, 2015
|
|
|
Where Net Income Is Presented
|
Gains and losses on derivative instruments Foreign currency and commodity hedges
|
|
$
|
1.6
|
|
|
$
|
0.3
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.6
|
|
|
$
|
0.3
|
|
|
Total before taxes
|
|
|
|
(0.6
|
)
|
|
|
(0.1
|
)
|
|
Tax (expense) or benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.0
|
|
|
$
|
0.2
|
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of pension benefit plan items Prior service costs
2
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
Total before taxes
|
|
|
|
|
|
|
|
|
|
|
Tax (expense) or benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
0.9
|
|
|
$
|
0.1
|
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Amounts in parenthesis indicate debits.
|
2.
|
These AOCI components are included in the computation of net periodic pension cost.
|
Note 11Commitments and Contingencies
We are subject to various claims and legal proceedings with respect to matters such as governmental regulations, and other
actions arising out of the normal course of business. Management believes that the resolution of these matters will not have a material adverse effect on our financial position, results of operations, or cash flow.
We had $40.9 million in standby letters of credit outstanding as of April 2, 2016 ($45.6 millionJanuary 2, 2016).
In May 2014, our Cott U.K. reporting segment acquired 100% of the share capital of Aimia Foods Holdings Limited (the Aimia
Acquisition), which included its operating subsidiary company, Aimia Foods Limited (together referred as Aimia) pursuant to a Share Purchase Agreement dated May 30, 2014. The terms of the transaction included aggregate contingent
consideration of up to £16.0 million ($22.9 million at exchange rates in effect on April 2, 2016), which is payable upon achievement of certain measures related to Aimias performance during the twelve months ending July 1, 2016.
Note 12Hedging Transactions and Derivative Financial Instruments
We are directly and indirectly affected by changes in foreign currency market conditions. These changes in market conditions
may adversely impact our financial performance and are referred to as market risks. When deemed appropriate by management, we use derivatives as a risk management tool to mitigate the potential impact of foreign currency market risks.
We use various types of derivative instruments including, but not limited to, forward contracts and swap agreements for certain commodities.
Forward contracts are agreements to buy or sell a quantity of a currency at a predetermined future date, and at a predetermined rate or price. A swap agreement is a contract between two parties to exchange cash flows based on specified underlying
notional amounts, assets and/or indices.
All derivatives are carried at fair value in the consolidated balance sheets in the line item
accounts receivable, net or accounts payable and accrued liabilities. The carrying values of the derivatives reflect the impact of legally enforceable agreements with the same counterparties. These allow us to net settle positive and negative
positions (assets and liabilities) arising from different transactions with the same counterparty.
16
The accounting for gains and losses that result from changes in the fair values of derivative
instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the types of hedging relationships. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in
foreign operations. The changes in the fair values of derivatives that have been designated and qualify for fair value hedge accounting are recorded in the same line item in our consolidated statements of operations as the changes in the fair value
of the hedged items attributable to the risk being hedged. The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in AOCI and are reclassified into the line item in the consolidated
statements of operations in which the hedged items are recorded in the same period the hedged items affect earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in
the value of the derivative instruments are generally offset by changes in the fair values or cash flows of the underlying exposures being hedged. The changes in fair values of derivatives that were not designated and/or did not qualify as hedging
instruments are immediately recognized into earnings. We classify cash inflows and outflows related to derivative and hedging instruments with the appropriate cash flows section associated with the item being hedged.
For derivatives that will be accounted for as hedging instruments, we formally designate and document, at inception, the financial instrument
as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, we formally assess both at the inception and at least quarterly thereafter, whether the financial
instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. Any ineffective portion of a financial instruments change in fair value is immediately
recognized into earnings.
We estimate the fair values of our derivatives based on quoted market prices or pricing models using current
market rates (see Note 13 to the consolidated financial statements). The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure
to the financial risks described above. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange rates or other financial indices. We do not
view the fair values of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying hedged transactions. All of our derivatives are over-the-counter instruments with liquid markets.
Credit Risk Associated with Derivatives
We have established strict counterparty credit guidelines and enter into transactions only with financial institutions of investment grade or
better. We monitor counterparty exposures regularly and review promptly any downgrade in counterparty credit rating. We mitigate pre-settlement risk by being permitted to net settle for transactions with the same counterparty. To minimize the
concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Based on these factors, we consider the risk of counterparty default to be minimal.
Cash Flow Hedging Strategy
We use cash
flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates and commodity prices. The changes in fair values of hedges that are determined to be
ineffective are immediately reclassified from AOCI into earnings. We did not discontinue any cash flow hedging relationships during the three months ended April 2, 2016 or April 4, 2015, respectively. Foreign exchange contracts typically have
maturities of less than twelve months and commodity contracts typically have maturities of less than 27 months. All outstanding hedges as of April 2, 2016 are expected to settle in the next twelve months.
We maintain a foreign currency cash flow hedging program to reduce the risk that our procurement activities will be adversely affected by
changes in foreign currency exchange rates. We enter into forward contracts to hedge certain portions of forecasted cash flows denominated in foreign currencies. The total notional values of derivatives that were designated and qualified for our
foreign currency cash flow hedging program were $26.9 million and $4.5 million as of April 2, 2016 and January 2, 2016, respectively. Approximately $1.1 million of unrealized net of tax losses and $1.5 million of unrealized net of tax gains related
to the foreign currency cash flow hedges were included in AOCI as of April 2, 2016 and April 4, 2015, respectively. The hedge ineffectiveness for these cash flow hedging instruments was not material during the periods presented.
We have entered into commodity swaps on aluminum to mitigate the price risk associated with forecasted purchases of materials used in our
manufacturing process. These derivative instruments have been designated and qualify as a part of our commodity cash flow hedging program. The objective of this hedging program is to reduce the variability of cash flows associated with future
purchases of aluminum. The total notional values of derivatives that were designated and qualified for our commodity cash flow hedging program were $37.8 million and $49.3 million as of April 2, 2016 and January 2, 2016, respectively. Approximately
$3.4 million and $1.5 million of unrealized net of tax losses related to the commodity swaps were included in AOCI as of April 2, 2016 and April 4, 2015, respectively. The hedge ineffectiveness was not material for the three months ended April 2,
2016. The cumulative hedge ineffectiveness for these hedging instruments was approximately $0.9 million, of which $0.3 million was recognized as a decrease in cost of sales within the consolidated statements of operations for the three months ended
April 4, 2015.
17
The fair value of the Companys derivative assets included within other receivables as a
component of accounts receivable, net was $0.6 million as of January 2, 2016. We did not have derivative assets as of April 2, 2016. The fair value of the Companys derivative liabilities included in accrued liabilities was $6.8 million and
$8.0 million as of April 2, 2016 and January 2, 2016, respectively. Set forth below is a reconciliation of the Companys derivatives by contract type for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
April 2, 2016
|
|
|
January 2, 2016
|
|
Derivative Contract
|
|
Assets
|
|
|
Liabilities
|
|
|
Assets
|
|
|
Liabilities
|
|
Foreign currency hedge
|
|
$
|
|
|
|
$
|
1.5
|
|
|
$
|
0.6
|
|
|
$
|
|
|
Aluminum swaps
|
|
|
|
|
|
|
5.3
|
|
|
|
|
|
|
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
6.8
|
|
|
$
|
0.6
|
|
|
$
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aluminum swaps subject to enforceable master netting arrangements are presented net in the reconciliation
above. The fair value of the aluminum swap assets and liabilities which are shown on a net basis are reconciled in the table below:
|
|
|
|
|
|
|
|
|
(in millions of U.S. dollars)
|
|
April 2, 2016
|
|
|
January 2, 2016
|
|
Aluminum swap assets
|
|
$
|
|
|
|
$
|
|
|
Aluminum swap liabilities
|
|
|
(5.3
|
)
|
|
|
(8.0
|
)
|
|
|
|
|
|
|
|
|
|
Net asset (liability)
|
|
$
|
(5.3
|
)
|
|
$
|
(8.0
|
)
|
|
|
|
|
|
|
|
|
|
The settlement of our derivative instruments resulted in a debit to cost of sales of $1.6 million for the
three months ended April 2, 2016 and $0.2 million for the comparable prior year period.
Note 13Fair Value Measurements
ASC 820,
Fair Value Measurements
, defines fair value as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value
are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.
The three levels of inputs used to measure fair value are as follows:
|
|
|
Level 1Quoted prices in active markets for identical assets or liabilities.
|
|
|
|
Level 2Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in
markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
|
|
|
Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow
methodologies and similar techniques that use significant unobservable inputs.
|
We have certain assets and liabilities that
are required to be recorded at fair value on a recurring basis in accordance with GAAP.
Our derivative assets and liabilities represent
Level 2 instruments. Level 2 instruments are valued based on observable inputs for quoted prices for similar assets and liabilities in active markets. The fair value for the derivative assets as of January 2, 2016 was $0.6 million. We did not have
derivative assets as of April 2, 2016. The fair value for the derivative liabilities as of April 2, 2016 and January 2, 2016 was $6.8 million and $8.0 million, respectively.
Fair Value of Financial Instruments
The
carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, receivables, payables, short-term borrowings and long-term debt approximate their respective fair values, except as otherwise indicated. The carrying values
and estimated fair values of our significant outstanding debt as of April 2, 2016 and January 2, 2016 were as follows:
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
|
January 2, 2016
|
|
|
|
Carrying
|
|
|
Fair
|
|
|
Carrying
|
|
|
Fair
|
|
(in millions of U.S. dollars)
|
|
Value
|
|
|
Value
|
|
|
Value
|
|
|
Value
|
|
6.750% senior notes due in 2020
1,3
|
|
$
|
613.7
|
|
|
$
|
657.0
|
|
|
$
|
613.0
|
|
|
$
|
641.4
|
|
10.000% senior notes due in 2021
1,2
|
|
|
388.6
|
|
|
|
395.9
|
|
|
|
390.1
|
|
|
|
397.3
|
|
5.375% senior notes due in 2022
1,3
|
|
|
517.0
|
|
|
|
534.2
|
|
|
|
516.8
|
|
|
|
522.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,519.3
|
|
|
$
|
1,587.1
|
|
|
$
|
1,519.9
|
|
|
$
|
1,561.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
The fair values were based on the trading levels and bid/offer prices observed by a market participant and are considered Level 1 financial instruments.
|
2.
|
The outstanding aggregate principal amount of $350.0 million of our 10.000% senior secured notes (DSS Notes) was assumed by Cott at a fair value of $406.0
million in connection with Cotts acquisition of DSS. The premium of $56.0 million is being amortized as an adjustment to interest expense using the effective interest method over the remaining contractual term of the DSS Notes.
|
3.
|
The carrying value of our significant outstanding debt is net of unamortized debt issuance costs of $19.6 million and $20.6 million as of April 2, 2016 and January 2,
2016, respectively.
|
Fair Value of Contingent Consideration
We estimated the fair value of the contingent consideration related to the Aimia Acquisition utilizing financial projections of the acquired
business and estimated probabilities of achievement of certain EBITDA targets. The fair value was based on significant inputs not observable in the market and thus represented a Level 3 instrument. Level 3 instruments are valued based on
unobservable inputs that are supported by little or no market activity and reflect our own assumptions in measuring fair value. The acquisition date fair value of the contingent consideration was determined to be £10.6 million using a
present valued probability-weighted income approach. The maximum potential payout is £16.0 million (U.S. $22.9 million at exchange rates in effect on April 2, 2016) on an undiscounted basis. The following tables provide a
reconciliation of the beginning and ending balances of this liability.
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
(in millions of U.S. dollars)
|
|
April 2, 2016
|
|
|
April 4, 2015
|
|
Fair value at beginning of period
|
|
$
|
16.4
|
|
|
$
|
16.5
|
|
Foreign exchange gain
|
|
|
(0.5
|
)
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
Fair value at end of period
|
|
$
|
15.9
|
|
|
$
|
15.8
|
|
|
|
|
|
|
|
|
|
|
Note 14Guarantor Subsidiaries
Guarantor Subsidiaries for DSS Notes
The DSS Notes assumed as part of the DSS Acquisition are guaranteed on a senior secured basis pursuant to guarantees by Cott Corporation and
certain other 100% owned direct and indirect subsidiaries (the DSS Guarantor Subsidiaries). DSS and each DSS Guarantor Subsidiary is 100% owned by Cott Corporation. The guarantees of the DSS Notes by Cott Corporation and the DSS
Guarantor Subsidiaries are full and unconditional, and all such guarantees are joint and several. The guarantees of the DSS Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary
conditions.
We have not presented separate financial statements and separate disclosures have not been provided concerning the DSS
Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with Securities and Exchange Commission (SEC) interpretations governing reporting of subsidiary financial
information.
The following summarized condensed consolidating financial information of the Company sets forth on a consolidating basis,
our Balance Sheets, Statements of Operations and Cash Flows for Cott Corporation, DSS, the DSS Guarantor Subsidiaries and our other non-guarantor subsidiaries (the DSS Non-Guarantor Subsidiaries). The supplemental financial information
reflects our investments and those of DSS in their respective subsidiaries using the equity method of accounting.
19
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 2, 2016
|
|
|
|
|
|
|
|
|
|
DSS
|
|
|
DSS
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
DS Services of
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
America, Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Revenue, net
|
|
$
|
33.8
|
|
|
$
|
243.1
|
|
|
$
|
406.8
|
|
|
$
|
28.5
|
|
|
$
|
(13.8
|
)
|
|
$
|
698.4
|
|
Cost of sales
|
|
|
29.7
|
|
|
|
97.4
|
|
|
|
348.2
|
|
|
|
22.9
|
|
|
|
(13.8
|
)
|
|
|
484.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
4.1
|
|
|
|
145.7
|
|
|
|
58.6
|
|
|
|
5.6
|
|
|
|
|
|
|
|
214.0
|
|
Selling, general and administrative expenses
|
|
|
5.5
|
|
|
|
137.2
|
|
|
|
51.6
|
|
|
|
2.7
|
|
|
|
|
|
|
|
197.0
|
|
Loss (gain) on disposal of property, plant & equipment
|
|
|
|
|
|
|
1.8
|
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
Acquisition and integration expenses
|
|
|
|
|
|
|
0.9
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(1.4
|
)
|
|
|
5.8
|
|
|
|
7.4
|
|
|
|
2.9
|
|
|
|
|
|
|
|
14.7
|
|
Other (income) expense, net
|
|
|
(1.6
|
)
|
|
|
(1.0
|
)
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
(2.2
|
)
|
Intercompany interest expense (income), net
|
|
|
|
|
|
|
10.8
|
|
|
|
(10.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
0.2
|
|
|
|
7.4
|
|
|
|
20.2
|
|
|
|
|
|
|
|
|
|
|
|
27.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income tax (benefit) expense and equity (loss) income
|
|
|
|
|
|
|
(11.4
|
)
|
|
|
(2.4
|
)
|
|
|
2.9
|
|
|
|
|
|
|
|
(10.9
|
)
|
Income tax (benefit) expense
|
|
|
|
|
|
|
(4.2
|
)
|
|
|
(4.9
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
(9.0
|
)
|
Equity (loss) income
|
|
|
(3.3
|
)
|
|
|
|
|
|
|
1.8
|
|
|
|
|
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(3.3
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
4.3
|
|
|
$
|
2.8
|
|
|
$
|
1.5
|
|
|
$
|
(1.9
|
)
|
Less: Net income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributed to Cott Corporation
|
|
$
|
(3.3
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
4.3
|
|
|
$
|
1.4
|
|
|
$
|
1.5
|
|
|
$
|
(3.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income attributed to Cott Corporation
|
|
$
|
(5.9
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
30.8
|
|
|
$
|
(0.6
|
)
|
|
$
|
(23.0
|
)
|
|
$
|
(5.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 4, 2015
|
|
|
|
|
|
|
|
|
|
DSS
|
|
|
DSS
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
DS Services of
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
America, Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Revenue, net
|
|
$
|
30.0
|
|
|
$
|
240.3
|
|
|
$
|
418.3
|
|
|
$
|
31.4
|
|
|
$
|
(10.2
|
)
|
|
$
|
709.8
|
|
Cost of sales
|
|
|
27.0
|
|
|
|
100.4
|
|
|
|
365.4
|
|
|
|
25.9
|
|
|
|
(10.2
|
)
|
|
|
508.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
3.0
|
|
|
|
139.9
|
|
|
|
52.9
|
|
|
|
5.5
|
|
|
|
|
|
|
|
201.3
|
|
Selling, general and administrative expenses
|
|
|
5.5
|
|
|
|
137.2
|
|
|
|
42.7
|
|
|
|
3.1
|
|
|
|
|
|
|
|
188.5
|
|
Loss on disposal of property, plant & equipment
|
|
|
|
|
|
|
1.1
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
Acquisition and integration expenses
|
|
|
|
|
|
|
3.0
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(2.5
|
)
|
|
|
(1.4
|
)
|
|
|
8.2
|
|
|
|
2.4
|
|
|
|
|
|
|
|
6.7
|
|
Other (income) expense, net
|
|
|
(10.5
|
)
|
|
|
(0.2
|
)
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
|
|
|
|
(10.4
|
)
|
Intercompany interest (income) expense, net
|
|
|
(3.0
|
)
|
|
|
10.9
|
|
|
|
(7.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
0.1
|
|
|
|
7.3
|
|
|
|
20.3
|
|
|
|
|
|
|
|
|
|
|
|
27.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax expense (benefit) and equity (loss) income
|
|
|
10.9
|
|
|
|
(19.4
|
)
|
|
|
(4.4
|
)
|
|
|
2.3
|
|
|
|
|
|
|
|
(10.6
|
)
|
Income tax expense (benefit)
|
|
|
1.2
|
|
|
|
(7.2
|
)
|
|
|
(3.5
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
(9.4
|
)
|
Equity (loss) income
|
|
|
(12.2
|
)
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
10.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(2.5
|
)
|
|
$
|
(12.2
|
)
|
|
$
|
0.5
|
|
|
$
|
2.2
|
|
|
$
|
10.8
|
|
|
$
|
(1.2
|
)
|
Less: Net income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
1.3
|
|
Less: Accumulated dividends on convertible preferred shares
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.7
|
|
Less: Accumulated dividends on non-convertible preferred shares
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributed to Cott Corporation
|
|
$
|
(6.0
|
)
|
|
$
|
(12.2
|
)
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
|
$
|
10.8
|
|
|
$
|
(6.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income attributed to Cott Corporation
|
|
$
|
(31.8
|
)
|
|
$
|
(12.2
|
)
|
|
$
|
(15.8
|
)
|
|
$
|
0.6
|
|
|
$
|
27.4
|
|
|
$
|
(31.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
Consolidating Balance Sheets
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 2, 2016
|
|
|
|
|
|
|
|
|
|
DSS
|
|
|
DSS
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
DS Services of
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
America, Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents
|
|
$
|
4.9
|
|
|
$
|
20.5
|
|
|
$
|
25.0
|
|
|
$
|
4.7
|
|
|
$
|
|
|
|
$
|
55.1
|
|
Accounts receivable, net of allowance
|
|
|
18.4
|
|
|
|
112.4
|
|
|
|
239.6
|
|
|
|
11.2
|
|
|
|
(61.2
|
)
|
|
|
320.4
|
|
Income taxes recoverable
|
|
|
|
|
|
|
1.8
|
|
|
|
0.3
|
|
|
|
0.2
|
|
|
|
(1.4
|
)
|
|
|
0.9
|
|
Inventories
|
|
|
16.6
|
|
|
|
27.9
|
|
|
|
203.8
|
|
|
|
6.4
|
|
|
|
|
|
|
|
254.7
|
|
Prepaid expenses and other assets
|
|
|
2.1
|
|
|
|
7.8
|
|
|
|
10.6
|
|
|
|
0.4
|
|
|
|
|
|
|
|
20.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
42.0
|
|
|
|
170.4
|
|
|
|
479.3
|
|
|
|
22.9
|
|
|
|
(62.6
|
)
|
|
|
652.0
|
|
Property, plant & equipment, net
|
|
|
30.8
|
|
|
|
371.2
|
|
|
|
366.1
|
|
|
|
6.5
|
|
|
|
|
|
|
|
774.6
|
|
Goodwill
|
|
|
21.0
|
|
|
|
579.2
|
|
|
|
179.6
|
|
|
|
|
|
|
|
|
|
|
|
779.8
|
|
Intangibles and other assets, net
|
|
|
1.0
|
|
|
|
395.1
|
|
|
|
313.0
|
|
|
|
1.8
|
|
|
|
|
|
|
|
710.9
|
|
Deferred tax assets
|
|
|
10.2
|
|
|
|
|
|
|
|
44.2
|
|
|
|
0.2
|
|
|
|
(44.3
|
)
|
|
|
10.3
|
|
Due from affiliates
|
|
|
393.2
|
|
|
|
|
|
|
|
544.4
|
|
|
|
|
|
|
|
(937.6
|
)
|
|
|
|
|
Investments in subsidiaries
|
|
|
366.6
|
|
|
|
|
|
|
|
400.1
|
|
|
|
|
|
|
|
(766.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
864.8
|
|
|
$
|
1,515.9
|
|
|
$
|
2,326.7
|
|
|
$
|
31.4
|
|
|
$
|
(1,811.2
|
)
|
|
$
|
2,927.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
$
|
30.7
|
|
|
$
|
|
|
|
$
|
32.1
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
62.8
|
|
Current maturities of long-term debt
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
|
0.2
|
|
|
|
|
|
|
|
3.4
|
|
Accounts payable and accrued liabilities
|
|
|
59.3
|
|
|
|
135.3
|
|
|
|
280.9
|
|
|
|
7.8
|
|
|
|
(62.6
|
)
|
|
|
420.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
90.0
|
|
|
|
135.3
|
|
|
|
316.2
|
|
|
|
8.0
|
|
|
|
(62.6
|
)
|
|
|
486.9
|
|
Long-term debt
|
|
|
|
|
|
|
388.6
|
|
|
|
1,135.5
|
|
|
|
|
|
|
|
|
|
|
|
1,524.1
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
93.2
|
|
|
|
17.0
|
|
|
|
|
|
|
|
(44.3
|
)
|
|
|
65.9
|
|
Other long-term liabilities
|
|
|
0.5
|
|
|
|
35.5
|
|
|
|
34.6
|
|
|
|
1.2
|
|
|
|
|
|
|
|
71.8
|
|
Due to affiliates
|
|
|
1.1
|
|
|
|
543.3
|
|
|
|
365.0
|
|
|
|
28.2
|
|
|
|
(937.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
91.6
|
|
|
|
1,195.9
|
|
|
|
1,868.3
|
|
|
|
37.4
|
|
|
|
(1,044.5
|
)
|
|
|
2,148.7
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, no par
|
|
|
682.2
|
|
|
|
355.5
|
|
|
|
849.9
|
|
|
|
40.2
|
|
|
|
(1,245.6
|
)
|
|
|
682.2
|
|
Additional paid-in-capital
|
|
|
50.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50.8
|
|
Retained earnings (deficit)
|
|
|
119.0
|
|
|
|
(35.3
|
)
|
|
|
(432.3
|
)
|
|
|
(58.9
|
)
|
|
|
526.5
|
|
|
|
119.0
|
|
Accumulated other comprehensive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(loss) income
|
|
|
(78.8
|
)
|
|
|
(0.2
|
)
|
|
|
40.8
|
|
|
|
7.0
|
|
|
|
(47.6
|
)
|
|
|
(78.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Cott Corporation equity
|
|
|
773.2
|
|
|
|
320.0
|
|
|
|
458.4
|
|
|
|
(11.7
|
)
|
|
|
(766.7
|
)
|
|
|
773.2
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.7
|
|
|
|
|
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
773.2
|
|
|
|
320.0
|
|
|
|
458.4
|
|
|
|
(6.0
|
)
|
|
|
(766.7
|
)
|
|
|
778.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
864.8
|
|
|
$
|
1,515.9
|
|
|
$
|
2,326.7
|
|
|
$
|
31.4
|
|
|
$
|
(1,811.2
|
)
|
|
$
|
2,927.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
Consolidating Balance Sheets
(in millions of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 2, 2016
|
|
|
|
|
|
|
|
|
|
DSS
|
|
|
DSS
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
DS Services of
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
America, Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents
|
|
$
|
20.8
|
|
|
$
|
12.8
|
|
|
$
|
38.4
|
|
|
$
|
5.1
|
|
|
$
|
|
|
|
$
|
77.1
|
|
Accounts receivable, net of allowance
|
|
|
18.3
|
|
|
|
122.6
|
|
|
|
184.6
|
|
|
|
13.0
|
|
|
|
(45.2
|
)
|
|
|
293.3
|
|
Income taxes recoverable
|
|
|
|
|
|
|
0.5
|
|
|
|
0.9
|
|
|
|
0.2
|
|
|
|
|
|
|
|
1.6
|
|
Inventories
|
|
|
13.0
|
|
|
|
31.4
|
|
|
|
199.4
|
|
|
|
5.6
|
|
|
|
|
|
|
|
249.4
|
|
Prepaid expenses and other assets
|
|
|
2.2
|
|
|
|
4.8
|
|
|
|
10.0
|
|
|
|
0.2
|
|
|
|
|
|
|
|
17.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
54.3
|
|
|
|
172.1
|
|
|
|
433.3
|
|
|
|
24.1
|
|
|
|
(45.2
|
)
|
|
|
638.6
|
|
Property, plant & equipment, net
|
|
|
29.7
|
|
|
|
372.6
|
|
|
|
360.8
|
|
|
|
6.7
|
|
|
|
|
|
|
|
769.8
|
|
Goodwill
|
|
|
19.8
|
|
|
|
579.1
|
|
|
|
160.7
|
|
|
|
|
|
|
|
|
|
|
|
759.6
|
|
Intangibles and other assets, net
|
|
|
0.8
|
|
|
|
402.5
|
|
|
|
305.6
|
|
|
|
2.8
|
|
|
|
|
|
|
|
711.7
|
|
Deferred tax assets
|
|
|
7.4
|
|
|
|
|
|
|
|
38.2
|
|
|
|
0.2
|
|
|
|
(38.2
|
)
|
|
|
7.6
|
|
Due from affiliates
|
|
|
400.1
|
|
|
|
|
|
|
|
544.3
|
|
|
|
|
|
|
|
(944.4
|
)
|
|
|
|
|
Investments in subsidiaries
|
|
|
176.3
|
|
|
|
|
|
|
|
400.0
|
|
|
|
|
|
|
|
(576.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
688.4
|
|
|
$
|
1,526.3
|
|
|
$
|
2,242.9
|
|
|
$
|
33.8
|
|
|
$
|
(1,604.1
|
)
|
|
$
|
2,887.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
$
|
|
|
|
$
|
|
|
|
$
|
122.0
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
122.0
|
|
Current maturities of long-term debt
|
|
|
|
|
|
|
|
|
|
|
3.0
|
|
|
|
0.4
|
|
|
|
|
|
|
|
3.4
|
|
Accounts payable and accrued liabilities
|
|
|
47.6
|
|
|
|
131.8
|
|
|
|
295.1
|
|
|
|
8.3
|
|
|
|
(45.2
|
)
|
|
|
437.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
47.6
|
|
|
|
131.8
|
|
|
|
420.1
|
|
|
|
8.7
|
|
|
|
(45.2
|
)
|
|
|
563.0
|
|
Long-term debt
|
|
|
|
|
|
|
390.1
|
|
|
|
1,135.3
|
|
|
|
|
|
|
|
|
|
|
|
1,525.4
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
97.7
|
|
|
|
17.0
|
|
|
|
|
|
|
|
(38.2
|
)
|
|
|
76.5
|
|
Other long-term liabilities
|
|
|
0.5
|
|
|
|
36.2
|
|
|
|
38.7
|
|
|
|
1.1
|
|
|
|
|
|
|
|
76.5
|
|
Due to affiliates
|
|
|
1.0
|
|
|
|
543.3
|
|
|
|
371.9
|
|
|
|
28.2
|
|
|
|
(944.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
49.1
|
|
|
|
1,199.1
|
|
|
|
1,983.0
|
|
|
|
38.0
|
|
|
|
(1,027.8
|
)
|
|
|
2,241.4
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, no par
|
|
|
534.7
|
|
|
|
355.5
|
|
|
|
683.1
|
|
|
|
38.6
|
|
|
|
(1,077.2
|
)
|
|
|
534.7
|
|
Additional paid-in-capital
|
|
|
51.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51.2
|
|
Retained earnings (deficit)
|
|
|
129.6
|
|
|
|
(28.1
|
)
|
|
|
(437.5
|
)
|
|
|
(58.4
|
)
|
|
|
524.0
|
|
|
|
129.6
|
|
Accumulated other comprehensive (loss) income
|
|
|
(76.2
|
)
|
|
|
(0.2
|
)
|
|
|
14.3
|
|
|
|
9.0
|
|
|
|
(23.1
|
)
|
|
|
(76.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Cott Corporation equity
|
|
|
639.3
|
|
|
|
327.2
|
|
|
|
259.9
|
|
|
|
(10.8
|
)
|
|
|
(576.3
|
)
|
|
|
639.3
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.6
|
|
|
|
|
|
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
639.3
|
|
|
|
327.2
|
|
|
|
259.9
|
|
|
|
(4.2
|
)
|
|
|
(576.3
|
)
|
|
|
645.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
688.4
|
|
|
$
|
1,526.3
|
|
|
$
|
2,242.9
|
|
|
$
|
33.8
|
|
|
$
|
(1,604.1
|
)
|
|
$
|
2,887.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 2, 2016
|
|
|
|
|
|
|
|
|
|
DSS
|
|
|
DSS
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
DS Services of
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
America, Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(136.8
|
)
|
|
$
|
26.1
|
|
|
$
|
89.7
|
|
|
$
|
4.7
|
|
|
$
|
(2.4
|
)
|
|
$
|
(18.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition, net of cash received
|
|
|
(43.2
|
)
|
|
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(44.4
|
)
|
Additions to property, plant & equipment
|
|
|
(0.4
|
)
|
|
|
(16.8
|
)
|
|
|
(12.0
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
(29.5
|
)
|
Additions to intangibles and other assets
|
|
|
(0.1
|
)
|
|
|
(0.5
|
)
|
|
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.3
|
)
|
Proceeds from sale of property, plant & equipment
|
|
|
|
|
|
|
0.1
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(43.7
|
)
|
|
|
(18.4
|
)
|
|
|
(11.1
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
(73.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments of long-term debt
|
|
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
(1.1
|
)
|
Borrowings under ABL
|
|
|
87.6
|
|
|
|
|
|
|
|
409.6
|
|
|
|
|
|
|
|
|
|
|
|
497.2
|
|
Payments under ABL
|
|
|
(58.8
|
)
|
|
|
|
|
|
|
(499.5
|
)
|
|
|
|
|
|
|
|
|
|
|
(558.3
|
)
|
Distributions to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.3
|
)
|
|
|
|
|
|
|
(2.3
|
)
|
Issuance of common shares
|
|
|
144.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144.1
|
|
Common shares repurchased and cancelled
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.1
|
)
|
Dividends paid to common shareowners
|
|
|
(7.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.3
|
)
|
Intercompany dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.4
|
)
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
164.5
|
|
|
|
|
|
|
|
(90.9
|
)
|
|
|
(4.8
|
)
|
|
|
2.4
|
|
|
|
71.2
|
|
Effect of exchange rate changes on cash
|
|
|
0.1
|
|
|
|
|
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash & cash equivalents
|
|
|
(15.9
|
)
|
|
|
7.7
|
|
|
|
(13.4
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
(22.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, beginning of period
|
|
|
20.8
|
|
|
|
12.8
|
|
|
|
38.4
|
|
|
|
5.1
|
|
|
|
|
|
|
|
77.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, end of period
|
|
$
|
4.9
|
|
|
$
|
20.5
|
|
|
$
|
25.0
|
|
|
$
|
4.7
|
|
|
$
|
|
|
|
$
|
55.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 4, 2015
|
|
|
|
|
|
|
|
|
|
DSS
|
|
|
DSS
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
DS Services of
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
America, Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
4.4
|
|
|
$
|
0.6
|
|
|
$
|
(3.6
|
)
|
|
$
|
1.7
|
|
|
$
|
(4.2
|
)
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant & equipment
|
|
|
(0.3
|
)
|
|
|
(18.4
|
)
|
|
|
(8.6
|
)
|
|
|
|
|
|
|
|
|
|
|
(27.3
|
)
|
Additions to intangibles and other assets
|
|
|
|
|
|
|
(1.8
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.1
|
)
|
Proceeds from sale of property, plant & equipment
|
|
|
|
|
|
|
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(0.3
|
)
|
|
|
(20.2
|
)
|
|
|
(8.5
|
)
|
|
|
|
|
|
|
|
|
|
|
(29.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments of long-term debt
|
|
|
|
|
|
|
|
|
|
|
(0.5
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
(0.8
|
)
|
Borrowings under ABL
|
|
|
|
|
|
|
|
|
|
|
94.8
|
|
|
|
|
|
|
|
|
|
|
|
94.8
|
|
Payments under ABL
|
|
|
|
|
|
|
|
|
|
|
(102.8
|
)
|
|
|
|
|
|
|
|
|
|
|
(102.8
|
)
|
Distributions to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.0
|
)
|
|
|
|
|
|
|
(2.0
|
)
|
Proceeds from the exercise of options for common shares, net
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
Common shares repurchased and cancelled
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.7
|
)
|
Dividends paid to common and preferred shareowners
|
|
|
(9.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9.0
|
)
|
Intercompany dividends
|
|
|
|
|
|
|
|
|
|
|
(2.1
|
)
|
|
|
(2.1
|
)
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(9.6
|
)
|
|
|
|
|
|
|
(10.6
|
)
|
|
|
(4.4
|
)
|
|
|
4.2
|
|
|
|
(20.4
|
)
|
Effect of exchange rate changes on cash
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash & cash equivalents
|
|
|
(5.9
|
)
|
|
|
(19.6
|
)
|
|
|
(23.4
|
)
|
|
|
(2.8
|
)
|
|
|
|
|
|
|
(51.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, beginning of period
|
|
|
6.2
|
|
|
|
34.4
|
|
|
|
38.2
|
|
|
|
7.4
|
|
|
|
|
|
|
|
86.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, end of period
|
|
$
|
0.3
|
|
|
$
|
14.8
|
|
|
$
|
14.8
|
|
|
$
|
4.6
|
|
|
$
|
|
|
|
$
|
34.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25
Guarantor Subsidiaries for 2020 Notes and 2022 Notes
The 2022 Notes and 2020 Notes, each issued by our 100% owned subsidiary Cott Beverages Inc. (CBI), are guaranteed on a senior basis
pursuant to guarantees by Cott Corporation and certain other 100% owned direct and indirect subsidiaries (the Cott Guarantor Subsidiaries). CBI and each Cott Guarantor Subsidiary is 100% owned by Cott Corporation. The guarantees of the
2020 Notes and the 2022 Notes by Cott Corporation and the Cott Guarantor Subsidiaries are full and unconditional, and all such guarantees are joint and several. The guarantees of the Cott Guarantor Subsidiaries are subject to release in limited
circumstances only upon the occurrence of certain customary conditions.
We have not presented separate financial statements and separate
disclosures have not been provided concerning the Cott Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with SEC interpretations governing reporting of subsidiary
financial information.
The following summarized condensed consolidating financial information of the Company sets forth on a
consolidating basis, our Balance Sheets, Statements of Operations and Cash Flows for Cott Corporation, CBI, the Cott Guarantor Subsidiaries and our other non-guarantor subsidiaries (the Cott Non-Guarantor Subsidiaries). The supplemental
financial information reflects our investments and those of CBI in their respective subsidiaries using the equity method of accounting.
26
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 2, 2016
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
Beverages Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Revenue, net
|
|
$
|
33.8
|
|
|
$
|
168.9
|
|
|
$
|
481.0
|
|
|
$
|
28.5
|
|
|
$
|
(13.8
|
)
|
|
$
|
698.4
|
|
Cost of sales
|
|
|
29.7
|
|
|
|
146.0
|
|
|
|
299.6
|
|
|
|
22.9
|
|
|
|
(13.8
|
)
|
|
|
484.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
4.1
|
|
|
|
22.9
|
|
|
|
181.4
|
|
|
|
5.6
|
|
|
|
|
|
|
|
214.0
|
|
Selling, general and administrative expenses
|
|
|
5.5
|
|
|
|
28.1
|
|
|
|
160.7
|
|
|
|
2.7
|
|
|
|
|
|
|
|
197.0
|
|
Loss on disposal of property, plant & equipment
|
|
|
|
|
|
|
0.3
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
Acquisition and integration expenses
|
|
|
|
|
|
|
0.3
|
|
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(1.4
|
)
|
|
|
(5.8
|
)
|
|
|
19.0
|
|
|
|
2.9
|
|
|
|
|
|
|
|
14.7
|
|
Other income, net
|
|
|
(1.6
|
)
|
|
|
(0.1
|
)
|
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.2
|
)
|
Intercompany interest (income) expense, net
|
|
|
|
|
|
|
(11.4
|
)
|
|
|
11.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
0.2
|
|
|
|
20.1
|
|
|
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
27.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income tax (benefit) expense and equity (loss) income
|
|
|
|
|
|
|
(14.4
|
)
|
|
|
0.6
|
|
|
|
2.9
|
|
|
|
|
|
|
|
(10.9
|
)
|
Income tax (benefit) expense
|
|
|
|
|
|
|
(5.6
|
)
|
|
|
(3.5
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
(9.0
|
)
|
Equity (loss) income
|
|
|
(3.3
|
)
|
|
|
1.5
|
|
|
|
0.3
|
|
|
|
|
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(3.3
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
4.4
|
|
|
$
|
2.8
|
|
|
$
|
1.5
|
|
|
$
|
(1.9
|
)
|
Less: Net income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributed to Cott Corporation
|
|
$
|
(3.3
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
4.4
|
|
|
$
|
1.4
|
|
|
$
|
1.5
|
|
|
$
|
(3.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income attributed to Cott Corporation
|
|
$
|
(5.9
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
31.0
|
|
|
$
|
(0.6
|
)
|
|
$
|
(23.0
|
)
|
|
$
|
(5.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 4, 2015
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
Beverages Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Revenue, net
|
|
$
|
30.0
|
|
|
$
|
170.0
|
|
|
$
|
488.6
|
|
|
$
|
31.4
|
|
|
$
|
(10.2
|
)
|
|
$
|
709.8
|
|
Cost of sales
|
|
|
27.0
|
|
|
|
145.8
|
|
|
|
320.0
|
|
|
|
25.9
|
|
|
|
(10.2
|
)
|
|
|
508.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
3.0
|
|
|
|
24.2
|
|
|
|
168.6
|
|
|
|
5.5
|
|
|
|
|
|
|
|
201.3
|
|
Selling, general and administrative expenses
|
|
|
5.5
|
|
|
|
23.8
|
|
|
|
156.1
|
|
|
|
3.1
|
|
|
|
|
|
|
|
188.5
|
|
Loss on disposal of property, plant & equipment
|
|
|
|
|
|
|
0.3
|
|
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
Acquisition and integration expenses
|
|
|
|
|
|
|
1.5
|
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(2.5
|
)
|
|
|
(1.4
|
)
|
|
|
8.2
|
|
|
|
2.4
|
|
|
|
|
|
|
|
6.7
|
|
Other (income) expense, net
|
|
|
(10.5
|
)
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
(10.4
|
)
|
Intercompany interest (income) expense, net
|
|
|
(3.0
|
)
|
|
|
(12.2
|
)
|
|
|
15.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
0.1
|
|
|
|
20.1
|
|
|
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
27.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax expense (benefit) and equity (loss) income
|
|
|
10.9
|
|
|
|
(9.3
|
)
|
|
|
(14.5
|
)
|
|
|
2.3
|
|
|
|
|
|
|
|
(10.6
|
)
|
Income tax expense (benefit)
|
|
|
1.2
|
|
|
|
(4.6
|
)
|
|
|
(6.1
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
(9.4
|
)
|
Equity (loss) income
|
|
|
(12.2
|
)
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(2.5
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(8.4
|
)
|
|
$
|
2.2
|
|
|
$
|
10.8
|
|
|
$
|
(1.2
|
)
|
Less: Net income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
1.3
|
|
Less: Accumulated dividends on convertible preferred shares
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.7
|
|
Less: Accumulated dividends on non-convertible preferred shares
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributed to Cott Corporation
|
|
$
|
(6.0
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(8.4
|
)
|
|
$
|
0.9
|
|
|
$
|
10.8
|
|
|
$
|
(6.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income attributed to Cott Corporation
|
|
$
|
(31.8
|
)
|
|
$
|
(22.8
|
)
|
|
$
|
(20.5
|
)
|
|
$
|
0.6
|
|
|
$
|
42.7
|
|
|
$
|
(31.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
Consolidating Balance Sheets
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 2, 2016
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
Beverages Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents
|
|
$
|
4.9
|
|
|
$
|
1.0
|
|
|
$
|
44.5
|
|
|
$
|
4.7
|
|
|
$
|
|
|
|
$
|
55.1
|
|
Accounts receivable, net of allowance
|
|
|
18.4
|
|
|
|
94.7
|
|
|
|
380.2
|
|
|
|
11.2
|
|
|
|
(184.1
|
)
|
|
|
320.4
|
|
Income taxes recoverable
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|
|
0.2
|
|
|
|
(1.4
|
)
|
|
|
0.9
|
|
Inventories
|
|
|
16.6
|
|
|
|
78.0
|
|
|
|
153.7
|
|
|
|
6.4
|
|
|
|
|
|
|
|
254.7
|
|
Prepaid expenses and other assets
|
|
|
2.1
|
|
|
|
6.3
|
|
|
|
12.1
|
|
|
|
0.4
|
|
|
|
|
|
|
|
20.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
42.0
|
|
|
|
180.0
|
|
|
|
592.6
|
|
|
|
22.9
|
|
|
|
(185.5
|
)
|
|
|
652.0
|
|
Property, plant & equipment, net
|
|
|
30.8
|
|
|
|
160.3
|
|
|
|
577.0
|
|
|
|
6.5
|
|
|
|
|
|
|
|
774.6
|
|
Goodwill
|
|
|
21.0
|
|
|
|
4.5
|
|
|
|
754.3
|
|
|
|
|
|
|
|
|
|
|
|
779.8
|
|
Intangibles and other assets, net
|
|
|
1.0
|
|
|
|
79.6
|
|
|
|
628.5
|
|
|
|
1.8
|
|
|
|
|
|
|
|
710.9
|
|
Deferred tax assets
|
|
|
10.2
|
|
|
|
44.2
|
|
|
|
|
|
|
|
0.2
|
|
|
|
(44.3
|
)
|
|
|
10.3
|
|
Due from affiliates
|
|
|
393.2
|
|
|
|
586.2
|
|
|
|
142.6
|
|
|
|
|
|
|
|
(1,122.0
|
)
|
|
|
|
|
Investments in subsidiaries
|
|
|
366.6
|
|
|
|
847.3
|
|
|
|
702.6
|
|
|
|
|
|
|
|
(1,916.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
864.8
|
|
|
$
|
1,902.1
|
|
|
$
|
3,397.6
|
|
|
$
|
31.4
|
|
|
$
|
(3,268.3
|
)
|
|
$
|
2,927.6
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
$
|
30.7
|
|
|
$
|
32.1
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
62.8
|
|
Current maturities of long-term debt
|
|
|
|
|
|
|
2.7
|
|
|
|
0.5
|
|
|
|
0.2
|
|
|
|
|
|
|
|
3.4
|
|
Accounts payable and accrued liabilities
|
|
|
59.3
|
|
|
|
227.1
|
|
|
|
312.0
|
|
|
|
7.8
|
|
|
|
(185.5
|
)
|
|
|
420.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
90.0
|
|
|
|
261.9
|
|
|
|
312.5
|
|
|
|
8.0
|
|
|
|
(185.5
|
)
|
|
|
486.9
|
|
Long-term debt
|
|
|
|
|
|
|
1,134.2
|
|
|
|
389.9
|
|
|
|
|
|
|
|
|
|
|
|
1,524.1
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
110.2
|
|
|
|
|
|
|
|
(44.3
|
)
|
|
|
65.9
|
|
Other long-term liabilities
|
|
|
0.5
|
|
|
|
19.7
|
|
|
|
50.4
|
|
|
|
1.2
|
|
|
|
|
|
|
|
71.8
|
|
Due to affiliates
|
|
|
1.1
|
|
|
|
141.6
|
|
|
|
951.1
|
|
|
|
28.2
|
|
|
|
(1,122.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
91.6
|
|
|
|
1,557.4
|
|
|
|
1,814.1
|
|
|
|
37.4
|
|
|
|
(1,351.8
|
)
|
|
|
2,148.7
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, no par
|
|
|
682.2
|
|
|
|
701.4
|
|
|
|
1,653.8
|
|
|
|
40.2
|
|
|
|
(2,395.4
|
)
|
|
|
682.2
|
|
Additional paid-in-capital
|
|
|
50.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50.8
|
|
Retained earnings (deficit)
|
|
|
119.0
|
|
|
|
(339.9
|
)
|
|
|
(127.7
|
)
|
|
|
(58.9
|
)
|
|
|
526.5
|
|
|
|
119.0
|
|
Accumulated other comprehensive (loss) income
|
|
|
(78.8
|
)
|
|
|
(16.8
|
)
|
|
|
57.4
|
|
|
|
7.0
|
|
|
|
(47.6
|
)
|
|
|
(78.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Cott Corporation equity
|
|
|
773.2
|
|
|
|
344.7
|
|
|
|
1,583.5
|
|
|
|
(11.7
|
)
|
|
|
(1,916.5
|
)
|
|
|
773.2
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.7
|
|
|
|
|
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
773.2
|
|
|
|
344.7
|
|
|
|
1,583.5
|
|
|
|
(6.0
|
)
|
|
|
(1,916.5
|
)
|
|
|
778.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
864.8
|
|
|
$
|
1,902.1
|
|
|
$
|
3,397.6
|
|
|
$
|
31.4
|
|
|
$
|
(3,268.3
|
)
|
|
$
|
2,927.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
Consolidating Balance Sheets
(in millions of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 2, 2016
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
Beverages Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents
|
|
$
|
20.8
|
|
|
$
|
1.0
|
|
|
$
|
50.2
|
|
|
$
|
5.1
|
|
|
$
|
|
|
|
$
|
77.1
|
|
Accounts receivable, net of allowance
|
|
|
18.3
|
|
|
|
63.3
|
|
|
|
361.8
|
|
|
|
13.0
|
|
|
|
(163.1
|
)
|
|
|
293.3
|
|
Income taxes recoverable
|
|
|
|
|
|
|
0.6
|
|
|
|
0.8
|
|
|
|
0.2
|
|
|
|
|
|
|
|
1.6
|
|
Inventories
|
|
|
13.0
|
|
|
|
76.7
|
|
|
|
154.1
|
|
|
|
5.6
|
|
|
|
|
|
|
|
249.4
|
|
Prepaid expenses and other assets
|
|
|
2.2
|
|
|
|
4.6
|
|
|
|
10.2
|
|
|
|
0.2
|
|
|
|
|
|
|
|
17.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
54.3
|
|
|
|
146.2
|
|
|
|
577.1
|
|
|
|
24.1
|
|
|
|
(163.1
|
)
|
|
|
638.6
|
|
Property, plant & equipment, net
|
|
|
29.7
|
|
|
|
163.3
|
|
|
|
570.1
|
|
|
|
6.7
|
|
|
|
|
|
|
|
769.8
|
|
Goodwill
|
|
|
19.8
|
|
|
|
4.5
|
|
|
|
735.3
|
|
|
|
|
|
|
|
|
|
|
|
759.6
|
|
Intangibles and other assets, net
|
|
|
0.8
|
|
|
|
79.2
|
|
|
|
628.9
|
|
|
|
2.8
|
|
|
|
|
|
|
|
711.7
|
|
Deferred tax assets
|
|
|
7.4
|
|
|
|
38.2
|
|
|
|
|
|
|
|
0.2
|
|
|
|
(38.2
|
)
|
|
|
7.6
|
|
Due from affiliates
|
|
|
400.1
|
|
|
|
587.5
|
|
|
|
2.6
|
|
|
|
|
|
|
|
(990.2
|
)
|
|
|
|
|
Investments in subsidiaries
|
|
|
176.3
|
|
|
|
847.3
|
|
|
|
702.5
|
|
|
|
|
|
|
|
(1,726.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
688.4
|
|
|
$
|
1,866.2
|
|
|
$
|
3,216.5
|
|
|
$
|
33.8
|
|
|
$
|
(2,917.6
|
)
|
|
$
|
2,887.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
$
|
|
|
|
$
|
122.0
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
122.0
|
|
Current maturities of long-term debt
|
|
|
|
|
|
|
2.6
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
|
|
|
|
3.4
|
|
Accounts payable and accrued liabilities
|
|
|
47.6
|
|
|
|
234.6
|
|
|
|
310.2
|
|
|
|
8.3
|
|
|
|
(163.1
|
)
|
|
|
437.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
47.6
|
|
|
|
359.2
|
|
|
|
310.6
|
|
|
|
8.7
|
|
|
|
(163.1
|
)
|
|
|
563.0
|
|
Long-term debt
|
|
|
|
|
|
|
1,134.1
|
|
|
|
391.3
|
|
|
|
|
|
|
|
|
|
|
|
1,525.4
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
114.7
|
|
|
|
|
|
|
|
(38.2
|
)
|
|
|
76.5
|
|
Other long-term liabilities
|
|
|
0.5
|
|
|
|
20.0
|
|
|
|
54.9
|
|
|
|
1.1
|
|
|
|
|
|
|
|
76.5
|
|
Due to affiliates
|
|
|
1.0
|
|
|
|
1.6
|
|
|
|
959.4
|
|
|
|
28.2
|
|
|
|
(990.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
49.1
|
|
|
|
1,514.9
|
|
|
|
1,830.9
|
|
|
|
38.0
|
|
|
|
(1,191.5
|
)
|
|
|
2,241.4
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, no par
|
|
|
534.7
|
|
|
|
701.5
|
|
|
|
1,486.9
|
|
|
|
38.6
|
|
|
|
(2,227.0
|
)
|
|
|
534.7
|
|
Additional paid-in-capital
|
|
|
51.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51.2
|
|
Retained earnings (deficit)
|
|
|
129.6
|
|
|
|
(333.5
|
)
|
|
|
(132.1
|
)
|
|
|
(58.4
|
)
|
|
|
524.0
|
|
|
|
129.6
|
|
Accumulated other comprehensive (loss) income
|
|
|
(76.2
|
)
|
|
|
(16.7
|
)
|
|
|
30.8
|
|
|
|
9.0
|
|
|
|
(23.1
|
)
|
|
|
(76.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Cott Corporation equity
|
|
|
639.3
|
|
|
|
351.3
|
|
|
|
1,385.6
|
|
|
|
(10.8
|
)
|
|
|
(1,726.1
|
)
|
|
|
639.3
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.6
|
|
|
|
|
|
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
639.3
|
|
|
|
351.3
|
|
|
|
1,385.6
|
|
|
|
(4.2
|
)
|
|
|
(1,726.1
|
)
|
|
|
645.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
688.4
|
|
|
$
|
1,866.2
|
|
|
$
|
3,216.5
|
|
|
$
|
33.8
|
|
|
$
|
(2,917.6
|
)
|
|
$
|
2,887.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 2, 2016
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
Beverages Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(136.8
|
)
|
|
$
|
99.0
|
|
|
$
|
16.8
|
|
|
$
|
4.7
|
|
|
$
|
(2.4
|
)
|
|
$
|
(18.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition, net of cash received
|
|
|
(43.2
|
)
|
|
|
|
|
|
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
(44.4
|
)
|
Additions to property, plant & equipment
|
|
|
(0.4
|
)
|
|
|
(6.7
|
)
|
|
|
(22.1
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
(29.5
|
)
|
Additions to intangibles and other assets
|
|
|
(0.1
|
)
|
|
|
(1.7
|
)
|
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.3
|
)
|
Proceeds from sale of property, plant & equipment
|
|
|
|
|
|
|
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(43.7
|
)
|
|
|
(8.4
|
)
|
|
|
(21.1
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
(73.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments of long-term debt
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
(0.3
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
(1.1
|
)
|
Borrowings under ABL
|
|
|
87.6
|
|
|
|
409.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
497.2
|
|
Payments under ABL
|
|
|
(58.8
|
)
|
|
|
(499.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(558.3
|
)
|
Distributions to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.3
|
)
|
|
|
|
|
|
|
(2.3
|
)
|
Issuance of common shares
|
|
|
144.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144.1
|
|
Common shares repurchased and cancelled
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.1
|
)
|
Dividends paid to common shareowners
|
|
|
(7.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.3
|
)
|
Intercompany dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.4
|
)
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
164.5
|
|
|
|
(90.6
|
)
|
|
|
(0.3
|
)
|
|
|
(4.8
|
)
|
|
|
2.4
|
|
|
|
71.2
|
|
Effect of exchange rate changes on cash
|
|
|
0.1
|
|
|
|
|
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash & cash equivalents
|
|
|
(15.9
|
)
|
|
|
0.0
|
|
|
|
(5.7
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
(22.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, beginning of period
|
|
|
20.8
|
|
|
|
1.0
|
|
|
|
50.2
|
|
|
|
5.1
|
|
|
|
|
|
|
|
77.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, end of period
|
|
$
|
4.9
|
|
|
$
|
1.0
|
|
|
$
|
44.5
|
|
|
$
|
4.7
|
|
|
$
|
|
|
|
$
|
55.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 4, 2015
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
|
|
|
|
|
|
|
Cott
|
|
|
Cott
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
Elimination
|
|
|
|
|
|
|
Corporation
|
|
|
Beverages Inc.
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Entries
|
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
4.4
|
|
|
$
|
16.9
|
|
|
$
|
(19.9
|
)
|
|
$
|
1.7
|
|
|
$
|
(4.2
|
)
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant & equipment
|
|
|
(0.3
|
)
|
|
|
(6.9
|
)
|
|
|
(20.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(27.3
|
)
|
Additions to intangibles and other assets
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(1.8
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.1
|
)
|
Proceeds from sale of property, plant & equipment
|
|
|
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(0.3
|
)
|
|
|
(6.8
|
)
|
|
|
(21.9
|
)
|
|
|
|
|
|
|
|
|
|
|
(29.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments of long-term debt
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
(0.1
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
(0.8
|
)
|
Borrowings under ABL
|
|
|
|
|
|
|
85.9
|
|
|
|
8.9
|
|
|
|
|
|
|
|
|
|
|
|
94.8
|
|
Payments under ABL
|
|
|
|
|
|
|
(102.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(102.8
|
)
|
Distributions to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.0
|
)
|
|
|
|
|
|
|
(2.0
|
)
|
Proceeds from the exercise of options for common shares, net
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
Common shares repurchased and cancelled
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.7
|
)
|
Dividends paid to common and preferred shareowners
|
|
|
(9.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9.0
|
)
|
Intercompany dividends
|
|
|
|
|
|
|
|
|
|
|
(2.1
|
)
|
|
|
(2.1
|
)
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities
|
|
|
(9.6
|
)
|
|
|
(17.3
|
)
|
|
|
6.7
|
|
|
|
(4.4
|
)
|
|
|
4.2
|
|
|
|
(20.4
|
)
|
Effect of exchange rate changes on cash
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash & cash equivalents
|
|
|
(5.9
|
)
|
|
|
(7.2
|
)
|
|
|
(35.8
|
)
|
|
|
(2.8
|
)
|
|
|
|
|
|
|
(51.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, beginning of period
|
|
|
6.2
|
|
|
|
8.6
|
|
|
|
64.0
|
|
|
|
7.4
|
|
|
|
|
|
|
|
86.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents, end of period
|
|
$
|
0.3
|
|
|
$
|
1.4
|
|
|
$
|
28.2
|
|
|
$
|
4.6
|
|
|
$
|
|
|
|
$
|
34.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 15Subsequent Events
On May 3, 2016, our board of directors declared a dividend of $0.06 per share on common shares, payable in cash on June 15,
2016 to shareowners of record at the close of business on June 3, 2016.
32