FORM10-Q
| ☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
| ☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
l
COTT
Canada | 98-0154711 | |||||||||||||
| (State or Other Jurisdiction of
| (IRS Employer
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4221
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| Suite 400 | ||||||||||||||
| Tampa, | Florida | 33607 | ||||||||||||
| United States | ||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
313-1732
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Shares, no par value per share | PRMW | New York Stock Exchange | ||||||
| Toronto Stock Exchange | ||||||||
| Large | ý | Accelerated filer | ☐ | ||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||||||||
| Emerging growth company | ☐ | ||||||||||||||||
Class | Outstanding at | |||||||
| Common Shares, no par value per share | ||||||||
Revenue, net Cost of sales Gross profit Selling, general and administrative expenses (Gain) loss on disposal of property, plant & equipment, net Acquisition and integration expenses Operating income Other expense (income), net Interest expense, net Income (loss) from continuing operations before income taxes Income tax expense (benefit) Net income (loss) from continuing operations Net income from discontinued operations, net of income taxes (Note 3) Net income (loss) Less: Net income attributable tonon-controlling interests - discontinued operations Net income (loss) attributable to Cott Corporation Net income (loss) per common share attributable to Cott Corporation Basic: Continuing operations Discontinued operations Net income (loss) Diluted: Continuing operations Discontinued operations Net income (loss) Weighted average common shares outstanding (in thousands) Basic Diluted Dividends declared per common share Net income (loss) Other comprehensive income (loss): Currency translation adjustment Pension benefit plan, net of tax1 Gain (loss) on derivative instruments, net of tax2 Total other comprehensive income (loss) Comprehensive income (loss) Less: Comprehensive income attributable tonon-controlling interests Comprehensive income (loss) attributable to Cott Corporation ASSETS Current assets Cash & cash equivalents Accounts receivable, net of allowance of $8.1 ($6.3 as of December 31, 2016) Inventories Prepaid expenses and other current assets Current assets of discontinued operations Total current assets Property, plant & equipment, net Goodwill Intangible assets, net Deferred tax assets Other long-term assets, net Long-term assets of discontinued operations Total assets LIABILITIES AND EQUITY Current liabilities Current maturities of long-term debt Accounts payable and accrued liabilities Current liabilities of discontinued operations Total current liabilities Long-term debt Deferred tax liabilities Other long-term liabilities Long-term liabilities of discontinued operations Total liabilities Equity Common shares, no par - 139,268,878 (December 31, 2016 -138,591,100) shares issued Additionalpaid-in-capital (Accumulated deficit) retained earnings Accumulated other comprehensive loss Total Cott Corporation equity Non-controlling interests Total equity Total liabilities and equity Cash flows from operating activities of continuing operations: Net income (loss) Net income from discontinued operations, net of income taxes Net income (loss) from continuing operations Adjustments to reconcile net income (loss) from continuing operations to cash flows from operating activities: Depreciation & amortization Amortization of financing fees Amortization of senior notes premium Share-based compensation expense Benefit for deferred income taxes Unrealized commodity hedging gain, net Gain on extinguishment of debt, net (Gain) loss on disposal of property, plant & equipment, net Othernon-cash items Change in operating assets and liabilities, net of acquisitions: Accounts receivable Inventories Prepaid expenses and other current assets Other assets Accounts payable and accrued liabilities and other liabilities Net cash provided by operating activities from continuing operations Cash flows from investing activities of continuing operations: Acquisitions, net of cash received Additions to property, plant & equipment Additions to intangible assets Proceeds from sale of property, plant & equipment Other investing activities Net cash used in investing activities from continuing operations Cash flows from financing activities of continuing operations: Payments of long-term debt Issuance of long-term debt Premiums and costs paid upon extinguishment of long-term debt Issuance of common shares Common shares repurchased and cancelled Financing fees Dividends paid to common shareholders Payment of contingent consideration for acquisitions Other financing activities Net cash (used in) provided by financing activities from continuing operations Cash flows from discontinued operations: Operating activities of discontinued operations Investing activities of discontinued operations Financing activities of discontinued operations Net cash provided by (used in) discontinued operations Effect of exchange rate changes on cash Net increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, beginning of period Cash & cash equivalents, end of period Cash & cash equivalents of discontinued operations, end of period Cash & cash equivalents from continuing operations, end of period SupplementalNon-cash Investing and Financing Activities: Accrued deferred financing fees Additions to property, plant & equipment through accounts payable and accrued liabilities and other liabilities Supplemental Disclosures of Cash Flow Information: Cash paid for interest Cash (received) paid for income taxes, net Balance at January 2, 2016 Cumulative effect adjustment Common shares repurchased and cancelled Common shares issued - Equity Incentive Plan Common shares issued - Equity issuance Common shares issued - Dividend Reinvestment Plan Common shares issued - Employee Stock Purchase Plan Share-based compensation Common shares dividends Distributions tonon-controlling interests Comprehensive (loss) income Currency translation adjustment Pension benefit plan, net of tax Unrealized gain on derivative instruments, net of tax Net income Balance at October 1, 2016 Balance at December 31, 2016 Common shares repurchased and cancelled Common shares issued - Equity Incentive Plan Common shares issued - Dividend Reinvestment Plan Common shares issued - Employee Stock Purchase Plan Share-based compensation Common shares dividends Distributions tonon-controlling interests Comprehensive income (loss) Currency translation adjustment Pension benefit plan, net of tax Loss on derivative instruments, net of tax Net (loss) income Balance at September 30, 2017 consumer protection. Consolidated Financial Statements. the end of 2020. All costs incurred by the 2020 Restructuring Plan are included in SG&A expenses for the three and six months ended June 27, 2020. (in millions of U.S. dollars) Balance December 31, 2016 Goodwill acquired during the year Adjustments1 Foreign exchange Balance September 30, 2017 six months ended June 27, 2020. expected credit losses. 820) Consolidated Financial Statements. Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Consolidated Financial Statements. Hedging, and Topic 825—Financial Instruments Consolidated Financial Statements. 740) Consolidated Financial Statements. Financial Instruments Consolidated Financial Statements. (in millions of U.S. dollars) Othernon-cash items Accounts payable and accrued liabilities and other liabilities Net cash provided by operating activities Additions to property, plant & equipment Other investing activities Net cash used in investing activities Issuance of long-term debt Net cash provided by financing activities Effect of exchange rate changes on cash Net (decrease) increase in cash, cash equivalents, and restricted cash Cash & cash equivalents, beginning of period Cash, cash equivalents and restricted cash, end of period SupplementalNon-cash Investing and Financing Activities: Long-term debt funded to escrow Additions to property, plant & equipment through accounts payable and accrued liabilities (in millions of U.S. dollars) Othernon-cash items Accounts payable and accrued liabilities and other liabilities Net cash provided by operating activities Additions to property, plant & equipment Other investing activities Net cash used in investing activities Issuance of long-term debt Net cash provided by financing activities Effect of exchange rate changes on cash Net (decrease) increase in cash, cash equivalents, and restricted cash Cash & cash equivalents, beginning of period Cash, cash equivalents and restricted cash, end of period SupplementalNon-cash Investing and Financing Activities: Long-term debt funded to escrow Additions to property, plant & equipment through accounts payable and accrued liabilities (in millions of U.S. dollars) Revenue, net Cost of sales Operating income from discontinued operations Income (loss) from discontinued operations, before income taxes Income tax (benefit) expense1 Net income from discontinued operations, net of income taxes Less: Net income attributable tonon-controlling interests Net income (loss) attributable to Cott Corporation – discontinued operations (in millions of U.S. dollars) ASSETS Cash & cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Current assets of discontinued operations Property, plant & equipment, net Goodwill Intangible assets, net Other long-term assets, net Long-term assets of discontinued operations LIABILITIES Short-term borrowings Current maturities of long-term debt Accounts payable and accrued liabilities Current liabilities of discontinued operations Long-term debt Deferred tax liabilities Other long-term liabilities Long-term liabilities of discontinued operations (in millions of U.S. dollars) Cash Accounts receivable Inventory Prepaid expenses and other assets Property, plant & equipment Goodwill Intangible assets Other assets Accounts payable and accrued liabilities Deferred tax liabilities Other long-term liabilities Total (in millions of U.S. dollars) Cash & cash equivalents Accounts receivable Inventories Prepaid expenses and other current assets Property, plant & equipment Goodwill Intangible assets Other assets Deferred tax assets Current maturities of long-term debt Accounts payable and accrued liabilities Long-term debt Deferred tax liabilities Other long-term liabilities Total deductible. (in millions of U.S. dollars, except per share amounts) Revenue Net income from continuing operations Net income attributable to Cott Corporation Net income per common share from continuing operations Net income per common share attributable to Cott Corporation, diluted Numerator (in millions): Net income (loss) attributable to Cott Corporation Continuing operations Discontinued operations Net earnings Basic Earnings Per Share Denominator (in thousands): Weighted average common shares outstanding - basic Basic Earnings Per Share: Continuing operations Discontinued operations Net earnings Diluted Earnings Per Share Denominator (in thousands): Weighted average common shares outstanding - basic Dilutive effect of Stock Options Dilutive effect of Performance based RSUs Dilutive effect of Time-based RSUs Weighted average common shares outstanding - diluted Diluted Earnings Per Share: Continued operations Discontinued operations Net earnings (in thousands) Stock Options Performance-based RSUs1 Time-based RSUs cereals. (in millions of U.S. dollars) For the Three Months Ended September 30, 2017 Revenue, net1 Depreciation and amortization Operating income (loss) Additions to property, plant & equipment For the Nine Months Ended September 30, 2017 Revenue, net 1 Depreciation and amortization Operating income (loss) Additions to property, plant & equipment As of September 30, 2017 Total assets2 (in millions of U.S. dollars) For the Three Months Ended October 1, 2016 Revenue, net1 Depreciation and amortization Operating income (loss) Additions to property, plant & equipment For the Nine Months Ended October 1, 2016 Revenue, net1 Depreciation and amortization Operating income (loss) Additions to property, plant & equipment As of December 31, 2016 Total assets2 (in millions of U.S. dollars) Segment assets1 Assets of discontinued operations1 Total assets the pandemic and actions taken by governmental authorities in the markets in which we operate and other third parties in response to the pandemic. (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Raw materials Finished goods Resale items Other Total 28, 2019: (in millions of U.S. dollars) Intangible Assets Not subject to amortization Rights1 Trademarks Total intangible assets not subject to amortization Subject to amortization Customer relationships Patents Trademarks Information technology Other Total intangible assets subject to amortization Total intangible assets 28, 2019: (in millions of U.S. dollars) Remainder of 2017 2018 2019 2020 2021 Thereafter Total (in millions of U.S. dollars) Trade payables Accrued compensation Accrued sales incentives Accrued interest Payroll, sales and other taxes Accrued deposits Other accrued liabilities Total (in millions of U.S. dollars) 10.000% senior notes due in 20211 5.500% senior notes due in 2024 5.500% senior notes due in 2025 Capital leases Total debt Capital leases - current maturities Total current debt Total long-term debt Liquidity the Closing Date. We incurred $250.7 million. Accordingly, unused availability under the Revolving Credit Facility as of June 27, 2020 amounted to $99.3 million. (in millions of U.S. dollars)1 Beginning balance January 2, 2016 OCI before reclassifications Amounts reclassified from AOCI Net current-period OCI Ending balance October 1, 2016 Beginning balance December 31, 2016 OCI before reclassifications Amounts reclassified from AOCI Net current-period OCI Ending balance September 30, 2017 (in millions of U.S. dollars) Details About AOCI Components1 Gains and losses on derivative instruments Foreign currency and commodity hedges Amortization of pension benefit plan items Prior service costs2 Total reclassifications for the period (in millions of U.S. dollars) Derivative Contract Coffee futures1 (in millions of U.S. dollars) Coffee futures assets Coffee futures liabilities Net liability obligations.9516565656566666768 For the Three Months Ended For the Nine Months Ended September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016 $ 580.9 $ 476.7 $ 1,698.4 1,102.0 288.1 229.0 849.7 510.4 292.8 247.7 848.7 591.6 262.8 225.3 777.8 547.7 (0.4 ) 1.4 4.8 4.6 3.2 7.4 17.2 20.5 27.2 13.6 48.9 18.8 1.5 0.2 (1.1 ) — 23.2 14.5 62.1 29.2 2.5 (1.1 ) (12.1 ) (10.4 ) 0.9 2.9 1.0 (4.8 ) $ 1.6 $ (4.0 ) $ (13.1 ) $ (5.6 ) 43.0 2.9 1.0 12.0 $ 44.6 $ (1.1 ) $ (12.1 ) $ 6.4 2.1 1.5 6.4 4.4 $ 42.5 $ (2.6 ) $ (18.5 ) $ 2.0 $ 0.01 $ (0.03 ) $ (0.09 ) $ (0.04 ) $ 0.29 $ 0.01 $ (0.04 ) $ 0.06 $ 0.30 $ (0.02 ) $ (0.13 ) $ 0.02 $ 0.01 $ (0.03 ) $ (0.09 ) $ (0.04 ) $ 0.29 $ 0.01 $ (0.04 ) $ 0.06 $ 0.30 $ (0.02 ) $ (0.13 ) $ 0.02 139,205 138,195 138,980 124,900 141,003 138,195 138,980 124,900 $ 0.06 $ 0.06 $ 0.18 $ 0.18 For the Three Months Ended For the Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Revenue, net $ 456.8 $ 455.6 $ 931.0 $ 883.3 Cost of sales 202.1 184.0 403.0 368.6 Gross profit 254.7 271.6 528.0 514.7 Selling, general and administrative expenses 246.7 245.7 501.8 481.5 Loss on disposal of property, plant and equipment, net 2.5 1.7 3.9 3.6 Acquisition and integration expenses 4.3 2.7 25.1 7.4 Goodwill and intangible asset impairment charges 115.2 — 115.2 — Operating (loss) income (114.0) 21.5 (118.0) 22.2 Other (income) expense, net (1.6) (2.2) 5.4 3.3 Interest expense, net 20.7 18.8 40.4 38.1 (Loss) income from continuing operations before income taxes (133.1) 4.9 (163.8) (19.2) Income tax (benefit) expense (1.4) 2.2 (4.7) 0.8 Net (loss) income from continuing operations $ (131.7) $ 2.7 $ (159.1) $ (20.0) Net (loss) income from discontinued operations, net of income taxes (4.3) 1.7 26.6 4.7 Net (loss) income $ (136.0) $ 4.4 $ (132.5) $ (15.3) Net (loss) income per common share Basic: Continuing operations $ (0.82) $ 0.02 $ (1.06) $ (0.15) Discontinued operations $ (0.03) $ 0.01 $ 0.18 $ 0.04 Net (loss) income $ (0.85) $ 0.03 $ (0.88) $ (0.11) Diluted: Continuing operations $ (0.82) $ 0.02 $ (1.06) $ (0.15) Discontinued operations $ (0.03) $ 0.01 $ 0.18 $ 0.04 Net (loss) income $ (0.85) $ 0.03 $ (0.88) $ (0.11) Weighted average common shares outstanding (in thousands) Basic 159,931 135,569 150,535 135,758 Diluted 159,931 137,306 150,535 135,758 Cott (Loss) For the Three Months Ended For the Nine Months Ended September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016 $ 44.6 $ (1.1 ) $ (12.1 ) $ 6.4 3.9 (5.9 ) 26.1 (23.8 ) (0.2 ) — (0.4 ) 0.2 0.5 0.7 (0.5 ) 3.8 4.2 (5.2 ) 25.2 (19.8 ) $ 48.8 $ (6.3 ) $ 13.1 $ (13.4 ) 2.1 1.5 6.4 4.4 $ 46.7 $ (7.8 ) $ 6.7 $ (17.8 ) 1.Net of the effect of $0.3 million tax expense for the nine months ended September 30, 2017, and $0.1 million and $0.3 million tax benefit for the three and nine months ended October 1, 2016, respectively.2.Net of the effect of $0.8 million and $2.3 million tax benefit for the three and nine months ended October 1, 2016, respectively. For the Three Months Ended For the Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Net (loss) income $ (136.0) $ 4.4 $ (132.5) $ (15.3) Other comprehensive (loss) income: Currency translation adjustment 8.4 (3.5) (10.3) 7.1 — 12.5 (11.2) 7.0 Comprehensive (loss) income $ (127.6) $ 13.4 $ (154.0) $ (1.2) Cott September 30,
2017 December 31,
2016 $ 82.0 $ 78.1 311.6 276.7 142.3 124.6 22.2 22.1 426.5 351.7 984.6 853.2 590.4 581.8 1,097.0 1,048.3 763.9 759.0 2.2 — 36.8 24.0 673.6 673.4 $ 4,148.5 $ 3,939.7 $ 2.6 $ 2.9 453.1 368.0 519.1 439.2 974.8 810.1 1,534.0 851.4 131.9 155.0 67.5 75.4 566.5 1,174.0 3,274.7 3,065.9 915.5 909.3 63.3 54.2 (20.7 ) 22.9 (92.7 ) (117.9 ) 865.4 868.5 8.4 5.3 873.8 873.8 $ 4,148.5 $ 3,939.7 June 27, 2020 December 28, 2019 ASSETS Current assets Cash and cash equivalents $ 211.1 $ 156.9 Accounts receivable, net of allowance of $12.9 ($8.8 as of December 28, 2019) 223.3 216.7 Inventories 73.2 62.9 Prepaid expenses and other current assets 23.5 19.1 Current assets of discontinued operations — 186.7 Total current assets 531.1 642.3 Property, plant and equipment, net 693.1 558.1 Operating lease right-of-use-assets 179.5 185.7 Goodwill 1,244.9 1,047.5 Intangible assets, net 980.7 597.0 Other long-term assets, net 24.4 20.5 Long-term assets of discontinued operations — 339.8 Total assets $ 3,653.7 $ 3,390.9 LIABILITIES AND EQUITY Current liabilities Short-term borrowings $ 217.7 $ 92.4 Current maturities of long-term debt 9.9 6.9 Accounts payable and accrued liabilities 410.4 370.6 Current operating lease obligations 37.9 36.5 Current liabilities of discontinued operations — 101.2 Total current liabilities 675.9 607.6 Long-term debt 1,282.2 1,259.1 Operating lease obligations 147.5 155.2 Deferred tax liabilities 138.3 90.6 Other long-term liabilities 61.6 58.7 Long-term liabilities of discontinued operations — 53.5 Total liabilities 2,305.5 2,224.7 Shareholders' Equity Common shares, 0 par value - 160,019,274 (December 28, 2019 - 134,803,211) shares issued 1,263.3 892.3 Additional paid-in-capital 75.2 77.4 Retained earnings 99.7 265.0 Accumulated other comprehensive loss (90.0) (68.5) Total shareholders' equity 1,348.2 1,166.2 Total liabilities and shareholders' equity $ 3,653.7 $ 3,390.9 Cott For the Three Months Ended For the Nine Months Ended September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016 $ 44.6 $ (1.1 ) $ (12.1 ) $ 6.4 43.0 2.9 1.0 12.0 1.6 (4.0 ) (13.1 ) (5.6 ) 49.4 41.2 141.8 102.6 0.6 0.3 1.4 0.3 (1.1 ) (1.5 ) (3.9 ) (4.4 ) 2.1 (0.9 ) 11.1 4.0 (3.1 ) 1.3 1.4 (11.3 ) (0.4 ) (1.0 ) (1.9 ) (0.8 ) — — (1.5 ) — (0.4 ) 1.4 4.8 4.6 (8.4 ) 8.5 (13.2 ) 7.7 (16.4 ) 4.6 (36.7 ) (18.5 ) (4.9 ) 7.4 (14.5 ) 10.6 2.5 1.6 (0.3 ) (3.5 ) 0.7 (1.0 ) 4.8 0.6 24.0 (6.8 ) 58.5 (14.4 ) 46.2 51.1 138.7 71.9 (3.4 ) (912.5 ) (33.4 ) (958.7 ) (38.2 ) (32.4 ) (97.1 ) (69.3 ) (3.4 ) (1.2 ) (6.0 ) (2.3 ) 3.1 1.3 6.0 1.5 0.5 — 0.9 — (41.4 ) (944.8 ) (129.6 ) (1,028.8 ) (0.3 ) (0.8 ) (101.9 ) (0.9 ) — — 750.0 498.7 — — (7.7 ) — 2.1 2.4 2.9 366.6 (0.1 ) (3.4 ) (1.9 ) (4.5 ) — (9.6 ) (11.1 ) (9.6 ) (8.4 ) (8.4 ) (25.1 ) (23.1 ) — (10.8 ) — (10.8 ) — — 0.5 — (6.7 ) (30.6 ) 605.7 816.4 47.4 44.9 56.1 87.5 (13.3 ) (8.2 ) (36.7 ) (29.3 ) (9.2 ) 257.9 (610.5 ) 128.3 24.9 294.6 (591.1 ) 186.5 2.0 (4.0 ) 6.4 (4.2 ) 25.0 (633.7 ) 30.1 41.8 123.2 752.6 118.1 77.1 148.2 118.9 148.2 118.9 66.2 27.5 66.2 27.5 $ 82.0 $ 91.4 $ 82.0 $ 91.4 $ — $ 0.7 $ 0.6 $ 0.7 6.8 5.8 6.9 7.1 $ 12.6 $ 17.5 $ 45.4 $ 35.1 (0.1 ) 0.2 1.7 4.2 For the Three Months Ended For the Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Cash flows from operating activities of continuing operations: Net (loss) income $ (136.0) $ 4.4 $ (132.5) $ (15.3) Net (loss) income from discontinued operations, net of income taxes (4.3) 1.7 26.6 4.7 Net (loss) income from continuing operations (131.7) 2.7 (159.1) (20.0) Adjustments to reconcile net (loss) income from continuing operations to cash flows from operating activities: Depreciation and amortization 52.8 42.9 97.8 82.6 Amortization of financing fees 0.9 0.9 1.8 1.7 Share-based compensation expense 4.9 3.2 7.3 6.5 Benefit for deferred income taxes (0.9) (0.9) (4.4) (6.1) (Gain) loss on sale of business (0.6) 0.6 (0.6) 6.0 Goodwill and intangible asset impairment 115.2 — 115.2 — Loss on disposal of property, plant and equipment, net 2.5 1.7 3.9 3.6 Other non-cash items (1.5) (3.8) 4.5 (3.6) Change in operating assets and liabilities, net of acquisitions: Accounts receivable 39.0 (20.4) 10.1 (21.7) Inventories 3.1 (1.5) 2.5 (4.3) Prepaid expenses and other current assets 1.9 1.9 0.4 0.3 Other assets (1.3) 0.6 (0.6) 1.2 Accounts payable and accrued liabilities and other liabilities (18.8) (26.7) (8.6) (29.9) Net cash provided by operating activities from continuing operations 65.5 1.2 70.2 16.3 Cash flows from investing activities of continuing operations: Acquisitions, net of cash received (11.9) (21.8) (434.5) (25.5) Additions to property, plant and equipment (28.7) (24.3) (63.6) (46.3) Additions to intangible assets (2.4) (0.9) (5.4) (2.8) Proceeds from sale of property, plant and equipment 0.5 0.8 0.8 1.9 Proceeds from sale of business, net of cash sold — — — 50.5 Other investing activities 1.1 — 1.1 — Net cash used in investing activities from continuing operations (41.4) (46.2) (501.6) (22.2) Cash flows from financing activities of continuing operations: Payments of long-term debt (2.6) (1.3) (5.3) (2.8) Proceeds from short-term borrowings 188.0 37.9 323.9 62.9 Payments on short-term borrowings (100.0) (9.1) (209.9) (61.9) Issuance of common shares 0.2 0.3 0.8 0.7 Common shares repurchased and canceled (0.2) (20.0) (32.1) (31.0) Financing fees (0.3) — (2.8) — Equity issuance fees — — (1.1) — Dividends paid to common shareholders (10.5) (8.0) (20.3) (16.2) Payment of deferred consideration for acquisitions (1.0) (0.2) (1.2) (0.2) Other financing activities 2.4 2.0 11.2 3.4 Net cash provided by (used in) financing activities from continuing operations 76.0 1.6 63.2 (45.1) Cash flows from discontinued operations: Operating activities of discontinued operations (0.7) 7.1 (18.0) 15.6 Investing activities of discontinued operations (1.6) (4.1) 392.9 (23.2) Financing activities of discontinued operations — (0.2) (0.1) (0.2) Net cash (used in) provided by discontinued operations (2.3) 2.8 374.8 (7.8) Effect of exchange rate changes on cash 1.1 0.1 (1.0) 1.4 Net increase (decrease) in cash, cash equivalents and restricted cash 98.9 (40.5) 5.6 (57.4) Cash and cash equivalents and restricted cash, beginning of period 112.2 153.9 205.5 170.8 Cash and cash equivalents and restricted cash, end of period 211.1 113.4 211.1 113.4 Cash and cash equivalents and restricted cash from discontinued operations, end of period — 32.0 — 32.0 Cash and cash equivalents and restricted cash from continuing operations, end of period $ 211.1 $ 81.4 $ 211.1 $ 81.4 Supplemental Non-cash Investing and Financing Activities: Shares issued in connection with business combination $ — $ — $ 377.6 — Accrued deferred financing fees — — 0.6 $ — Dividends payable issued through accounts payable and accrued liabilities — 0.1 0.2 0.1 Additions to property, plant and equipment through accounts payable and accrued liabilities and other liabilities 9.0 13.9 12.7 20.9 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 23.0 $ 35.2 $ 38.6 $ 50.3 Cash paid for income taxes, net 0.3 4.1 2.7 5.1 Cott Cott Corporation Equity Number of
Common
Shares
(In thousands) Common
Shares Additional
Paid-in-
Capital Retained
Earnings
(Accumulated
Deficit) Accumulated
Other
Comprehensive
(Loss) Income Non-
Controlling
Interests Total
Equity 109,695 $ 534.7 $ 51.2 $ 129.6 $ (76.2 ) $ 6.6 $ 645.9 — — — 2.8 — — 2.8 (302 ) (4.5 ) — — — — (4.5 ) 1,012 12.5 (3.7 ) — — — 8.8 27,853 363.6 — — — — 363.6 14 0.2 — — — — 0.2 74 0.9 (0.1 ) — — — 0.8 — — 5.7 — — — 5.7 — — — (23.1 ) — — (23.1 ) — — — — — (5.9 ) (5.9 ) — — — — (23.8 ) — (23.8 ) — — — — 0.2 — 0.2 — — — — 3.8 — 3.8 — — — 2.0 — 4.4 6.4 138,346 $ 907.4 $ 53.1 $ 111.3 $ (96.0 ) $ 5.1 $ 980.9 138,591 $ 909.3 $ 54.2 $ 22.9 $ (117.9 ) $ 5.3 $ 873.8 (165 ) (1.9 ) — — — — (1.9 ) 708 6.4 (5.0 ) — — — 1.4 27 0.3 — — — — 0.3 108 1.4 (0.2 ) — — — 1.2 — — 14.3 — — — 14.3 — — — (25.1 ) — — (25.1 ) — — — — — (3.3 ) (3.3 ) — — — — 26.1 — 26.1 — — — — (0.4 ) — (0.4 ) — — — — (0.5 ) — (0.5 ) — — — (18.5 ) — 6.4 (12.1 ) 139,269 $ 915.5 $ 63.3 $ (20.7 ) $ (92.7 ) $ 8.4 $ 873.8 Common Shares Additional Paid-in-Capital Retained
EarningsAccumulated Other Comprehensive Loss Total Shareholders' Equity Balance at March 28, 2020 159,826 $ 1,262.7 $ 71.5 $ 244.9 $ (98.4) $ 1,480.7 Cumulative effect of changes in accounting principle, net of taxes — — — 0.7 — 0.7 Net loss — — — (136.0) — (136.0) Other comprehensive income, net of tax — — — — 8.4 8.4 Common shares dividends ($0.06 per common share) — — — (9.9) — (9.9) Share-based compensation — — 4.2 — — 4.2 Common shares repurchased and canceled (20) (0.3) — — — (0.3) Common shares issued - Equity Incentive Plan 175 0.6 (0.4) — — 0.2 Common shares issued - Dividend Reinvestment Plan 1 — — — — — Common shares issued - Employee Stock Purchase Plan 37 0.3 (0.1) — — 0.2 Balance at June 27, 2020 160,019 $ 1,263.3 $ 75.2 $ 99.7 $ (90.0) $ 1,348.2 Number of
Common
Shares
(In thousands)Common Shares Additional Paid-in-Capital Retained
EarningsAccumulated Other Comprehensive Loss Total Shareholders' Equity Balance at December 28, 2019 134,803 $ 892.3 $ 77.4 $ 265.0 $ (68.5) $ 1,166.2 Cumulative effect of changes in accounting principle, net of taxes — — — (3.6) — (3.6) Net loss — — — (132.5) — (132.5) Other comprehensive loss, net of tax — — — — (21.5) (21.5) Common shares dividends ($0.12 per common share) — — — (19.5) — (19.5) Share-based compensation — — 7.3 — — 7.3 Common shares issued in connection with business combination and assumed vested awards, net of equity issuance costs of $1.1 million 26,497 376.5 2.9 — — 379.4 Common shares repurchased and canceled (2,796) (22.5) — (9.7) — (32.2) Common shares issued - Equity Incentive Plan 1,452 16.3 (12.2) — — 4.1 Common shares issued - Dividend Reinvestment Plan 1 — — — — — Common shares issued - Employee Stock Purchase Plan 62 0.7 (0.2) — — 0.5 Balance at June 27, 2020 160,019 $ 1,263.3 $ 75.2 $ 99.7 $ (90.0) $ 1,348.2 Common Shares Additional Paid-in-Capital Retained
EarningsAccumulated Other Comprehensive Loss Total Shareholders' Equity Balance at March 30, 2019 135,966 $ 899.0 $ 71.3 $ 277.3 $ (96.6) $ 1,151.0 Net income — — — 4.4 — 4.4 Other comprehensive income, net of tax — — — — 9.0 9.0 Common shares dividends ($0.06 per common share) — — — (8.1) — (8.1) Share-based compensation — — 3.3 — — 3.3 Common shares repurchased and canceled (1,441) (9.5) — (10.5) — (20.0) Common shares issued - Equity Incentive Plan 86 0.2 (0.2) — — — Common shares issued - Dividend Reinvestment Plan 3 — — — — — Common shares issued - Employee Stock Purchase Plan 24 0.3 — — — 0.3 Balance at June 29, 2019 134,638 $ 890.0 $ 74.4 $ 263.1 $ (87.6) $ 1,139.9 Common Shares Additional Paid-in-Capital Retained
EarningsAccumulated Other Comprehensive Loss Total Shareholders' Equity Balance at December 29, 2018 136,195 $ 899.4 $ 73.9 $ 298.8 $ (101.7) $ 1,170.4 Cumulative effect of changes in accounting principle, net of taxes — — — 10.5 — 10.5 Net loss — — — (15.3) — (15.3) Other comprehensive income, net of tax — — — — 14.1 14.1 Common shares dividends ($0.12 per common share) — — — (16.3) — (16.3) Share-based compensation — — 6.8 — — 6.8 Common shares repurchased and canceled (2,211) (16.4) — (14.6) — (31.0) Common shares issued - Equity Incentive Plan 605 6.3 (6.3) — — — Common shares issued - Dividend Reinvestment Plan 3 — — — — — Common shares issued - Employee Stock Purchase Plan 46 0.7 — — — 0.7 Balance at June 29, 2019 134,638 $ 890.0 $ 74.4 $ 263.1 $ (87.6) $ 1,139.9 “Cott,“Primo,” “the Company,” “our Company,” “Cott“Primo Water Corporation,” “we,” “us,” or “our” refers to CottPrimo Water Corporation, together with its consolidated subsidiaries. CottPrimo is a diversified beverage company with a leading volume-based national presencepure-play water solutions provider in the North America, Europe and EuropeanIsrael. Primo operates largely under a recurring razor/razorblade revenue model. The razor in Primo’s revenue model is its industry leading line-up of sleek and innovative water dispensers, which are sold through major retailers and online at various price points or leased to customers. The dispensers help increase household penetration, which drives recurring purchases of Primo’s razorblade offering. Primo’s razorblade offering is comprised of Water Direct, Water Exchange, and Water Refill. Through its Water Direct business, Primo delivers sustainable hydration solutions across its 21-country footprint direct to the customer’s door, whether at home or to commercial businesses. Through its Water Exchange and office delivery (“HOD”) industry for bottledWater Refill businesses, Primo offers pre-filled and reusable containers at over 13,000 locations and water refill units at approximately 22,000 locations, respectively. Primo also offers water filtration units across its 21-country footprint representing a leadertop five position. custom coffee roasting and blending of iced tea for the U.S. foodservice industry, and a leader in the production of beverages on behalf of retailers, brand owners and distributors. Our platform reaches over 2.3 million customers or delivery points across North America and Europe supported by strategically located sales and distribution facilities and fleets, as well as wholesalerswith Water coolers Europe, which ensure strict adherence to safety, quality, sanitation and distributors. This enables us to efficiently service residences, businesses, restaurant chains, hotels and motels, small and large retailers, and healthcare facilities.On July 24, 2017, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Refresco Group N.V., a Netherlands limited liability company (“Refresco”), pursuant to which we will sell to Refresco our carbonated soft drinks (“CSDs”) and juice businesses viaregulatory standards for the salebenefit of our North America, United Kingdom (“U.K.”) and Mexico business units (including the Canadian business) and our Royal Crown International (“RCI”) finished goods export business (collectively, “Traditional Business”). Accordingly, as a result of the sale of the Traditional Business representing a strategic shift in our operations, those businesses are presented herein as discontinued operations. See Note 3 to the consolidated financial statements for additional information on discontinued operations. The Traditional Business excludes our Route Based Services and Coffee, Tea and Extract Solutions reporting segments, and RCI concentrate business, the Columbus manufacturing facility and our Aimia Foods (“Aimia”) business.consolidated financial statementsConsolidated Financial Statements have been prepared in accordance with the instructions to Form10-Q and Article 10 of RegulationS-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 adjustments) 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 sheetConsolidated Balance Sheet as of December 31, 201628, 2019 included herein was derived from the audited consolidated financial statementsConsolidated Financial Statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2016 (“201628, 2019 (our “2019 Annual Report”). This Quarterly Report on Form10-Q should be read in conjunction with the annual audited consolidated financial statementsConsolidated Financial Statements and accompanying notes in our 20162019 Annual Report. The accounting policies used in these interim consolidated financial statementsConsolidated Financial Statements are consistent with those used in the annual consolidated financial statements.consolidated financial statementsConsolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statementsConsolidated Financial Statements and accompanying notes.thirdsecond quarter of 2017,2020, we reviewed our reporting segmentsimplemented a restructuring program intended to optimize synergies from the Company’s transition to a pure-play water company following the Legacy Primo Acquisition and, as a result, of the Refresco transaction. Following such review, we reorganized our reporting segments into three2 reporting segments: Route Based ServicesNorth America (which includes our DS Services of America, Inc. (“DSS”), Aquaterra Corporation (“Aquaterra”), Mountain Valley Spring Company (“Mountain Valley”) and Eden Springs Europe B.V. (“Eden”)Legacy Primo businesses), Coffee, Tea & Extract Solutions and Rest of World (which includes our S.Eden Springs Nederland B.V. (“Eden”), Aimia Foods Limited (“Aimia”), Decantae Mineral Water Limited (“Decantae”) and John Farrer & D. Coffee, Inc.Company Limited (“S&D”Farrers”) business) and All Other (which includes our Aimia and RCI concentrate businesses, the Columbus manufacturing facilitybusinesses). Our corporate oversight function and other miscellaneous expenses).expenses are aggregated and included in the All Other category. Segment reporting results have been recast to reflect these changes for all periods presented.Changes in PresentationCertain prior period amounts have been reclassified to conform to current period presentation inaccompanying consolidated statementsCOVID-19 Pandemicoperations, consolidated balance sheets and consolidated statements of cash flows. These reclassificationsthe novel coronavirus (“COVID-19”) had no effecta significant impact on operations,our business, financial condition, results of operations and cash flows for the three and six months ended June 27, 2020. In response to COVID-19, authorities in many of the markets in which we operate have implemented numerous measures to stall the spread of COVID-19, including travel bans and restrictions, quarantines, curfews, shelter in place orders, and business shutdowns. These measures have impacted and will further impact us, our customers, employees, distributors, suppliers and other third parties with whom we do business. There is considerable uncertainty regarding how these measures and future measures in response to the pandemic will impact our business in the future, including whether they will result in further changes in demand for our services and products, further increases in operating costs (whether as a result of changes to our supply chain or netincreases in employee costs or otherwise), and how they will further impact our supply chain, each or all of which can impact our ability to make, manufacture, distribute and sell our products. In addition, measures that impact our ability to access our offices, plants, warehouses, distribution centers or other facilities, or that impact the ability of our customers, employees, distributors, suppliers and other third parties to do the same, may impact the availability of our and their employees, many of whom are not able to perform their job functions remotely.providedexpenditures and are expected to be fully paid by operating activities.For the Three Months Ended For the Six Months Ended (in millions of U.S. dollars) June 27, 2020 June 27, 2020 North America $ 2.3 $ 2.3 Rest of World 6.6 6.6 Total $ 8.9 $ 8.9 Restructuring Liability (in millions of U.S. dollars) Balance at December 28, 2019 Charges to Costs and Expenses Cash Payments Balance at June 27, 2020 North America $ — $ 2.3 $ (2.3) $ — Rest of World — 6.6 (0.8) 5.8 Total $ — $ 8.9 $ (3.1) $ 5.8 the 2016our 2019 Annual Report is a summary of the Company’s significant accounting policies. Provided below is a summary of additional accounting policies that are significant to the financial results of the Company.costscost of sales. Shipping and handling costs incurred to store, prepare and move products between production facilities or from production facilities to branch locations or storage facilities are recorded in cost of sales. CostsShipping and handling costs incurred to deliver products from our North America and Rest of World reporting segment branch locations to the end-user consumer of those products are recorded in SG&A expenses. All other costs incurred in the shipment of products from our production facilities to customer locations are also reflected in cost of sales, with the exception of shippingsales. Shipping and handling costs incurred to deliver products from our Route Based Services and Coffee, Tea and Extract Solutions segment branch locations to theend-user consumer of those products, which are recordedincluded in selling, general and administrative (“SG&A”) expenses. These shipping and handling costs totaled $123.2&A expenses were $99.8 million and $339.0$219.8 million for the three and ninesix months ended September 30, 2017,June 27, 2020, respectively, and $92.4$120.5 million and $240.3$235.5 million for the three and ninesix months ended October 1, 2016,June 29, 2019, respectively. Finished goods inventory costs include the cost of direct labor and materials and the applicable share of overhead expense chargeable to production.Goodwill is not amortized, but instead is testedWe test goodwill for impairment at least annually. annually on the first day of the fourth quarter, based on our reporting unit carrying values, calculated as total assets less non-interest bearing liabilities, as of the end of the third quarter, or more frequently if we determine a triggering event has occurred during the year. During the second quarter of 2020, given the general deterioration in economic and market conditions in which we operate arising from the COVID-19 pandemic, we identified a triggering event indicating possible impairment of goodwill and intangible assets, as further described below. We did not identify impairment of our property, plant and equipment, lease-related right-of-use assets, or long-lived assets.following table summarizesCompany operates through 2 operating segments: North America and Rest of World. These 2 operating segments are also reportable segments. We evaluate goodwill for impairment on a reporting unit basis, which is an operating segment or a level below an operating segment, referred to as a component. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. However, two or more components of an operating segment can be aggregated and deemed a single reporting unit if the components have similar economic characteristics. Our North America operating segment was determined to have 3 components: DSS, Mountain Valley, and Aquaterra. We have determined that DSS and Aquaterra have similar economic characteristics and have aggregated them as a single reporting unit for the purpose of testing goodwill for impairment (“DSSAqua”). Our Rest of World operating segment was determined to have 4 components: Eden, Aimia, Decantae, and Farrers, none of which have similar economic characteristics. We have thus determined our reporting units are DSSAqua, Mountain Valley, Eden, Aimia, Decantae, and Farrers. Reporting Segment (in millions of U.S. dollars) North America Rest of World Total Balance at December 28, 2019 Goodwill $ 673.0 $ 374.5 $ 1,047.5 Accumulated impairment losses — — — $ 673.0 $ 374.5 $ 1,047.5 Goodwill acquired during the year 337.5 5.6 343.1 Measurement period adjustments (42.3) 1.2 (41.1) Impairment losses — (104.1) (104.1) Foreign exchange (1.2) 0.7 (0.5) Balance at June 27, 2020 Goodwill 967.0 382.0 1,349.0 Accumulated impairment losses — (104.1) (104.1) $ 967.0 $ 277.9 $ 1,244.9 September 30, 2017: Reporting Segment Route
Based
Services Coffee, Tea
and Extract
Solutions All Other Total $ 886.5 $ 117.1 $ 44.7 $ 1,048.3 7.0 — 1.3 8.3 0.1 0.7 — 0.8 35.6 — 4.0 39.6 $ 929.2 $ 117.8 $ 50.0 $ 1,097.0 1.During the nine months ended September 30, 2017, we recorded adjustments to goodwill allocated to the Route Based Services and the Coffee, Tea and Extract Solutions segments in connection with the acquisitions of Eden and S&D (see Note 4 to the consolidated financial statements).Discontinued OperationsIn July 2017,June 27, 2020. We assessed qualitative factors to determine whether the Company’s Boardexistence of Directors committed toevents or circumstances indicated that it was more likely than not that the fair value of our trademarks with indefinite lives were less than their respective carrying value. The qualitative factors we assessed included macroeconomic conditions, industry and market considerations, cost factors that would have a plan to sellnegative effect on earnings and cash flows, overall financial performance compared with forecasted projections in prior periods, and other relevant events, the impact of which are all significant judgments and estimates. Based on this qualitative assessment, we determined that impairment was more likely than not with the trademarks with indefinite lives associated with our Traditional Business. The closingEden and Aquaterra businesses. As a result, we performed an interim quantitative impairment test as of June 27, 2020 on these intangible assets.transactiontrademarks with indefinite lives associated with our Eden and Aquaterra businesses, we use a relief from royalty method of the income approach, which calculates a fair value royalty rate that is subjectapplied to certain customary closing conditions,revenue forecasts associated with those trademarks. The resulting cash flows are discounted using a rate to reflect the risk of achieving the projected royalty savings attributable to the trademarks. The assumptions used to estimate the fair value of these trademarks are subjective and require significant management judgment, including regulatory approval fromestimated future revenues, the United Kingdom. Approval from Refresco’s stockholders was receivedfair value royalty rate (which is estimated to be a reasonable market royalty charge that would be charged by a licensor of the trademarks) and the risk adjusted discount rate. Based on our impairment test, we determined the trademarks with indefinite lives associated with our Eden and Aquaterra businesses were impaired and recognized impairment charges of $9.9 million and $1.2 million, respectively. The impairment charges are included in September 2017goodwill and accordingly, the Company has presented this portion of our business as discontinued operations beginningintangible asset impairment charge expense in the third quarterConsolidated Statements of 2017. The Company has reclassifiedOperations for the financial results of the Traditional Business to net income from discontinued operations, net of income taxes in the consolidated statements of operations for all periods presented. The Company has also reclassified the related assetsthree and liabilities as current and long-term assets and liabilities of discontinued operations on the accompanying consolidated balance sheets as of September 30, 2017 and December 31, 2016. Cash flows from the Company’s discontinued operations are presented in the consolidated statements of cash flows for all periods presented. See Note 3 to the consolidated financial statements for additional information on discontinued operations.July 2015,June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”)2015-11 – Inventory (Topic 330) to simplify the accounting for inventory. The guidance requires entities to measure most inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted the provisions of this guidance effective January 1, 2017, and applied it prospectively to all periods presented. The adoption of this standard did not have a material impact on the Company’s financial statements.In March 2016, the FASB issued ASU2016-09—Compensation – Stock Compensation (Topic 718). We elected to early adopt this standard in the fourth quarter of 2016, effective as of the beginning of the Company’s 2016 fiscal year. Amendments requiring the recognition of excess tax benefits and tax deficiencies within the consolidated statements of operations were adopted prospectively and resulted in an increase of $1.0 million and $1.2 million in income tax benefit and net income (loss) from continuing operations for the three and nine months ended October 1, 2016.Recently issued accounting pronouncementsChanges to GAAP are established by the FASB in the form of ASUs or the issuance of new standards to the FASB’s 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 our consolidated financial statements.Update ASU2014-09 – 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.During the first half of 2017, we hired a third-party consultant to assist in the adoption of this standard, developed a scoping phase project plan, identified an inventory of revenue streams and are currently in the contract review phase. We are continuing our progress in the contract review phase and are identifying gaps between our current revenue recognition policies and the new standard so that we can quantify and assess the impact to our consolidated financial statements.Update ASU2016-02 – 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 ASU2016-13 – Financial Instruments—Credit Losses (Topic 326)In June 2016, the FASB amended its guidance to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. The amended guidance also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. TheIn May 2019, the FASB amended the original guidance by providing an option to irrevocably elect the fair value option for certain financial instruments previously measured at amortized cost basis. In November 2019, the FASB provided additional guidance around how to report expected recoveries. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Earlyyears, with early adoption will be permitted for fiscal years beginning afterpermitted.15, 2018, including interim periods within those fiscal years. This29, 2019, we adopted the guidance will be appliedin this amendment using a prospective orthe modified retrospective transition method, depending onmethod. The adoption of this new standard, with the area coveredimpact being the increase in this update. We are currently assessingallowance for doubtful accounts related to our trade accounts receivable, resulted in a cumulative-effect adjustment of $3.6 million recognized to the opening balance of retained earnings. The Company will continue to actively monitor the impact of adoption of this standardthe COVID-19 pandemic on our consolidated financial statements.2017-01 2018-13 – Business CombinationsFair Value Measurement (Topic 805)January 2017,August 2018, the FASB amended its guidance regarding business combinations. The amendment clarified the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accountedon disclosure requirements for as acquisitions (or disposals) of assets or businesses. The amendments provide an analysis of fair value of assets acquired to determine when a set of assets is not a business, and uses more stringent criteria related to inputs, substantive process, and outputs to determine if a business exists.measurement. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The amendments in this update should be applied prospectively onamends existing fair value measurement disclosure requirements by adding, changing, or after the effective date with no requirement for disclosures at transition. We are currently assessing the impact of adoption of this standard on our consolidated financial statements.Update ASU2017-04 – Intangibles—Goodwill and Other (Topic 350)In January 2017, the FASB amended its guidance regarding goodwill impairment. The amendments removeremoving certain conditions of the goodwill impairment test and simplify the computation of impairment.disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permittedpermitted. The standard also allows for early adoption of any tests performed after January 1, 2017. The amendmentsremoved or modified disclosures upon issuance of this update while delaying adoption of the additional disclosures until their effective date. We adopted the guidance in this update should be applied prospectively, with disclosure required as toamendment effective December 29, 2019 prospectively. Adoption of the nature of and reason for the change in accounting principle upon transition. We are currently assessing thenew standard did not have a material impact of adoption of this standard on our consolidated financial statements.2017-07 2018-15 – Compensation—Retirement Benefits (Topic 715)March 2017,August 2018, the FASB issued an update toamended its guidance on presentation of net periodic pension cost and net periodic post-retirement pension cost, and requiresa customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service cost componentcontract with the requirements for capitalizing implementation costs incurred to be presented in the same line itemdevelop or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The amendments in thisobtain internal-use software. This update also allow onlyrequires customers to expense the capitalized implementation costs of a hosting arrangement that is a service cost component to be eligible for capitalization when applicable. For public entities,contract over the term of the hosting arrangement. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including2019, and interim periods within those fiscal years, with early adoption permitted. At adoption,We adopted the guidance in this update will be applied retrospectively for the presentationamendment effective December 29, 2019. Adoption of the service cost component and other components of net periodic pension cost and net periodic post-retirement benefit cost in the income statement and prospectively, on or after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic post-retirement benefit in assets. Additionally, in the period of adoption, an entity should provide disclosures aboutnew standard did not have a change in accounting principle. We are currently assessing thematerial impact of adoption of this standard on our consolidated financial statements.2017-08 2019-04 – Receivables—Nonrefundable FeesCodification Improvements to Topic 326—Financial Instruments—Credit Losses, Topic 815—Derivative and Other Costs (Subtopic310-20)March 2017,April 2019, the FASB amended its guidance on accountingto clarify and provide narrow-scope amendments for debt securities.these three recent standards related to financial instruments accounting. The amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2018,2019, including interim periods within those fiscal years, with early adoption permitted. If an entity early adoptsyears. We adopted the amendmentsguidance in an interim period, any adjustments should be reflected asthis amendment effective December 29, 2019. Adoption of the beginning of the fiscal year that includes that interim period. At adoption, this update will be applied usingnew standard did not have a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. We are currently assessing thematerial impact of adoption of this standard on our consolidated financial statements.2017-09 2019-12 – Stock Compensation – Scope of ModificationIncome Taxes—Simplifying the Accounting for Income Taxes (Topic 718)May 2017,December 2019, the FASB amended its guidance regarding the scope of modification accounting for share-based compensation arrangements. The amendments provide guidance about which changesto remove certain exceptions to the terms or conditions of a share-based payment award require an entity to apply modification accountinggeneral principles in Topic 718. For public entities, the740 and improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in this update are effective for fiscal years beginning after December 15, 2017. Early2020, with early adoption is permitted, including adoption in any interim period, for public entities for reporting periods for which financial statements have not yet been issued. The amendmentspermitted. We adopted the guidance in this update should be applied prospectively to an award modified on or afteramendment effective December 29, 2019. Adoption of the adoption date. We are currently assessing thenew standard did not have a material impact of adoption of this standard on our consolidated financial statements.2017-12 2020-03 – Derivatives and Hedging (Topic 815): TargetedCodification Improvements to Accounting for Hedging ActivitiesAugust 2017,March 2020, the FASB amended its guidance regardingto clarify or improve the improvementfinancial instrument topics in the existing guidance. These amendments make the guidance easier to understand and apply by eliminating inconsistencies and providing clarifications. Certain amendments in this update are effective upon issuance of accountingthis update. The remaining amendments in this update are effective for hedging transactions. This new standard simplifiesfiscal years beginning after December 15, 2019, and expandsinterim periods within those fiscal years, with early adoption permitted. We adopted the eligible hedging strategies for financial andnon-financial risks. It also enhances the transparencyguidance in this amendment effective December 29, 2019. Adoption of how hedging results are presented and disclosed. Further, the new standard provides partial reliefdid not have a material impact on our Consolidated Financial Statements.timing ofFASB amended its guidance on disclosure requirements for defined benefit plans. The update amends existing annual disclosure requirements applicable to all employers that sponsor defined benefit pension and other postretirement plans by adding, removing, and clarifying certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in earnings. The guidance is designed to align hedge accounting with a company’s risk management activities and simplifies its application through targeted improvements by expanding the list of items eligible to be hedged and amending the methods used to measure the effectiveness of hedging relationships. Additionally it prescribes how hedging results should be presented and requires incremental disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2018,2020, with early adoption permitted, and interimare to be applied on a retrospective basis to all periods within those fiscal years. Early application is permitted in any interim period after issuance of this update.presented. We are currently assessing the impact of adoption of this standard on our consolidated financial statements. – Revision of Previously Reported Financial InformationDuring the fourth quarter of 2016,adopted ASU2016-18 – Statementcompleted the sale of Cash Flows (Topic 230): Restricted Cash, which requires thatS&D to Westrock Coffee Company, LLC, a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash, and that adoption be applied retrospectively. During the second quarter of 2017, we failed to retrospectively adjust our 2016 comparative consolidated statements of cash flows for the second quarter 2016 issuance of $498.7 million of our 5.500% senior notes due 2024 (the “2024 Notes”Delaware limited liability company (“Westrock”), the cash proceeds of which were restricted for a subsequent acquisition. Prior to the adoption of ASU2016-18, this restricted use financing was disclosed as a non-cash investing and financing activity. In connection with this revision, we are also correcting other immaterial cash flow errors. For the three and six months ended July 2, 2016, these errors resulted in our cash provided from operating activities being overstated by $2.6 and $5.5 million, our cash used in investing activities being overstated by $4.1 and $7.0 million, and our cash provided from financing activities being understated by $498.7 and $498.7 million. As a result of this error, cash, cash equivalents and restricted cash, end of period, was understated by $503.1 million as of July 2, 2016 in the consolidated statement of cash flows.We have also corrected other immaterial items in the consolidated statements of cash flows for the three and nine months ended October 1, 2016, as presented herein. These corrections increase cash provided by operating activities from continuing operations and cash flows used in investing activities from continuing operations by $3.1 million for the three months ended October 1, 2016 and decreased cash flows provided by operating activities from continuing operations and cash flows used in investing activities from continuing operations by $1.1 million for the nine months ended October 1, 2016. These corrections also impacted the supplemental disclosure of additions to property, plant & equipment through accounts payable and accrued liabilities by $1.1 million for the nine months ended October 1, 2016.As a result of the revision, our ending cash, cash equivalents and restricted cash in the statements of cash flows for the three and six months ended July 2, 2016, now reconcile to the ending cash and restricted cash as presented on the consolidated balance sheet as of July 2, 2016, within the Form10-Q filed August 9, 2016.We have evaluated these errors and determined they are not material to the previously issued financial statements and have elected to revise our previously issued consolidated statements of cash flows for the three and six months ended July 2, 2016 as follows: For the Three Months Ended July 2, 2016 As Previously
Reported Adjustments As Revised $ 2.6 $ (1.3 ) $ 1.3 44.6 (1.3 ) 43.3 87.6 (2.6 ) 85.0 (33.2 ) 1.3 (31.9 ) (2.8 ) 2.8 — (38.6 ) 4.1 (34.5 ) — 498.7 498.7 147.5 498.7 646.2 (2.1 ) 2.9 0.8 194.4 503.1 697.5 55.1 — 55.1 249.5 503.1 752.6 498.7 (498.7 ) — 10.2 1.3 11.5 For the Six Months Ended July 2, 2016 As Previously Reported Adjustments As Revised $ 0.9 $ (1.3 ) $ (0.4 ) 11.1 (4.2 ) 6.9 68.9 (5.5 ) 63.4 (62.7 ) 4.2 (58.5 ) (2.8 ) 2.8 — (112.1 ) 7.0 (105.1 ) — 498.7 498.7 218.7 498.7 717.4 (3.1 ) 2.9 (0.2 ) 172.4 503.1 675.5 77.1 — 77.1 249.5 503.1 752.6 498.7 (498.7 ) — 11.4 4.2 15.6 Note 3—Discontinued OperationsOn July 24, 2017, the Company entered into a Purchase Agreement with Refresco, pursuant to which Westrock acquired all of the issued and outstanding equity of S&D from the Company will sell to Refresco its Traditional Business.(“S&D Divestiture”). The transaction is structured as a sale of the assets of the Canadian business and a sale of the stock of the operating subsidiaries engaged in the Traditional Business in the other jurisdictions after the Company completes an internal reorganization. The Traditional Business excludes our Route Based Services and Coffee, Tea and Extract Solutions reporting segments, and RCI’s concentrate business, the Columbus manufacturing facility and our Aimia business. The Traditional Business produces, either directly or through third-party manufacturers throughco-packing arrangements, CSDs, 100% shelf stable juice and juice-based products, clear, still and sparkling flavored waters, energy drinks and shots, sports drinks, new age beverages,ready-to-drink teas, liquid enhancers, freezables, andready-to-drink alcoholic beverages. The closing of the transaction is subject to receipt of regulatory approval in the United Kingdom. The aggregate deal consideration is $1.25 billion, is payablewas $405.0 million paid at closing in cash, subject to adjustment for indebtedness,with customary post-closing working capital and other items, and is expectedadjustments, which were resolved in June 2020 by payment of $1.5 million from the Company to close near the end of 2017. Westrock.intends to useused the proceeds of the transactionS&D Divestiture to repay indebtedness and reduce overall leverage.Upon closingfinance a portion of the saleLegacy Primo Acquisition. See Note 5 to the Consolidated Financial Statements for additional information on the Legacy Primo Acquisition.the Traditional Business, the Company and Refresco will enter into a Transition Services Agreement pursuant to which the Company and Refresco will provide certain services to each other for various service periods, with the longest service period being 18 months, including tax and accounting services, certain human resources services, communications systems and support, and insurance/risk management. Each party will be compensated for services rendered as set forth in the Transition Services Agreement. Each service period may be extended as set forth in the Transition Services Agreement, up to a maximum extension of 180 days.In addition, upon closing the Company and Refresco will enter into certainCo-pack Manufacturing Agreements pursuant to which the Company and Refresco will manufacture and supply certain beverage products for each other and a Concentrate Supply Agreement pursuant to which the Company will supply concentrates to Refresco. Each party will be compensated for the products they supply as set forth in the applicable agreements. TheCo-pack Manufacturing Agreements provide for a term of 36 months and the Concentrate Supply Agreement provides for a term that is coterminous with the term of the Transition Services Agreement.For all periods presented, the operating results associated with the Traditional Business have been reclassified into net (loss) income from discontinued operations, net of income taxes in the consolidated statementsaccompanying Consolidated Statements of Operations include the following:For the Three Months Ended For the Six Months Ended (in millions of U.S. dollars) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 $ — $ 150.0 $ 97.1 $ 298.0 Cost of sales — 108.5 71.1 216.7 Operating income (loss) from discontinued operations — 3.1 (0.5) 6.5 (Loss) gain on sale of discontinued operations (5.6) — 54.9 — Net (loss) income from discontinued operations, before income taxes (5.5) 3.0 54.3 6.4 (1.2) 1.3 27.7 1.7 Net (loss) income from discontinued operations, net of income taxes $ (4.3) $ 1.7 $ 26.6 $ 4.7 For the Three Months Ended For the Six Months Ended (in millions of U.S. dollars) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Operating lease cost $ 11.5 $ 11.3 $ 24.0 $ 22.9 Short-term lease cost 1.7 0.4 4.0 1.3 Finance lease cost Amortization of right-of-use assets $ 2.6 $ 2.0 $ 4.3 $ 2.7 Interest on lease liabilities 0.8 0.1 1.8 0.3 Total finance lease cost $ 3.4 $ 2.1 $ 6.1 $ 3.0 Sublease income $ 0.2 $ 0.2 $ 0.4 $ 0.5 For the Three Months Ended (in millions of U.S. dollars) June 27, 2020 June 29, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 11.3 $ 11.3 Operating cash flows from finance leases 0.8 0.2 Financing cash flows from finance leases 2.4 1.1 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 7.6 $ 6.7 Finance leases 2.3 4.2 For the Six Months Ended (in millions of U.S. dollars) June 27, 2020 June 29, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 23.9 $ 24.2 Operating cash flows from finance leases 1.7 0.3 Financing cash flows from finance leases $ 3.8 $ 1.8 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 14.9 $ 8.0 Finance leases 24.0 13.4 (in millions of U.S. dollars, except lease term and discount rate) June 27, 2020 December 28, 2019 Operating leases Operating lease right-of-use assets $ 179.5 $ 185.7 Current operating lease obligations 37.9 36.5 Operating lease obligations 147.5 155.2 Total operating lease obligations $ 185.4 $ 191.7 Financing leases Property, plant and equipment, net $ 42.1 $ 30.4 Current maturities of long-term debt 9.6 5.7 Long-term debt 39.6 23.7 Total finance lease obligations $ 49.2 $ 29.4 Weighted Average Remaining Lease Term June 27, 2020 December 28, 2019 Operating leases 8.3 8.7 Finance leases 5.5 5.6 Weighted Average Discount Rate Operating leases 6.2 % 6.2 % Finance leases 5.3 % 6.3 % (in millions of U.S. dollars) June 27, 2020 December 28, 2019 Remainder of 2020 $ 27.0 $ 47.8 2021 41.2 38.4 2022 31.7 29.6 2023 27.2 25.3 2024 22.0 20.6 Thereafter 94.9 93.5 Total lease payments 244.0 255.2 Less imputed interest (58.6) (63.5) Present value of lease obligations $ 185.4 $ 191.7 (in millions of U.S. dollars) June 27, 2020 December 28, 2019 Remainder of 2020 $ 7.5 $ 6.8 2021 11.3 6.1 2022 10.2 5.7 2023 8.9 5.4 2024 7.4 4.6 Thereafter 11.7 6.4 Total lease payments 57.0 35.0 Less imputed interest (7.8) (5.6) Present value of lease obligations $ 49.2 $ 29.4 For the Three Months Ended For the Six Months Ended (in millions of U.S. dollars) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 United States $ 350.1 $ 305.6 $ 684.7 $ 595.2 United Kingdom 25.6 42.2 68.1 88.3 Canada 14.0 17.9 30.1 33.7 All other countries 67.1 89.9 148.1 166.1 Total $ 456.8 $ 455.6 $ 931.0 $ 883.3 (in millions of U.S. dollars, except share and per share amounts) Fair value of common shares issued to holders of Legacy Primo common stock (26,497,015 shares issued at $14.25 per share) $ 377.6 Cash to holders of Legacy Primo common stock 216.1 Cash paid to retire outstanding indebtedness on behalf of Legacy Primo 196.9 Settlement of pre-existing relationship 4.7 Fair value of replacement common share options and restricted stock units for Legacy Primo awards 2.9 Total consideration $ 798.2 assets and liabilities associated with this business have been reflected as assets and liabilities of discontinued operations in the consolidated balance sheets.The major components of net income from discontinued operations, net of income taxes in the consolidated statements of operations include the following: For the Three Months Ended For the Nine Months Ended September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016 $ 425.6 $ 419.3 $ 1,244.7 $ 1,282.7 371.3 361.3 1,093.4 1,102.0 13.9 21.0 33.6 67.1 12.1 4.5 (27.5 ) 9.5 (30.9 ) 1.6 (28.5 ) (2.5 ) 43.0 2.9 1.0 12.0 2.1 1.5 6.4 4.4 $ 40.9 $ 1.4 $ (5.4 ) $ 7.6 1.The pending transaction with Refresco is anticipated to result in a gain on sale which led to certain U.S. deferred tax liabilities being considered as a source of future taxable income. As a result, we recognized a tax benefit of approximately $26.9 million related to a corresponding U.S. valuation allowance release.Assets and liabilities of discontinued operations presented in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 include the following: September 30,
2017 December 31,
2016 $ 66.2 $ 40.0 165.2 127.2 184.7 176.8 10.4 7.7 426.5 351.7 341.9 348.1 136.9 127.1 175.7 180.7 19.1 17.5 $ 673.6 $ 673.4 247.6 207.0 2.9 2.8 268.6 229.4 519.1 439.2 519.8 1,136.6 0.8 2.8 45.9 34.6 $ 566.5 $ 1,174.0 Note 4—AcquisitionsS&D AcquisitionOn August 11, 2016, the Company acquired S. & D. Coffee, Inc. (“S&D”), a premium coffee roaster and provider of customized coffee, tea and extract solutions pursuant to a Stock and Membership Interest Purchase Agreement dated August 3, 2016 (the “S&D Acquisition”). Thepreliminary purchase price considerationallocation of $353.6 million was allocated to the assets acquired and the liabilities assumed based on their fair values as of the acquisition date. assumed:(in millions of U.S. dollars) Originally Reported Measurement Period Adjustments Acquired Value Cash and cash equivalents $ 1.3 $ — $ 1.3 Accounts receivable 21.9 — 21.9 Inventory 12.7 — 12.7 Prepaid expenses and other current assets 4.3 0.9 5.2 Property, plant and equipment 119.0 7.1 126.1 Operating lease right-of-use-assets 4.9 (0.9) 4.0 Goodwill 337.4 (42.4) 295.0 Intangible assets 361.3 51.4 412.7 Other assets 3.9 (3.4) 0.5 Current maturities of long-term debt (2.2) — (2.2) Accounts payable and accrued liabilities (41.6) — (41.6) Current operating lease obligations (1.8) — (1.8) Long-term debt (5.8) 0.5 (5.3) Operating lease obligations (3.1) 0.9 (2.2) Deferred tax liabilities (11.7) (14.5) (26.2) Other long-term liabilities (2.3) 0.4 (1.9) Total $ 798.2 $ — $ 798.2 ninethree months ended September 30, 2017 includedJune 27, 2020 include adjustments to property, plant & equipment and a related adjustment to deferred taxesintangible assets based on the results of the validation procedures performed as well aspreliminary valuations, adjustments to operating and financing lease right-of-use assets and obligations based on a review of acquired leases, a deferred tax adjustment related to the preliminary valuation and an adjustment to income taxes payablea note receivable existing at the acquisition date. The measurement period adjustments did not have a material effect on our results of operations in prior periods.table below summarizesassets and liabilities acquired in the originally reportedLegacy Primo Acquisition are recorded at their estimated acquisition date fair values measurementper preliminary valuations and management estimates and are subject to change when formal valuations and other studies are finalized. Estimated fair values for deferred tax balances are preliminary and are also subject to change based on the final valuation results. In addition, consideration for potential loss contingencies are still under review.adjustments recordedfrom the Legacy Primo Acquisition date through June 27, 2020 were $116.4 million and $1.4 million, respectively. The Company incurred $2.9 million and $21.7 million of acquisition-related costs associated with the Legacy Primo Acquisition, which are included in acquisition and integration expenses in the Consolidated Statements of Operations for the three and six months ended June 27, 2020.(in millions of U.S. dollars) Estimated Fair Market Value Estimated Useful Life Customer relationships $ 236.3 26 years Trade names 174.9 Indefinite Software 1.5 3 years Total $ 412.7 final purchase price allocationintegration 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 assets acquired and liabilities assumed: Originally
Reported Measurement
Period
Adjustments Acquired Value $ 1.7 $ — $ 1.7 51.4 — 51.4 62.5 — 62.5 2.3 — 2.3 92.9 (0.7 ) 92.2 117.1 0.7 117.8 119.0 — 119.0 2.2 — 2.2 (46.7 ) (0.2 ) (46.9 ) (43.3 ) 0.2 (43.1 ) (5.5 ) — (5.5 ) $ 353.6 $ — $ 353.6 EdenLegacy Primo AcquisitionOn August 2, 2016, the Company acquired Eden Springs Europe B.V., a leading provider of water and coffee solutions in Europe (“Eden”), pursuant to a Share Purchase Agreement dated June 7, 2016 (the “Eden Acquisition”). The purchase price consideration of €515.9 million (U.S. $576.3 million at the exchange rate in effect on the acquisition date), was allocated to the assets acquired and liabilities assumed based on their fair values asNorth America reporting segment, a portion of the acquisition date. Measurement period adjustments recorded during the nine months ended September 30, 2017 included adjustmentswhich is expected to property, plant & equipment and a related adjustment to deferred taxes based on the results of the validation procedures performed, adjustments to accounts receivable, intangible assets and accrued liabilities based on a final review of fair values, and an adjustment to other long-term liabilities based on a final analysis of certainbe tax positions. The measurement period adjustments did not have a material effect on our results of operations in prior periods.The table below summarizes the originally reported estimated acquisition date fair values, measurement period adjustments recorded and the final purchase price allocation of the assets acquired and liabilities assumed: Originally
Reported Measurement
Period
Adjustments Acquired Value $ 19.6 $ — $ 19.6 95.4 (1.0 ) 94.4 17.7 — 17.7 6.2 — 6.2 107.1 (8.2 ) 98.9 299.7 0.1 299.8 213.2 (0.7 ) 212.5 2.8 — 2.8 19.5 — 19.5 (2.7 ) — (2.7 ) (128.3 ) (0.5 ) (128.8 ) (3.1 ) — (3.1 ) (49.5 ) 3.5 (46.0 ) (21.3 ) 6.8 (14.5 ) $ 576.3 $ — $ 576.3 ninesix months ended October 1, 2016,June 27, 2020 and June 29, 2019, respectively, represent the combined results of operations as if the S&D Acquisition and Eden Acquisition had occurred on January 4, 2015. Unaudited pro forma consolidated results of operations for the acquisition of Aquaterra Corporation (“Aquaterra”) inJanuary 2016 were not included in the combined results of our operations foras if the three and nine months ended October 1, 2016 becauseLegacy Primo Acquisition had occurred on December 30, 2018. For the Three Months Ended For the Six Months Ended (in millions of U.S. dollars, except per share amounts) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Revenue $ 456.8 $ 523.4 $ 971.5 $ 1,010.3 Net (loss) income from continuing operations $ (131.7) $ 6.3 $ (144.7) $ (30.4) Net (loss) income $ (136.0) $ 8.0 $ (118.1) $ (25.7) Net (loss) income per common share from continuing operations, diluted $ (0.82) $ 0.04 $ (0.96) $ (0.19) Net (loss) income per common share, diluted $ (0.85) $ 0.05 $ (0.78) $ (0.16) Company determined they were immaterial. The unaudited pro forma financial information results reflect certain adjustments related to these acquisitions such as increased amortization expense on acquired intangible assets resulting from the preliminary fair valuationsecond quarter of assets acquired. The unaudited pro forma financial information does not necessarily reflect the results of operations that would have occurred had2020, we operated as a single entity during such periods. For the Three Months Ended
October 1, 2016 For the Nine Months Ended
October 1, 2016 $ 588.6 $ 1,664.3 12.8 18.0 13.9 23.4 $ 0.08 $ 0.13 $ 0.09 $ 0.17 Note 5—Share-based CompensationDuring the nine months ended September 30, 2017, the Company granted 84,060118,059 common shares with an aggregate grant date fair value of approximately $1.3 million to thenon-management members of our boardBoard of directorsDirectors under the Amended and Restated Cott Corporation Equity Incentive Plan with an aggregate grant date fair value of approximately $1.1 million.Plan. The common shares were issued in consideration of the directors’ annual board retainer fee and vestare fully vested upon issuance.6—7—Income Taxeswas $0.9of $2.2 million on pre-tax income from continuing operations of $2.5$4.9 million and incomein the comparable prior year period. Income tax expensebenefit was $1.0$4.7 million on pre-tax loss from continuing operations of $12.1$163.8 million for the three and ninesix months ended September 30, 2017,June 27, 2020, as compared to income tax expense of $2.9$0.8 million on pre-tax loss from continuing operations of $1.1 million and an income tax benefit of $4.8 million on pre-tax loss from continuing operations of $10.4$19.2 million in the comparable prior year periods.period. The effective income tax rates for the three and ninesix months ended September 30, 2017June 27, 2020 were 36.0%1.1% and (8.3%)2.9%, respectively, compared to (263.6%)44.9% and 46.2%(4.2)% in the comparable prior year periods.ninesix months ended September 30, 2017June 27, 2020 varied from the effective tax rates for the three and ninesix months ended October 1, 2016June 29, 2019 due primarily due to lossesimpairment charges incurred in the United Statessecond quarter of 2020 for which we have not recognized aminimal tax benefit is recognized.2017, partially offsetMarch 2020 by the Coronavirus Aid, Relief, and Economic Security Act. On July 28, 2020, the U.S. Department of the Treasury released final regulations and new proposed regulations to provide interpretative guidance for the new Section 163(j) rules, with early adoption permitted. We will adopt the final regulations in our 2021 tax expense relatedyear and do not currently plan to early adopt the proposed regulations. We are currently assessing the final and proposed regulations. However, we do not anticipate a material impact on our Consolidated Financial Statements.Canadian valuation allowance recordedprecise number of shares, if any, that will be repurchased under the Repurchase Plan in the third quarterfuture, or the aggregate dollar amount of 2016.The effective tax rate differs fromshares to be purchased in future periods. We may discontinue purchases at any time, subject to compliance with applicable regulatory requirements.Canadian statutory rate duringCompany completed the three and nine months ended September 30, 2017 and October 1, 2016, primarily due to: (a) losses incurred in tax jurisdictions for which we have not recognized a tax benefit; (b) permanent differences for which we recognized a tax benefit; (c) income in tax jurisdictionsLegacy Primo Acquisition, with lower statutory tax rates than Canada; and (d)26,497,015 common shares issued at $14.25 per share to holders of Legacy Primo (see Note 5 to the Canadian valuation allowance recorded in the third quarter of 2016.The pending transaction with Refresco is anticipated to generate a gain on sale which could result in a U.S. valuation allowance release and recognition of a material income tax benefit within the next twelve months.Note 7—Consolidated Financial Statements). (Loss) per Common Share (loss) per common share is calculated by dividing net (loss) income (loss) attributable to CottPrimo Water Corporation by the weighted average number of common shares outstanding during the periods presented. Diluted net (loss) income (loss) per common share is calculated by dividing net (loss) income (loss) attributable to CottPrimo Water Corporation by the weighted average number of common shares outstanding adjusted to include the effect, if dilutive, of the exercise ofin-the-money Stock Options, Performance-based stock options, performance-based RSUs, andTime-based time-based RSUs during the periods presented. Set forth below is a reconciliation of the numerator and denominator for the diluted net (loss) income (loss) per common share computations for the periods indicated: For the Three Months Ended For the Nine Months Ended September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016 $ 1.6 $ (4.0 ) $ (13.1 ) $ (5.6 ) 40.9 1.4 (5.4 ) 7.6 42.5 (2.6 ) (18.5 ) 2.0 139,205 138,195 138,980 124,900 0.01 (0.03 ) (0.09 ) (0.04 ) 0.29 0.01 (0.04 ) 0.06 0.30 (0.02 ) (0.13 ) 0.02 139,205 138,195 138,980 124,900 1,158 — — — 154 — — — 486 — — — 141,003 138,195 138,980 124,900 0.01 (0.03 ) (0.09 ) (0.04 ) 0.29 0.01 (0.04 ) 0.06 0.30 (0.02 ) (0.13 ) 0.02 For the Three Months Ended For the Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Numerator (in millions of U.S. dollars): Net (loss) income from continuing operations $ (131.7) $ 2.7 $ (159.1) $ (20.0) Net (loss) income from discontinued operations (4.3) 1.7 26.6 4.7 Net (loss) income (136.0) 4.4 (132.5) (15.3) Basic Earnings Per Share Denominator (in thousands): Weighted average common shares outstanding - basic 159,931 135,569 150,535 135,758 Basic Earnings Per Share: Continuing operations (0.82) 0.02 (1.06) (0.15) Discontinued operations (0.03) 0.01 0.18 0.04 Net (loss) income (0.85) 0.03 (0.88) (0.11) Diluted Earnings Per Share Denominator (in thousands): Weighted average common shares outstanding - basic 159,931 135,569 150,535 135,758 Dilutive effect of Stock Options — 919 — — Dilutive effect of Performance-based RSUs — 618 — — Dilutive effect of Time-based RSUs — 200 — — Weighted average common shares outstanding - diluted 159,931 137,306 150,535 135,758 Diluted Earnings Per Share: Continuing operations (0.82) 0.02 (1.06) (0.15) Discontinued operations (0.03) 0.01 0.18 0.04 Net (loss) income (0.85) 0.03 (0.88) (0.11) (loss) per common share for the periods indicated: For the Three Months Ended For the Nine Months Ended September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016 198 2,846 4,286 2,846 — 1,574 1,703 1,574 — 882 660 882 1.Performance-based RSUs represent the number of shares expected to be issued based primarily on the estimated achievement of cumulativepre-tax income targets for these awards. For the Three Months Ended For the Six Months Ended (in thousands) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Stock Options 6,510 2,164 6,510 5,435 924 568 924 1,254 Time-based RSUs 511 2 511 365 8—9—Segment Reportingincludeincludes bottled water, coffee, brewed tea, water dispensers, coffeepurified bottled water, self-service refill drinking water, premium spring, sparkling and tea brewers,flavored water, mineral water, filtration equipment, clear, still and sparkling flavored waters,coffee, hot chocolate, soups, malt drinks, creamers/whiteners and beverage concentrates.thirdsecond quarter of 2017,2020, we reviewed our reporting segmentsimplemented a restructuring program intended to optimize synergies from the Company’s transition to a pure-play water company following the Legacy Primo Acquisition and, as a result, of the Refresco transaction. Following such review, we reorganized our reporting segments into three2 reporting segments: Route Based ServicesNorth America (which includes our DSS, Aquaterra, Mountain Valley, and EdenLegacy Primo businesses), Coffee, Tea & Extract Solutions and Rest of World (which includes our S&D business)Eden, Aimia, Decantae, and All Other(which includes our Aimia and RCI concentrate businesses, the Columbus manufacturing facility and other miscellaneous expenses)Farrers businesses). Our corporate oversight function is not treated as a segment. This function includes certain general and administrative costs thatother miscellaneous expenses are not allocated to any ofaggregated and included in the reporting segments.All Other category. Segment reporting results have been recast to reflect these changes for all periods presented. Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Corporate Total $ 397.3 $ 143.4 $ 40.2 $ — $ 580.9 41.7 6.0 1.7 — 49.4 34.6 3.7 4.7 (15.8 ) 27.2 34.8 3.3 0.1 — 38.2 $ 1,134.9 $ 440.2 $ 123.3 $ — $ 1,698.4 119.1 17.2 5.5 — 141.8 66.3 13.3 6.9 (37.6 ) 48.9 85.9 10.6 0.6 — 97.1 $ 2,370.3 $ 471.8 $ 206.3 $ — $ 3,048.4 (in millions of U.S. dollars) North America Rest of World All Other Total For the Three Months Ended June 27, 2020 Revenue, net $ 363.9 $ 92.9 $ — $ 456.8 Depreciation and amortization 38.0 14.3 0.5 52.8 Operating income (loss) 24.4 (126.6) (11.8) (114.0) Additions to property, plant and equipment 25.2 3.7 (0.2) 28.7 For the Six Months Ended June 27, 2020 Revenue, net $ 714.6 $ 216.4 $ — $ 931.0 Depreciation and amortization 68.6 28.6 0.6 97.8 Operating income (loss) 48.1 (127.1) (39.0) (118.0) Additions to property, plant and equipment 48.9 14.9 (0.2) 63.6 As of June 27, 2020 $ 2,729.7 $ 824.5 $ 99.5 $ 3,653.7 (in millions of U.S. dollars) North America Rest of World All Other Total For the Three Months Ended June 29, 2019 Revenue, net $ 323.5 $ 132.1 $ — $ 455.6 Depreciation and amortization 29.1 13.8 — 42.9 Operating income (loss) 21.9 9.0 (9.4) 21.5 Additions to property, plant and equipment 18.9 5.3 0.1 24.3 For the Six Months Ended June 29, 2019 Revenue, net $ 621.6 $ 254.5 $ 7.2 $ 883.3 Depreciation and amortization 55.8 26.7 0.1 82.6 Operating income (loss) 32.1 14.3 (24.2) 22.2 Additions to property, plant and equipment 35.9 10.2 0.2 46.3 As of December 28, 2019 $ 1,874.5 $ 941.6 $ 48.3 $ 2,864.4 1.All Other includes $9.5 million and $31.4 million(in millions of related party concentrate sales toU.S. dollars)December 28, 2019 $ 2,864.4 for the three and nine months ended September 30, 2017.1526.5 Total assets $ 3,390.9 2Excludes intersegment receivables, investments and notes receivable. Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Corporate Total $ 349.2 $ 87.3 $ 40.2 $ — $ 476.7 36.9 2.8 1.5 — 41.2 21.2 (0.1 ) 0.7 (8.2 ) 13.6 30.4 1.8 0.2 — 32.4 $ 882.3 $ 87.3 $ 132.4 $ — $ 1,102.0 94.6 2.8 5.2 — 102.6 44.7 (0.1 ) 7.5 (33.3 ) 18.8 66.6 1.8 0.9 — 69.3 $ 2,287.1 $ 463.2 $ 164.3 $ — $ 2,914.6 1.All Other includes $9.0 million and $29.7 million of related party concentrate sales to discontinued operations for the three and nine months ended October 1, 2016.2Excludes intersegment receivables, investments and notes receivable.Reconciliation of Segment Assets to Total Assets September 30, 2017 December 31, 2016 $ 3,048.4 $ 2,914.6 1,100.1 1,025.1 $ 4,148.5 $ 3,939.7 1.Excludes intersegment receivables, investments and notes receivable. Wenot currently awarehighly uncertain and cannot be predicted, including the scope and duration of any facts that would create a material credit risk. For the Three Months Ended September 30, 2017 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 268.0 $ — $ — $ 268.0 44.2 120.9 0.7 165.8 43.5 — 11.7 55.2 41.6 22.5 27.8 91.9 $ 397.3 $ 143.4 $ 40.2 $ 580.9 For the Nine Months Ended September 30, 2017 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 753.7 $ — $ — $ 753.7 134.9 369.6 2.0 506.5 127.8 — 33.9 161.7 118.5 70.6 87.4 276.5 $ 1,134.9 $ 440.2 $ 123.3 $ 1,698.4 For the Three Months Ended October 1, 2016 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 235.9 $ — $ — $ 235.9 38.9 72.0 2.0 112.9 42.9 — 10.0 52.9 31.5 15.3 28.2 75.0 $ 349.2 $ 87.3 $ 40.2 $ 476.7 For the Nine Months Ended October 1, 2016 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 575.1 $ — $ — $ 575.1 100.4 72.0 2.0 174.4 127.7 — 37.8 165.5 79.1 15.3 92.6 187.0 $ 882.3 $ 87.3 $ 132.4 $ 1,102.0 For the Three Months Ended June 27, 2020 (in millions of U.S. dollars) North America Rest of World All Other Total Revenue, net Water Direct/Water Exchange $ 225.8 $ 42.3 $ — $ 268.1 Water Refill/Water Filtration 51.2 6.3 — 57.5 Other Water 42.5 14.3 — 56.8 Water Dispensers 20.8 — — 20.8 Other 23.6 30.0 — 53.6 Total $ 363.9 $ 92.9 $ — $ 456.8 For the Six Months Ended June 27, 2020 (in millions of U.S. dollars) North America Rest of World All Other Total Revenue, net Water Direct/Water Exchange $ 463.2 $ 100.1 $ — $ 563.3 Water Refill/Water Filtration 74.9 13.4 — 88.3 Other Water 84.7 27.5 — 112.2 Water Dispensers 26.7 — — 26.7 Other 65.1 75.4 — 140.5 Total $ 714.6 $ 216.4 $ — $ 931.0 For the For the Three Months Ended June 29, 2019 (in millions of U.S. dollars) North America Rest of World All Other Total Revenue, net Water Direct/Water Exchange $ 229.7 $ 66.0 $ — $ 295.7 Water Refill/Water Filtration 8.8 6.5 — 15.3 Other Water 41.6 16.5 — 58.1 Water Dispensers — — — — Other 43.4 43.1 — 86.5 Total $ 323.5 $ 132.1 $ — $ 455.6 For the Six Months Ended June 29, 2019 (in millions of U.S. dollars) North America Rest of World All Other Total Revenue, net Water Direct/Water Exchange $ 436.2 $ 123.7 $ — $ 559.9 Water Refill/Water Filtration 17.7 12.9 — 30.6 Other Water 81.3 27.6 — 108.9 Water Dispensers — — — — Other 86.4 90.3 7.2 183.9 Total $ 621.6 $ 254.5 $ 7.2 $ 883.3 9—10—InventoriesSeptember 30, 2017June 27, 2020 and December 31, 2016: September 30, 2017 December 31, 2016 $ 80.5 $ 56.5 37.5 42.7 21.1 22.0 3.2 3.4 $ 142.3 $ 124.6 (in millions of U.S. dollars) June 27, 2020 December 28, 2019 Raw materials $ 27.0 $ 23.8 Finished goods 33.8 24.2 Resale items 11.4 14.0 Other 1.0 0.9 Total $ 73.2 $ 62.9 10—11—Property, Plant and Equipment, NetJune 27, 2020 December 28, 2019 (in millions of U.S. dollars) Estimated Useful Life in Years Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Land n/a $ 95.8 $ — $ 95.8 $ 95.3 $ — $ 95.3 Buildings 10-40 90.3 29.2 61.1 88.9 26.9 62.0 Machinery and equipment 5-15 267.8 79.2 188.6 146.8 66.0 80.8 Plates, films and molds 1-10 1.6 0.7 0.9 1.5 0.6 0.9 Vehicles and transportation equipment 3-15 104.8 68.4 36.4 90.3 59.5 30.8 19.7 11.4 8.3 19.8 10.7 9.1 IT Systems 3-7 17.1 10.9 6.2 15.6 9.9 5.7 Furniture and fixtures 3-10 11.8 9.0 2.8 12.0 8.6 3.4 3-7 358.4 160.6 197.8 339.7 144.9 194.8 3-5 98.3 45.2 53.1 82.0 37.1 44.9 53.0 10.9 42.1 37.6 7.2 30.4 Total $ 1,118.6 $ 425.5 $ 693.1 $ 929.5 $ 371.4 $ 558.1 September 30, 2017June 27, 2020 and December 31, 2016: September 30, 2017 December 31, 2016 Cost Accumulated
Amortization Net Cost Accumulated
Amortization Net $ 24.5 $ — $ 24.5 $ 24.5 $ — $ 24.5 263.1 — 263.1 257.1 — 257.1 287.6 — 287.6 281.6 — 281.6 580.8 138.9 441.9 552.3 94.3 458.0 15.2 0.6 14.6 — — — 1.2 0.2 1.0 1.1 0.1 1.0 27.4 11.8 15.6 20.5 6.3 14.2 6.7 3.5 3.2 6.2 2.0 4.2 631.3 155.0 476.3 580.1 102.7 477.4 $ 918.9 $ 155.0 $ 763.9 $ 861.7 $ 102.7 $ 759.0 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. June 27, 2020 December 28, 2019 (in millions of U.S. dollars) Cost Accumulated
AmortizationNet Cost Accumulated
AmortizationNet Intangible Assets Not subject to amortization Trademarks $ 449.8 $ 449.8 $ 287.1 $ — $ 287.1 Total intangible assets not subject to amortization 449.8 — 449.8 287.1 — 287.1 Subject to amortization Customer relationships 773.5 289.9 483.6 534.9 267.4 267.5 Patents 19.2 5.2 14.0 15.2 4.0 11.2 Software 56.8 32.4 24.4 49.3 28.0 21.3 Other 14.3 5.4 8.9 14.9 5.0 9.9 Total intangible assets subject to amortization 863.8 332.9 530.9 614.3 304.4 309.9 Total intangible assets $ 1,313.6 $ 332.9 $ 980.7 $ 901.4 $ 304.4 $ 597.0 $17.9$16.0 million and $50.7$30.4 million for the three and ninesix months ended September 30, 2017,June 27, 2020, respectively, compared to $14.5and $14.6 million and $36.6$27.9 million for the three and ninesix months ended October 1, 2016,June 29, 2019, respectively.intangiblesintangible assets over the next five years and thereafter is: $ 18.1 66.7 59.2 50.2 44.0 238.1 $ 476.3 (in millions of U.S. dollars) Remainder of 2020 $ 31.1 2021 57.7 2022 52.8 2023 44.8 2024 37.2 Thereafter 307.3 Total $ 530.9 11—Accounts Payable13—DebtAccrued LiabilitiesThe following table summarizes accounts payable and accrued liabilities as of September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 $ 218.0 $ 185.9 48.5 38.4 6.9 1.0 30.9 11.6 13.3 9.0 65.8 51.9 69.7 70.2 $ 453.1 $ 368.0 Note 12—DebtOur total debt as of September 30, 2017 and December 31, 2016 was as follows: September 30, 2017 December 31, 2016 Principal Unamortized
Debt Issuance
Costs Net Principal Unamortized
Debt Issuance
Costs Net 271.1 — 271.1 384.2 — 384.2 531.1 9.8 521.3 474.1 9.8 464.3 750.0 11.2 738.8 — — — 5.4 — 5.4 5.8 — 5.8 1,557.6 21.0 1,536.6 864.1 9.8 854.3 2.6 — 2.6 2.9 — 2.9 2.6 — 2.6 2.9 — 2.9 $ 1,555.0 $ 21.0 $ 1,534.0 $ 861.2 $ 9.8 $ 851.4 1.Includes unamortized premium of $21.1 million and $34.2 million at September 30, 2017 and December 31, 2016, respectively. The effective interest rate is 7.515%.5.500% Senior Notes due in 2025 (the “2025 Notes”)22, 2017, we issued $750.0 million of 2025 Notes to qualified purchasers in6, 2020 (the “Closing Date”), the Company entered into a private placement offering under Rule 144A undercredit agreement (the “Credit Agreement”) among the Securities Act of 1933,Company, as amended (the “Securities Act”), and outside the United States tonon-U.S. purchasers pursuant to Regulation S under the Securities Act and other applicable laws. The 2025 Notes were issued by our wholly-owned subsidiaryparent borrower, Primo Water Holdings Inc. (formerly known as Cott Holdings Inc.) and Eden, each as subsidiary borrowers, certain other subsidiaries of the Company from time to time designated as subsidiary borrowers, Bank of America, N.A., as administrative agent and mostcollateral agent, and the lenders from time to time party thereto.our U.S.$350.0 million (the “Revolving Credit Facility”), Canadian, U.K., Luxembourg and Dutch subsidiaries guaranteewhich may be increased by incremental credit extensions from time to time in the 2025 Notes.form of term loans or additional revolving credit commitments. The 2025 NotesRevolving Credit Facility will mature five years from the Closing Date and includes letter of credit and swing line loan sub facilities.April 1, 2025the Closing Date to refinance in full and interest is payable semi-annuallyterminate our previously existing asset-based lending credit facility, governed by the Second Amended and Restated Credit Agreement, dated January 30, 2019, by and among the Company, the other loan parties party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the lenders from time to time party thereto (as amended, the “ABL Credit Agreement”). Certain letters of credit outstanding under the ABL Credit Agreement were rolled over under the Revolving Credit Facility on April 1st and October 1st of each year commencing on October 1, 2017.$11.7approximately $3.4 million of financing fees in connection with the issuanceRevolving Credit Facility. The Revolving Credit Facility was considered to be a modification of the 2025 Notes. TheABL Credit Agreement under GAAP. These new financing fees along with $1.8 million of unamortized deferred costs of the ABL Credit Agreement are being amortized using the effective intereststraight-line method over an eight-year period, which represents the term to maturityduration of the 2025 Notes.10.000% Senior Notes due in 2021 (the “DSS Notes”)On May 5, 2017, we used a portionRevolving Credit Facility.proceeds fromoutstanding borrowings under the issuance of the 2025 Notes to purchase $100.0 million in aggregate principal amount of the DSS Notes. The redemption included $7.7 million in premium payments, accrued interest of $1.8Revolving Credit Facility were $206.0 million and were recorded in short-term borrowings on thewrite-off Consolidated Balance Sheet. Outstanding letters of $9.2credit totaled $44.7 million resulting in total utilization under the Revolving Credit Facility of unamortized premium.13—14—Accumulated Other Comprehensive (Loss) Incomeninethree and six months ended September 30, 2017June 27, 2020 and October 1, 2016June 29, 2019 were as follows: Gains and Losses
on Derivative
Instruments Pension
Benefit
Plan Items Currency
Translation
Adjustment Items Total $ (4.7 ) $ (10.1 ) $ (61.4 ) $ (76.2 ) 7.4 — (23.8 ) (16.4 ) (3.6 ) 0.2 — (3.4 ) 3.8 0.2 (23.8 ) (19.8 ) $ (0.9 ) $ (9.9 ) $ (85.2 ) $ (96.0 ) $ (0.1 ) $ (14.4 ) $ (103.4 ) $ (117.9 ) 1.2 (0.5 ) 26.1 26.8 (1.7 ) 0.1 — (1.6 ) (0.5 ) (0.4 ) 26.1 25.2 $ (0.6 ) $ (14.8 ) $ (77.3 ) $ (92.7 ) 1.All amounts are net of tax.Gains and Losses
on Derivative
InstrumentsPension
Benefit
Plan ItemsCurrency
Translation
Adjustment ItemsTotal Beginning balance March 30, 2019 $ (15.2) $ 0.3 $ (81.7) $ (96.6) OCI before reclassifications 10.8 — (3.5) 7.3 Amounts reclassified from AOCI 1.7 — — 1.7 Net current-period OCI 12.5 — (3.5) 9.0 Ending balance June 29, 2019 $ (2.7) $ 0.3 $ (85.2) $ (87.6) Beginning balance December 29, 2018 $ (9.7) $ 0.3 $ (92.3) $ (101.7) OCI before reclassifications 2.7 — 7.1 9.8 Amounts reclassified from AOCI 4.3 — — 4.3 Net current-period OCI 7.0 — 7.1 14.1 Ending balance June 29, 2019 $ (2.7) $ 0.3 $ (85.2) $ (87.6) Beginning balance March 28, 2020 $ — $ (1.0) $ (97.4) $ (98.4) OCI before reclassifications — — 8.4 8.4 Amounts reclassified from AOCI — — — — Net current-period OCI — — 8.4 8.4 Ending Balance June 27, 2020 $ — $ (1.0) $ (89.0) $ (90.0) Beginning balance December 28, 2019 $ 11.2 $ (1.0) $ (78.7) $ (68.5) OCI before reclassifications (8.7) — (10.3) (19.0) Amounts reclassified from AOCI (2.5) — — (2.5) Net current-period OCI (11.2) — (10.3) (21.5) Ending Balance June 27, 2020 $ — $ (1.0) $ (89.0) $ (90.0) ninesix months ended September 30, 2017June 27, 2020 and October June 29, 2019, respectively:(in millions of U.S. dollars) For the Three Months Ended For the Six Months Ended Affected Line Item in the Statement Where Net Income Is Presented June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Gains and losses on derivative instruments Foreign currency and commodity hedges $ — $ (1.7) $ 0.1 $ (4.3) Cost of sales — — 2.4 — Gain on sale of discontinued operations — (1.7) 2.5 (4.3) Total before taxes — — — — Tax expense or (benefit) $ — $ (1.7) $ 2.5 $ (4.3) Net of tax Amortization of pension benefit plan items $ — $ — $ — $ — — — — — — — — — Total before taxes — — — Tax expense or (benefit) $ — $ — $ — $ — Net of tax Total reclassifications for the period $ — $ (1.7) $ 2.5 $ (4.3) Net of tax 2016, respectively. For the Three Months Ended For the Nine Months Ended Affected Line Item in September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016 the Statement Where
Net Income Is Presented $ 0.2 $ 1.5 $ 1.7 $ 5.5 Cost of sales — (0.6 ) — (1.9 ) Tax expense $ 0.2 $ 0.9 $ 1.7 $ 3.6 Net of tax $ (0.3 ) $ — $ (0.1 ) $ (0.2 ) Cost of sales (0.3 ) — (0.1 ) (0.2 ) Total before taxes — — — — Tax expense $ (0.3 ) $ — $ (0.1 ) $ (0.2 ) Net of tax $ (0.1 ) $ 0.9 $ 1.6 $ 3.4 Net of tax 1.Amounts in parenthesis indicate debits.
Amounts in parentheses indicate debits.2.These AOCI components are included in the computation of net periodic pension cost.14—15—Commitments and Contingencies$40.1$44.7 million in standby letters of credit outstanding as of September 30, 2017June 27, 2020 ($47.4 million as of December 28, 2019).42.429.4 million—December 31, 2016).Note 15—Hedging Transactions and Derivative Financial InstrumentsWe 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, futures contracts and swap agreements for certain commodities. Forward and futures contracts are agreements to buy or sell a quantity of a commodity at a predetermined future date, and at a predetermined rate or price. Forward contracts are tradedover-the-counter whereas future contracts are traded on an exchange. A swap agreement is a contract between two parties to exchange cash flows28, 2019) was calculated 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 valuesminimum lease payments of the derivatives reflectleases over the impactremaining term of legally enforceable master netting agreements with each counterparty. These allowthe agreements. The sale documents require Refresco to pay all post-closing obligations under these conveyed leases, and to reimburse us if the landlord calls on a guarantee. Refresco has also agreed to net settle positive and negative positions (assets and liabilities) arising from different transactionsa covenant to negotiate with the same counterparty.The accountinglandlords for gains and losses that result from changes ina release of our guarantees. Discussions with the fair valueslandlords are ongoing. We currently do not believe it is probable we would be required to perform under any 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 hedgesthese guarantees 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 flowsany 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 within 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 instrument’s 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 16 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 areover-the-counter or exchange traded instruments with liquid markets.Credit Risk Associated with DerivativesWe 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 mitigatepre-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 StrategyWe use cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in 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 nine months ended September 30, 2017 or October 1, 2016. Substantially all outstanding hedges as of September 30, 2017 are expected to settle in the next twelve months.We have entered into coffee futures contracts to hedge exposure to price fluctuations on green coffee associated with fixed-price sales contracts with customers, which generally range from three to 18 months in length. These derivatives have been designated and qualified as a part of our commodity cash flow hedging program effective January 1, 2017. The objective of this hedging program is to reduce the variability of cash flows associated with future purchases of green coffee.We did not elect hedge accounting for our coffee futures contracts in 2016. The notional amount for the coffee futures contracts that were designated and qualified for our commodity cash flow hedging program was 32.1 million pounds as of September 30, 2017. The notional amounts for the coffee futures contracts not designated or qualifying as hedging instruments was 44.9 million pounds as of December 31, 2016. The effective portion of the cash-flow hedge recognized in AOCI during the nine months ended September 30, 2017 was $1.6 million. Approximately $0.2 million and $1.7 million of realized gains, representing the effective portion of the cash-flow hedge, were subsequently reclassified from AOCI to earnings and recognized in cost of sales in the consolidated statements of operations for the three and nine months ended September 30, 2017, respectively. The hedge ineffectiveness for these cash flow hedging instruments was nil and $0.1 million for the three and nine months ended September 30, 2017, respectively.The fair value of the Company’s derivative assets included within other receivables as a component of accounts receivable, net was nil as of September 30, 2017 and December 31, 2016. The fair value of the Company’s derivative liabilities included in accrued liabilities was $1.9 million and $6.1 million as of September 30, 2017 and December 31, 2016, respectively. Set forth below is a reconciliation of the Company’s derivatives by contract type for the periods indicated: September 30, 2017 December 31, 2016 Assets Liabilities Assets Liabilities $ — $ 1.9 $ — $ 6.1 $ — $ 1.9 $ — $ 6.1 1.The fair value of the coffee futures excludes amounts in the related margin accounts. As of September 30, 2017 and December 31, 2016, the aggregate margin account balances were $4.1 million and $9.2 million, respectively, and are included in cash & cash equivalents on the consolidated balance sheets.Coffee futures are subject to enforceable master netting arrangements and are presented net in the reconciliation above. The fair value of the coffee futures assets and liabilities which are shown on a net basis are reconciled in the table below: September 30, 2017 December 31, 2016 $ 0.1 $ 1.4 (2.0 ) (7.5 ) $ (1.9 ) $ (6.1 ) The settlement of our derivative instruments resulted in a credit to cost of sales of $0.2 million and $1.7 million for the three and nine months ended September 30, 2017, respectively, and nil and nil for the three and nine months ended October 1, 2016, respectively.ASC No.
We have certain assets and liabilities such as our derivative instruments 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 September 30, 2017 and December 31, 2016 was nil. The fair value for the derivative liabilities as of September 30, 2017 and December 31, 2016 was $1.9 million and $6.1 million, respectively.
| September 30, 2017 | December 31, 2016 | |||||||||||||||
(in millions of U.S. dollars) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
10.000% senior notes due in 20211, 2 | 271.1 | 264.4 | 384.2 | 383.7 | ||||||||||||
5.500% senior notes due in 20241, 3 | 521.3 | 584.9 | 464.3 | 505.5 | ||||||||||||
5.500% senior notes due in 20251, 3 | 738.8 | 781.9 | — | — | ||||||||||||
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Total | $ | 1,531.2 | $ | 1,631.2 | $ | 848.5 | $ | 889.2 | ||||||||
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| June 27, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||||||||||
5.500% senior notes due in 2024 1, 2 | $ | 500.1 | $ | 500.1 | $ | 493.5 | $ | 514.5 | |||||||||||||||||||||||||||
5.500% senior notes due in 2025 1, 2 | 742.4 | 744.2 | 741.8 | 775.3 | |||||||||||||||||||||||||||||||
| Total | $ | 1,242.5 | $ | 1,244.3 | $ | 1,235.3 | $ | 1,289.8 | |||||||||||||||||||||||||||
Guarantor SubsidiariesSubsequent Events
The DSS Notes assumed as parta settlement of pending and future claims,
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”) rules 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 othernon-guarantor subsidiaries (the “DSSNon-Guarantor Subsidiaries”). This supplemental financial information reflects our investments and those of DSS in their respective subsidiaries using the equity method of accounting.
The €450.0 million (U.S. $531.1 million at the exchange rate in effect on September 30, 2017) of the 2024 Notes were initially issued on June 30, 2016 by Cott Finance Corporation, which was not a DSS Guarantor Subsidiary. Cott Finance Corporation was declared an unrestricted subsidiary under the DSS Indenture. As a result, such entity is reflected as a DSSNon-Guarantor Subsidiary in the following summarized condensed consolidating financial information through August 2, 2016. Substantially simultaneously with the closing of the Eden Acquisition on August 2, 2016, we assumed all of the obligations of Cott Finance Corporation as issuer under the 2024 Notes, and Cott Corporation’s U.S., Canadian, U.K., Luxembourg and Dutch subsidiaries that are currently obligors under the 5.375% senior notes due 2022 (“2022 Notes”) and the 6.75% senior notes due 2020 (“2020 Notes”) (including Cott Beverages Inc.) entered into a supplemental indenture to guarantee the 2024 Notes. Currently, the obligors under the 2024 Notes are different than the obligors under the DSS Notes, but identical to the obligors under the 2020 Notes and the 2022 Notes. The 2024 Notes are listed on the official list of the Irish Stock Exchange and are traded on the Global Exchange Market thereof.
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 271.9 | $ | 198.7 | $ | 110.3 | $ | — | $ | 580.9 | ||||||||||||
Cost of sales | — | 105.4 | 145.9 | 36.8 | — | 288.1 | ||||||||||||||||||
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Gross profit | — | 166.5 | 52.8 | 73.5 | — | 292.8 | ||||||||||||||||||
Selling, general and administrative expenses | 1.2 | 143.7 | 57.0 | 60.9 | — | 262.8 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 0.3 | (0.6 | ) | (0.1 | ) | — | (0.4 | ) | |||||||||||||||
Acquisition and integration expenses | — | 2.5 | 2.2 | (1.5 | ) | — | 3.2 | |||||||||||||||||
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Operating (loss) income | (1.2 | ) | 20.0 | (5.8 | ) | 14.2 | — | 27.2 | ||||||||||||||||
Other expense (income), net | — | 0.3 | 1.3 | (0.1 | ) | — | 1.5 | |||||||||||||||||
Intercompany interest expense (income), net | — | 54.2 | (33.4 | ) | (12.8 | ) | (8.0 | ) | — | |||||||||||||||
Interest expense, net | 7.5 | 5.2 | 10.5 | — | — | 23.2 | ||||||||||||||||||
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(Loss) income before income tax expense, equity income and discontinued operations | (8.7 | ) | (39.7 | ) | 15.8 | 27.1 | 8.0 | 2.5 | ||||||||||||||||
Income tax expense | — | 0.4 | 0.5 | — | — | 0.9 | ||||||||||||||||||
Equity income | 43.4 | — | 0.1 | — | (43.5 | ) | — | |||||||||||||||||
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Net income (loss) from continuing operations | $ | 34.7 | $ | (40.1 | ) | $ | 15.4 | $ | 27.1 | $ | (35.5 | ) | $ | 1.6 | ||||||||||
Net income from discontinued operations, net of income taxes | 7.8 | — | 32.8 | 3.3 | (0.9 | ) | 43.0 | |||||||||||||||||
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Net income (loss) | 42.5 | (40.1 | ) | 48.2 | 30.4 | (36.4 | ) | 44.6 | ||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 2.1 | — | 2.1 | ||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | $ | 42.5 | $ | (40.1 | ) | $ | 48.2 | $ | 28.3 | $ | (36.4 | ) | $ | 42.5 | ||||||||||
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Comprehensive income (loss) attributable to Cott Corporation | $ | 46.7 | $ | (40.1 | ) | $ | 27.4 | $ | 23.0 | $ | (10.3 | ) | $ | 46.7 | ||||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 786.3 | $ | 607.6 | $ | 304.5 | $ | — | $ | 1,698.4 | ||||||||||||
Cost of sales | — | 305.9 | 443.8 | 100.0 | — | 849.7 | ||||||||||||||||||
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Gross profit | — | 480.4 | 163.8 | 204.5 | — | 848.7 | ||||||||||||||||||
Selling, general and administrative expenses | 4.1 | 423.4 | 171.6 | 178.7 | — | 777.8 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 6.3 | (1.5 | ) | — | — | 4.8 | |||||||||||||||||
Acquisition and integration expenses | — | 5.9 | 6.9 | 4.4 | — | 17.2 | ||||||||||||||||||
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Operating (loss) income | (4.1 | ) | 44.8 | (13.2 | ) | 21.4 | — | 48.9 | ||||||||||||||||
Other (income) expense, net | — | (1.4 | ) | 0.9 | (0.6 | ) | — | (1.1 | ) | |||||||||||||||
Intercompany interest expense (income), net | — | 32.5 | (21.6 | ) | (7.6 | ) | (3.3 | ) | — | |||||||||||||||
Interest expense, net | 21.6 | 18.4 | 22.1 | — | — | 62.1 | ||||||||||||||||||
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(Loss) income before income tax (benefit) expense, equity income and discontinued operations | (25.7 | ) | (4.7 | ) | (14.6 | ) | 29.6 | 3.3 | (12.1 | ) | ||||||||||||||
Income tax (benefit) expense | — | 1.2 | (5.3 | ) | 5.1 | — | 1.0 | |||||||||||||||||
Equity income | 0.6 | — | 0.1 | — | (0.7 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (25.1 | ) | $ | (5.9 | ) | $ | (9.2 | ) | $ | 24.5 | $ | 2.6 | $ | (13.1 | ) | ||||||||
Net income (loss) from discontinued operations, net of income taxes | 6.6 | — | (7.4 | ) | 10.8 | (9.0 | ) | 1.0 | ||||||||||||||||
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Net (loss) income | (18.5 | ) | (5.9 | ) | (16.6 | ) | 35.3 | (6.4 | ) | (12.1 | ) | |||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 6.4 | — | 6.4 | ||||||||||||||||||
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Net (loss) income attributable to Cott Corporation | $ | (18.5 | ) | $ | (5.9 | ) | $ | (16.6 | ) | $ | 28.9 | $ | (6.4 | ) | $ | (18.5 | ) | |||||||
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Comprehensive income (loss) attributable to Cott Corporation | $ | 6.7 | $ | (5.9 | ) | $ | (81.3 | ) | $ | 28.5 | $ | 58.7 | $ | 6.7 | ||||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 262.2 | $ | 144.6 | $ | 69.9 | $ | — | $ | 476.7 | ||||||||||||
Cost of sales | — | 101.2 | 103.0 | 24.8 | — | 229.0 | ||||||||||||||||||
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Gross profit | — | 161.0 | 41.6 | 45.1 | — | 247.7 | ||||||||||||||||||
Selling, general and administrative expenses | 1.6 | 143.9 | 38.7 | 41.1 | — | 225.3 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 1.6 | (0.2 | ) | — | — | 1.4 | |||||||||||||||||
Acquisition and integration expenses | — | (1.4 | ) | 7.4 | 1.4 | — | 7.4 | |||||||||||||||||
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Operating (loss) income | (1.6 | ) | 16.9 | (4.3 | ) | 2.6 | — | 13.6 | ||||||||||||||||
Other (income) expense, net | — | (0.3 | ) | (0.6 | ) | 1.1 | — | 0.2 | ||||||||||||||||
Intercompany interest expense (income), net | — | 10.8 | (0.6 | ) | (4.2 | ) | (6.0 | ) | — | |||||||||||||||
Interest expense (income), net | 7.4 | 7.4 | — | (0.3 | ) | — | 14.5 | |||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (9.0 | ) | (1.0 | ) | (3.1 | ) | 6.0 | 6.0 | (1.1 | ) | ||||||||||||||
Income tax expense (benefit) | 7.6 | (0.2 | ) | (4.9 | ) | 0.4 | — | 2.9 | ||||||||||||||||
Equity income | 8.7 | — | — | — | (8.7 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (7.9 | ) | $ | (0.8 | ) | $ | 1.8 | $ | 5.6 | $ | (2.7 | ) | $ | (4.0 | ) | ||||||||
Net income from discontinued operations, net of income taxes | 5.3 | — | 5.0 | 3.2 | (10.6 | ) | 2.9 | |||||||||||||||||
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Net (loss) income | (2.6 | ) | (0.8 | ) | 6.8 | 8.8 | (13.3 | ) | (1.1 | ) | ||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 1.5 | — | 1.5 | ||||||||||||||||||
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Net (loss) income attributable to Cott Corporation | $ | (2.6 | ) | $ | (0.8 | ) | $ | 6.8 | $ | 7.3 | $ | (13.3 | ) | $ | (2.6 | ) | ||||||||
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Comprehensive (loss) income attributable to Cott Corporation | $ | (7.8 | ) | $ | (0.8 | ) | $ | 110.4 | $ | 11.2 | $ | (120.8 | ) | $ | (7.8 | ) | ||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 764.3 | $ | 267.8 | $ | 69.9 | $ | — | $ | 1,102.0 | ||||||||||||
Cost of sales | — | 297.5 | 188.1 | 24.8 | — | 510.4 | ||||||||||||||||||
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Gross profit | — | 466.8 | 79.7 | 45.1 | — | 591.6 | ||||||||||||||||||
Selling, general and administrative expenses | 12.6 | 422.3 | 71.7 | 41.1 | — | 547.7 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 4.8 | (0.2 | ) | — | — | 4.6 | |||||||||||||||||
Acquisition and integration expenses | — | 0.6 | 18.5 | 1.4 | — | 20.5 | ||||||||||||||||||
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Operating (loss) income | (12.6 | ) | 39.1 | (10.3 | ) | 2.6 | — | 18.8 | ||||||||||||||||
Other (income) expense, net | — | (1.6 | ) | 0.5 | 1.1 | — | — | |||||||||||||||||
Intercompany interest expense (income), net | — | 32.4 | 0.4 | (13.3 | ) | (19.5 | ) | — | ||||||||||||||||
Interest expense (income), net | 7.4 | 22.0 | — | (0.2 | ) | — | 29.2 | |||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (20.0 | ) | (13.7 | ) | (11.2 | ) | 15.0 | 19.5 | (10.4 | ) | ||||||||||||||
Income tax expense (benefit) | 7.4 | (4.8 | ) | (7.6 | ) | 0.2 | — | (4.8 | ) | |||||||||||||||
Equity income | 22.9 | — | — | — | (22.9 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (4.5 | ) | $ | (8.9 | ) | $ | (3.6 | ) | $ | 14.8 | $ | (3.4 | ) | $ | (5.6 | ) | |||||||
Net income from discontinued operations, net of income taxes | 6.5 | — | 26.7 | 9.4 | (30.6 | ) | 12.0 | |||||||||||||||||
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Net income (loss) | 2.0 | (8.9 | ) | 23.1 | 24.2 | (34.0 | ) | 6.4 | ||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 4.4 | — | 4.4 | ||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | $ | 2.0 | $ | (8.9 | ) | $ | 23.1 | $ | 19.8 | $ | (34.0 | ) | $ | 2.0 | ||||||||||
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Comprehensive (loss) income attributable to Cott Corporation | $ | (17.8 | ) | $ | (8.9 | ) | $ | 211.2 | $ | 23.8 | $ | (226.1 | ) | $ | (17.8 | ) | ||||||||
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Consolidating Balance Sheets
(in millions of U.S. dollars)
Unaudited
| As of September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | 20.8 | $ | 34.4 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
Accounts receivable, net of allowance | — | 137.4 | 89.0 | 93.9 | (8.7 | ) | 311.6 | |||||||||||||||||
Inventories | — | 30.2 | 96.5 | 15.6 | — | 142.3 | ||||||||||||||||||
Prepaid expenses and other current assets | 0.1 | 8.5 | 7.1 | 6.5 | — | 22.2 | ||||||||||||||||||
Current assets of discontinued operations | 63.2 | — | 563.4 | 28.9 | (229.0 | ) | 426.5 | |||||||||||||||||
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Total current assets | 63.3 | 196.9 | 790.4 | 171.7 | (237.7 | ) | 984.6 | |||||||||||||||||
Property, plant & equipment, net | — | 371.2 | 112.2 | 107.0 | — | 590.4 | ||||||||||||||||||
Goodwill | — | 587.2 | 189.6 | 320.2 | — | 1,097.0 | ||||||||||||||||||
Intangible assets, net | — | 353.1 | 203.6 | 207.2 | — | 763.9 | ||||||||||||||||||
Deferred tax assets | — | — | — | 2.2 | — | 2.2 | ||||||||||||||||||
Other long-term assets, net | 0.4 | 14.6 | 5.6 | 16.2 | — | 36.8 | ||||||||||||||||||
Due from affiliates | — | — | 1.1 | 371.8 | (372.9 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | 3.9 | — | (3.9 | ) | — | |||||||||||||||||
Long-term assets of discontinued operations | 1,425.1 | — | 1,546.1 | 6.9 | (2,304.5 | ) | 673.6 | |||||||||||||||||
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Total assets | $ | 1,488.8 | $ | 1,523.0 | $ | 2,852.5 | $ | 1,203.2 | $ | (2,919.0 | ) | $ | 4,148.5 | |||||||||||
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LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | 0.1 | $ | — | $ | 2.5 | $ | — | $ | 2.6 | ||||||||||||
Accounts payable and accrued liabilities | 8.6 | 275.6 | 187.1 | 136.8 | (155.0 | ) | 453.1 | |||||||||||||||||
Current liabilities of discontinued operations | 91.6 | — | 500.2 | 10.0 | (82.7 | ) | 519.1 | |||||||||||||||||
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Total current liabilities | 100.2 | 275.7 | 687.3 | 149.3 | (237.7 | ) | 974.8 | |||||||||||||||||
Long-term debt | 521.3 | 271.2 | 738.8 | 2.7 | — | 1,534.0 | ||||||||||||||||||
Deferred tax liabilities | — | 82.6 | 18.6 | 30.7 | — | 131.9 | ||||||||||||||||||
Other long-term liabilities | — | 39.5 | 17.2 | 10.8 | — | 67.5 | ||||||||||||||||||
Due to affiliates | — | 543.3 | 424.8 | 858.6 | (1,826.7 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.9 | — | 655.4 | 28.1 | (118.9 | ) | 566.5 | |||||||||||||||||
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Total liabilities | 623.4 | 1,212.3 | 2,542.1 | 1,080.2 | (2,183.3 | ) | 3,274.7 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 915.5 | 355.5 | 752.1 | 144.5 | (1,252.1 | ) | 915.5 | |||||||||||||||||
Additionalpaid-in-capital | 63.3 | — | — | — | 63.3 | |||||||||||||||||||
(Accumulated deficit) retained earnings | (20.7 | ) | (44.6 | ) | (534.8 | ) | (38.6 | ) | 618.0 | (20.7 | ) | |||||||||||||
Accumulated other comprehensive (loss) income | (92.7 | ) | (0.2 | ) | 93.1 | 8.7 | (101.6 | ) | (92.7 | ) | ||||||||||||||
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Total Cott Corporation equity | 865.4 | 310.7 | 310.4 | 114.6 | (735.7 | ) | 865.4 | |||||||||||||||||
Non-controlling interests | — | — | — | 8.4 | — | 8.4 | ||||||||||||||||||
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Total equity | 865.4 | 310.7 | 310.4 | 123.0 | (735.7 | ) | 873.8 | |||||||||||||||||
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Total liabilities and equity | $ | 1,488.8 | $ | 1,523.0 | $ | 2,852.5 | $ | 1,203.2 | $ | (2,919.0 | ) | $ | 4,148.5 | |||||||||||
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Consolidating Balance Sheets
(in millions of U.S. dollars)
| As of December 31, 2016 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | 22.7 | $ | 23.6 | $ | 31.8 | $ | — | $ | 78.1 | ||||||||||||
Accounts receivable, net of allowance | — | 121.7 | 82.6 | 84.0 | (11.6 | ) | 276.7 | |||||||||||||||||
Inventories | — | 29.2 | 79.9 | 15.5 | — | 124.6 | ||||||||||||||||||
Prepaid expenses and other current assets | 1.7 | 7.1 | 10.0 | 4.2 | (0.9 | ) | 22.1 | |||||||||||||||||
Current assets of discontinued operations | 47.2 | — | 346.6 | 23.2 | (65.3 | ) | 351.7 | |||||||||||||||||
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Total current assets | 48.9 | 180.7 | 542.7 | 158.7 | (77.8 | ) | 853.2 | |||||||||||||||||
Property, plant & equipment, net | — | 364.5 | 115.8 | 101.5 | — | 581.8 | ||||||||||||||||||
Goodwill | — | 582.0 | 183.6 | 282.7 | — | 1,048.3 | ||||||||||||||||||
Intangible assets, net | — | 356.8 | 204.4 | 197.8 | — | 759.0 | ||||||||||||||||||
Other long-term assets, net | 0.5 | 14.6 | 6.6 | 2.3 | — | 24.0 | ||||||||||||||||||
Due from affiliates | — | — | — | 329.6 | (329.6 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | — | — | — | — | ||||||||||||||||||
Long-term assets of discontinued operations | 1,353.7 | — | 1,548.9 | 4.2 | (2,233.4 | ) | 673.4 | |||||||||||||||||
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Total assets | $ | 1,403.1 | $ | 1,498.6 | $ | 2,602.0 | $ | 1,076.8 | $ | (2,640.8 | ) | $ | 3,939.7 | |||||||||||
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| |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | — | $ | 0.1 | $ | 2.8 | $ | — | $ | 2.9 | ||||||||||||
Accounts payable and accrued liabilities | 4.2 | 135.1 | 124.9 | 124.8 | (21.0 | ) | 368.0 | |||||||||||||||||
Current liabilities of discontinued operations | 63.6 | — | 423.8 | 8.5 | (56.7 | ) | 439.2 | |||||||||||||||||
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| |||||||||||||
Total current liabilities | 67.8 | 135.1 | 548.8 | 136.1 | (77.7 | ) | 810.1 | |||||||||||||||||
Long-term debt | 464.4 | 384.2 | — | 2.8 | — | 851.4 | ||||||||||||||||||
Deferred tax liabilities | 0.9 | 81.2 | 46.5 | 26.4 | — | 155.0 | ||||||||||||||||||
Other long-term liabilities | — | 38.0 | 16.9 | 20.5 | — | 75.4 | ||||||||||||||||||
Due to affiliates | — | 543.3 | 390.6 | 775.1 | (1,709.0 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.5 | — | 1,255.8 | 24.6 | (107.9 | ) | 1,174.0 | |||||||||||||||||
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| |||||||||||||
Total liabilities | 534.6 | 1,181.8 | 2,258.6 | 985.5 | (1,894.6 | ) | 3,065.9 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 909.3 | 355.4 | 691.5 | 149.7 | (1,196.6 | ) | 909.3 | |||||||||||||||||
Additionalpaid-in-capital | 54.2 | — | — | — | — | 54.2 | ||||||||||||||||||
Retained earnings (accumulated deficit) | 22.9 | (38.4 | ) | (505.9 | ) | (72.8 | ) | 617.1 | 22.9 | |||||||||||||||
Accumulated other comprehensive (loss) income | (117.9 | ) | (0.2 | ) | 157.8 | 9.1 | (166.7 | ) | (117.9 | ) | ||||||||||||||
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| |||||||||||||
Total Cott Corporation equity | 868.5 | 316.8 | 343.4 | 86.0 | (746.2 | ) | 868.5 | |||||||||||||||||
Non-controlling interests | — | — | — | 5.3 | — | 5.3 | ||||||||||||||||||
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|
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| |||||||||||||
Total equity | 868.5 | 316.8 | 343.4 | 91.3 | (746.2 | ) | 873.8 | |||||||||||||||||
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| |||||||||||||
Total liabilities and equity | $ | 1,403.1 | $ | 1,498.6 | $ | 2,602.0 | $ | 1,076.8 | $ | (2,640.8 | ) | $ | 3,939.7 | |||||||||||
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| �� |
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Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.1 | ) | $ | (88.0 | ) | $ | 17.4 | $ | 14.7 | $ | 102.2 | $ | 46.2 | ||||||||||
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| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | (1.1 | ) | — | (2.3 | ) | — | (3.4 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (22.1 | ) | (7.9 | ) | (8.2 | ) | — | (38.2 | ) | ||||||||||||||
Additions to intangible assets | — | (0.4 | ) | (2.7 | ) | (0.3 | ) | — | (3.4 | ) | ||||||||||||||
Proceeds from sale of property, plant & equipment | — | 0.2 | 0.9 | 2.0 | — | 3.1 | ||||||||||||||||||
Other investing activities | — | — | 0.5 | — | — | 0.5 | ||||||||||||||||||
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| |||||||||||||
Net cash used in investing activities from continuing operations | — | (23.4 | ) | (9.2 | ) | (8.8 | ) | — | (41.4 | ) | ||||||||||||||
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| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.1 | ) | — | (0.3 | ) | |||||||||||||||
Issuance of common shares | 2.1 | — | — | — | — | 2.1 | ||||||||||||||||||
Common shares repurchased and cancelled | (0.1 | ) | — | — | — | — | (0.1 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | 109.5 | — | — | (109.5 | ) | — | |||||||||||||||||
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| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (6.4 | ) | 109.5 | (0.2 | ) | (0.1 | ) | (109.5 | ) | (6.7 | ) | |||||||||||||
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| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 7.6 | — | 137.5 | 6.1 | (103.8 | ) | 47.4 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.5 | ) | — | (121.8 | ) | (0.5 | ) | 109.5 | (13.3 | ) | ||||||||||||||
Net cash used in financing activities from discontinued operations | — | — | (7.9 | ) | (2.9 | ) | 1.6 | (9.2 | ) | |||||||||||||||
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| |||||||||||||
Net cash provided by discontinued operations | 7.1 | — | 7.8 | 2.7 | 7.3 | 24.9 | ||||||||||||||||||
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| |||||||||||||
Effect of exchange rate changes on cash | 0.1 | — | 1.1 | 0.8 | — | 2.0 | ||||||||||||||||||
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| |||||||||||||
Net increase (decrease) in cash & cash equivalents | 0.7 | (1.9 | ) | 16.9 | 9.3 | — | 25.0 | |||||||||||||||||
Cash & cash equivalents, beginning of period | 5.1 | 22.7 | 67.3 | 28.1 | — | 123.2 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 20.8 | 84.2 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | — | 49.8 | 10.6 | — | 66.2 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 20.8 | $ | 34.4 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
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| |||||||||||||
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 0.5 | $ | 84.0 | $ | 34.4 | $ | 29.8 | $ | (10.0 | ) | $ | 138.7 | |||||||||||
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| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | (27.9 | ) | (2.1 | ) | (3.4 | ) | — | (33.4 | ) | ||||||||||||||
Additions to property, plant & equipment | — | (59.8 | ) | (13.3 | ) | (24.0 | ) | — | (97.1 | ) | ||||||||||||||
Additions to intangible assets | — | (2.4 | ) | (2.7 | ) | (0.9 | ) | — | (6.0 | ) | ||||||||||||||
Proceeds from sale of property, plant & equipment | — | 2.4 | 0.9 | 2.7 | — | 6.0 | ||||||||||||||||||
Intercompany loan to affiliate | — | — | (750.0 | ) | — | 750.0 | — | |||||||||||||||||
Other investing activities | — | — | 0.9 | — | — | 0.9 | ||||||||||||||||||
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| |||||||||||||
Net cash used in investing activities from continuing operations | — | (87.7 | ) | (766.3 | ) | (25.6 | ) | 750.0 | (129.6 | ) | ||||||||||||||
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| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | (100.0 | ) | (0.2 | ) | (1.7 | ) | — | (101.9 | ) | ||||||||||||||
Issuance of long-term debt | — | — | 750.0 | — | — | 750.0 | ||||||||||||||||||
Premiums and costs paid upon extinguishment of long-term debt | — | (7.7 | ) | — | — | — | (7.7 | ) | ||||||||||||||||
Financing fees | — | — | (11.1 | ) | — | — | (11.1 | ) | ||||||||||||||||
Issuance of common shares | 2.9 | — | — | — | — | 2.9 | ||||||||||||||||||
Common shares repurchased and cancelled | (1.9 | ) | — | — | — | — | (1.9 | ) | ||||||||||||||||
Dividends paid to common shareowners | (25.1 | ) | — | — | — | — | (25.1 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | 109.5 | — | — | (109.5 | ) | — | |||||||||||||||||
Other financing activities | — | — | — | 0.5 | — | 0.5 | ||||||||||||||||||
Intercompany dividends | — | — | — | (10.9 | ) | 10.9 | — | |||||||||||||||||
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| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (24.1 | ) | 1.8 | 738.7 | (12.1 | ) | (98.6 | ) | 605.7 | |||||||||||||||
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| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 27.0 | — | 21.8 | 11.6 | (4.3 | ) | 56.1 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (1.9 | ) | — | (142.9 | ) | (1.4 | ) | 109.5 | (36.7 | ) | ||||||||||||||
Net cash provided by (used in) financing activities from discontinued operations | — | — | 142.4 | (6.3 | ) | (746.6 | ) | (610.5 | ) | |||||||||||||||
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| |||||||||||||
Net cash provided by (used in) discontinued operations | 25.1 | — | 21.3 | 3.9 | (641.4 | ) | (591.1 | ) | ||||||||||||||||
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Effect of exchange rate changes on cash | (0.5 | ) | — | 4.0 | 2.9 | — | 6.4 | |||||||||||||||||
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| |||||||||||||
Net increase (decrease) in cash & cash equivalents | 1.0 | (1.9 | ) | 32.1 | (1.1 | ) | — | 30.1 | ||||||||||||||||
Cash & cash equivalents, beginning of period | 4.8 | 22.7 | 52.1 | 38.5 | — | 118.1 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 20.8 | 84.2 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | — | 49.8 | 10.6 | — | 66.2 | ||||||||||||||||||
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Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 20.8 | $ | 34.4 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
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| |||||||||||||
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.3 | ) | $ | 35.6 | $ | 17.8 | $ | 52.5 | $ | (54.5 | ) | $ | 51.1 | ||||||||||
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| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (911.3 | ) | (1.2 | ) | — | — | — | (912.5 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (24.2 | ) | (4.1 | ) | (4.1 | ) | — | (32.4 | ) | ||||||||||||||
Additions to intangible assets | — | (1.2 | ) | — | — | — | (1.2 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 0.9 | 0.4 | — | 1.3 | ||||||||||||||||||
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| |||||||||||||
Net cash used in investing activities from continuing operations | (911.3 | ) | (26.6 | ) | (3.2 | ) | (3.7 | ) | — | (944.8 | ) | |||||||||||||
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| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.6 | ) | — | (0.8 | ) | |||||||||||||||
Financing fees | (9.6 | ) | — | — | — | — | (9.6 | ) | ||||||||||||||||
Issuance of common shares | 2.4 | — | — | — | — | 2.4 | ||||||||||||||||||
Common shares repurchased and cancelled | (3.4 | ) | — | — | — | — | (3.4 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | — | (13.9 | ) | 13.9 | — | |||||||||||||||||
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| |||||||||||||
Net cash used in financing activities from continuing operations | (19.0 | ) | — | (11.0 | ) | (14.5 | ) | 13.9 | (30.6 | ) | ||||||||||||||
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| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 252.2 | — | (250.4 | ) | 5.3 | 37.8 | 44.9 | |||||||||||||||||
Net cash provided by (used in) investing activities from discontinued operations | 0.4 | — | (8.5 | ) | (0.1 | ) | — | (8.2 | ) | |||||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (2.3 | ) | — | 262.9 | (5.5 | ) | 2.8 | 257.9 | ||||||||||||||||
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| |||||||||||||
Net cash provided by (used in) discontinued operations | 250.3 | — | 4.0 | (0.3 | ) | 40.6 | 294.6 | |||||||||||||||||
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| |||||||||||||
Effect of exchange rate changes on cash | (4.1 | ) | — | (0.5 | ) | 0.6 | — | (4.0 | ) | |||||||||||||||
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| |||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (684.4 | ) | 9.0 | 7.1 | 34.6 | — | (633.7 | ) | ||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 685.7 | 26.4 | 33.2 | 7.3 | — | 752.6 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents, end of period | 1.3 | 35.4 | 40.3 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | — | 19.2 | 7.0 | — | 27.5 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 35.4 | $ | 21.1 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
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| |||||||||||||
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 1.4 | $ | 87.4 | $ | 34.2 | $ | 52.6 | $ | (103.7 | ) | $ | 71.9 | |||||||||||
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| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (954.0 | ) | (4.7 | ) | — | — | — | (958.7 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (58.0 | ) | (7.2 | ) | (4.1 | ) | — | (69.3 | ) | ||||||||||||||
Additions to intangible assets | — | (2.3 | ) | — | — | — | (2.3 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | 0.2 | 0.9 | 0.4 | — | 1.5 | ||||||||||||||||||
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| |||||||||||||
Net cash used in investing activities from continuing operations | (954.0 | ) | (64.8 | ) | (6.3 | ) | (3.7 | ) | — | (1,028.8 | ) | |||||||||||||
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| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.3 | ) | (0.6 | ) | — | (0.9 | ) | |||||||||||||||
Issuance of long-term debt | 498.7 | — | — | — | — | 498.7 | ||||||||||||||||||
Financing fees | (9.6 | ) | — | — | — | — | (9.6 | ) | ||||||||||||||||
Issuance of common shares | 366.6 | — | — | — | — | 366.6 | ||||||||||||||||||
Common shares repurchased and cancelled | (4.5 | ) | — | — | — | — | (4.5 | ) | ||||||||||||||||
Dividends paid to common shareowners | (23.1 | ) | — | — | — | — | (23.1 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | (12.2 | ) | (13.9 | ) | 26.1 | — | ||||||||||||||||
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| |||||||||||||
Net cash provided by (used in) financing activities from continuing operations | 828.1 | — | (23.3 | ) | (14.5 | ) | 26.1 | 816.4 | ||||||||||||||||
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| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 112.2 | — | (98.4 | ) | 15.1 | 58.6 | 87.5 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.6 | ) | — | (28.0 | ) | (0.7 | ) | — | (29.3 | ) | ||||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (5.2 | ) | — | 127.0 | (12.5 | ) | 19.0 | 128.3 | ||||||||||||||||
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| |||||||||||||
Net cash provided by discontinued operations | 106.4 | — | 0.6 | 1.9 | 77.6 | 186.5 | ||||||||||||||||||
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| |||||||||||||
Effect of exchange rate changes on cash | (1.4 | ) | — | (3.3 | ) | 0.5 | — | (4.2 | ) | |||||||||||||||
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| |||||||||||||
Net (decrease) increase in cash & cash equivalents | (19.5 | ) | 22.6 | 1.9 | 36.8 | — | 41.8 | |||||||||||||||||
Cash & cash equivalents, beginning of period | 20.8 | 12.8 | 38.4 | 5.1 | — | 77.1 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents, end of period | 1.3 | 35.4 | 40.3 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | — | 19.2 | 7.0 | — | 27.5 | ||||||||||||||||||
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Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 35.4 | $ | 21.1 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
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Guarantor Subsidiaries for 2020 Notes, 2022 Notes, and 2024 Notes
The 2020 Notes and the 2022 Notes, each issued by Cott Corporation’s 100% owned subsidiary Cott Beverages Inc. (“CBI”), are fully and unconditionally, jointly and severally guaranteed on a senior basis by Cott Corporation and certain of its 100% owned direct and indirect subsidiaries (the “Cott Guarantor Subsidiaries”). The Indentures governing the 2020 Notes and the 2022 Notes require (i) any 100% owned direct and indirect restricted subsidiary that guarantees any indebtedness of CBI or any guarantor and (ii) anynon-100% owned subsidiary that guarantees any other capital markets debt of CBI or any guarantor to guarantee the 2020 Notes and the 2022 Notes. Nonon-100% owned subsidiaries guarantee the 2020 Notes or the 2022 Notes. The guarantees of Cott Corporation and the Cott Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indentures governing the 2020 Notes and the 2022 Notes. In April 2017, the entire aggregate principal amount of our 2020 Notes were redeemed.
The 2024 Notes were initially issued on June 30, 2016 by Cott Finance Corporation, which was not a Cott Guarantor Subsidiary. Cott Finance Corporation was declared an unrestricted subsidiary under the Indentures governing the 2022 Notes and the 2020 Notes. As a result, such entity is reflected as a CottNon-Guarantor Subsidiary in the following summarized condensed consolidating financial information through August 2, 2016. Substantially simultaneously with the closing of the Eden Acquisition on August 2, 2016, we assumed all of the obligations of Cott Finance Corporation as issuer under the 2024 Notes, and Cott Corporation’s U.S., Canadian, U.K., Luxembourg and Dutch subsidiaries that are currently obligors under the 2022 Notes and the 2020 Notes (including CBI) entered into a supplemental indenture to guarantee the 2024 Notes. The Indenture governing the 2024 Notes requires (i) any 100% owned domestic restricted subsidiary that guarantees any debt of the issuer or any guarantor and (ii) and anynon-100% owned subsidiary that guarantees any other capital markets debt of Cott Corporation or any other guarantor to guarantee the 2024 Notes. Nonon-100% owned subsidiaries guarantee the 2024 Notes. The guarantees of CBI and the Cott Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indenture governing the 2024 Notes. Currently, the obligors under the 2024 Notes are identical to the obligors under the 2020 Notes and the 2022 Notes, but different than the obligors under the DSS Notes. The 2024 Notes are listed on the official list of the Irish Stock Exchange and are traded on the Global Exchange Market thereof.
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 the SEC rules 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 othernon-guarantor subsidiaries (the “CottNon-Guarantor Subsidiaries”). This supplemental financial information reflects our investments and those of CBI in their respective subsidiaries using the equity method of accounting.
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 15.8 | $ | 454.8 | $ | 110.3 | $ | — | $ | 580.9 | ||||||||||||
Cost of sales | — | 13.2 | 238.1 | 36.8 | — | 288.1 | ||||||||||||||||||
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Gross profit | — | 2.6 | 216.7 | 73.5 | — | 292.8 | ||||||||||||||||||
Selling, general and administrative expenses | 1.2 | 10.4 | 190.3 | 60.9 | — | 262.8 | ||||||||||||||||||
Gain on disposal of property, plant & equipment, net | — | — | (0.3 | ) | (0.1 | ) | — | (0.4 | ) | |||||||||||||||
Acquisition and integration expenses | — | 2.5 | 2.2 | (1.5 | ) | — | 3.2 | |||||||||||||||||
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| |||||||||||||
Operating (loss) income | (1.2 | ) | (10.3 | ) | 24.5 | 14.2 | — | 27.2 | ||||||||||||||||
Other expense (income), net | — | 0.1 | 1.5 | (0.1 | ) | — | 1.5 | |||||||||||||||||
Intercompany interest expense (income), net | — | — | 20.8 | (12.8 | ) | (8.0 | ) | — | ||||||||||||||||
Interest expense, net | 7.5 | — | 15.7 | — | — | 23.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(Loss) income before income tax expense (benefit), equity income and discontinued operations | (8.7 | ) | (10.4 | ) | (13.5 | ) | 27.1 | 8.0 | 2.5 | |||||||||||||||
Income tax expense (benefit) | — | 0.2 | 0.7 | — | — | 0.9 | ||||||||||||||||||
Equity income | 43.4 | — | 0.1 | — | (43.5 | ) | — | |||||||||||||||||
|
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|
|
|
|
|
|
| |||||||||||||
Net income (loss) from continuing operations | $ | 34.7 | $ | (10.6 | ) | $ | (14.1 | ) | $ | 27.1 | $ | (35.5 | ) | $ | 1.6 | |||||||||
Net income (loss) from discontinued operations, net of income taxes | 7.8 | 33.5 | (0.7 | ) | 3.3 | (0.9 | ) | 43.0 | ||||||||||||||||
|
|
|
|
|
|
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|
|
|
| |||||||||||||
Net income (loss) | 42.5 | 22.9 | (14.8 | ) | 30.4 | (36.4 | ) | 44.6 | ||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 2.1 | — | 2.1 | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Net income (loss) attributable to Cott Corporation | $ | 42.5 | $ | 22.9 | $ | (14.8 | ) | $ | 28.3 | $ | (36.4 | ) | $ | 42.5 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Comprehensive income (loss) attributable to Cott Corporation | $ | 46.7 | $ | 22.5 | $ | (36.5 | ) | $ | 23.0 | $ | (9.0 | ) | $ | 46.7 | ||||||||||
|
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|
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| |||||||||||||
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 52.1 | $ | 1,341.8 | $ | 304.5 | $ | — | $ | 1,698.4 | ||||||||||||
Cost of sales | — | 43.8 | 705.9 | 100.0 | — | 849.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gross profit | — | 8.3 | 635.9 | 204.5 | — | 848.7 | ||||||||||||||||||
Selling, general and administrative expenses | 4.1 | 30.8 | 564.2 | 178.7 | — | 777.8 | ||||||||||||||||||
Loss on disposal of property, plant & equipment, net | — | — | 4.8 | — | — | 4.8 | ||||||||||||||||||
Acquisition and integration expenses | — | 5.9 | 6.9 | 4.4 | — | 17.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating (loss) income | (4.1 | ) | (28.4 | ) | 60.0 | 21.4 | — | 48.9 | ||||||||||||||||
Other expense (income), net | — | 0.1 | (0.6 | ) | (0.6 | ) | — | (1.1 | ) | |||||||||||||||
Intercompany interest expense (income), net | — | — | 10.9 | (7.6 | ) | (3.3 | ) | — | ||||||||||||||||
Interest expense, net | 21.6 | — | 40.5 | — | — | 62.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(Loss) income before income tax expense (benefit), equity income and discontinued operations | (25.7 | ) | (28.5 | ) | 9.2 | 29.6 | 3.3 | (12.1 | ) | |||||||||||||||
Income tax expense (benefit) | — | 0.3 | (4.4 | ) | 5.1 | — | 1.0 | |||||||||||||||||
Equity income | 0.6 | — | 0.1 | — | (0.7 | ) | — | |||||||||||||||||
|
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|
|
| |||||||||||||
Net (loss) income from continuing operations | $ | (25.1 | ) | $ | (28.8 | ) | $ | 13.7 | $ | 24.5 | $ | 2.6 | $ | (13.1 | ) | |||||||||
Net income (loss) from discontinued operations, net of income taxes | 6.6 | (7.3 | ) | (0.1 | ) | 10.8 | (9.0 | ) | 1.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (loss) income | (18.5 | ) | (36.1 | ) | 13.6 | 35.3 | (6.4 | ) | (12.1 | ) | ||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 6.4 | — | 6.4 | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (loss) income attributable to Cott Corporation | $ | (18.5 | ) | $ | (36.1 | ) | $ | 13.6 | $ | 28.9 | $ | (6.4 | ) | $ | (18.5 | ) | ||||||||
|
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|
|
|
|
|
|
|
| |||||||||||||
Comprehensive income (loss) attributable to Cott Corporation | $ | 6.7 | $ | (34.3 | ) | $ | (44.1 | ) | $ | 28.5 | $ | 49.9 | $ | 6.7 | ||||||||||
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|
|
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|
|
|
| |||||||||||||
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 15.4 | $ | 391.4 | $ | 69.9 | $ | — | $ | 476.7 | ||||||||||||
Cost of sales | — | 13.0 | 191.2 | 24.8 | — | 229.0 | ||||||||||||||||||
|
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|
|
|
|
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|
|
|
| |||||||||||||
Gross profit | — | 2.4 | 200.2 | 45.1 | — | 247.7 | ||||||||||||||||||
Selling, general and administrative expenses | 1.6 | 4.5 | 178.1 | 41.1 | — | 225.3 | ||||||||||||||||||
Loss on disposal of property, plant & equipment, net | — | — | 1.4 | — | — | 1.4 | ||||||||||||||||||
Acquisition and integration expenses | — | 3.2 | 2.8 | 1.4 | — | 7.4 | ||||||||||||||||||
|
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|
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|
|
|
|
| |||||||||||||
Operating (loss) income | (1.6 | ) | (5.3 | ) | 17.9 | 2.6 | — | 13.6 | ||||||||||||||||
Other (income) expense, net | — | — | (0.8 | ) | 1.0 | — | 0.2 | |||||||||||||||||
Intercompany interest expense (income), net | — | — | 55.4 | (22.4 | ) | (33.0 | ) | — | ||||||||||||||||
Interest expense (income), net | 7.4 | — | 7.3 | (0.2 | ) | — | 14.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(Loss) income before income tax expense (benefit), equity income and discontinued operations | (9.0 | ) | (5.3 | ) | (44.0 | ) | 24.2 | 33.0 | (1.1 | ) | ||||||||||||||
Income tax expense (benefit) | 7.6 | (1.9 | ) | (3.2 | ) | 0.4 | — | 2.9 | ||||||||||||||||
Equity income | 8.7 | — | — | — | (8.7 | ) | — | |||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (loss) income from continuing operations | $ | (7.9 | ) | $ | (3.4 | ) | $ | (40.8 | ) | $ | 23.8 | $ | 24.3 | $ | (4.0 | ) | ||||||||
Net income (loss) from discontinued operations, net of income taxes | 5.3 | 7.7 | (2.8 | ) | 3.2 | (10.5 | ) | 2.9 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (loss) income | (2.6 | ) | 4.3 | (43.6 | ) | 27.0 | 13.8 | (1.1 | ) | |||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 1.5 | — | 1.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (loss) income attributable to Cott Corporation | $ | (2.6 | ) | $ | 4.3 | $ | (43.6 | ) | $ | 25.5 | $ | 13.8 | $ | (2.6 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Comprehensive (loss) income attributable to Cott Corporation | $ | (7.8 | ) | $ | 3.7 | $ | 60.6 | $ | 29.4 | $ | (93.7 | ) | $ | (7.8 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 52.2 | $ | 979.9 | $ | 69.9 | $ | — | $ | 1,102.0 | ||||||||||||
Cost of sales | — | 42.5 | 443.1 | 24.8 | — | 510.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gross profit | — | 9.7 | 536.8 | 45.1 | — | 591.6 | ||||||||||||||||||
Selling, general and administrative expenses | 12.6 | 13.8 | 480.2 | 41.1 | — | 547.7 | ||||||||||||||||||
Loss on disposal of property, plant & equipment, net | — | — | �� | 4.6 | — | — | 4.6 | |||||||||||||||||
Acquisition and integration expenses | — | 14.2 | 4.9 | 1.4 | — | 20.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating (loss) income | (12.6 | ) | (18.3 | ) | 47.1 | 2.6 | — | 18.8 | ||||||||||||||||
Other (income) expense, net | — | — | (1.0 | ) | 1.0 | — | — | |||||||||||||||||
Intercompany interest expense (income), net | — | — | 32.8 | (13.3 | ) | (19.5 | ) | — | ||||||||||||||||
Interest expense (income), net | 7.4 | — | 22.0 | (0.2 | ) | — | 29.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(Loss) income before income tax expense (benefit), equity income and discontinued operations | (20.0 | ) | (18.3 | ) | (6.7 | ) | 15.1 | 19.5 | (10.4 | ) | ||||||||||||||
Income tax expense (benefit) | 7.4 | (4.0 | ) | (8.4 | ) | 0.2 | — | (4.8 | ) | |||||||||||||||
Equity income | 22.9 | — | — | — | (22.9 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (loss) income from continuing operations | $ | (4.5 | ) | $ | (14.3 | ) | $ | 1.7 | $ | 14.9 | $ | (3.4 | ) | $ | (5.6 | ) | ||||||||
Net income from discontinued operations, net of income taxes | 6.5 | 16.2 | 12.0 | 9.4 | (32.1 | ) | 12.0 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net income (loss) | 2.0 | 1.9 | 13.7 | 24.3 | (35.5 | ) | 6.4 | |||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 4.4 | — | 4.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net income (loss) attributable to Cott Corporation | $ | 2.0 | $ | 1.9 | $ | 13.7 | $ | 19.9 | $ | (35.5 | ) | $ | 2.0 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Comprehensive (loss) income attributable to Cott Corporation | $ | (17.8 | ) | $ | — | $ | 203.7 | $ | 23.9 | $ | (227.6 | ) | $ | (17.8 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Consolidating Balance Sheets
(in millions of U.S. dollars)
Unaudited
| As of September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | — | $ | 55.2 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
Accounts receivable, net of allowance | — | 8.1 | 216.5 | 93.9 | (6.9 | ) | 311.6 | |||||||||||||||||
Inventories | — | 15.5 | 111.2 | 15.6 | — | 142.3 | ||||||||||||||||||
Prepaid expenses and other current assets | 0.1 | 0.4 | 15.2 | 6.5 | — | 22.2 | ||||||||||||||||||
Current assets of discontinued operations | 63.2 | 324.4 | 415.2 | 28.9 | (405.2 | ) | 426.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current assets | 63.3 | 348.4 | 813.3 | 171.7 | (412.1 | ) | 984.6 | |||||||||||||||||
Property, plant & equipment, net | — | 3.7 | 479.7 | 107.0 | — | 590.4 | ||||||||||||||||||
Goodwill | — | 4.5 | 772.3 | 320.2 | — | 1,097.0 | ||||||||||||||||||
Intangible assets, net | — | 24.5 | 532.2 | 207.2 | — | 763.9 | ||||||||||||||||||
Deferred tax assets | — | — | — | 2.2 | — | 2.2 | ||||||||||||||||||
Other long-term assets, net | 0.4 | 1.1 | 19.1 | 16.2 | — | 36.8 | ||||||||||||||||||
Due from affiliates | — | — | 893.2 | 371.8 | (1,265.0 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | 1,038.7 | — | (1,038.7 | ) | — | |||||||||||||||||
Long-term assets of discontinued operations | 1,425.1 | 1,847.4 | 414.1 | 6.9 | (3,019.9 | ) | 673.6 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total assets | $ | 1,488.8 | $ | 2,229.6 | $ | 4,962.6 | $ | 1,203.2 | $ | (5,735.7 | ) | $ | 4,148.5 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | — | $ | 0.1 | $ | 2.5 | $ | — | $ | 2.6 | ||||||||||||
Accounts payable and accrued liabilities | 8.6 | 27.8 | 385.1 | 136.8 | (105.2 | ) | 453.1 | |||||||||||||||||
Current liabilities of discontinued operations | 91.6 | 580.3 | 144.1 | 10.0 | (306.9 | ) | 519.1 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current liabilities | 100.2 | 608.1 | 529.3 | 149.3 | (412.1 | ) | 974.8 | |||||||||||||||||
Long-term debt | 521.3 | — | 1,010.0 | 2.7 | — | 1,534.0 | ||||||||||||||||||
Deferred tax liabilities | — | 11.5 | 89.7 | 30.7 | — | 131.9 | ||||||||||||||||||
Other long-term liabilities | — | 10.9 | 45.8 | 10.8 | — | 67.5 | ||||||||||||||||||
Due to affiliates | — | — | 1,208.3 | 858.6 | (2,066.9 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.9 | 1,427.6 | 119.9 | 28.1 | (1,011.0 | ) | 566.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 623.4 | 2,058.1 | 3,003.0 | 1,080.2 | (3,490.0 | ) | 3,274.7 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 915.5 | 1,034.7 | 1,574.1 | 144.5 | (2,753.3 | ) | 915.5 | |||||||||||||||||
Additionalpaid-in-capital | 63.3 | — | — | — | — | 63.3 | ||||||||||||||||||
(Accumulated deficit) retained earnings | (20.7 | ) | (844.9 | ) | 265.5 | (38.6 | ) | 618.0 | (20.7 | ) | ||||||||||||||
Accumulated other comprehensive (loss) income | (92.7 | ) | (18.3 | ) | 120.0 | 8.7 | (110.4 | ) | (92.7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Cott Corporation equity | 865.4 | 171.5 | 1,959.6 | 114.6 | (2,245.7 | ) | 865.4 | |||||||||||||||||
Non-controlling interests | — | — | — | 8.4 | — | 8.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total equity | 865.4 | 171.5 | 1,959.6 | 123.0 | (2,245.7 | ) | 873.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and equity | $ | 1,488.8 | $ | 2,229.6 | $ | 4,962.6 | $ | 1,203.2 | $ | (5,735.7 | ) | $ | 4,148.5 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Consolidating Balance Sheets
(in millions of U.S. dollars)
| As of December 31, 2016 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | — | $ | 46.3 | $ | 31.8 | $ | — | $ | 78.1 | ||||||||||||
Accounts receivable, net of allowance | — | 8.6 | 198.0 | 84.0 | (13.9 | ) | 276.7 | |||||||||||||||||
Inventories | — | 13.2 | 95.9 | 15.5 | — | 124.6 | ||||||||||||||||||
Prepaid expenses and other current assets | 1.7 | 0.8 | 15.4 | 4.2 | — | 22.1 | ||||||||||||||||||
Current assets of discontinued operations | 47.2 | 126.9 | 360.5 | 23.2 | (206.1 | ) | 351.7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current assets | 48.9 | 149.5 | 716.1 | 158.7 | (220.0 | ) | 853.2 | |||||||||||||||||
Property, plant & equipment, net | — | 4.0 | 476.3 | 101.5 | — | 581.8 | ||||||||||||||||||
Goodwill | — | 4.5 | 761.1 | 282.7 | — | 1,048.3 | ||||||||||||||||||
Intangible assets, net | — | 24.5 | 536.7 | 197.8 | — | 759.0 | ||||||||||||||||||
Deferred tax assets | — | 6.0 | — | — | (6.0 | ) | — | |||||||||||||||||
Other long-term assets, net | 0.5 | 1.3 | 19.9 | 2.3 | — | 24.0 | ||||||||||||||||||
Due from affiliates | — | — | 143.1 | 329.6 | (472.7 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | 975.0 | — | (975.0 | ) | — | |||||||||||||||||
Long-term assets of discontinued operations | 1,353.7 | 1,635.4 | 411.3 | 4.2 | (2,731.2 | ) | 673.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total assets | $ | 1,403.1 | $ | 1,825.2 | $ | 4,039.5 | $ | 1,076.8 | $ | (4,404.9 | ) | $ | 3,939.7 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | — | $ | 0.1 | $ | 2.8 | $ | — | $ | 2.9 | ||||||||||||
Accounts payable and accrued liabilities | 4.2 | 30.5 | 229.7 | 124.8 | (21.2 | ) | 368.0 | |||||||||||||||||
Current liabilities of discontinued operations | 63.6 | 437.7 | 128.2 | 8.5 | (198.8 | ) | 439.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current liabilities | 67.8 | 468.2 | 358.0 | 136.1 | (220.0 | ) | 810.1 | |||||||||||||||||
Long-term debt | 464.4 | — | 384.2 | 2.8 | — | 851.4 | ||||||||||||||||||
Deferred tax liabilities | 0.9 | — | 133.7 | 26.4 | (6.0 | ) | 155.0 | |||||||||||||||||
Other long-term liabilities | — | 11.3 | 43.6 | 20.5 | — | 75.4 | ||||||||||||||||||
Due to affiliates | — | — | 970.8 | 775.1 | (1,745.9 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.5 | 1,290.7 | 107.4 | 24.6 | (250.2 | ) | 1,174.0 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 534.6 | 1,770.2 | 1,997.7 | 985.5 | (2,222.1 | ) | 3,065.9 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 909.3 | 834.8 | 1,648.7 | 149.7 | (2,633.2 | ) | 909.3 | |||||||||||||||||
Additionalpaid-in-capital | 54.2 | — | — | — | — | 54.2 | ||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||
(accumulated deficit) | 22.9 | (759.7 | ) | 215.4 | (72.8 | ) | 617.1 | 22.9 | ||||||||||||||||
Accumulated other comprehensive | ||||||||||||||||||||||||
(loss) income | (117.9 | ) | (20.1 | ) | 177.7 | 9.1 | (166.7 | ) | (117.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Cott Corporation equity | 868.5 | 55.0 | 2,041.8 | 86.0 | (2,182.8 | ) | 868.5 | |||||||||||||||||
Non-controlling interests | — | — | — | 5.3 | — | 5.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total equity | 868.5 | 55.0 | 2,041.8 | 91.3 | (2,182.8 | ) | 873.8 | |||||||||||||||||
|
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|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and equity | $ | 1,403.1 | $ | 1,825.2 | $ | 4,039.5 | $ | 1,076.8 | $ | (4,404.9 | ) | $ | 3,939.7 | |||||||||||
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|
|
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|
|
|
|
| |||||||||||||
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.1 | ) | $ | — | $ | (70.6 | ) | $ | 14.7 | $ | 102.2 | $ | 46.2 | ||||||||||
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|
|
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|
|
|
| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | — | (1.1 | ) | (2.3 | ) | — | (3.4 | ) | |||||||||||||||
Additions to property, plant & equipment | — | — | (30.0 | ) | (8.2 | ) | — | (38.2 | ) | |||||||||||||||
Additions to intangible assets | — | — | (3.1 | ) | (0.3 | ) | — | (3.4 | ) | |||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 1.1 | 2.0 | — | 3.1 | ||||||||||||||||||
Other investing activities | — | — | 0.5 | — | — | 0.5 | ||||||||||||||||||
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|
|
|
|
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|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | — | — | (32.6 | ) | (8.8 | ) | — | (41.4 | ) | |||||||||||||||
|
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|
|
|
|
|
|
|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.1 | ) | — | (0.3 | ) | |||||||||||||||
Issuance of common shares | 2.1 | — | — | — | — | 2.1 | ||||||||||||||||||
Common shares repurchased and cancelled | (0.1 | ) | — | — | — | — | (0.1 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | — | 109.5 | — | (109.5 | ) | — | |||||||||||||||||
|
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|
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|
|
|
|
|
|
|
| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (6.4 | ) | — | 109.3 | (0.1 | ) | (109.5 | ) | (6.7 | ) | ||||||||||||||
|
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|
|
|
| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 7.6 | 132.8 | 4.7 | 6.1 | (103.8 | ) | 47.4 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.5 | ) | (117.7 | ) | (4.1 | ) | (0.5 | ) | 109.5 | (13.3 | ) | |||||||||||||
Net cash used in financing activities from discontinued operations | — | (7.8 | ) | (0.1 | ) | (2.9 | ) | 1.6 | (9.2 | ) | ||||||||||||||
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|
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| |||||||||||||
Net cash provided by discontinued operations | 7.1 | 7.3 | 0.5 | 2.7 | 7.3 | 24.9 | ||||||||||||||||||
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| |||||||||||||
Effect of exchange rate changes on cash | 0.1 | — | 1.1 | 0.8 | — | 2.0 | ||||||||||||||||||
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|
| |||||||||||||
Net increase in cash & cash equivalents | 0.7 | 7.3 | 7.7 | 9.3 | — | 25.0 | ||||||||||||||||||
Cash & cash equivalents, beginning of period | 5.1 | 16.1 | 73.9 | 28.1 | — | 123.2 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 23.4 | 81.6 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | 23.4 | 26.4 | 10.6 | — | 66.2 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 55.2 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
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|
|
|
|
|
|
| |||||||||||||
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 0.5 | $ | — | $ | 118.4 | $ | 29.8 | $ | (10.0 | ) | $ | 138.7 | |||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | — | (30.0 | ) | (3.4 | ) | — | (33.4 | ) | |||||||||||||||
Additions to property, plant & equipment | — | — | (73.1 | ) | (24.0 | ) | — | (97.1 | ) | |||||||||||||||
Additions to intangible assets | — | — | (5.1 | ) | (0.9 | ) | — | (6.0 | ) | |||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 3.3 | 2.7 | — | 6.0 | ||||||||||||||||||
Intercompany loan to affiliate | — | — | (750.0 | ) | — | 750.0 | — | |||||||||||||||||
Other investing activities | — | — | 0.9 | — | — | 0.9 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | — | — | (854.0 | ) | (25.6 | ) | 750.0 | (129.6 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (100.2 | ) | (1.7 | ) | — | (101.9 | ) | |||||||||||||||
Issuance of long-term debt | — | — | 750.0 | — | — | 750.0 | ||||||||||||||||||
Premiums and costs paid upon extinguishment of long-term debt | — | — | (7.7 | ) | — | — | (7.7 | ) | ||||||||||||||||
Financing fees | — | — | (11.1 | ) | — | — | (11.1 | ) | ||||||||||||||||
Issuance of common shares | 2.9 | — | — | — | — | 2.9 | ||||||||||||||||||
Common shares repurchased and cancelled | (1.9 | ) | — | — | — | — | (1.9 | ) | ||||||||||||||||
Dividends paid to common shareowners | (25.1 | ) | — | — | — | — | (25.1 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | — | 109.5 | — | (109.5 | ) | — | |||||||||||||||||
Other financing activities | — | — | — | 0.5 | — | 0.5 | ||||||||||||||||||
Intercompany dividends | — | — | — | (10.9 | ) | 10.9 | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (24.1 | ) | — | 740.5 | (12.1 | ) | (98.6 | ) | 605.7 | |||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 27.0 | 15.7 | 6.1 | 11.6 | (4.3 | ) | 56.1 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (1.9 | ) | (138.0 | ) | (4.9 | ) | (1.4 | ) | 109.5 | (36.7 | ) | |||||||||||||
Net cash provided by (used in) financing activities from discontinued operations | — | 142.6 | (0.2 | ) | (6.3 | ) | (746.6 | ) | (610.5 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) discontinued operations | 25.1 | 20.3 | 1.0 | 3.9 | (641.4 | ) | (591.1 | ) | ||||||||||||||||
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|
|
|
|
| |||||||||||||
Effect of exchange rate changes on cash | (0.5 | ) | — | 4.0 | 2.9 | — | 6.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) in cash & cash equivalents | 1.0 | 20.3 | 9.9 | (1.1 | ) | — | 30.1 | |||||||||||||||||
Cash & cash equivalents, beginning of period | 4.8 | 3.1 | 71.7 | 38.5 | — | 118.1 | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 23.4 | 81.6 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | 23.4 | 26.4 | 10.6 | — | 66.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 55.2 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.3 | ) | $ | 0.4 | $ | 53.0 | $ | 52.5 | $ | (54.5 | ) | $ | 51.1 | ||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (911.3 | ) | — | (1.2 | ) | — | — | (912.5 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (0.4 | ) | (27.9 | ) | (4.1 | ) | — | (32.4 | ) | ||||||||||||||
Additions to intangible assets | — | — | (1.2 | ) | — | — | (1.2 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 0.9 | 0.4 | — | 1.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | (911.3 | ) | (0.4 | ) | (29.4 | ) | (3.7 | ) | — | (944.8 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.6 | ) | — | (0.8 | ) | |||||||||||||||
Financing fees | (9.6 | ) | — | — | — | (9.6 | ) | |||||||||||||||||
Issuance of common shares | 2.4 | — | — | — | — | 2.4 | ||||||||||||||||||
Common shares repurchased and cancelled | (3.4 | ) | — | — | — | — | (3.4 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | — | (13.9 | ) | 13.9 | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in financing activities from continuing operations | (19.0 | ) | — | (11.0 | ) | (14.5 | ) | 13.9 | (30.6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 252.2 | (258.1 | ) | 7.7 | 5.3 | 37.8 | 44.9 | |||||||||||||||||
Net cash provided by (used in) investing activities from discontinued operations | 0.4 | (5.0 | ) | (3.5 | ) | (0.1 | ) | — | (8.2 | ) | ||||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (2.3 | ) | 262.9 | — | (5.5 | ) | 2.8 | 257.9 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) discontinued operations | 250.3 | (0.2 | ) | 4.2 | (0.3 | ) | 40.6 | 294.6 | ||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Effect of exchange rate changes on cash | (4.1 | ) | — | (0.5 | ) | 0.6 | — | (4.0 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (684.4 | ) | (0.2 | ) | 16.3 | 34.6 | — | (633.7 | ) | |||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 685.7 | 2.4 | 57.2 | 7.3 | — | 752.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents, end of period | 1.3 | 2.2 | 73.5 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | 2.2 | 17.0 | 7.0 | — | 27.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 56.5 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
| For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
| Cott | Cott | |||||||||||||||||||||||
| Cott | Cott | Guarantor | Non-Guarantor | Elimination | ||||||||||||||||||||
| Corporation | Beverages Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 1.4 | $ | 0.4 | $ | 121.2 | $ | 52.6 | $ | (103.7 | ) | $ | 71.9 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (954.0 | ) | — | (4.7 | ) | — | — | (958.7 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (0.4 | ) | (64.8 | ) | (4.1 | ) | — | (69.3 | ) | ||||||||||||||
Additions to intangible assets | — | — | (2.3 | ) | — | — | (2.3 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 1.1 | 0.4 | — | 1.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | (954.0 | ) | (0.4 | ) | (70.7 | ) | (3.7 | ) | — | (1,028.8 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.3 | ) | (0.6 | ) | — | (0.9 | ) | |||||||||||||||
Issuance of long-term debt | 498.7 | — | — | — | — | 498.7 | ||||||||||||||||||
Financing fees | (9.6 | ) | — | — | — | — | (9.6 | ) | ||||||||||||||||
Issuance of common shares | 366.6 | — | — | — | — | 366.6 | ||||||||||||||||||
Common shares repurchased and cancelled | (4.5 | ) | — | — | — | — | (4.5 | ) | ||||||||||||||||
Dividends paid to common shareowners | (23.1 | ) | — | — | — | — | (23.1 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | (12.2 | ) | (13.9 | ) | 26.1 | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) financing activities from continuing operations | 828.1 | — | (23.3 | ) | (14.5 | ) | 26.1 | 816.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 112.2 | (112.3 | ) | 13.9 | 15.1 | 58.6 | 87.5 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.6 | ) | (18.0 | ) | (10.0 | ) | (0.7 | ) | — | (29.3 | ) | |||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (5.2 | ) | 131.5 | (4.5 | ) | (12.5 | ) | 19.0 | 128.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) discontinued operations | 106.4 | 1.2 | (0.6 | ) | 1.9 | 77.6 | 186.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Effect of exchange rate changes on cash | (1.4 | ) | — | (3.3 | ) | 0.5 | — | (4.2 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (19.5 | ) | 1.2 | 23.3 | 36.8 | — | 41.8 | |||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 20.8 | 1.0 | 50.2 | 5.1 | — | 77.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents, end of period | 1.3 | 2.2 | 73.5 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | 2.2 | 17.0 | 7.0 | — | 27.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 56.5 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
|
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|
|
|
|
|
|
|
|
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Note 18—Subsequent Events
On October 26, 2017, the Company’s wholly owned subsidiaries CBI and DSS, gave notice to the trustees under the indentures governing the 2022 Notes and DSS Notes of their intent to conditionally redeem all of the outstanding 2022 Notes and DSS Notes on November 27, 2017 (the “Redemption Date”). The redemption price of the 2022 Notes, as set forth in the indenture governing the 2022 Notes, is equal to 104.031% of the principal amount of such 2022 Notes redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date. The redemption price of the DSS Notes, as set forth in the indenture governing the DSS Notes, is equal to 105.000% of the principal amount of such DSS Notes redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date. The redemptions of the 2022 Notes and the DSS Notes are each conditioned upon the closing of the sale of the Company’s Traditional Business to Refresco.
On November 7, 2017, our board of directorsDirectors declared a dividend of $0.06 per share on common shares, payable in cash on December 8, 2017September 2, 2020 to shareownersshare owners of record at the close of business on November 28, 2017.
Cott
On July 24, 2017, we entered into a Share Purchase Agreement with Refresco Group N.V., a Netherlands limited liability company (“Refresco”), pursuant toregulatory standards for the benefit of consumer protection.
The beverage marketoperate is subject to some seasonal variations. Our water delivery sales are generally higher during the warmer months. Our purchases of raw materials and related accounts payable fluctuate based upon the demand for our products. The seasonality of our sales volume causes our working capital needs to fluctuate throughout the year, with inventory levels increasing in the first half of the year in order to meet high summer demand. In addition, our accounts receivable balances decline in the fall as customers pay their higher-than-average outstanding balances from the summer deliveries.
Ingredient and packaging costs represent a significant portion of our cost of sales. These costs are subject to global and regional commodity price trends. Our most significant commodities are green coffee, polyethylene terephthalate (“PET”) resin, high-density polyethylene (“HDPE”) and fuel. We attempt to manage our exposure to fluctuations in ingredient and packaging costs by entering into fixed price commitments for a portion of our ingredient and packaging requirements and implementing price increases as needed.
year.
Financing Transactions
On March 22, 2017,
We incurred $11.7 million of financing fees ina pure-play water solutions provider.
On October 26, 2017, our wholly owned subsidiaries, Cott Beverages Inc. and DSS, gave notice to the trustees under the indentures governing the 5.375% senior notes due 2022 (the “2022 Notes”) and the DSS Notes of their intent to conditionally redeem all of the outstanding 2022 Notes and DSS Notes on November 27, 2017 (the “Redemption Date”). The redemption price of the 2022 Notes, as set forth in the indenture governing the 2022 Notes, is equal to 104.031% of the principal amount of such 2022 Notes redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date. The redemption price of the DSS Notes, as set forth in the indenture governing the DSS Notes, is equal to 105.000% of the principal amount of such DSS Notes redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date. The redemptions of the 2022 Notes and the DSS Notes are each conditioned upon the closing of the saleLegacy Primo Acquisition, Cott Corporation changed its corporate name to Primo Water Corporation and its ticker symbol on the New York Stock Exchange and Toronto Stock Exchange to “PRMW”.
previously existing asset-based lending credit facility.
We exclude these items to better understand trends in the business. We exclude the impact of foreign exchange to separate the impact of currency exchange rate changes from our results of operations.
We also utilize adjusted net income (loss) from continuing operations, which is GAAP income (loss) from continuing operations excluding acquisition and integration costs, inventorystep-up adjustments, unrealized gain on commodity hedging instruments, net, foreign exchange and other (gains) losses, net, loss on disposal of property, plant & equipment, net, interest payment on 2024 Notes (as defined below), interest expense on 2020 Notes (as defined below), tax valuation allowance, gain on extinguishment of long-term debt, other adjustments, and the tax effect of adjustments, as well as adjusted net income (loss) per diluted common share from continuing operations, which is adjusted net income (loss) from continuing operations divided by diluted weighted average common shares outstanding. We consider these measures to be indicators of our operating performance.
Additionally, we supplement our reporting of net cash provided by operating activities from continuing operations determined in accordance with GAAP by excluding additions to property, plant & equipment to present free cash flow and adjusted free cash flow (which is free cash flow excluding acquisition and integration cash costs), which management believes provides useful information to investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions, paying dividends, and strengthening the balance sheet.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||||||||||||||||||||||
(in millions of U.S. dollars) | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
Revenue, net | 580.9 | 100.0 | 476.7 | 100.0 | 1,698.4 | 100.0 | 1,102.0 | 100.0 | ||||||||||||||||||||||||
Cost of sales | 288.1 | 49.6 | 229.0 | 48.0 | 849.7 | 50.0 | 510.4 | 46.3 | ||||||||||||||||||||||||
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Gross profit | 292.8 | 50.4 | 247.7 | 52.0 | 848.7 | 50.0 | 591.6 | 53.7 | ||||||||||||||||||||||||
Selling, general, and administrative expenses | 262.8 | 45.2 | 225.3 | 47.3 | 777.8 | 45.8 | 547.7 | 49.7 | ||||||||||||||||||||||||
(Gain) loss on disposal of property, plant & equipment, net | (0.4 | ) | (0.1 | ) | 1.4 | 0.3 | 4.8 | 0.3 | 4.6 | 0.4 | ||||||||||||||||||||||
Acquisition and integration expenses | 3.2 | 0.6 | 7.4 | 1.5 | 17.2 | 1.0 | 20.5 | 1.9 | ||||||||||||||||||||||||
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Operating income | 27.2 | 4.7 | 13.6 | 2.9 | 48.9 | 2.9 | 18.8 | 1.7 | ||||||||||||||||||||||||
Other expense (income), net | 1.5 | 0.3 | 0.2 | — | (1.1 | ) | (0.1 | ) | — | — | ||||||||||||||||||||||
Interest expense, net | 23.2 | 4.0 | 14.5 | 3.1 | 62.1 | 3.7 | 29.2 | 2.6 | ||||||||||||||||||||||||
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Income (loss) from continuing operations before income taxes | 2.5 | 0.4 | (1.1 | ) | (0.2 | ) | (12.1 | ) | (0.7 | ) | (10.4 | ) | (0.9 | ) | ||||||||||||||||||
Income tax expense (benefit) | 0.9 | 0.1 | 2.9 | 0.6 | 1.0 | 0.1 | (4.8 | ) | (0.4 | ) | ||||||||||||||||||||||
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Net income (loss) from continuing operations | 1.6 | 0.3 | (4.0 | ) | (0.8 | ) | (13.1 | ) | (0.8 | ) | (5.6 | ) | (0.5 | ) | ||||||||||||||||||
Net income from discontinued operations, net of income taxes | 43.0 | 7.4 | 2.9 | 0.6 | 1.0 | 0.1 | 12.0 | 1.1 | ||||||||||||||||||||||||
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Net income (loss) | 44.6 | 7.7 | (1.1 | ) | (0.2 | ) | (12.1 | ) | (0.7 | ) | 6.4 | 0.6 | ||||||||||||||||||||
Less: Net income attributable to non-controlling interests—discontinued operations | 2.1 | 0.4 | 1.5 | 0.3 | 6.4 | 0.4 | 4.4 | 0.4 | ||||||||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | 42.5 | 7.3 | (2.6 | ) | (0.5 | ) | (18.5 | ) | (1.1 | ) | 2.0 | 0.2 | ||||||||||||||||||||
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Depreciation & amortization | 49.4 | 8.5 | 41.2 | 8.6 | 141.8 | 8.3 | 102.6 | 9.3 | ||||||||||||||||||||||||
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June 29, 2019:
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue, net | 456.8 | 100.0 | 455.6 | 100.0 | 931.0 | 100.0 | 883.3 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 202.1 | 44.2 | 184.0 | 40.4 | 403.0 | 43.3 | 368.6 | 41.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 254.7 | 55.8 | 271.6 | 59.6 | 528.0 | 56.7 | 514.7 | 58.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 246.7 | 54.0 | 245.7 | 53.9 | 501.8 | 53.9 | 481.5 | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on disposal of property, plant and equipment, net | 2.5 | 0.5 | 1.7 | 0.4 | 3.9 | 0.4 | 3.6 | 0.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition and integration expenses | 4.3 | 0.9 | 2.7 | 0.6 | 25.1 | 2.7 | 7.4 | 0.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and intangible asset impairment charges | 115.2 | 25.2 | — | — | 115.2 | 12.4 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating (loss) income | (114.0) | (25.0) | 21.5 | 4.7 | (118.0) | (12.7) | 22.2 | 2.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | (1.6) | (0.4) | (2.2) | (0.5) | 5.4 | 0.6 | 3.3 | 0.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 20.7 | 4.5 | 18.8 | 4.1 | 40.4 | 4.3 | 38.1 | 4.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Loss) income from continuing operations before income taxes | (133.1) | (29.1) | 4.9 | 1.1 | (163.8) | (17.6) | (19.2) | (2.2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax (benefit) expense | (1.4) | (0.3) | 2.2 | 0.5 | (4.7) | (0.5) | 0.8 | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income from continuing operations | (131.7) | (28.8) | 2.7 | 0.6 | (159.1) | (17.1) | (20.0) | (2.3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income from discontinued operations, net of income taxes | (4.3) | (0.9) | 1.7 | 0.4 | 26.6 | 2.9 | 4.7 | 0.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | (136.0) | (29.8) | 4.4 | 1.0 | (132.5) | (14.2) | (15.3) | (1.7) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation & amortization | 52.8 | 11.6 | 42.9 | 9.4 | 97.8 | 10.5 | 82.6 | 9.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars, except percentage amounts) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Change in revenue | $ | 48.1 | $ | 56.1 | $ | — | $ | 104.2 | ||||||||
Impact of foreign exchange 1 | (5.8 | ) | — | 0.6 | (5.2 | ) | ||||||||||
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Change excluding foreign exchange | $ | 42.3 | $ | 56.1 | $ | 0.6 | $ | 99.0 | ||||||||
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Percentage change in revenue | 13.8 | % | 64.3 | % | — | % | 21.9 | % | ||||||||
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Percentage change in revenue excluding foreign exchange | 12.1 | % | 64.3 | % | 1.5 | % | 20.8 | % | ||||||||
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| For the Nine Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars, except percentage amounts) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Change in revenue | $ | 252.6 | $ | 352.9 | $ | (9.1 | ) | $ | 596.4 | |||||||
Impact of foreign exchange1 | (5.7 | ) | — | 5.7 | — | |||||||||||
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Change excluding foreign exchange | $ | 246.9 | $ | 352.9 | $ | (3.4 | ) | $ | 596.4 | |||||||
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Percentage change in revenue | 28.6 | % | 404.2 | % | (6.9 | )% | 54.1 | % | ||||||||
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Percentage change in revenue excluding foreign exchange | 28.0 | % | 404.2 | % | (2.6 | )% | 54.1 | % | ||||||||
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June 27, 2020:
| For the Three Months Ended June 27, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars, except percentage amounts) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Change in revenue | $ | 40.4 | $ | (39.2) | $ | — | $ | 1.2 | |||||||||||||||||||||||||||||||||
Impact of foreign exchange 1 | 0.4 | 2.1 | — | 2.5 | |||||||||||||||||||||||||||||||||||||
| Change excluding foreign exchange | $ | 40.8 | $ | (37.1) | $ | — | $ | 3.7 | |||||||||||||||||||||||||||||||||
| Percentage change in revenue | 12.5 | % | (29.7) | % | — | % | 0.3 | % | |||||||||||||||||||||||||||||||||
| Percentage change in revenue excluding foreign exchange | 12.6 | % | (28.1) | % | — | % | 0.8 | % | |||||||||||||||||||||||||||||||||
| For the Six Months Ended June 27, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars, except percentage amounts) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Change in revenue | $ | 93.0 | $ | (38.1) | $ | (7.2) | $ | 47.7 | |||||||||||||||||||||||||||||||||
Impact of foreign exchange 1 | 0.5 | 2.2 | — | 2.7 | |||||||||||||||||||||||||||||||||||||
| Change excluding foreign exchange | $ | 93.5 | $ | (35.9) | $ | (7.2) | $ | 50.4 | |||||||||||||||||||||||||||||||||
| Percentage change in revenue | 15.0 | % | (15.0) | % | (100.0) | % | 5.4 | % | |||||||||||||||||||||||||||||||||
| Percentage change in revenue excluding foreign exchange | 15.0 | % | (14.1) | % | (100.0) | % | 5.7 | % | |||||||||||||||||||||||||||||||||
| For the Three Months Ended June 27, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars, except percentage amounts) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Change in gross profit | $ | 9.6 | $ | (26.5) | $ | — | $ | (16.9) | |||||||||||||||||||||||||||||||||
Impact of foreign exchange 1 | 0.2 | 1.1 | — | 1.3 | |||||||||||||||||||||||||||||||||||||
| Change excluding foreign exchange | $ | 9.8 | $ | (25.4) | $ | — | $ | (15.6) | |||||||||||||||||||||||||||||||||
| Percentage change in gross profit | 4.9 | % | (35.2) | % | — | % | (6.2) | % | |||||||||||||||||||||||||||||||||
| Percentage change in gross profit excluding foreign exchange | 5.0 | % | (33.7) | % | — | % | (5.7) | % | |||||||||||||||||||||||||||||||||
| For the Six Months Ended June 27, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars, except percentage amounts) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Change in gross profit | $ | 40.1 | $ | (26.5) | $ | (0.3) | $ | 13.3 | |||||||||||||||||||||||||||||||||
Impact of foreign exchange 1 | 0.3 | 1.1 | — | 1.4 | |||||||||||||||||||||||||||||||||||||
| Change excluding foreign exchange | $ | 40.4 | $ | (25.4) | $ | (0.3) | $ | 14.7 | |||||||||||||||||||||||||||||||||
| Percentage change in gross profit | 10.8 | % | (18.6) | % | (100.0) | % | 2.6 | % | |||||||||||||||||||||||||||||||||
| Percentage change in gross profit excluding foreign exchange | 10.9 | % | (17.8) | % | (100.0) | % | 2.9 | % | |||||||||||||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Revenue, net | ||||||||||||||||
Route Based Services | $ | 397.3 | $ | 349.2 | $ | 1,134.9 | $ | 882.3 | ||||||||
Coffee, Tea and Extract Solutions | 143.4 | 87.3 | 440.2 | 87.3 | ||||||||||||
All Other | 40.2 | 40.2 | 123.3 | 132.4 | ||||||||||||
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Total | $ | 580.9 | $ | 476.7 | $ | 1,698.4 | $ | 1,102.0 | ||||||||
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Gross profit | ||||||||||||||||
Route Based Services | $ | 249.2 | $ | 216.5 | $ | 710.9 | $ | 541.7 | ||||||||
Coffee, Tea and Extract Solutions | 36.8 | 24.5 | 117.9 | 24.5 | ||||||||||||
All Other | 6.8 | 6.7 | 19.9 | 25.4 | ||||||||||||
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Total | $ | 292.8 | $ | 247.7 | $ | 848.7 | $ | 591.6 | ||||||||
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Operating income (loss) | ||||||||||||||||
Route Based Services | $ | 34.6 | $ | 21.2 | $ | 66.3 | $ | 44.7 | ||||||||
Coffee, Tea and Extract Solutions | 3.7 | (0.1 | ) | 13.3 | (0.1 | ) | ||||||||||
All Other | 4.7 | 0.7 | 6.9 | 7.5 | ||||||||||||
Corporate | (15.8 | ) | (8.2 | ) | (37.6 | ) | (33.3 | ) | ||||||||
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Total | $ | 27.2 | $ | 13.6 | $ | 48.9 | $ | 18.8 | ||||||||
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segment for the three and six months ended June 27, 2020 and June 29, 2019:
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||||||||||
| Revenue, net | |||||||||||||||||||||||||||||||||||
| North America | $ | 363.9 | $ | 323.5 | $ | 714.6 | $ | 621.6 | |||||||||||||||||||||||||||
| Rest of World | 92.9 | 132.1 | 216.4 | 254.5 | |||||||||||||||||||||||||||||||
| All Other | — | — | — | 7.2 | |||||||||||||||||||||||||||||||
| Total | $ | 456.8 | $ | 455.6 | $ | 931.0 | $ | 883.3 | |||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| North America | $ | 205.9 | $ | 196.3 | $ | 412.0 | $ | 371.9 | |||||||||||||||||||||||||||
| Rest of World | 48.8 | 75.3 | 116.0 | 142.5 | |||||||||||||||||||||||||||||||
| All Other | — | — | — | 0.3 | |||||||||||||||||||||||||||||||
| Total | $ | 254.7 | $ | 271.6 | $ | 528.0 | $ | 514.7 | |||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||
| North America | $ | 175.5 | $ | 171.8 | $ | 352.7 | $ | 334.4 | |||||||||||||||||||||||||||
| Rest of World | 60.1 | 64.4 | 126.7 | 124.8 | |||||||||||||||||||||||||||||||
| All Other | 11.1 | 9.5 | 22.4 | 22.3 | |||||||||||||||||||||||||||||||
| Total | $ | 246.7 | $ | 245.7 | $ | 501.8 | $ | 481.5 | |||||||||||||||||||||||||||
| Operating income (loss) | |||||||||||||||||||||||||||||||||||
| North America | $ | 24.4 | $ | 21.9 | $ | 48.1 | $ | 32.1 | |||||||||||||||||||||||||||
| Rest of World | (126.6) | 9.0 | (127.1) | 14.3 | |||||||||||||||||||||||||||||||
| All Other | (11.8) | (9.4) | (39.0) | (24.2) | |||||||||||||||||||||||||||||||
| Total | $ | (114.0) | $ | 21.5 | $ | (118.0) | $ | 22.2 | |||||||||||||||||||||||||||
| For the Three Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Revenue, net | ||||||||||||||||
Home and office bottled water delivery | $ | 268.0 | $ | — | $ | — | $ | 268.0 | ||||||||
Coffee and tea services | 44.2 | 120.9 | 0.7 | 165.8 | ||||||||||||
Retail | 43.5 | — | 11.7 | 55.2 | ||||||||||||
Other | 41.6 | 22.5 | 27.8 | 91.9 | ||||||||||||
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Total | $ | 397.3 | $ | 143.4 | $ | 40.2 | $ | 580.9 | ||||||||
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| |||||||||
(in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total For the Nine Months Ended September 30, 2017 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 753.7 $ — $ — $ 753.7 134.9 369.6 2.0 506.5 127.8 — 33.9 161.7 118.5 70.6 87.4 276.5 $ 1,134.9 $ 440.2 $ 123.3 $ 1,698.4 For the Three Months Ended October 1, 2016 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 235.9 $ — $ — $ 235.9 38.9 72.0 2.0 112.9 42.9 — 10.0 52.9 31.5 15.3 28.2 75.0 $ 349.2 $ 87.3 $ 40.2 $ 476.7 For the Nine Months Ended October 1, 2016 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 575.1 $ — $ — $ 575.1 100.4 72.0 2.0 174.4 127.7 — 37.8 165.5 79.1 15.3 92.6 187.0 $ 882.3 $ 87.3 $ 132.4 $ 1,102.0
June 29, 2019:
| For the Three Months Ended June 27, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Revenue, net | |||||||||||||||||||||||||||||||||||||||||
| Water Direct/Water Exchange | $ | 225.8 | $ | 42.3 | $ | — | $ | 268.1 | |||||||||||||||||||||||||||||||||
| Water Refill/Water Filtration | 51.2 | 6.3 | — | 57.5 | |||||||||||||||||||||||||||||||||||||
| Other Water | 42.5 | 14.3 | — | 56.8 | |||||||||||||||||||||||||||||||||||||
| Water Dispensers | 20.8 | — | — | 20.8 | |||||||||||||||||||||||||||||||||||||
| Other | 23.6 | 30.0 | — | 53.6 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 363.9 | $ | 92.9 | $ | — | $ | 456.8 | |||||||||||||||||||||||||||||||||
| For the Six Months Ended June 27, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Revenue, net | |||||||||||||||||||||||||||||||||||||||||
| Water Direct/Water Exchange | $ | 463.2 | $ | 100.1 | $ | — | $ | 563.3 | |||||||||||||||||||||||||||||||||
| Water Refill/Water Filtration | 74.9 | 13.4 | — | 88.3 | |||||||||||||||||||||||||||||||||||||
| Other Water | 84.7 | 27.5 | — | 112.2 | |||||||||||||||||||||||||||||||||||||
| Water Dispensers | 26.7 | — | — | 26.7 | |||||||||||||||||||||||||||||||||||||
| Other | 65.1 | 75.4 | — | 140.5 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 714.6 | $ | 216.4 | $ | — | $ | 931.0 | |||||||||||||||||||||||||||||||||
| For the Three Months Ended June 29, 2019 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Revenue, net | |||||||||||||||||||||||||||||||||||||||||
| Water Direct/Water Exchange | $ | 229.7 | $ | 66.0 | $ | — | $ | 295.7 | |||||||||||||||||||||||||||||||||
| Water Refill/Water Filtration | 8.8 | 6.5 | — | 15.3 | |||||||||||||||||||||||||||||||||||||
| Other Water | 41.6 | 16.5 | — | 58.1 | |||||||||||||||||||||||||||||||||||||
| Water Dispensers | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other | 43.4 | 43.1 | — | 86.5 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 323.5 | $ | 132.1 | $ | — | $ | 455.6 | |||||||||||||||||||||||||||||||||
| For the Six Months Ended June 29, 2019 | |||||||||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | North America | Rest of World | All Other | Total | |||||||||||||||||||||||||||||||||||||
| Revenue, net | |||||||||||||||||||||||||||||||||||||||||
| Water Direct/Water Exchange | $ | 436.2 | $ | 123.7 | $ | — | $ | 559.9 | |||||||||||||||||||||||||||||||||
| Water Refill/Water Filtration | 17.7 | 12.9 | — | 30.6 | |||||||||||||||||||||||||||||||||||||
| Other Water | 81.3 | 27.6 | — | 108.9 | |||||||||||||||||||||||||||||||||||||
| Water Dispensers | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other | 86.4 | 90.3 | 7.2 | 183.9 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 621.6 | $ | 254.5 | $ | 7.2 | $ | 883.3 | |||||||||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||||||||||
| Net (loss) income from continuing operations | $ | (131.7) | $ | 2.7 | $ | (159.1) | $ | (20.0) | |||||||||||||||||||||||||||
| Interest expense, net | 20.7 | 18.8 | 40.4 | 38.1 | |||||||||||||||||||||||||||||||
| Income tax (benefit) expense | (1.4) | 2.2 | (4.7) | 0.8 | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 52.8 | 42.9 | 97.8 | 82.6 | |||||||||||||||||||||||||||||||
| EBITDA | $ | (59.6) | $ | 66.6 | $ | (25.6) | $ | 101.5 | |||||||||||||||||||||||||||
Acquisition and integration costs 1 | 4.3 | 2.7 | 25.1 | 7.4 | |||||||||||||||||||||||||||||||
| Share-based compensation costs | 4.9 | 3.0 | 7.3 | 6.1 | |||||||||||||||||||||||||||||||
| COVID-19 costs | 15.4 | — | 16.8 | — | |||||||||||||||||||||||||||||||
| Goodwill and intangible asset impairment charges | 115.2 | — | 115.2 | — | |||||||||||||||||||||||||||||||
| Foreign exchange and other (gains) losses, net | (1.1) | (0.7) | 5.2 | 0.3 | |||||||||||||||||||||||||||||||
| Loss on disposal of property, plant and equipment, net | 2.5 | 1.7 | 3.9 | 3.6 | |||||||||||||||||||||||||||||||
| (Gain) loss on sale of business | (0.6) | 0.6 | (0.6) | 6.0 | |||||||||||||||||||||||||||||||
| Other adjustments, net | 1.5 | 0.8 | 5.6 | 3.5 | |||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 82.5 | $ | 74.7 | $ | 152.9 | $ | 128.4 | |||||||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Net income (loss) from continuing operations | $ | 1.6 | $ | (4.0 | ) | $ | (13.1 | ) | $ | (5.6 | ) | |||||
Interest expense, net | 23.2 | 14.5 | 62.1 | 29.2 | ||||||||||||
Income tax expense (benefit) | 0.9 | 2.9 | 1.0 | (4.8 | ) | |||||||||||
Depreciation & amortization | 49.4 | 41.2 | 141.8 | 102.6 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EBITDA | $ | 75.1 | $ | 54.6 | $ | 191.8 | $ | 121.4 | ||||||||
Acquisition and integration costs1 | 3.2 | 7.4 | 17.2 | 20.5 | ||||||||||||
Inventorystep-up | — | 4.2 | — | 4.7 | ||||||||||||
Unrealized commodity hedging gain, net | (0.4 | ) | (1.0 | ) | (1.9 | ) | (0.8 | ) | ||||||||
Foreign exchange and other (gains) losses, net | (0.2 | ) | 0.8 | (1.1 | ) | (0.5 | ) | |||||||||
Loss on disposal of property, plant & equipment, net | — | 1.4 | 5.7 | 4.6 | ||||||||||||
Gain on extinguishment of long-term debt | — | — | (1.5 | ) | — | |||||||||||
Share-based compensation costs | 1.9 | 0.2 | 8.7 | 4.4 | ||||||||||||
Other adjustments | 4.3 | 0.9 | 6.3 | 1.8 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Adjusted EBITDA | $ | 83.9 | $ | 68.5 | $ | 225.2 | $ | 156.1 | ||||||||
|
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|
|
|
|
|
| |||||||||
The following table summarizes our adjusted net income (loss) from continuing operations and adjusted net income (loss) per common share from continuing operations for the three and ninesix months ended September 30, 2017 and October 1, 2016:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in millions of U.S. dollars, except share amounts) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Net income (loss) from continuing operations | $ | 1.6 | $ | (4.0 | ) | $ | (13.1 | ) | $ | (5.6 | ) | |||||
Acquisition and integration costs | 3.2 | 7.4 | 17.2 | 20.5 | ||||||||||||
Inventorystep-up | — | 4.2 | — | 4.7 | ||||||||||||
Unrealized commodity hedging gain, net | (0.4 | ) | (1.0 | ) | (1.9 | ) | (0.8 | ) | ||||||||
Foreign exchange and other (gains) losses, net | (0.2 | ) | 0.8 | (1.1 | ) | (0.5 | ) | |||||||||
Loss on disposal of property, plant & equipment, net | — | 1.4 | 5.7 | 4.6 | ||||||||||||
Interest payment on 2024 Notes1 | — | 2.4 | — | 2.4 | ||||||||||||
Interest expense on 2020 Notes2 | — | (10.7 | ) | (9.5 | ) | (31.9 | ) | |||||||||
Tax valuation allowance | — | 8.5 | — | 8.5 | ||||||||||||
Gain on extinguishment of long-term debt | — | — | (1.5 | ) | — | |||||||||||
Other adjustments | 4.3 | 0.9 | 6.3 | 1.8 | ||||||||||||
Adjustments for tax effect3 | 0.1 | (4.5 | ) | (1.4 | ) | (10.7 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Adjusted net income (loss) from continuing operations | $ | 8.6 | $ | 5.4 | $ | 0.7 | $ | (7.0 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Adjusted net income (loss) per common share from continuing operations | ||||||||||||||||
Basic | $ | 0.06 | $ | 0.04 | $ | 0.01 | $ | (0.06 | ) | |||||||
Diluted | $ | 0.06 | $ | 0.04 | $ | 0.01 | $ | (0.06 | ) | |||||||
Weighted average common shares outstanding (in millions) | ||||||||||||||||
Basic | 139.2 | 138.2 | 139.0 | 124.9 | ||||||||||||
Diluted | 141.0 | 139.3 | 140.2 | 124.9 | ||||||||||||
The following table summarizes our free cash flow and adjusted free cash flow for the three and nine months ended September 30, 2017 and October 1, 2016:
| For the Three Months Ended | ||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | ||||||
Net cash provided by operating activities from continuing operations | $ | 46.2 | $ | 51.1 | ||||
Less: Additions to property, plant & equipment | (38.2 | ) | (32.4 | ) | ||||
|
|
|
| |||||
Free Cash Flow | $ | 8.0 | $ | 18.7 | ||||
|
|
|
| |||||
Plus: | ||||||||
Acquisition and integration cash costs | 4.6 | 14.1 | ||||||
|
|
|
| |||||
Adjusted Free Cash Flow | $ | 12.6 | $ | 32.8 | ||||
|
|
|
| |||||
| For the Nine Months Ended | ||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | ||||||
Net cash provided by operating activities from continuing operations | $ | 138.7 | $ | 71.9 | ||||
Less: Additions to property, plant & equipment | (97.1 | ) | (69.3 | ) | ||||
|
|
|
| |||||
Free Cash Flow | $ | 41.6 | $ | 2.6 | ||||
|
|
|
| |||||
Plus: | ||||||||
Acquisition and integration cash costs | 16.9 | 16.0 | ||||||
|
|
|
| |||||
Adjusted Free Cash Flow | $ | 58.5 | $ | 18.6 | ||||
|
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| |||||
Eden business.
Route Based Services
Coffee, Teaperiod due primarily to a decline in water consumption and Extract Solutions net revenue increased $56.1volumes due to the impact of COVID-19.
All Other net2020 for which minimal tax benefit is recognized.
Cost of Sales
Cost of sales represented 49.6% and 50.0% ofperiod.
Cott Beverages LLC business, which was sold in the first quarter of 2019.
Selling, General and Administrative Expenses
SG&A expensesperiod.
Operating Income
Operating income increasedpricing initiatives, partially offset by a decline in water and office coffee services consumption and volumes as a result of the impact of COVID-19.
Other Expense (Income), Net
Other expense, net was $1.5COVID-19.
Interest Expense, Net
Interest expense, net was $23.2 million and $62.1 million for the third quarter and year to date, respectively, compared to $14.5 million and $29.2operating income of $22.2 million in the comparable prior year periodsperiod.
Cott Beverages LLC business in the prior year period.
period. The effective tax ratesrate for the three and nine months ended September 30, 2017year to date was 2.9% compared to (4.2)% in the comparable prior year period.
The effective tax rate differs from the Canadian statutory rate during the three and nine months ended September 30, 2017 and October 1, 2016 primarily due to: (a) losses incurred in tax jurisdictions for which we have not recognized a tax benefit; (b) permanent differences for which we recognized a tax benefit; (c) income in tax jurisdictions with lower statutory tax rates than Canada; and (d) the Canadian valuation allowance recorded in the third quarter of 2016.
The pending transaction with Refresco is anticipated to generate a gain on sale which could result in a U.S. valuation allowance release and recognition of a material income tax benefit within the next twelve months.
recognized.
28, 2019. Our cash and cash equivalents balances as of June 27, 2020 and December 28, 2019 include $12.4 million of cash proceeds received from the sale of our legacy carbonated soft drink and juice business and our Royal Crown International finished goods export business that are being held in escrow by a third party escrow agent to secure potential indemnification claims. Our cash and cash equivalents balances as of June 27, 2020 and December 28, 2019 also include $0.5 million of cash proceeds received from the sale of our Cott Beverages LLC business that are being held in escrow by a third party escrow agent to secure potential indemnification claims. In July 2020, a settlement agreement was reached with Refresco, the buyer of both businesses. In exchange for a settlement of pending and future claims, $4.0 million of the escrow funds were released to Refresco. The remaining $8.4 million and $0.5 million were released to us.
subsidiaries.
We intend However, the covenants in our Revolving Credit Facility subject such purchases to use the proceeds of the Refresco transaction to repay our outstanding ABL facility indebtednesscertain limitations and to redeem the 5.375% senior notes due 2022 from our discontinued operations and the remaining DSS Notes from our continuing operations.
conditions.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | October 1, | September 30, | October 1, | |||||||||||||
(in millions of U.S. dollars) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net cash provided by operating activities from continuing operations | $ | 46.2 | $ | 51.1 | $ | 138.7 | $ | 71.9 | ||||||||
Net cash used in investing activities from continuing operations | (41.4 | ) | (944.8 | ) | (129.6 | ) | (1,028.8 | ) | ||||||||
Net cash (used in) provided by financing activities from continuing operations | (6.7 | ) | (30.6 | ) | 605.7 | 816.4 | ||||||||||
Cash flows from discontinued operations: | ||||||||||||||||
Net cash provided by operating activities from discontinued operations | 47.4 | 44.9 | 56.1 | 87.5 | ||||||||||||
Net cash used in investing activities from discontinued operations | (13.3 | ) | (8.2 | ) | (36.7 | ) | (29.3 | ) | ||||||||
Net cash (used in) provided by financing activities from discontinued operations | (9.2 | ) | 257.9 | (610.5 | ) | 128.3 | ||||||||||
Effect of exchange rate changes on cash | 2.0 | (4.0 | ) | 6.4 | (4.2 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 25.0 | (633.7 | ) | 30.1 | 41.8 | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 123.2 | 752.6 | 118.1 | 77.1 | ||||||||||||
|
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|
|
|
|
|
| |||||||||
Cash & cash equivalents, end of period | 148.2 | 118.9 | 148.2 | 118.9 | ||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 66.2 | 27.5 | 66.2 | 27.5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash & cash equivalents from continuing operations, end of period | $ | 82.0 | $ | 91.4 | $ | 82.0 | $ | 91.4 | ||||||||
|
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| |||||||||
Consolidated Financial Statements:
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||
| (in millions of U.S. dollars) | June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||||||||||||||||||||
| Net cash provided by operating activities from continuing operations | $ | 65.5 | $ | 1.2 | $ | 70.2 | $ | 16.3 | |||||||||||||||||||||||||||
| Net cash used in investing activities from continuing operations | (41.4) | (46.2) | (501.6) | (22.2) | |||||||||||||||||||||||||||||||
| Net cash provided by (used in) financing activities from continuing operations | 76.0 | 1.6 | 63.2 | (45.1) | |||||||||||||||||||||||||||||||
| Cash flows from discontinued operations: | |||||||||||||||||||||||||||||||||||
| Net cash (used in) provided by operating activities from discontinued operations | (0.7) | 7.1 | (18.0) | 15.6 | |||||||||||||||||||||||||||||||
| Net cash (used in) provided by investing activities from discontinued operations | (1.6) | (4.1) | 392.9 | (23.2) | |||||||||||||||||||||||||||||||
| Net cash used in financing activities from discontinued operations | — | (0.2) | (0.1) | (0.2) | |||||||||||||||||||||||||||||||
| Effect of exchange rate changes on cash | 1.1 | 0.1 | (1.0) | 1.4 | |||||||||||||||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 98.9 | (40.5) | 5.6 | (57.4) | |||||||||||||||||||||||||||||||
| Cash and cash equivalents and restricted cash, beginning of period | 112.2 | 153.9 | 205.5 | 170.8 | |||||||||||||||||||||||||||||||
| Cash and cash equivalents and restricted cash from continuing operations, end of period | $ | 211.1 | $ | 113.4 | $ | 211.1 | $ | 113.4 | |||||||||||||||||||||||||||
period.
Financing Activities
Cash provided by financing activities from continuing operations was $605.7 million year to date compared to $816.4 million in the comparable prior year period. The $210.7 million decrease was due primarily to the receipt of net proceeds from the issuance of common shares and the 2024 Notes in the prior year period, partially offset by the issuance of our 2025 Notes and the partial redemption of our DSS Notes.
June 27, 2020.
Except as described below, there were
In March 2017, we issued $750.0 million of 5.500% senior notes due April 1, 2025. The interest on the notes is payable semi-annually on April 1st and October 1st of each year commencing October 1, 2017. We used a portion of these proceeds to redeem $202.3 million aggregate principal amount of our 2020 Notes in a cash tender offer in March 2017, $422.7 million to redeem the remaining aggregate principal amount of our 2020 Notes in April 2017 and $100.0 million to redeem a portion of the aggregate principal amount of our DSS Notes in May 2017.
In connection with
2019 Annual Report.
ABLissuance.
June 27, 2020.
record at the close of business on November 28, 2017. Cott intends19, 2020. We intend to pay a regular quarterly dividend on itsour common shares subject to, among other things, the best interests of itsour shareowners, Cott’sour results of continuing operations, cash balances and future cash requirements, financial condition, statutory regulations and covenants set forth in the ABL facilityRevolving Credit Facility and indentures governing our outstanding notes as well as other factors that the boardBoard of directorsDirectors may deem relevant from time to time.
Consolidated Financial Statements.
We
Recent Accounting Pronouncements
On July 24, 2017, we entered into a Share Purchase Agreement with Refresco Group N.V., a Netherlands limited liability company (“Refresco”), to sell our Traditional Business in the United States, Canada, Mexico and United Kingdom for $1.25 billion in cash. The transaction, which is expected to close near the end of 2017, is subject to certain customary closing conditions, including regulatory approval from the United Kingdom. If any closing conditions are not met, the closing of the transaction may be delayed or fail to occur, and we may not achieve the intended benefits we anticipate. Other risks and uncertainties related to the pending transaction include, among others: the difficulties in the separation of operations, services, products and personnel; the need to provide significant ongoing post-closing transition support to Refresco; and the obligation to indemnify or reimburse Refresco for certain past liabilities of the divested business. In addition, we have incurred and will continue to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the transaction, as well as the diversion of management resources, for which we will receive little or no benefit if the closing of the transaction does not occur. We may not be successful in managing these or any other significant risks that we may encounter arising from the transaction, which could have a material adverse effect on our business.
Withholding
| Total Number of | Maximum Number | |||||||||||||||
| Common Shares | (or Dollar Value) of | |||||||||||||||
| Total | Purchased as | Common Shares | ||||||||||||||
| Number of | Average Price | Part of Publicly | that May Yet Be | |||||||||||||
| Common Shares | Paid per | Announced Plans | Purchased Under the | |||||||||||||
| Purchased | Common Share | or Programs | Plans or Programs | |||||||||||||
July 2017 | — | $ | — | N/A | N/A | |||||||||||
August 2017 | 13,770 | $ | 15.33 | N/A | N/A | |||||||||||
September 2017 | — | $ | — | N/A | N/A | |||||||||||
|
| |||||||||||||||
Total | 13,770 | |||||||||||||||
|
| |||||||||||||||
| Total Number of Common Shares Purchased | Average Price Paid per Common Share | Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||
| March 29, 2019 - April 30, 2020 | 8,792 | $ | 9.27 | N/A | N/A | ||||||||||||||||||
| May 1, 2020 - May 31, 2020 | 6,937 | $ | 10.32 | N/A | N/A | ||||||||||||||||||
| June 1, 2020 - June 27, 2020 | 4,249 | $ | 12.41 | N/A | N/A | ||||||||||||||||||
| Total | 19,978 | ||||||||||||||||||||||
| Incorporated by Reference | Filed or Furnished Herewith | ||||||||||||||||||||||||||||||||||
| Exhibit No. | Description of Exhibit | Form | Exhibit | Filing Date | File No. | ||||||||||||||||||||||||||||||
| 3.1 | 8-K | 3.1 | 3/5/2020 | 001-31410 | |||||||||||||||||||||||||||||||
| 3.2 | 8-A | 3.2 | 5/4/2018 | 001-31410 | |||||||||||||||||||||||||||||||
10.1 (1) | * | ||||||||||||||||||||||||||||||||||
10.2 (1) | * | ||||||||||||||||||||||||||||||||||
10.3 (1) | * | ||||||||||||||||||||||||||||||||||
| 31.1 | * | ||||||||||||||||||||||||||||||||||
| 31.2 | * | ||||||||||||||||||||||||||||||||||
| 32.1 | * | ||||||||||||||||||||||||||||||||||
| 32.2 | * | ||||||||||||||||||||||||||||||||||
| 101 | The following financial statements from Primo Water Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 27, 2020, filed August 6, 2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, (vi) Notes to the Consolidated Financial Statements. | * | |||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | * | |||||||||||||||||||||||||||||||||
COTTPRIMO WATER CORPORATION(Registrant) Date: November 9, 2017August 6, 2020/s/ Jay Wells Jay Wells Chief Financial Officer (On behalf of the Company) Date: November 9, 2017August 6, 2020/s/ Jason Ausher Jason Ausher Chief Accounting Officer (Principal Accounting Officer) 68