United States
                       Securities and Exchange Commission
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

|X|   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 30, 2006

[ ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

              For the transition period from ________ to ________

                        Commission file number 000-19914

                                COTT CORPORATION

             (Exact name of registrant as specified in its charter)

                   CANADA                                     NONE
(State or Other Jurisdiction of Incorporation  (IRS Employer Identification No.)
              or Organization)

           207 QUEEN'S QUAY WEST, SUITE 340,
               TORONTO, ONTARIO, CANADA                      M5J 1A7

        4211 W. BOY SCOUT BOULEVARD, SUITE 290
             TAMPA, FLORIDA, UNITED STATES                    33607
       (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code: (416) 203-3898

          Securities registered pursuant to Section 12(b) of the Act:

        Title of each class            Name of each exchange on which registered
        -------------------            -----------------------------------------
COMMON SHARES WITHOUT NOMINAL OR                NEW YORK STOCK EXCHANGE
           PAR VALUE

        Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |X| No [ ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No |X|

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K or any
amendment to this form 10-K. |X|

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer |X|    Accelerated filer [ ]   Non-accelerated filer [ ]

Indicate by check mark if the registrant is a shell company (as defined in Rule
12b-12 of the Act). Yes [ ] No |X|

The aggregate market value of the common equity held by non-affiliates of the
registrant as of June 30, 2006 (based on the closing sale price of the
registrant's common stock as reported on the New York Stock Exchange on June 30,
2006) was $929,031,671.

(Reference is made to the last paragraph of Part II, Item 5 for a statement of
assumptions upon which the calculation is made.)

The number of shares outstanding of the registrant's common stock as of February
19, 2007 was 71,749,630.

                                       1


                                TABLE OF CONTENTS



                                                                                                                        PAGE
                                                                                                                        ----
                                                                                                                     
                                                         PART I
Item 1   Business.....................................................................................................    5
Item 1A  Risk factors.................................................................................................    9
Item 1B  Unresolved staff comments....................................................................................   13
Item 2   Properties...................................................................................................   13
Item 3   Legal proceedings............................................................................................   13
Item 4   Submission of matters to a vote of security holders..........................................................   14
         Supplemental Item Part I - Executive officers of Cott Corporation............................................   15

                                                         PART II

Item 5   Market for the registrant's common equity and related shareowner matters ....................................   17
Item 6   Selected financial data .....................................................................................   19
Item 7   Management's discussion and analysis of financial condition and results of operations .......................   20

Item 7A  Quantitative and qualitative disclosures about market risk ..................................................   33
Item 8   Financial statements and supplementary data

              Report of management....................................................................................   34
              Report of independent registered public accounting firm.................................................   35
              Consolidated Statements of (Loss) Income for fiscal years ended 2006, 2005 and 2004.....................   37
              Consolidated Balance Sheets as of the 2006 and 2005 fiscal year end.....................................   38
              Consolidated Statements of Shareowners' Equity for the 2006, 2005 and 2004 fiscal year end..............   39
              Consolidated Statements of Cash Flows for the 2006, 2005 and 2004 fiscal year end.......................   40
              Notes to the Consolidated Financial Statements for the 2006, 2005 and 2004 fiscal year end..............   41
              Quarterly Financial Information.........................................................................   58

Item 9   Changes in and disagreements with accountants on accounting and financial disclosure.........................   59

Item 9A  Controls and procedures......................................................................................   59

                                                        PART III

Item 10  Directors and executive officers.............................................................................   61
Item 11  Executive compensation.......................................................................................   61
Item 12  Security ownership of certain beneficial owners and management and related shareowner matters................   61
Item 13  Certain relationships and related transactions...............................................................   61
Item 14  Principal accountant fees and services ......................................................................   61

                                                         PART IV

Item 15  Exhibits and financial statement schedules ..................................................................   62


Our consolidated financial statements are prepared in accordance with United
States ("U.S.") generally accepted accounting principles ("GAAP") in U.S.
dollars. Unless otherwise indicated, all amounts in this report are in U.S.
dollars and U.S. GAAP.

      Any reference to 2006, 2005 and 2004 corresponds to our fiscal years ended
December 30, 2006, December 31, 2005, and January 1, 2005, respectively.

                                       2


DOCUMENTS INCORPORATED BY REFERENCE

Portions of our definitive proxy statement for the 2007 Annual and Special
Meeting of Shareowners, to be filed within 120 days of December 30, 2006, are
incorporated by reference in Part III.

      Such proxy statement, except for the parts therein which have been
specifically incorporated by reference, shall not be deemed "filed" for the
purposes of this report on Form 10-K.

FORWARD-LOOKING STATEMENTS

In addition to historical information, this report and the reports and documents
incorporated by reference in this report contain statements relating to future
events and our future results. These statements are "forward-looking" within the
meaning of the Private Securities Litigation Reform Act of 1995 and applicable
Canadian securities legislation and include, but are not limited to, statements
that relate to projections of sales, earnings, earnings per share, cash flows,
capital expenditures or other financial items, discussions of estimated future
revenue enhancements and cost savings. These statements also relate to our
business strategy, goals and expectations concerning our market position, future
operations, margins, profitability, liquidity and capital resources. Generally,
words such as "anticipate", "believe", "continue", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "project", "should" and similar
terms and phrases are used to identify forward-looking statements in this report
and in the documents incorporated in this report by reference. These
forward-looking statements are made as of the date of this report.

      Although we believe the assumptions underlying these forward-looking
statements are reasonable, any of these assumptions could prove to be inaccurate
and, as a result, the forward-looking statements based on those assumptions
could be incorrect. Our operations involve risks and uncertainties, many of
which are outside of our control, and any one or any combination of these risks
and uncertainties could also affect whether the forward-looking statements
ultimately prove to be correct.

      The following are some of the factors that could affect our financial
performance, including but not limited to sales, earnings and cash flows, or
could cause actual results to differ materially from estimates contained in or
underlying the forward-looking statements:

- -     changing nature of the North American business;

- -     our ability to successfully implement our cost reduction program, restore
      plant efficiencies and lower logistics and other costs;

- -     our ability to grow our business outside of North America, including in
      new geographic areas;

- -     our ability to expand our business to new channels and products;

- -     our ability to integrate new management and a new management structure;

- -     loss of key customers, particularly Wal-Mart, and the commitment of our
      customers to their own Cott-supplied beverage programs;

- -     increases in competitor consolidations and other marketplace competition,
      particularly among manufacturers of branded beverage products;

- -     our ability to identify acquisition and alliance candidates and to
      integrate into our operations the businesses and product lines that we
      acquire or become allied with;

- -     our ability to secure additional production capacity either through
      acquisitions, or third party manufacturing arrangements;

- -     increase in interest rates;

- -     fluctuations in the cost and availability of beverage ingredients and
      packaging supplies, and our ability to maintain favorable arrangements and
      relationships with our suppliers;

- -     our ability to pass on increased costs to our customers and the impact
      those increased prices could have on our volumes;

- -     unseasonably cold or wet weather, which could reduce demand for our
      beverages;

- -     our ability to protect the intellectual property inherent in new and
      existing products;

- -     adverse rulings, judgments or settlements in our existing litigation and
      regulatory reviews, and the possibility that additional litigation or
      regulatory reviews will be brought against us;

- -     product recalls or changes in or increased enforcement of the laws and
      regulations that affect our business;

- -     currency fluctuations that adversely affect the exchange between the U.S.
      dollar on one hand and the pound sterling, the Canadian dollar, the
      Mexican peso and other currencies on the other;

- -     changes in tax laws and interpretations of tax laws;

- -     changes in consumer tastes and preferences and market demand for new and
      existing products and our ability to develop new products that appeal to
      changing consumer tastes;

- -     interruption in transportation systems, labor strikes, work stoppages and
      other interruptions or difficulties in the employment of labor or
      transportation in our markets; and

- -     changes in general economic and business conditions.

                                       3


      Many of these factors are described in greater detail in this report and
in other filings that we make with the U.S. Securities and Exchange Commission
("SEC") and Canadian securities regulatory authorities. We undertake no
obligation to update any information contained in this report or to publicly
release the results of any revisions to forward-looking statements to reflect
events or circumstances of which we may become aware of after the date of this
report. Undue reliance should not be placed on forward-looking statements.

      All future written and oral forward-looking statements attributable to us
or persons acting on our behalf are expressly qualified in their entirety by the
foregoing.

NON-GAAP FINANCIAL MEASURES

In this Annual Report on Form 10-K for the year ended December 30, 2006, we use
the non-GAAP measure cash flow from operations after capital expenditures. We
believe this measure is useful to our investors because it measures cash we are
able to generate after considering the investments required to maintain or
expand our capital base. A reconciliation to cash provided by operating
activities is presented on page 23 of this Annual Report on Form 10-K.

                                       4


PART I

ITEM 1.

BUSINESS

OUR COMPANY

We operate our business in North America through our indirect wholly owned
subsidiary, Cott Beverages Inc., in the United States and through Cott
Corporation in Canada. We operate our International business (as defined below)
through several subsidiaries including our indirect wholly owned subsidiary,
Cott Beverages Ltd., in the U.K. and Europe, and through an indirect 90% owned
subsidiary, Cott Embotelladores de Mexico, S.A. de C.V., in Mexico. References
throughout this report to North America or our North American business mean,
unless otherwise indicated, Canada and the United States. References throughout
this report to International mean, unless otherwise indicated, U.K., Europe,
Mexico and Asia as well as our Royal Crown International business.

We incorporated in 1955 and are governed by the Canada Business Corporations
Act. Our registered Canadian office is located at 333 Avro Avenue,
Pointe-Claire, Quebec, Canada H9R 5W3 and our principal executive offices are
located at 207 Queen's Quay  West, Suite 340, Toronto, Ontario, Canada M5J 1A7
and 4211 W. Boy Scout Boulevard, Suite 290, Tampa, Florida, United States 33607.

PRINCIPAL MARKETS AND PRODUCTS

We are one of the world's largest non-alcoholic beverage companies and the
world's largest retailer brand soft drink provider. Based on industry
information, we estimate that we produce (either directly or through third party
manufacturers with whom we have co-packing agreements) approximately 68% of all
retailer brand carbonated soft drinks sold in North America. We produce directly
55% of those sold in the U.K. In addition to carbonated soft drinks, our product
lines include clear, sparkling flavored waters, juice-based products, bottled
water, energy drinks and ready-to-drink teas. During the year ended December 30,
2006, approximately 93% of all of the beverages we sell in North America and the
U.K., measured in 8-ounce equivalent cases, are under customer controlled
retailer brands, and the remainder are sold under brand names that we either own
or license from others. Eight-ounce equivalent cases is a standard industry
measure equaling 24 8-ounce servings (192 U.S. fluid ounces), and does not
equate to physical cases. Sales of carbonated soft drinks including sparkling
flavored waters and energy drinks represented approximately 83% of our sales
volume in 8-ounce equivalent cases. Sales of bottled water represented 8% of our
sales volume in 8-ounce equivalent cases. The balance of 9% represented sales of
ready-to-drink teas, still flavored waters and other non-carbonated beverages.

      In recent years, we expanded our business through acquisitions and growth
with key customers. We believe that opportunities exist to increase sales of
beverages in our markets by leveraging existing customer relationships,
obtaining new customers, exploring new channels of distribution and introducing
new products.

      From 2002 to 2005, we expanded our production and distribution
capabilities in North America and International through a series of acquisitions
totaling $250.1 million.

NORTH AMERICAN REALIGNMENT AND COST REDUCTION ACTIVITIES

In September 2005 we announced our plan to realign the management of our
Canadian and U.S. businesses to a North American basis, rationalize product
offerings, eliminate underperforming assets and increase focus on high potential
accounts.

      In conjunction with the North American realignment plan, we closed our
Lachine, Quebec ("Lachine") juice plant in February 2006 and in March 2006 we
closed our Columbus, Ohio ("Columbus") soft drink plant and warehouse to bring
production capacity in line with the needs of our customers.

      On July 27, 2006, we announced the realignment of the management of our
U.K. and Europe business, our Mexican business, our Royal Crown International
business and our business in Asia to an International basis, to focus on
customer management, channel development, sales and marketing.

      On October 26, 2006, we announced the closures of our manufacturing plant
in Elizabethtown, Kentucky ("Elizabethtown") and our manufacturing plant and
warehouse in Wyomissing, Pennsylvania ("Wyomissing"). We ceased production at
both plants on December 30, 2006, and reallocated production volume to other
manufacturing sites in North America. The Wyomissing warehouse was still in
operation as of December 30, 2006 and is expected to be closed in 2007.

FINANCIAL INFORMATION ABOUT SEGMENTS

For financial information about segments and geographic areas, see note 23 to
the consolidated financial statements, found on pages 56 to 57 of this Annual
Report on Form 10-K.

MANUFACTURING AND DISTRIBUTION

Approximately 94% of our beverages produced in North America were manufactured
in facilities that we, or third

                                       5


party manufacturers with whom we have long-term co-packing agreements, either
own or lease. We manufacture virtually all of our U.K. and Mexican beverages in
facilities that we either own or lease. We rely on third parties to produce and
distribute products in areas or markets where we do not have our own production
facilities, such as continental Europe, or when additional production capacity
is required.

      Our products are either picked up by customers at our facilities or
delivered by us, a common carrier, or third party distributors to the customer's
distribution centers or directly to retail locations.

      Subject to the terms and conditions of the applicable policies, we are
insured against product liability claims and product recalls that could result
from the injury, illness or death of consumers using our products, contamination
of our products, or damage to or mislabeling of our products. We believe that
our insurance coverage is adequate. Our insurers are comfortable with our
deductibles given our operational risk profile, our claims history and our
financial stability.

INGREDIENTS AND PACKAGING SUPPLIES

In addition to water, the principal raw materials required to produce our
products are polyethylene terephthalate ("PET") bottles, caps and PET preforms,
aluminum cans and ends, labels, cartons and trays, concentrates, sweeteners and
carbon dioxide.

      We typically enter into annual supply arrangements rather than long-term
contracts with our suppliers, which means that our suppliers are obligated to
continue to supply us with materials for one-year periods, at the end of which
we must either renegotiate the contracts with our incumbent suppliers or find
alternative sources.

      With respect to some of our key packaging supplies, such as aluminum cans
and ends, and some of our key ingredients, such as artificial sweeteners, we
have entered into long-term supply agreements, the terms of which range from 1
to 5 years. Crown Cork & Seal USA, Inc. ("CCS") supplies aluminum cans and ends
under a contract that expires on December 31, 2011. The contract provides that
CCS will supply all of our aluminum can and end requirements worldwide, subject
to certain exceptions. The contract contains a pricing mechanism for certain
materials, standard representations, warranties, indemnities and termination
events, including termination events related to bankruptcy or insolvency of
either party. This contract included a cap on aluminum prices, which expired in
December 2006. In 2007, the price paid for aluminum has increased significantly
to reflect world pricing. While we currently expect aluminum prices to decrease
through 2007, the degree of the price decline and the timing are uncertain. As
with our annual supply contracts, we must either renegotiate these long-term
supply agreements with the incumbent suppliers when they expire or find
alternative sources for supply.

      We rely upon our ongoing relationships with key suppliers to support our
operations. We believe that we will be able to either renegotiate contracts with
these suppliers when they expire or replace them.

      We believe there is adequate supply of the ingredients and packaging
materials used to produce or package our products.

     The majority of our ingredient and packaging supply contracts allow our
suppliers to alter the prices they charge us based on changes in the costs of
the underlying commodities. Aluminum for cans, resin for PET bottles, preforms
and caps and high fructose corn syrup ("HFCS") for sweeteners are examples of
these underlying commodities. In addition, the contracts for certain of our
ingredients and packaging materials permit our suppliers to increase the costs
they charge us based on increases in their cost of converting the underlying
commodities into the materials we purchase. In certain cases those increases are
subject to negotiated limits. Changes in the prices we pay for ingredients and
packaging materials occur at times that vary by product and supplier, but are
principally on semi-annual or annual bases. HFCS has a history of volatile price
changes. We typically purchase HFCS requirements for North America under
12 month contracts and have locked in the majority of our requirements for the
year. Our HFCS prices will be up significantly in 2007 over prior year and we
expect this trend to continue in the future, as a result of growing demand for
corn-related products.

Accordingly, we bear the risk of increases in the costs of these
ingredients and packaging materials, including the underlying costs of the
commodities that comprise them and, to some extent, the costs of converting
those commodities into finished products. We do not use derivatives to manage
this risk.

TRADE SECRETS, COPYRIGHTS, TRADEMARKS AND LICENSES

We sell the majority of our beverages under retailer brands to customers who own
the trademarks associated with those products. We also own registrations, or
applications to register, various trademarks that are important to our worldwide
business, including Cott(R) and Orient Emporium Tea Co.(TM) in the U.S., Canada
and the U.K., Stars & Stripes(R), Vess(R), Vintage(R), So Clear(R), Top Pop(R),
and City Club(R) in the U.S., Red Rain(TM) and Red Rave(TM) in the U.S. and
Canada, Red Rooster(R), Benshaws(R) and the H2 family of brands in the U.K., and
RC(R) in more than 100 countries outside of North America. Moreover, we are
licensed to use certain trademarks, including Carters(R) in the U.K.,
Jarritos(R) in Mexico, and RC(R) in certain regions of Canada. The licences to
which we are a party are of varying terms, including some which are perpetual.
Trademark ownership is generally of indefinite duration when marks are properly
maintained in commercial use.

      Our success depends in part on our intellectual property, which includes
trade secrets in the form of concentrate formulas for our beverages and
trademarks for the names of the beverages we sell. To protect this intellectual
property, we rely principally on registration of trademarks, contractual
responsibilities and restrictions in agreements

                                       6


(such as indemnification, nondisclosure and confidentiality agreements) with
employees, consultants and customers, and on the common law and statutory
protections afforded to trademarks, copyrights, trade secrets and proprietary
"know-how." We also closely monitor the use of our trademarks and vigorously
pursue any party that infringes on our trademarks, using all available legal
remedies.

SEASONALITY OF SALES

Sales of our beverages are seasonal, with the highest sales volumes generally
occurring in the second and third fiscal quarters, which correspond to the
warmer months of the year in our major markets.

CUSTOMERS

A significant portion of our revenue is concentrated in a small number of
customers. Our customers include many large national and regional grocery,
mass-merchandise, drugstore, wholesale and convenience store chains in our core
markets of North America and International. For the year ended December 30,
2006, sales to Wal-Mart Stores, Inc. and its affiliates (collectively,
"Wal-Mart") accounted for approximately 38% of total revenue. Wal-Mart was the
only customer that accounted for more that 10% of our total revenue in that
period. For the same period, our top ten customers accounted for approximately
60% of total revenue. We expect that sales of our products to a limited number
of customers will continue to account for a high percentage of revenue for the
foreseeable future. The loss of Wal-Mart, or customers which in the aggregate
represent a significant portion of our revenue, would have a material adverse
effect on our operating results and cash flows.

COMPETITION

Generally, carbonated soft drinks compete against all forms of liquid beverages,
including water, teas, coffees and juice-based beverages, for consumers'
shopping preferences.

      The carbonated soft drink category is highly competitive in each region in
which we compete and competition for incremental volume is intense. The brands
owned by the three major national soft drink companies, Coca-Cola, Pepsi and
Cadbury Schweppes, control approximately 84% of the aggregate take-home volume
of carbonated soft drink sales in the combined North American, U.K. and Mexican
markets. Those companies have significant financial resources and spend heavily
on promotional programs. They also have direct store delivery systems which
enable their personnel to visit retailers frequently to sell new items, stock
shelves and build displays.

      In addition, we face competition in the U.S. and U.K. from regional soft
drink manufacturers who sell aggressively priced brands and, in many cases, also
supply retailer brand products. A few larger U.S. retailers also
self-manufacture products for their own needs and consistently approach other
retailers seeking additional business.

      The competitive pressures in the carbonated soft drink industry are
significant. However, we seek to differentiate ourselves by offering our
customers efficient distribution methods, high-quality products, category
management strategies, packaging and marketing strategies and superior service.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

The conduct of our business, and the production, distribution, sale, labeling,
safety, transportation and use of many of our products are subject to various
federal, state, provincial, local and foreign laws and regulations.

      As a producer of beverages, we must comply with various federal, state,
provincial, local and foreign laws relating to production, packaging, quality,
labeling and distribution, including, in the U.S., those of the federal Food,
Drug and Cosmetic Act, the Fair Packaging and Labeling Act, the Federal Trade
Commission Act, the Nutrition Labeling and Education Act and California
Proposition 65. We are also subject to various federal, state, provincial, local
and foreign environmental laws and workplace regulations. These laws and
regulations include, in the U.S., the Occupational Safety and Health Act, the
Unfair Labor Standards Act, the Clean Air Act, the Clean Water Act, the
Comprehensive Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act, the Federal Motor Carrier Safety Act,
laws governing equal employment opportunity, customs and foreign trade laws and
regulations, laws relating to the maintenance of fuel storage tanks, laws
relating to water consumption and treatment, and various other federal statutes
and regulations.

      Our operations are also subject to extensive regulations administered by
the U.S. Environmental Protection Agency, which pertain to the discharge of
materials into the environment and the handling and disposition of wastes.
Failure to comply with these regulations can have serious consequences,
including civil and administrative penalties.

      We do not expect to make any material expenditures in connection with
environmental remediation and compliance. However, as discussed below, changes
in how the Ontario Ministry of the Environment enforces the Ontario
Environmental Protection Act could result in us having to make material
expenditures for environmental compliance.

THE ONTARIO ENVIRONMENTAL PROTECTION ACT ("EPA")

EPA regulations provide that a minimum percentage of a bottler's soft drink
sales within specified areas in Ontario must be made in refillable containers.
The penalty for non-

                                       7


compliance is a fine, which for companies ranges from $50,000 per day on which
the offense occurs or continues for the first conviction to $100,000 per day for
each subsequent conviction, although such fines may be increased to equal the
amount of monetary benefit acquired by the offender as a result of the
commission of the offense.

      We, and we believe other industry participants, are currently not in
compliance with the requirements of the EPA. To comply with these requirements
we, and we believe many other industry participants, would have to significantly
increase sales in refillable containers to a minimum refillable sales ratio of
30%. We are not in compliance with these regulations and do not expect to be in
the foreseeable future. Ontario is not enforcing the EPA at this time, despite
the fact that it is still in effect and not amended, but if it chooses to
enforce it in the future, we could incur fines for non-compliance and the
possible prohibition of sales of soft drinks in non-refillable containers in
Ontario. We estimate that approximately 4% of our sales would be affected by the
possible limitation of sales of soft drinks in non-refillable containers in
Ontario if the Ontario Ministry of the Environment initiated an action to
enforce the provisions of the EPA against us. Moreover, the Ontario Ministry of
the Environment released a report in 1997 stating that these EPA regulations are
"outdated and unworkable". However, despite the "unworkable" nature of the EPA
regulations, they have not yet been revoked.

      We believe that the magnitude of the potential fines that we could incur
if the Ontario Ministry of the Environment chose to enforce these regulations is
such that the costs to us of non-compliance could be, although are not
contemplated to be, significant. However, our management believes that such
enforcement is very remote and, in any event, these regulations are expected to
be revoked in the future given the more recent regulatory activity in this area
as described below.

      In December of 2003, the Ontario Ministry of the Environment approved the
Blue Box Program, which included provisions regarding industry responsibility
for 50% of the net cost of the Program. Generally, the company that owns the
intellectual property rights to the brand of a product, or is the licensee of
those rights, and that manufactures, packages or distributes a product for sale
in Ontario or causes such manufacturing, packaging or distributing of a product
in Ontario, will be liable for the costs under the Program. We generally do not
own the intellectual property rights to the brands of our products. Rather, we
generally manufacture, package and distribute products for and on behalf of
Ontario-based third party customers who are the brand owners and we do not
believe that any costs for which we might be ultimately responsible would have a
material adverse effect on our results of operations; however we cannot
guarantee this outcome.

EMPLOYEES

As of December 30, 2006, we had approximately 3,163 employees, of whom an
estimated 2,204 were located in North America and 959 were located in
International. Included in the 2,204 employees in North America, 352 are from
the Elizabethtown and Wyomissing plants and the Wyomissing warehouse. The
majority of these employees completed their employment as of December 31, 2006
and the remainder are expected to depart by July 2007. We have entered into
numerous collective bargaining agreements that we believe contain terms that are
typical in the beverage industry. As these agreements expire, we believe they
can be renegotiated on terms satisfactory to us. We consider our relations with
employees to be good.

AVAILABILITY OF INFORMATION AND OTHER MATTERS

Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to reports filed or furnished pursuant to Sections
13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are
available free of charge from our website at www.cott.com, when such reports are
available on the Securities and Exchange Commission's website, www.sec.gov. The
information found on our website is not part of this or any other report that we
file with, or furnish to, the Securities and Exchange Commission or to Canadian
securities regulators.

      Our chief executive officer is required by the rules of the New York Stock
Exchange (the "NYSE") to certify annually to the NYSE that he is not aware of
any violation by us of our corporate governance listing standards. Our chief
executive officer at the time made such certification to the NYSE as of May 8,
2006.

      We are responsible for establishing and maintaining adequate internal
control over financial reporting as required by the U.S. Securities and Exchange
Commission. See Management's Report on Internal Control over Financial Reporting
on page 59.

ITEM 1A.

RISK FACTORS

We face a number of risks and uncertainties, including the following:

WE MAY BE UNABLE TO COMPETE SUCCESSFULLY IN THE HIGHLY COMPETITIVE BEVERAGE
CATEGORY.

The markets for our products are extremely competitive. In comparison to the
major national brand beverage manufacturers, we are a relatively small
participant in the industry. We face competition from the national brand
beverage manufacturers in all of our markets and from other

                                       8



retailer brand beverage manufacturers in the U.S. and the U.K. If our
competitors reduce their selling prices or increase the frequency of their
promotional activities in our core markets or if our customers do not allocate
adequate shelf space for the beverages we supply, we could experience a decline
in our volumes or be forced to reduce pricing or increase capital and other
expenditures, any of which could adversely affect our profitability. This risk
is increased by current trends in the North American beverage market, which are
indicating a significant consumer shift away from carbonated soft drinks. To
address these trends and the increasing price competition in the beverage market
resulting from them, we have instituted a significant cost reduction program to
position our company as the low cost provider of retailer brand soft drinks. If
we are unable to achieve the objectives of this program, our business may be
negatively impacted.

BECAUSE A SMALL NUMBER OF CUSTOMERS ACCOUNT FOR A SIGNIFICANT PERCENTAGE OF OUR
SALES, THE LOSS OF ANY SIGNIFICANT CUSTOMER COULD HAVE A MATERIAL ADVERSE EFFECT
ON OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

A significant portion of our revenue is concentrated in a small number of
customers. Our customers include many large national and regional grocery,
mass-merchandise, drugstore, wholesale and convenience store chains in our core
markets of North America and International. Sales to our top customer in 2006
and 2005 accounted for 38% and 40% respectively of our total revenue, and sales
to the top ten customers in 2006 and 2005 were 60% and 65%, respectively. We
expect that sales of our products to a limited number of customers will continue
to account for a high percentage of our revenue in the foreseeable future. The
loss of any significant customer, or customers which in the aggregate represent
a significant portion of our revenue, could have a material adverse effect on
our operating results and cash flows. At December 30, 2006, we have $115.7
million of customer relationships recorded as an intangible asset. The permanent
loss of any customer included in the intangible asset would result in impairment
in the value of the intangible asset.

OUR INGREDIENTS AND PACKAGING SUPPLIES ARE SUBJECT TO PRICE INCREASES AND WE MAY
BE UNABLE TO EFFECTIVELY PASS RISING COSTS ON TO OUR CUSTOMERS.

We bear the risk of increasing prices on the ingredients and packaging in our
products. The majority of our ingredient and packaging supply contracts allow
our suppliers to alter the prices they charge us based on changes in the costs
of the underlying commodities that are used to produce them. Aluminum for cans
and ends, resin for PET bottles, preforms and caps and high fructose corn syrup
for sweeteners are examples of these underlying commodities. In addition, the
contracts for certain of our ingredients and packaging materials permit our
suppliers to increase the costs they charge us based on increases in their cost
of converting those underlying commodities into the materials that we purchase.
In certain cases those increases are subject to negotiated limits and, in other
cases, they are not. These changes in the prices that we pay for ingredients and
packaging materials occur at times that vary by product and supplier, but are
principally on semi-annual and annual bases.

In 2006, most aluminum buyers, including ourselves, were protected by price caps
keeping the price paid below world prices. However, the cap on aluminum in our
contract with CCS expired in December 2006, and in 2007, the price paid for
aluminum has increased significantly to reflect world pricing. While we
currently expect aluminum prices to decrease through 2007, the degree of the
price decline and the timing are uncertain. Resin prices have increased
significantly in recent years but are expected to be down slightly in 2007 as
compared with 2006 levels. HFCS has a history of volatile price changes. We
typically purchase HFCS requirements for North America under 12 month contracts
and have locked in the majority of our requirements for the year. Our HFCS
prices will be up significantly in 2007 over prior year and we expect this trend
to continue in the future, as a result of growing demand for corn-related
products.


Accordingly, we bear the risk of increases in the costs of these ingredients and
packaging materials, including the underlying costs of the commodities that
comprise them and, to some extent, the costs of converting those commodities
into finished products. We do not use derivatives to manage this risk. If the
cost of these ingredients or packaging materials increases, we may be unable to
pass these costs along to our customers through adjustments to the prices we
charge. If we cannot pass on these increases to our customers on a timely basis,
they could have a material adverse effect on our results of operations. If we
are able to pass these costs on to our customers through price increases, the
impact those increases could have on our volumes is uncertain.

IF WE ARE UNABLE TO MAINTAIN RELATIONSHIPS WITH OUR RAW MATERIAL SUPPLIERS, WE
MAY INCUR HIGHER SUPPLY COSTS OR BE UNABLE TO DELIVER PRODUCTS TO OUR CUSTOMERS.

In addition to water, the principal raw materials required to produce our
products are PET bottles, caps and preforms, aluminium cans and ends, labels,
cartons and trays, concentrates, sweeteners and carbon dioxide.

      We typically enter into annual supply arrangements rather than long-term
contracts with our suppliers, which means that our suppliers are obligated to
continue to supply us with materials for one-year periods, at the end of which
we must either renegotiate the contracts with our incumbent suppliers or we
would be required to find an alternative source for supply. With respect to some
of our key packaging supplies, such as aluminum cans and ends, and some of our
key ingredients, such as artificial sweeteners, we have entered into long-term
supply agreements, the terms of which range from 1 to 5 years, and therefore we
are assured of a supply of those key packaging supplies and ingredients for a
longer period of time. CCS supplies aluminum cans and ends under a contract
expiring on December 31, 2011. The contract provides that CCS will supply all of
our aluminum can and end requirements worldwide, subject to certain exceptions.
This contract included a cap on aluminum prices, which expired in December
2006. In 2007, the price paid for aluminum has increased significantly to
reflect world pricing. While we currently expect aluminum prices to decrease
through 2007, the degree of the price decline and the timing are uncertain. As
with our annual supply contracts, we must either renegotiate these long-term
supply agreements with the incumbent suppliers when they expire or find
alternative sources for supply.

      We rely upon our ongoing relationships with our key suppliers to support
our operations. We believe that we will be able to either renegotiate contracts
with these suppliers when they expire or, alternatively, if we are unable to
renegotiate contracts with our key suppliers, we believe that

                                       9


we could replace them. We could, however, incur higher ingredient and packaging
supply costs in renegotiating contracts with existing suppliers or replacing
those suppliers or we could experience temporary dislocations in our ability to
deliver products to our customers, either of which could have a material adverse
effect on our results of operations.

      In addition, the supply of specific ingredients and packaging materials
could be adversely affected by economic factors such as industry consolidation,
energy shortages, governmental controls, labor disputes, natural disasters, acts
of war or terrorism and other factors.

IF WE FAIL TO MANAGE OUR EXPANDING OPERATIONS SUCCESSFULLY, OUR BUSINESS AND
FINANCIAL RESULTS MAY BE MATERIALLY AND ADVERSELY AFFECTED.

Our success depends, in part, on our ability to manage our expanding operations,
including new acquisitions. In recent years, we have grown our business and
beverage offerings primarily through acquisition of other companies, new product
lines and growth with key customers. A part of our strategy is to expand our
business in new channels and markets and with new beverage offerings, including
through acquisitions and alliances. To succeed with this strategy, we must
identify appropriate acquisition or strategic alliance candidates. The success
of this strategy also depends on our ability to manage and integrate
acquisitions and alliances at a pace consistent with the growth of our business.
If attractive acquisition opportunities are not available, we may not continue
to acquire businesses and product lines. Furthermore, the businesses or product
lines that we acquire or align with may not be integrated successfully into our
business or prove profitable. A key element of our strategy is the expansion of
our business outside North America. In addition to the foregoing factors, our
ability to expand our business in foreign countries is also dependent on, and
may be limited by, our ability to comply with the laws of the various
jurisdictions in which we may operate, as well as changes in local government
regulations and policies in such jurisdictions.

WE COULD BE LIABLE FOR INJURY, ILLNESS OR DEATH CAUSED BY CONSUMPTION OF OUR
PRODUCTS.

We may be liable to our customers and/or consumers if the consumption of any of
our products causes injury, illness or death. We also may be required to recall
some of our products if they become contaminated or are damaged or mislabeled. A
significant unfavorable product liability judgment or a widespread product
recall could have a material adverse effect on our results of operations or cash
flows.

OUR SUCCESS DEPENDS, IN PART, ON OUR INTELLECTUAL PROPERTY, WHICH WE MAY BE
UNABLE TO PROTECT.

We possess certain intellectual property that is important to our business. This
intellectual property includes trade secrets, in the form of the concentrate
formulas for most of the beverages that we produce, and trademarks for the names
of the beverages that we sell. While we own certain of the trademarks used to
identify our beverages, other trademarks are used through license from third
parties or by permission from our retailer brand customers. Our success depends,
in part, on our ability to protect our intellectual property.

      To protect this intellectual property, we rely principally on registration
of trademarks, contractual responsibilities and restrictions in agreements (such
as indemnification, nondisclosure and confidentiality agreements) with
employees, consultants and customers, and on common law and statutory
protections afforded to trademarks, trade secrets and proprietary "know-how." In
addition, we vigorously pursue any person who infringes on our intellectual
property using any and all legal remedies available. Notwithstanding our
efforts, we may not be successful in protecting our intellectual property for a
number of reasons, including:

- -     our competitors may independently develop intellectual property that is
      similar to or better than ours;

- -     employees, consultants or customers may not abide by their contractual
      agreements and the cost of enforcing those agreements may be prohibitive,
      or those agreements may prove to be unenforceable or more limited than
      anticipated;

- -     foreign intellectual property laws may not adequately protect our
      intellectual property rights; and

- -     our intellectual property rights may be successfully challenged,
      invalidated or circumvented.

      If we are unable to protect our intellectual property, it would weaken our
competitive position and we could face significant expense to protect or enforce
our intellectual property rights. At December 30, 2006, we had $80.4 million of
rights and $18.1 million of trademarks recorded as intangible assets.

OTHERS MAY ALLEGE THAT WE INFRINGE ON THEIR INTELLECTUAL PROPERTY RIGHTS, WHICH
COULD RESULT IN THE DIVERSION OF ATTENTION AND RESOURCES FROM OUR BUSINESS
OPERATIONS.

Occasionally, third parties may assert that we are, or may be, infringing on or
misappropriating their intellectual property rights. In these cases, we intend
to defend against claims or negotiate licenses when we consider these actions
appropriate. Intellectual property cases are uncertain and involve complex legal
and factual questions. If we become involved in this type of litigation, it
could consume

                                       10


significant resources and divert our attention from business operations.

      If we are found to infringe on the intellectual property rights of others,
we could incur significant damages, be enjoined from continuing to manufacture,
market or use the affected product, or be required to obtain a license to
continue manufacturing or using the affected product. A license could be very
expensive to obtain or may not be available at all. Similarly, changing products
or processes to avoid infringing the rights of others may be costly or
impracticable.

OUR GEOGRAPHIC DIVERSITY SUBJECTS US TO THE RISK OF CURRENCY FLUCTUATIONS.

We are exposed to changes in foreign currency exchange rates, including those
between the U.S. dollar, on the one hand, and the Canadian dollar, the pound
sterling and the Mexican peso, on the other hand. Our operations outside of the
U.S. accounted for approximately 35% of our 2006 sales. Accordingly, currency
fluctuations in respect of our outstanding non-U.S. dollar denominated net asset
balances may affect our reported results and competitive position.

A PORTION OF OUR INDEBTEDNESS IS VARIABLE RATE DEBT, AND CHANGES IN INTEREST
RATES COULD ADVERSELY AFFECT US BY CAUSING US TO INCUR HIGHER INTEREST COSTS
WITH RESPECT TO SUCH VARIABLE RATE DEBT.

Our credit and securitization facilities subject us to interest rate risk. We
have a secured revolving credit facility, under which we borrow from time to
time for various purposes, including to fund our day-to-day operations and to
finance acquisitions. The maximum amount that we may borrow under these
facilities is $225.0 million. We obtain funding under the securitization
facility for our day-to-day operations. The maximum amount that we may borrow
under this facility is $75.0 million, based on eligible receivables and various
reserves required in the facility. As of December 30, 2006, total borrowings
under these facilities were $109.2 million.

      The interest rate applicable to our revolving credit facility is variable,
meaning that the rate at which we pay interest on amounts borrowed under the
facility fluctuates with changes in interest rates and our leverage. The
interest rate applicable to our securitization facility is also variable, based
on the cost of borrowing of Park Avenue Receivables Company, LLC and certain
other financial institutions, as required.

      Accordingly, with respect to any amounts from time to time outstanding
under this facility, we are exposed to changes in interest rates. We do not
currently use derivative instruments to hedge interest rate exposure. However,
we do regularly review the structure of our indebtedness and consider changes to
the proportion of variable versus fixed rate debt through refinancing, interest
rate swaps or other measures in response to the changing economic environment.
If we are unable to refinance our indebtedness on terms that are favorable to us
or otherwise adequately manage our debt structure in response to changes in the
market, our interest expense could increase, which would negatively impact our
financial condition and results of operations.

IF WE BREACH THE COVENANTS AND CONDITIONS SET OUT IN OUR SENIOR SECURED CREDIT
FACILITIES OR SECURITIZATION FACILITY, THE LENDERS COULD TERMINATE THE
FACILITIES OR WE WOULD HAVE TO RENEGOTIATE THESE AGREEMENTS AND MAY INCUR HIGHER
FEES AND INTEREST COSTS.

Our senior secured credit facilities allow for revolving credit borrowings of up
to $225.0 million provided we are in compliance with the covenants and
conditions of the agreement. Our securitization facility allows for borrowings
of up to $75.0 million, depending on eligible receivables balances and
calculations of reserves. These facilities contain cross default provisions. If
we are in default under one facility, default is triggered under the other
facility. As of December 30, 2006, total borrowings under these facilities were
$109.2 million. If we breach the covenants and such non-compliance is not waived
by the lenders, or an event occurs that would have a material adverse effect on
us, we would be required to renegotiate the agreements with higher fees and
interest rates, provided the lenders wish to renegotiate. The lenders could
choose to terminate the facilities, in which case we believe we could replace
them. We could however incur higher fees and interest expense which would
negatively impact our financial condition and results of operations. We are in
compliance with our covenants as of December 30, 2006. Our financial covenants
are calculated and determined at the end of each quarter. We expect that we will
not maintain compliance with the total leverage ratio financial covenant set
forth in our senior secured credit facilities in the first quarter of 2007 and
accordingly, we are in discussions with our lenders to change that financial
covenant. We believe we can reach agreement with our lenders on a new covenant
that is acceptable to us. Since a covenant default in our senior secured credit
facilities would result in a default in our unsecured senior subordinated notes
due in 2011, our notes due in 2011 would, in the event of such default, become
currently due and accordingly, classified as a current liability. If our lenders
do not agree to amend the covenant on terms that are acceptable to us, our
lenders could terminate our facilities and we would have to replace them. Should
our credit facilities and 2011 notes become currently due, we may have to incur
additional fees and higher interest costs to replace them.

      The senior unsecured notes include covenants that limit new borrowings
with certain exceptions, including

                                       11



borrowings based on receivables and inventory, unless certain conditions are
met.

CHANGES IN THE LEGAL AND REGULATORY ENVIRONMENT IN THE JURISDICTIONS IN WHICH WE
OPERATE COULD INCREASE OUR COSTS OR REDUCE OUR REVENUES.

As a producer of beverages, we must comply with various federal, state,
provincial, local and foreign laws relating to production, packaging, quality,
labeling and distribution, including, in the U.S., those of the federal Food,
Drug and Cosmetic Act, the Fair Packaging and Labeling Act, the Federal Trade
Commission Act, the Nutrition Labeling and Education Act and California
Proposition 65. We are also subject to various federal, state, provincial, local
and foreign environmental laws and workplace regulations. These laws and
regulations include, in the U.S., the Occupational Safety and Health Act, the
Unfair Labour Standards Act, the Clean Air Act, the Clean Water Act, the
Comprehensive Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act, the federal Motor Carrier Safety Act,
laws governing equal employment opportunity, customs and foreign trade laws and
regulations, laws relating to the maintenance of fuel storage tanks, laws
relating to water consumption and treatment, and various other federal statutes
and regulations. These laws and regulations may change as a result of political,
economic, or social events. Such regulatory changes may include changes in food
and drug laws, laws related to advertising, accounting standards, taxation
requirements, competition laws and environmental laws, including laws relating
to the regulation of water rights and treatment. Changes in laws, regulations or
government policy and related interpretations may alter the environment in which
we do business, which may impact our results or increase our costs or
liabilities.

WE ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF THE ONTARIO ENVIRONMENTAL
PROTECTION ACT ("EPA") AND, IF THE ONTARIO GOVERNMENT SEEKS TO ENFORCE THOSE
REQUIREMENTS OR IMPLEMENTS MODIFICATIONS TO THEM, WE COULD BE ADVERSELY
AFFECTED.

Certain regulations under the EPA provide that a minimum percentage of a
bottler's soft drink sales within specified areas in Ontario must be made in
refillable containers. The penalty for non-compliance is a fine, which for
companies ranges from $50,000 per day on which the offense occurs or continues
for the first conviction to $100,000 per day for each subsequent conviction,
although such fines may be increased to equal the amount of monetary benefit
acquired by the offender as a result of the commission of the offense. We, and
we believe other industry participants, are currently not in compliance with the
requirements of the EPA. Ontario is not enforcing the EPA at this time, but if
it chose to enforce the EPA in the future, we could incur fines for
non-compliance and the possible prohibition of sales of soft drinks in
non-refillable containers in Ontario.

      We estimate that approximately 4% of our sales would be affected by the
possible limitation on sales of soft drinks in non-refillable containers in
Ontario if the Ontario Ministry of the Environment initiated an action to
enforce the provisions of the EPA against us.

      In April 2003, the Ontario Ministry of the Environment proposed to revoke
these regulations in favor of new mechanisms under the Ontario Waste Diversion
Act to enhance diversion from disposal of carbonated soft drink containers. On
December 22, 2003, the Ontario provincial government approved the implementation
of the Blue Box Program plan under the Ministry of Environment Waste Diversion
Act. The Program requires those parties who are brand owners or licensees of
rights to brands which are manufactured, packaged or distributed for sale in
Ontario to contribute to the net cost of the Blue Box Program. We generally
manufacture, package and distribute products for and on behalf of third party
customers. Therefore, we do not believe that we will be responsible for direct
costs of the Program. However, our customers may attempt to pass these costs, or
a portion of them, onto us. We do not believe that the costs for which we may
ultimately be responsible under this Program will have a material adverse effect
on our results of operations; however, we cannot guarantee this outcome. The
Blue Box Program does not revoke any of the regulations mentioned above under
the EPA regarding refillable containers, although the industry anticipates that
they will be reversed in the future.

WE IDENTIFIED MATERIAL WEAKNESSES IN OUR INTERNAL CONTROLS OVER FINANCIAL
REPORTING IN FISCAL 2006. FAILURE TO REMEDIATE THE MATERIAL WEAKNESSES COULD
NEGATIVELY IMPACT OUR BUSINESS.

We concluded that material weaknesses existed in our internal controls over
financial reporting as of December 30, 2006. In response to the identified
material weaknesses, we, with oversight from our Audit Committee, are focused on
improving our internal controls over financial reporting and remedying the
identified material weaknesses, through implementing new controls and policies
and ensuring that all controls and policies are followed.

      Our policies require periodic inventory counts and detailed reconciliation
procedures to ensure the completeness, accuracy and existence of inventory. In
addition, we have procedures in place to ensure appropriate valuation of
inventory and credit notes. We plan on monitoring adherence to our policies by
assigning appropriate personnel to undertake responsibility for these controls.
We have also begun implementing a functional reporting structure intended to
ensure appropriate segregation of duties.

      We have recently hired a Chief Manufacturing and Supply Chain Officer who
is responsible for the global procurement function. We will implement processes
to ensure that our policy that all contracts be appropriately

                                       12


authorized and that appropriate review for accounting of contracts takes place
on a timely basis is followed.

      We believe that these corrective actions will remediate the material
weaknesses identified above. We will continue to monitor the effectiveness of
these actions and will make any changes and take such other actions that we deem
appropriate given the circumstances.

      If we fail to remediate these material weaknesses, or if our internal
controls over financial reporting required under Section 404 of the
Sarbanes-Oxley Act are inadequate in the future, it could negatively impact our
business and the price of our common stock.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

As of the end of 2006, we operated 15 beverage production facilities in North
America, 11 of which we owned and four of which we leased. We also operate our
global concentrate manufacturing facility in Columbus, Georgia, which we own.
Internationally, we operated five beverage production facilities, 4 of which we
owned and one of which we leased.

      Total square footage of our production facilities is approximately
2,094,776 in the U.S., 931,050 in Canada; 871,218 in the U.K.; and 111,278 in
Mexico. This square footage does not include separate offsite warehouses. Lease
terms for non-owned beverage production facilities expire between 2007 and 2019.

      The beverage production facilities and square footage amounts noted above
do not include the owned facility in Elizabethtown or leased facilities in
Columbus and Wyomissing, all of which were closed as of December 30, 2006.

ITEM 3.

LEGAL PROCEEDINGS

In January 2005, we were named as one of many defendants in an action styled The
Consumers' Association of Canada and Bruce Cran v. Coca-Cola Bottling Ltd. et
al., filed in the Supreme Court of British Columbia (Canada). This claim has
been brought under the British Columbia Class Proceedings Act as a class action,
but it has not to date been certified as a class action.

      The plaintiffs are suing over 30 defendants, consisting of beverage
manufacturers, retailers and Encorp Pacific (Canada), the government-approved
steward of British Columbia's container deposit program, alleging the improper
use and collection by the defendants of deposits and container recycling fees
pursuant to the British Columbia container recycling program.

      The relief sought by the plaintiffs includes a declaration that C$70
million in container deposits were unlawfully converted by the defendants and
are held on constructive trust for consumers and the repayment of C$60 million
collected as container recycling fees.

      The defendants, including us, brought and argued a summary trial
application in January 2006. On June 2, 2006, the British Columbia Supreme Court
granted the summary trial application, which resulted in the dismissal of the
plaintiffs' action against us and the other defendants. On June 26, 2006, the
plaintiffs appealed the dismissal of their action to the British Columbia Court
of Appeal. We, together with the other defendants, are defending the appeal,
which we expect to be heard in the next eight to twelve months. It is too early
to assess the chances of success of the appeal.

      In February 2005, similar class action claims, styled Kruger et al. v.
Pepsi-Cola Beverage Ltd. et al., were filed in the Superior Courts of a number
of other Canadian provinces, naming essentially the same defendants, including
us, plus the other regional stewardship agencies. The claims which were filed in
Quebec have since been discontinued.

      We are investigating this matter; however, legal proceedings are subject
to uncertainties, and the outcomes are difficult to predict. Since the
litigation is at a very preliminary stage, sufficient information regarding the
merits of these claims is not yet available to us.

      We are engaged in various litigation matters in the ordinary course of our
business. While we cannot predict with certainty the outcome of these matters,
we believe that the resolution of these matters will not have a material adverse
effect on our financial condition and results of operations.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of shareowners during the fourth quarter of
2006.

                                       13


SUPPLEMENTAL ITEM PART I.

EXECUTIVE OFFICERS OF COTT CORPORATION

The following is a list of names and ages of all of our executive officers as of
February 19, 2007, and the positions and offices that each of them holds.



NAME AND MUNICIPALITY OF RESIDENCE  OFFICE                                                   AGE  PERIOD SERVED AS OFFICER
- ----------------------------------  ------                                                   ---  ------------------------
                                                                                       
BRENT D. WILLIS
Tampa, Florida                      Chief Executive Officer                                   46  2006 to present
JOHN DENNEHY
Tampa, Florida                      President, North America                                  45  2005 to present
WYNN WILLARD
Tampa, Florida                      President, International                                  48  2006 to present
THOMAS J. ARRUFO
Tampa, Florida                      Chief Information & Shared Services Officer               48  2007 to present
TINA DELL'AQUILA                    Chief Financial Officer, Vice President, Controller &
Toronto, Ontario                    Assistant Secretary                                       44  1998 to present
RICHARD DOBRY
Tampa, Florida                      Chief Manufacturing & Supply Chain Officer                50  2006 to present
ABILIO GONZALEZ
Tampa, Florida                      Chief People Officer                                      46  2006 to present
MARK R. HALPERIN                    Chief Legal & Corporate Development Officer and Corporate
Toronto, Ontario                    Secretary                                                 49  1995 to present


During the last five years, the above persons have been engaged in their
principal occupations or in other executive capacities with us except as
follows:

- -     from August 2004 to May 2006, Brent D. Willis was Zone President for the
      Asia Pacific region of InBev, the world's largest brewer by volume. From
      September 2003 to August 2004, he served as Chief Commercial Officer of
      InBev and, prior to September 2003, he was Chief Marketing and Sales
      Officer of InBev;

- -     John Dennehy has held several management positions since joining Cott in
      2001. From October 2005 to August 2006, he was Senior Vice President,
      North American Sales and Marketing. From October 2002 to October 2005, he
      was Vice President, Business Development and prior to October 2002, he was
      General Manager, Northeast Retailer Brands, LLC, a 51% owned indirect
      subsidiary of Cott;

- -     prior to joining Cott, Wynn Willard was Chief Executive Officer of New
      World Pasta Company, a dry pasta manufacturer in the U.S. and Canada,
      which sought bankruptcy protection in May 2004, during Mr. Willard's
      tenure. Prior to New World Pasta Company, he was Senior Vice President and
      Chief Marketing Officer of Hershey Foods Corporation, a maker of
      confectionary products;

- -     from June 2006 to February 2007, Thomas J. Arrufo was Chief Information
      Officer for the PMSI division of AmerisourceBergen Corporation, a
      pharmaceutical and integrated workers compensation service company. From
      January 2003 to June 2006, he was President of the Regatta Group, LLC, a
      provider of interactive, experiential leadership and team building events
      and sailing charters. Prior to January 2003, he was Chief Information
      Officer and Vice-President, Energy Services for NiSource Inc., a natural
      gas and electricity provider in the U.S.;

- -     from April 2004 to October 2006, Richard Dobry was President, Americas
      Supply for Diageo, plc, a premium alcohol beverage business. Prior to
      April 2004, he was Senior Vice President, Supply Chain at Tropicana
      Products, Inc. the juice beverages subsidiary of PepsiCo; and

- -     prior to joining Cott, Abilio Gonzalez was General Manager, Global Talent
      Acquisition and Engagement and Microsoft Business Division at Microsoft
      Corporation ("Microsoft"). From September 2003 to November 2004 he was
      General Manager, HR Microsoft Productivity and Business Solutions for
      Microsoft. Prior to September 2003, he was Corporate Vice President, Human
      Resources of Panamco LLC,

                                       14

      a Latin American beverage manufacturer. Prior to July 2002, he was Global
      Head, Human Resources Research & Development for Novartis AG, a global
      pharmaceutical company.

                                       15


PART II

ITEM 5.

MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREOWNER MATTERS

Our common shares are listed on the Toronto Stock Exchange (the "TSX") under the
ticker symbol "BCB," and on the New York Stock Exchange (the "NYSE") under the
ticker symbol "COT."

      The tables below show the high and low reported per share sales prices of
common shares on the TSX (in Canadian dollars) and the NYSE (in U.S. dollars)
for the indicated periods of the years ended December 30, 2006 and December 31,
2005.

TORONTO STOCK EXCHANGE (C$)



                                        2006                 2005
                                  ---------------      ----------------
                                   High      Low        High       Low
                                  -----     -----      -----      -----
                                                      
January 1 - March 31              16.95     13.02      31.41      28.79
April 1 - June 30                 17.40     14.37      30.09      26.50
July 1 - September 30             20.15     13.76      31.45      20.31
October 1 - December 31           19.75     15.10      20.51      16.10


NEW YORK STOCK EXCHANGE (U.S.$)



                                        2006                 2005
                                  ---------------      ----------------
                                   High      Low        High       Low
                                  -----     -----      -----      -----
                                                      
January 1 - March 31              14.62     11.31      25.26      23.55
April 1 - June 30                 15.73     12.68      24.26      21.12
July 1 - September 30             18.03     12.16      25.93      17.40
October 1 - December 31           17.32     13.21      17.51      13.58


As of February 19, 2007, we had 690 shareowners of record. This number was
determined from records maintained by our transfer agent and it does not include
beneficial owners of securities whose securities are held in the names of
various dealers or clearing agencies. The closing sale price of our common
shares on February 19, 2007 was C$17.17 on the TSX and on February 16, 2007 was
$14.74 on the NYSE.

      We have not paid cash dividends since June 1998. There are certain
restrictions on the payment of dividends under our senior secured credit
facility and the indenture governing the 8% senior subordinated notes maturing
in 2011. The most restrictive is the quarterly limitation on dividends based on
the prior quarter's earnings.

      If we were to pay dividends to shareowners that are U.S. residents, those
dividends would generally be subject to Canadian withholding tax. Under current
Canadian tax law, dividends paid by a Canadian corporation to a nonresident
shareowner are generally subject to Canadian withholding tax at a 25% rate.
Under the current tax treaty between Canada and the U.S., U.S. residents are
eligible for a reduction in this withholding tax rate to 15% (and to 5% for a
company shareowner who is the beneficial owner of at least 10% of our voting
stock). Accordingly, under current tax law, our U.S. resident shareowners would
generally be subject to a Canadian withholding tax at a 15% rate on dividends
paid by us, provided that they had complied with applicable procedural
requirements to claim the benefit of the reduced rate under the tax treaty.

CALCULATION OF AGGREGATE MARKET VALUE OF NON-AFFILIATE SHARES

For purposes of calculating the aggregate market value of common shares held by
non-affiliates as shown on the cover page of this report, it was assumed that
all of the outstanding shares were held by non-affiliates except for outstanding
shares held or controlled by our directors and executive officers. This should
not be deemed to constitute an admission that any of these persons are, in fact,
affiliates of us, or that there are not other persons who may be deemed to be
affiliates. For further information concerning shareholdings of officers,
directors and principal stockholders see Item 12, "Security Ownership of Certain
Beneficial Owners and Management and Related Shareowner Matters."

SECURITIES TO BE ISSUED UNDER EQUITY COMPENSATION PLANS

Under the 1986 Common Share Option Plan, as amended, we reserved 14 million
shares for future issuance. The number of securities available for future
issuance as of December 30, 2006 were as follows:


                                                                    
Number of securities to be issued upon exercise of outstanding
    options (IN THOUSANDS)                                                2,696

Weighted average exercise price of outstanding options                 C$ 29.65

Number of securities available for future issuance under the
    stock option plan (IN THOUSANDS)                                      5,661


No new shares are issued for any other share-based compensation plan.

                                       16


SHAREOWNER RETURN PERFORMANCE GRAPH

The following graph shows changes over our past five fiscal years in the value
of C$100, assuming reinvestment of dividends, invested in: (i) our common
shares; (ii) the Toronto Stock Exchange's S&P/TSX Composite Index; and (iii) a
peer group of publicly traded companies in the bottling industry comprised of
Coca-Cola Enterprises Inc., Coca-Cola Bottling Co. Consolidated, National
Beverage Corp., Pepsi Bottling Group Inc. and PepsiAmericas Inc. The closing
price of Cott's common shares as of December 29, 2006 on the Toronto Stock
Exchange was C$16.69 and on the New York Stock Exchange was $14.31.

                                  [LINE GRAPH]



DATE                     DECEMBER 29,  DECEMBER 28,    JANUARY 3,       JANUARY 1,       DECEMBER 31,     DECEMBER 30,
                             2001          2002           2004             2005              2005             2006
- -----------------------  ------------  ------------  ---------------  ---------------  -----------------  ------------
                                                                                        
Cott Common Shares           100          110.08          144.56           117.78            68.37            66.23
TSX/S&P Composite Index      100           87.56          110.96           127.03           157.68           184.89
Peer Group                   100          109.30          111.59           118.68           119.60           128.42


                                       17


ITEM 6.

SELECTED FINANCIAL DATA

The following selected financial data reflects the results of operations. This
information should be read in conjunction with, and is qualified by reference to
"Management's discussion and analysis of financial condition and results of
operations" and the consolidated financial statements and notes thereto included
elsewhere in this report. The financial information presented may not be
indicative of future performance.



                                                          DECEMBER 30,  December 31,  January 1,  January 3,   December 28,
                                                            2006 (1)      2005 (2)     2005 (3)    2004 (4)      2002 (5)
(IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)    (52 WEEKS)    (52 weeks)   (52 weeks)  (53 weeks)    (52 weeks)
- -------------------------------------------------------   ------------  ------------  ----------  ----------   ------------
                                                                                                
REVENUE                                                   $   1,771.8   $    1,755.3  $  1,646.3  $  1,417.8   $   1,198.6
Cost of sales                                                 1,554.9        1,505.8     1,362.6     1,141.0         965.7
Selling, general and administrative                             176.1          138.6       138.1       126.1         110.2
Loss (gain) on disposal of property, plant and equipment           --            1.5        (0.3)       (0.1)           --
Restructuring, asset impairments and other charges
    Restructuring                                                20.5            3.2          --          --            --
    Asset impairments                                            15.4           33.5         0.9         1.8            --
    Other                                                         2.6            0.8          --          --            --
                                                          -----------   ------------  ----------  ----------   -----------
OPERATING INCOME                                                  2.3           71.9       145.0       149.0         122.7
                                                          -----------   ------------  ----------  ----------   -----------
(Loss) Income from continuing operations                        (17.5)          24.6        78.3        77.4          48.7
Cumulative effect of change in accounting principle                --             --          --          --         (44.8)
                                                          -----------   ------------  ----------  ----------   -----------
NET (LOSS) INCOME                                         $     (17.5)  $       24.6  $     78.3  $     77.4   $       3.9
                                                          ===========   ============  ==========  ==========   ===========
(LOSS) INCOME PER SHARE - BASIC
(Loss) Income from continuing operations                  $     (0.24)  $       0.34  $     1.10  $     1.12   $      0.75
Cumulative effect of change in accounting principle       $        --   $         --  $       --  $       --   $     (0.69)
Net (loss) income                                         $     (0.24)  $       0.34  $     1.10  $     1.12   $      0.06
                                                          ===========   ============  ==========  ==========   ===========
(LOSS) INCOME PER SHARE - DILUTED
(Loss) Income from continuing operations                  $     (0.24)  $       0.34  $     1.09  $     1.09   $      0.69
Cumulative effect of change in accounting principle       $        --   $         --  $       --  $       --   $     (0.64)
Net (loss) income                                         $     (0.24)  $       0.34  $     1.09  $     1.09   $      0.06
                                                          ===========   ============  ==========  ==========   ===========
Total assets                                              $   1,139.5   $    1,179.1  $  1,030.3  $    908.8   $     785.4
Current maturities of long-term debt                              2.0            0.8         0.8         3.3          16.5
Long-term debt                                                  275.2          272.3       272.5       275.7         339.3
Shareowners' equity                                             488.7          481.9       457.3       345.1         218.2
                                                          -----------   ------------  ----------  ----------   -----------


Under the 1986 Common Share Option Plan, as amended, we have reserved 14 million
shares for future issuance.

- ----------
(1)   There were no acquisitions in the year ended December 30, 2006. We
      recorded asset impairment charges of $15.4 million as described in Note 2
      to the Consolidated Financial Statements on page 43. During the year we
      adopted SFAS 123R, Share-Based Payments, using the modified prospective
      approach and therefore have not restated results for prior periods. This
      change resulted in the recognition of $11.4 million in share-based
      compensation expense, $8.4 million net of tax or $0.12 per basic and
      diluted share.

(2)   During the year we acquired 100% of the shares of Macaw (Holdings)
      Limited, the parent company of Macaw (Soft Drinks) Limited. We also
      recorded asset impairment charges of $33.5 million.

(3)   During the year we acquired certain of the assets of The Cardinal
      Companies of Elizabethtown, LLC and certain of the assets of Metro
      Beverage Co.

(4)   During the year we acquired the retailer brand business of Quality
      Beverage Brands, L.L.C.

(5)   During the year, we acquired Premium Beverage Packers, Inc. and formed a
      new business in Mexico, Cott Embotelladores de Mexico, S.A. de C.V. During
      the year we adopted SFAS 142, Goodwill and Other Intangible Assets. This
      change in method of valuing goodwill resulted in a $44.8 million non-cash
      write down of the U.K. business.

                                       18


ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

OVERVIEW

We are one of the world's largest non-alcoholic beverage companies and the
world's largest retailer brand soft drink provider.

      Trends of increasing commodity costs and consumers shifting towards
non-carbonated beverages continued in 2006. As a result, we persisted with our
efforts to increase long-term financial performance by improving our operating
performance, enhancing our sales focus, reducing costs and realigning our
organization.

      In October 2006 we announced the closures of our manufacturing plant in
Elizabethtown and our manufacturing plant and warehouse facilities in
Wyomissing. We ceased production at both plants on December 30, 2006, and
reallocated production volume to other manufacturing sites in North America. The
Wyomissing warehouse was still in operation as of December 30, 2006 and is
expected to be closed in 2007. As part of our previously announced 2005 North
American realignment we closed our juice plant in Lachine effective February
2006 and we closed our manufacturing plant and warehouse in Columbus effective
March 2006.

      In 2006, we recorded $38.5 million in pre-tax restructuring, asset
impairments and other charges, including restructuring charges of $20.5 million,
asset impairments of $15.4 million and other charges of $2.6 million.

      Our net loss in 2006 was $17.5 million or $0.24 per diluted share,
compared with our net income of $24.6 million or $0.34 per diluted share in
2005. The decrease resulted from:

- -     the highly competitive environment in the North American carbonated soft
      drinks ("CSD") industry;

- -     higher raw materials and packaging costs in the earlier part of 2006 that
      were not passed on to customers;

- -     higher fixed costs relating to increased production capacity from our new
      Fort Worth, Texas plant, partially offset by savings at plants closed
      earlier in the year;

- -     decreased gross profit due to accelerated depreciation and amortization
      and inventory writedowns resulting from the closures of Wyomissing and
      Elizabethtown and rationalizing SKUs;

- -     the impact on gross profit of an inventory loss arising from the
      receivership of our U.K. resin supplier;

- -     in 2005, we recorded a gain of $5.4 million for the high fructose corn
      syrup ("HFCS") settlement;

- -     increased selling, general and administrative costs due to share-based
      compensation, higher incentive compensation expense and executive
      transition costs; and

- -     increased interest expense due to the financing of our August 2005
      acquisition of 100% of the outstanding shares of Macaw (Holdings) Limited
      (now known as Cott Nelson (Holdings) Limited, the parent company of Macaw
      (Soft Drinks) Limited (now known as Cott (Nelson) Limited) (the "Macaw
      Acquisition").

2006 VERSUS 2005

RESULTS OF OPERATIONS



                                               2006                  2005
                                      --------------------  --------------------
                                       MILLIONS    PERCENT   MILLIONS    PERCENT
                                                     OF                    OF
                                      OF DOLLARS   REVENUE  OF DOLLARS   REVENUE
                                      ----------   -------  ----------   -------
                                                             
Revenue                               $  1,771.8   100.0%   $  1,755.3    100.0%
Cost of sales                            1,554.9    87.8%      1,505.8     85.8%
                                      ----------   -----    ----------    -----
Gross margin                               216.9    12.2%        249.5     14.2%
SG&A                                       176.1     9.9%        138.6      7.9%
Loss on disposal of property, plant
   and equipment                             --       --           1.5      0.1%
Restructuring, asset impairments
   and other                                38.5     2.2%         37.5      2.1%
                                      ----------   -----    ----------    -----
Operating income                             2.3     0.1%         71.9      4.1%
Other expense                                0.1      --          (0.7)      --
Interest expense                            32.2     1.8%         28.8      1.7%
Minority interest                            3.8     0.2%          4.5      0.3%
                                      ----------   -----    ----------    -----
(Loss) income before
   income taxes                            (33.8)   (1.9)%        39.3      2.2%
Income taxes                               (16.3)   (0.9)%        14.7      0.8%
                                      ----------   -----    ----------    -----
Net (loss) income                     $    (17.5)   (1.0)%  $     24.6      1.4%
                                      ----------   -----    ----------    -----

Depreciation & amortization           $     86.8     4.9%   $     70.2      4.0%
                                      ----------   -----    ----------    -----


REVENUE

Revenue in 2006 was $1,771.8 million, an increase of 0.9% from $1,755.3 million
in 2005. As shown in the following table, revenue decreased 5% when the impact
of acquisitions and foreign exchange are excluded. Total case volume in 8-ounce
equivalents was 1,233.5 million in 2006, up 3% from 1,201.4 million in 2005.

                                       19




                                            NORTH      INTER-
                                  COTT(1)  AMERICA    NATIONAL
                                 ------    -------    --------
                                             
Change in revenue                $ 16.5    $ (88.6)   $  103.6
Impact of acquisitions            (79.6)        --      (79.6)
Impact of foreign exchange        (21.5)     (14.5)      (6.9)
                                 ------    -------    -------
Change excluding acquisitions &
   foreign exchange              $(84.6)   $(103.1)   $  17.1
                                 ------    -------    -------
Percentage change excluding
   acquisitions & foreign
   exchange                          (5%)       (7%)        5%
                                 ------    -------    -------


(1) Cott includes North America, International and Corporate & other

In North America, our revenue was $1,339.4 million in 2006, a decrease of 6%
from 2005. Excluding the impact of foreign exchange, revenue decreased by 7%
from 2005. Case volume in 8-ounce equivalents decreased by 9% in 2006. The
volume decrease was driven by weakness in the North American carbonated soft
drinks segment and product and customer rationalization. The decrease was also
due to a structural change in our business arrangement with one of our
self-manufacturing customers. The related revenues are now in the form of
concentrates rather than filled beverages, which lowers our revenue but has
minimal earnings impact.

      The international segment includes our U.K. and Europe business, our
Mexican business, our Royal Crown International business and our business in
Asia. Revenue from this segment was $427.1 million in 2006, an increase of 32%
when compared with revenue of $323.5 million in 2005. Case volume in 8-ounce
equivalents increased by 20% in 2006. The growth was due to the inclusion of
Macaw's results for the entire year, as well as strong base business growth in
the U.K. which was up 8% year-over-year. Mexico also reported strong growth of
22% year-over-year, primarily as a result of broadening distribution within
non-supermarket channels. Excluding the impact of the Macaw Acquisition, revenue
increased 7%. Excluding the impact of the Macaw Acquisition and foreign
exchange, revenue increased 5%.

COST OF SALES

Cost of sales was $1,554.9 million or 87.8% of revenue, a 2 percentage point
increase from $1,505.8 million or 85.8% of revenue in 2005. Variable costs
represented 88% of total cost of sales in 2006, down from 89% in 2005, largely
as a result of the capacity addition in 2005, which increased fixed costs. Major
elements of these variable costs included ingredient and packaging costs, which
increased fixed costs. fees paid to third party manufacturers and distribution
costs.



                                      NORTH
Increase (decrease)            COTT  AMERICA  INTERNATIONAL
- -------------------            ----  -------  --------------
                                     
Volume impact                  (6)%    (9)%        7%
Ingredients & packaging costs   2%      2%         1%
Acquisitions                    3%     --         19%
Plant closures                  1%      1%        --
U.K. supplier receivership      1%     --          3%
Foreign exchange                1%      1%         2%
Other                           1%      1%         2%
                               --      --         --
Total cost of sales change      3%     (4)%       34%
                               --    ----      -----


      As noted from the above table, the increase in total cost of sales over
2005 was 3%. Ingredients and packaging costs have increased by 2% primarily due
to higher packaging materials costs, including PET bottles and cans.
Acquisitions added 3% to our cost of sales as we included the costs of Macaw for
the entire year. As a result of our decision to close Wyomissing and
Elizabethtown, we changed the useful lives of the related property, plant and
equipment and customer relationships. As a result, we recorded $13.2 million in
accelerated depreciation and amortization and writedowns of spare parts
inventory as plant closure costs causing a 1% increase in cost of sales. The
receivership of our U.K. resin supplier and foreign exchange both contributed 1%
increases. Other costs increased 1% as a result of added production capacity,
partially offset by the fixed cost savings of the closure of Lachine and
Columbus earlier in the year. In addition, in 2005, cost of sales was reduced by
the proceeds from the HFCS litigation settlement. The above increases were
partially offset by a 6% decrease related to lower sales volume.

GROSS PROFIT

Gross profit was 12.2% of revenue for 2006, down from 14.2% in 2005 mainly due
to plant closure costs of $13.2 million described above and the receivership of
our U.K. resin supplier that resulted in a loss of $9.0 million, while in the
prior year we recorded a gain of $5.4 million for the HFCS settlement. In
addition, fixed costs were higher this year due to the full year impact of the
capacity addition from our new Fort Worth, Texas plant in 2005.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")

SG&A was $176.1 million in 2006, up $37.5 million from $138.6 million in 2005.
As a percentage of revenue, SG&A increased to 9.9% for 2006, up from 7.9% in
2005. Excluding the impact of acquisitions and foreign exchange, SG&A was up
$29.1 million from 2005 primarily due to share-based compensation, higher
incentive compensation expense and executive transition costs.

                                       20


SHARE-BASED COMPENSATION

Effective January 1, 2006, we adopted Statement of Financial Accounting Standard
("SFAS 123R") Share-Based Payments, using the modified prospective approach and
therefore have not restated results for prior periods. Under the modified
prospective approach, share-based compensation expense for the year ended
December 30, 2006 includes compensation expense for all share-based compensation
awards granted prior to, but not yet vested as of January 1, 2006, based on the
grant date fair value estimated in accordance with the original provision of
SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").
Share-based compensation expense for all share-based compensation awards granted
after January 1, 2006 is based on the grant-date fair value estimated in
accordance with the provisions of SFAS 123R. We recognize these compensation
costs net of a forfeiture rate on a straight-line basis over the requisite
service period of the award, which is generally the vesting term of three years.
We estimated the forfeiture rate for fiscal 2006 based on our historical
experience with forfeitures during the preceding three fiscal years. For the
period ending December 30, 2006, net loss includes compensation expense of $11.4
million, or $8.4 million net of tax of $3.0 million, or $0.12 per basic and
diluted share. There is no effect on cash from operating or financing activities
from the adoption of SFAS 123R. Had compensation expense for the plans been
determined based on the fair value at the date of grant for the year ended
December 31, 2005 our income before taxes would have been $29.5 million, income
tax expense would have been $12.2 million and net income would have been $17.3
million or $0.24 per basic share and diluted share as described in note 18 to
our consolidated financial statements.

      Total compensation cost related to non-vested awards not yet recognized is
$5.2 million. The weighted average period over which this is expected to be
recognized is 0.9 year.

      During the second quarter of 2006, our shareowners approved and adopted
two new compensation plans for 2006 and future periods, the Performance Share
Unit ("PSUs") Plan and the Share Appreciation Rights ("SARs") Plan. These plans
are designed to attract, maintain and motivate key employees while promoting the
long-term financial success of our business.

      During the year ended December 30, 2006, a total of 0.6 million PSUs at a
fair value of $6.9 million (C$8.0 million) were granted to employees of our
Company and its subsidiaries. These are the number of units and value that are
expected to be issued based on an assumption that certain performance targets
will be achieved. The performance targets are not market based and therefore,
the amount of expense per unit is fixed. The number of units and value can vary
from 0 to 150% of the expected numbers noted above depending on meeting the
performance target. Subject to the terms of the PSU plan, these units will vest
on December 27, 2008. Compensation costs of $1.2 million were recognized in
selling, general and administrative expenses in the period ended December 30,
2006. As of December 30, 2006, there was approximately $5.7 million of unearned
compensation costs relating to the grant that is expected to be recognized on a
straight-line basis over a period of 29 months.

      During the year ended December 30, 2006, a total of 0.5 million SARs at a
fair value of $1.7 million were granted to employees of our Company and its
subsidiaries. The fair value of the SARs grant is estimated on the date of grant
using the Black-Scholes option pricing model. Subject to the terms of the SAR
plan, these units will vest on July 26, 2009 and October 25, 2009. Compensation
costs of $0.3 million were recognized in selling, general and administrative
expenses in the period ended December 30, 2006. As of December 30, 2006, there
was $1.5 million of unearned compensation costs relating to the grant that is
expected to be recognized on a straight-line basis over a period of three years.

      In addition, share-based awards with a total fair value of $4.1 million
were granted to our new Chief Executive Officer under the terms of his
employment agreement. As of December 30, 2006, $0.9 million was recorded as
compensation expense and there was $3.2 million of unearned compensation
expected to be recognized on a straight-line basis over a period of three years.

RESTRUCTURING, ASSET IMPAIRMENTS AND OTHER CHARGES

In 2006, we recorded restructuring, asset impairments and other charges of $38.5
million before taxes. Restructuring, asset impairments and other charges were
$37.5 million before tax in 2005 and were primarily related to our North
American operations.

RESTRUCTURING - In September 2005 we announced a plan to realign the management
of our Canadian and U.S. businesses to a North American basis. In conjunction
with this plan, we closed Lachine in February 2006 and in March 2006 we closed
Columbus to bring production capacity in line with the needs of our customers.

      On July 27, 2006, we announced the realignment of the management of our
U.K. and Europe business, our Mexican business, our Royal Crown International
business and our business in Asia to an International basis, to focus on
customer management, channel development, sales and marketing.

      In October 2006, as a result of our plans to reduce costs, we announced
the closures of Elizabethtown and

                                       21


Wyomissing. We ceased production at both plants on December 30, 2006, and
reallocated production volume to other manufacturing sites in North America. The
Wyomissing warehouse was still in operation as of December 30, 2006 and is
expected to be closed in 2007.

      During 2006, we recorded $8.7 million of restructuring charges for
severance and contract termination costs relating to the closures of Columbus
and Lachine. We also recorded $5.6 million of restructuring charges for
severance costs relating to the closures of Elizabethtown and Wyomissing. The
remaining restructuring costs of $6.2 million include $5.5 million of severances
and other costs resulting from consolidation of selling and administrative
functions and $0.7 million relates to consulting fees incurred in connection
with restructuring activities.

ASSET IMPAIRMENTS - During 2006, we recorded $1.7 million of asset impairments,
including property, plant and equipment of $1.3 million, information technology
software of $0.2 million and a customer relationship asset of $0.2 million
relating to the closures of Columbus and Lachine. We also recorded $14.2 million
of asset impairments relating to property, plant and equipment due to the
closures of Elizabethtown and Wyomissing. These charges were partially offset by
a $0.5 million recovery from the sale of other assets.

OTHER - Other charges of $2.6 million in 2006 relate primarily to legal and
consulting fees for the U.K. Competition Commission review of the Macaw
Acquisition in the U.K. On April 28, 2006, we received final clearance of the
Macaw Acquisition from the Competition Commission.

      In 2005, we recorded restructuring charges of $3.2 million, asset
impairments of $33.5 million and other charges of $0.8 million. Included in
asset impairments of $33.5 million was an impairment loss of $20.0 million with
respect to customer relationships resulting from declining sales and margins
relating to certain customers.

OPERATING INCOME

Operating income was $2.3 million in 2006 including restructuring, asset
impairments and other charges of $38.5 million, as compared with $71.9 million
in 2005 which included restructuring, asset impairments and other charges of
$37.5 million.

INTEREST EXPENSE

Net interest expense was $32.2 million in 2006, up 11.8% from $28.8 million in
2005, largely due to the financing of the Macaw acquisition of 2005.

INCOME TAXES

We recorded an income tax recovery of $16.3 million in 2006, or an effective tax
rate of 48.2%, as compared with an income tax provision of $14.7 million, or an
effective rate of 37.4%, in 2005. Since we do business in three main
jurisdiction with different tax rates, our effective tax rate is impacted by the
jurisdiction in which income is earned or losses incurred. During the year,
there was a $5.3 million increase in the reserve related to a change in
management's estimates of tax liabilities. This increase in reserve was
partially offset by a $3.5 million decrease in the valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES

Cash flow from operations after capital expenditures in 2006 was $61.3 million,
after capital expenditures of $48.1 million, as compared to 2005 in which cash
flow from operations after capital expenditures was $44.3 million after capital
expenditures of $84.8 million. We use cash flow from operations after capital
expenditures to measure cash we are able to generate after considering the
investments required to maintain or expand our capital base. A reconciliation to
cash provided by operating activities is presented below:



                                           2006     2005
                                          ------   -------
                                             
Cash provided by operating activities     $109.4   $ 129.1
Additions to property, plant & equipment   (35.1)    (75.8)
Additions to intangibles and other
   assets                                  (13.0)     (9.0)
                                          ------   -------
Cash flow from operations after capital
   expenditures                           $ 61.3   $  44.3
                                          ------   -------


Cash flow from operations after capital expenditures increased in 2006 mainly
due to a decrease in capital spending by $36.7 million.

INVESTING ACTIVITIES

CAPITAL EXPENDITURES - Our capital expenditures were $35.1 million in 2006 as
compared with $75.8 million in 2005. In 2005, we completed construction of a new
beverage manufacturing facility in Fort Worth, Texas. Total cost for the Fort
Worth facility in 2005 was $30.7 million. In 2006, we spent $7.1 million
relating to Fort Worth. There were no similar major projects in 2006.

OTHER INVESTING ACTIVITIES - Other investing activities relate primarily to
additions to information technology assets included in intangibles and other
assets.

                                       22


CAPITAL RESOURCES AND DEBT

Our sources of capital include operating cash flows, short-term borrowings under
current credit facilities, issuance of public debt and issuance of equity
securities. Management believes we have adequate financial resources to meet our
ongoing cash requirements for operations and capital expenditures, as well as
our other financial obligations based on our operating cash flows and current
available credit.

SENIOR SECURED CREDIT FACILITY - We maintain committed senior secured credit
facilities for financing in North America, the U.K. and Mexico expiring on March
31, 2010.

      The facilities allow for revolving credit borrowings in a principal amount
of up to $225.0 million, provided we are in compliance with the covenants and
conditions of the agreements, and are comprised of two separate facilities:

(1)   a $220.0 million multicurrency facility made by certain lenders to us and
      our indirect wholly-owned subsidiaries, Cott Beverages Inc., Cott (Nelson)
      Limited and Cott Beverages Limited as co-borrowers, and

(2)   a $5.0 million Mexican facility made by the lender to our indirect 90%
      owned subsidiary Cott Embotelladores de Mexico, S.A. de C.V.

      Each facility includes subfacilities for swingline loans and letters of
credit. The $225.0 million facility can be increased up to an additional $125.0
million at our option if the lenders agree to increase their commitments or new
lenders join the facility and we satisfy certain conditions.

      The facilities are collateralized by substantially all our personal
property with certain exceptions including the receivables sold as part of our
receivables securitization facility discussed below.

      In general, borrowings under these facilities bear interest at either a
floating or fixed rate for the applicable currency plus a margin based on our
consolidated total leverage ratio. A facility fee of between 0.15% and 0.375%
per annum is payable on the entire line of credit. The level of the facility fee
is dependent on financial covenants. As of December 30, 2006 credit of $110.6
million was available after borrowings of $109.2 million, comprised of 55.7
million pounds sterling, and standby letters of credit of $5.2 million. The
weighted average interest rate was 6.63% on these facilities as of December 30,
2006, as compared to 5.83% as of December 31, 2005.

SECURITIZATIONS - Our principal U.S. operating subsidiaries maintain a
receivables securitization facility under which they agreed to sell
substantially all of their receivables generated from their ordinary course of
operations to a special purpose indirect subsidiary, Cott USA Receivables
Corporation, which in turn sells and assigns undivided interests in the
receivables and related assets to an unaffiliated entity and certain other
financial institutions in exchange for cash. These transfers are treated as a
financing for purposes of our consolidated financial statements; however, the
presentation of consolidated financial statements does not itself imply that the
assets of any consolidated entity, including any special-purpose entity formed
for a particular project, are available to pay the liabilities of any other
consolidated entity, or that the liabilities of any consolidated entity,
including any special-purpose entity formed for a particular project, are
obligations of any other consolidated entity. The agreement contains
representations, warranties, covenants, and indemnities customary for facilities
of this type. The facility does not contain any covenants that we view as
materially constraining our activities or the activities of its subsidiaries,
except for Cott USA Receivables Corporation.

      The amount of funds available under the receivables facility is based upon
the amount of eligible receivables and various reserves required by the
facility. Accordingly, availability may fluctuate over time given changes in
eligible receivables balances and calculation of reserves, but will not exceed
the $75.0 million program limit. This facility bears interest at a variable
rate, based on the cost of borrowing of the Purchasers. A fee of between 0.20%
and 0.40% per annum is payable on the unused portion of the facility. The level
of the facility fee is dependent on financial covenants. As of December 30,
2006, $41.3 million of eligible receivables, net of reserves, were available for
purchase under this facility. There were no borrowings on this facility at
December 30, 2006.

SENIOR SUBORDINATED NOTES - We also have outstanding 8% senior subordinated
notes, which are due in 2011. As of December 30, 2006, the principal amount of
those notes was $275.0 million. The issuer of the notes is Cott Beverages Inc.,
but we and most of our U.S., Canadian and U.K. subsidiaries guarantee the notes.

LONG-TERM DEBT - Long-term debt as of December 30, 2006 was $277.2 million,
compared with $273.1 million at the end of 2005. Long-term debt in 2006 and 2005
consisted of 8% senior subordinated notes with a stated face value of $275.0
million and in 2006 capital leases of $5.9 million ($2.6 million - December 31,
2005).

DEBT COVENANTS - Our senior secured credit facility and the indenture respecting
the 2011 notes contain a number of business and financial covenants and events
of default that apply to the borrowers and the restricted subsidiaries. The
restricted subsidiaries are, in general, the guarantor subsidiaries organized in
Canada, the U.S., the U.K. and Mexico. Among other events of default or triggers
for prepayment in our credit facilities and indenture are: a change of control
of us in certain circumstances; cross

                                       23


default or cross acceleration to other indebtedness in excess of $15.0 million;
unsatisfied judgments in excess of $15.0 million; our insolvency or that of the
restricted subsidiaries; and covenant default under the indenture or credit
facilities. Some of the more material business and financial covenants are
discussed below.

      Our senior secured credit facility restricts additional indebtedness for
subsidiaries to the existing debt and credit facilities, certain intercompany
debt, $50.0 million of purchase money indebtedness and capital lease
obligations, $25.0 million of guarantee obligations and a $25.0 million basket
of other additional indebtedness. The senior secured credit facility contains
restrictions on investments, including investments in subsidiaries outside of
the U.S., Canada or the U.K., and acquisitions. In general, individual
acquisitions are permitted up to $100.0 million with the aggregate expenditure
for all acquisitions limited to $150.0 million in any fiscal year.

      There is also a restriction on disposition of assets having a fair market
value exceeding $40.0 million in a fiscal year with certain specified
exemptions. Dividends are currently limited to 25% of consolidated net income
for the immediately preceding fiscal quarter but that amount increases to 50% of
consolidated net income for the immediately preceding fiscal quarter if the
leverage ratio is below 2.0 to 1.0. Capital stock purchases are limited to $50.0
million during the term of this credit facility.

      There are further restrictions in several of the covenants, such as a
complete prohibition on paying any dividends, if we are in default under the
senior secured credit agreement. In addition, many of the covenants effectively
limit transactions with our unrestricted subsidiaries or non-guarantor entities.

      In addition to business covenants, there are financial covenants in our
senior secured credit facility. Since March 31, 2005, our total leverage ratio,
as defined in the credit agreement, was required to be no more than 3.25 to 1.0
and that requirement is tightened to 3.00 to 1.0 from July 1, 2006. At the end
of 2006, our leverage ratio was 3.0 to 1.0. The senior secured credit facility
also has a minimum fixed charge coverage ratio. From March 31, 2005, our fixed
charge coverage ratio was required to be at least 1.05 to 1.0 and July 1, 2006
it must be at least 1.10 to 1.0 and after July 1, 2007 it must be at least 1.15
to 1.0. As of December 30, 2006 it was 2.6 to 1.0.

      The indenture for the 2011 notes also has numerous covenants that are
applicable to Cott Beverages Inc., the restricted subsidiaries and us. We can
only make restricted payments, such as paying dividends, buying back stock or
making certain investments, if our fixed charge coverage ratio is at least 2.0
to 1.0. Even then, we can only make those restricted payments in an amount that
is no greater than 50% of our consolidated net income subject to certain
adjustments. Certain other investments, like those not exceeding $60.0 million
in the aggregate, may be made without satisfying the restricted payments test.

      We can only incur additional debt or issue preferred stock, other than
certain specified debt, if our fixed charge coverage ratio is greater than 2.0
to 1.0. For purposes of the indenture, our fixed charge coverage ratio was 3.7
to 1.0 as of December 30, 2006. Subject to some exceptions, asset sales may only
be made where the sale price is equal to the fair market value of the asset sold
and we receive at least 75% of the proceeds in cash. There are also limitations
on what we may do with the sale proceeds such that we may be required to pay
down debt or reinvest the proceeds in enumerated business uses within a
specified period of time.

      There are further restrictions in several of the covenants, such as a
complete prohibition on paying any dividends, if we are in default under the
indenture. Many of the covenants also effectively limit transactions with our
unrestricted subsidiaries or non-guarantor entities.

      Several of the terms, such as restricted payments, are defined differently
in the indenture and the senior secured credit facility and certain calculations
are made differently in the two agreements.

      We are in compliance with our covenants as of December 30, 2006. Our
financial covenants are calculated and determined at the end of each quarter. We
expect that we will not maintain compliance with the total leverage ratio
financial covenant set forth in our senior secured credit facilities in the
first quarter of 2007 and accordingly, we are in discussions with our lenders to
change that financial covenant.  We believe we can reach agreement with our
lenders on a new covenant that is acceptable to us, although there can be no
assurance that we will. Since a covenant default in our senior secured credit
facilities would result in a default in our unsecured senior subordinated notes
due in 2011, our notes due in 2011 would, in the event of such default, become
currently due and accordingly, classified as a current liability. If our lenders
do not agree to amend the covenant on terms that are acceptable to us, our
lenders could terminate our facilities and we would have to replace them. Should
our credit facilities and 2011 notes become currently due, we may have to incur
additional fees and higher interest costs to replace them.

CAPITAL STRUCTURE

In 2006, shareowner's equity increased by $6.8 million from 2005. Shareowners'
equity decreased as a result of net loss of $17.5 million. This decrease was
offset by an increase in additional paid-in-capital of $11.4 million from the
recording of share-based compensation expense, a $12.8 million foreign currency
translation gain on the net assets of self-sustaining foreign operations and a
$0.4 million change in the unrealized loss on cash flow hedges. The foreign

                                       24


currency translation adjustment resulted from the net changes in the pound
sterling and the Canadian dollar relative to the U.S. dollar.

DIVIDEND PAYMENTS

No dividends were paid in 2006 and we are not expecting to change this policy in
2007 as we intend to use cash for future growth or debt repayment.

      There are certain restrictions on the payment of dividends under our
credit facility and 2011 notes indenture. The most restrictive provision is the
quarterly limitation of dividends based on the prior quarter's earnings.

CONTRACTUAL OBLIGATIONS

The following chart shows the schedule of future payments under certain
contracts, including long-term debt agreements and guarantees as of December 30,
2006:



                                Payments due by period
                    ---------------------------------------------
                             Less than   Years    Years   After 5
(IN MILLIONS)        Total    1 Year      2-3      4-5     years
- ------------------  -------  ---------  -------  -------  -------
                                           
2011 notes          $ 275.0   $    --   $    --  $ 275.0  $   --
Interest
   expense (1)        146.6      33.8      65.8     47.0      --
Operating leases      101.4      17.3      24.8     17.1    42.2
Capital leases          5.9       2.0       3.3      0.5     0.1
Purchase
   obligations (2)    211.5      96.4      36.3     31.6    47.2
                    -------   -------   -------  -------  ------
                    $ 740.4   $ 149.5   $ 130.2  $ 371.2  $ 89.5
                    -------   -------   -------  -------  ------


- ----------
(1)   Interest expense consists of fixed interest for our 2011 notes, global
      facility, receivables securitization and capital leases including
      administrative fees and amortization of deferred financing costs. It also
      includes estimated interest charges under our short term financing
      arrangements assuming that the balance and rates do not change from
      projected 2007 levels. Actual amounts will differ from estimates provided.

(2)   Purchase obligations consist of an information technology outsourcing
      contract, contracts with certain co-packers and commitments for the
      purchase of inventory and capital expenditures. These obligations
      represent expected expenditures under the normal course of business, not
      our minimum contractual obligations.

CRITICAL ACCOUNTING POLICIES

Note 1 to the consolidated financial statements includes a summary of the
significant accounting policies and estimates used in the preparation of our
consolidated financial statements.

      Our critical accounting policies require management to make estimates and
assumptions that affect the reported amounts in the consolidated financial
statements and the accompanying notes. These estimates are based on historical
experience, the advice of external experts or on other assumptions management
believes to be reasonable. Where actuals differ from estimates, revisions are
included in the results of the period in which actuals become known.
Historically, differences between estimates and actuals have not had a
significant impact on our consolidated financial statements.

      Critical accounting policies and estimates used to prepare the financial
statements are discussed with our Audit Committee as they are implemented and on
an annual basis and include the following:

REVENUE RECOGNITION

We report revenue, net of sales returns, when ownership passes to customers for
products manufactured in our own plants and/or by third parties on our behalf.
We regularly evaluate the facts and circumstances in relation to the criteria in
the EITF 99-19 and use our best judgment to determine whether to report sales on
a gross or net basis for products manufactured by third parties. Currently, the
facts and circumstances surrounding all of our business support the reporting of
all sales on a gross basis.

      We offer sales incentives to certain customers. We account for these
incentives as a reduction in sales. We follow the guidance under EITF 01-9 in
accounting for sales incentives. Where the incentive has been paid in advance,
we amortize the amount based on expected future sales related to the incentive.
Where the incentive is to be paid in arrears, we accrue the amount based on our
estimate of the total rebate the customer is expected to earn and claim. We
regularly review customer sales forecasts to ensure volume targets will be met
and adjust incentive accruals accordingly.

      Although we accept returns of products from our customers occasionally,
such returns, historically, have not been material.

IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLE ASSETS WITH AN INDEFINITE LIFE

With the implementation of Statement of Financial Accounting Standard ("SFAS")
142 in 2002, goodwill and intangible assets with an indefinite life are no
longer amortized, but instead are tested at least annually for impairment. Any
impairment loss is recognized in income. We have goodwill of $158.4 million and
rights of $80.4 million on our balance sheet at December 30, 2006.

      In accordance with SFAS 142, we evaluate goodwill for impairment on a
reporting unit basis. Reporting units are operating segments or components of
operating segments for which discrete financial information is available. The
evaluation of goodwill for each reporting unit is based upon the following
approach. We compare the fair value of a reporting unit to its carrying value.
Where the carrying

                                       25


value is greater than the fair value, the implied fair value of the reporting
unit goodwill is determined by allocating the fair value of the reporting unit
to all the assets and liabilities of the reporting unit with any of the
remainder being allocated to goodwill. The implied fair value of the reporting
unit goodwill is then compared to the carrying value of that goodwill to
determine the impairment loss.

      We measure the fair value of reporting units using discounted future cash
flow. Because the business is assumed to continue in perpetuity, the discounted
future cash flow includes a terminal value. The long-term growth assumptions
incorporated into the discounted cash flow calculation reflect our long-term
view of the market and the discount rate is based on our weighted average cost
of capital. Each year we re-evaluate the assumptions used to reflect changes in
the business environment. Based on the evaluation performed this year, we
determined that the fair values of our reporting units exceeded their carrying
value and that as a result the second step of the impairment test was not
required.

      Our only intangible asset with an indefinite life relates to our 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 and know-how.
There is an indefinite life to our ownership of these rights, and there are no
legal, regulatory, contractual, competitive, economic, or other factors that
limit the useful life. In accordance with SFAS 142, based on the above factors,
the life of the rights is considered to be indefinite and they are not
amortized, but are tested annually for impairment. Impairment of an intangible
asset with an indefinite life, if any, is determined using the same discounted
future cash flow assumptions and model discussed above for goodwill. We compare
the carrying value of the rights to their fair value and recognize in income any
impairment in value.

OTHER INTANGIBLE ASSETS

Other intangible assets consist principally of customer relationships that arise
from acquisitions, which amounted to $115.7 million at December 30, 2006.
Customer relationships are amortized on a straight-line basis for the period
over which we expect to receive economic benefits. We review the estimated
useful life of these intangible assets annually unless it is required more
frequently because of a triggering event. During fiscal 2006, we changed the
estimated useful life of two customer relationship assets relating to the
closures of Wyomissing and Elizabethtown and recorded accelerated amortization
of $2.4 million.

IMPAIRMENT OF LONG-LIVED ASSETS

We periodically compare the carrying value of long-lived assets, including
customer relationships by customer, to the estimated undiscounted future cash
flows at the lowest level of independent cash flows for the group of long-lived
assets and recognize any impairment in our income statement. The expected life
and value of these long-lived assets is based on an evaluation of the
competitive environment, history and future prospects as appropriate. We also
periodically review the estimated useful life of these assets. In 2006, we
recorded impairment losses of $15.9 million relating to long-lived assets of the
Elizabethtown, Wyomissing, Columbus, and Lachine facilities in restructuring,
asset impairments and other. We also changed the estimated useful life of two
customer relationship assets and property, plant and equipment resulting in $2.4
million in accelerated amortization and $8.2 million in accelerated depreciation
respectively resulting from the closures of Wyomissing and Elizabethtown.

RESTRUCTURING CHARGES

Over the last two years we have undertaken restructuring activities which
resulted in provisions for severance and lease terminations. We continually
evaluate the adequacy of the remaining liabilities under our restructuring
initiatives and, as a result, there may be additional charges or adjustments for
changes in estimates of amounts previously expensed as well as charges for new
restructuring activities.

SHARE-BASED COMPENSATION

Effective January 1, 2006, we adopted Statement of Financial Accounting Standard
("SFAS") 123R, Share-Based Payments, using the modified prospective approach and
therefore have not restated results for prior periods. Under this prospective
approach, share-based compensation expense for the year ended December 30, 2006
includes compensation expense for all share-based compensation awards granted,
prior to, but not yet vested as of January 1, 2006, based on the grant date fair
value estimated in accordance with the original provision of SFAS No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"). Share-based compensation
expense for all share-based compensation awards granted after January 1, 2006 is
based on the grant-date fair value estimated in accordance with the provisions
of SFAS 123R. We recognized these compensation costs net of a forfeiture rate on
a straight-line basis over the requisite service period of the award, which is
generally the vesting term of three years. We estimated the forfeiture rate for
fiscal 2006 based on our historical experience with forfeitures during the
preceding three fiscal years.

      The fair value of each option and share appreciation rights grant is
estimated on the date of grant using the Black-Scholes option pricing model. The
assumptions are based on three factors: risk-free interest rate, expected term
and expected volatility. The risk-free interest rate is based

                                       26


on the implied yield available on zero coupon Government of Canada bond with an
equivalent remaining term. The expected term of the options represents the
estimated period of time until exercise and is based on historical experience of
similar awards, giving consideration to the contractual terms, vesting schedules
and expectations of future employee behavior. The expected stock price
volatility is based on a combination of historical volatility of our stock and
the implied volatility of our traded options.

      In 2006, we also awarded performance share units to our employees as part
of our two new long-term incentive plans. The number of units ultimately earned
by our employees will depend on our performance over a three year performance
cycle and accordingly the compensation expense will vary depending on our
estimate of the number of units which will ultimately vest. We review our
performance against these targets and will adjust the compensation expense to
reflect our best estimate of the number of units we expect to vest. These
performance targets are not market based and therefore, the expense per unit is
fixed.

INVENTORY COSTS

Effective January 1, 2006, we adopted SFAS 151, Inventory Costs. The statement
requires that the allocation of fixed production overheads to inventory be based
on the normal capacity of the production facilities. Unallocated overheads
resulting from abnormally low production and certain other costs are to be
recognized as an expense in the period in which they are incurred. There was no
material impact from the adoption of this standard.

INCOME TAXES

We regularly review the recognized and unrecognized deferred income tax assets
to determine whether or not a valuation allowance is required. Management
continues to believe that it is more likely than not that the deferred tax asset
of $17.5 million in respect of Canada will not be realized and has retained a
valuation allowance for this amount. An increase in reserves of $5.3 million
partially offset the decrease in the valuation allowance. All other deferred tax
assets will be realized as a result of anticipated future taxable income from
these operations. The remaining deferred tax assets of $11.7 million relate
primarily to the United States. A significant change in the volumes or
profitability of these operations could affect the realization of the deferred
tax assets. We periodically review exposures and make our best estimate of the
reserve amount.

      In the ordinary course of business, we enter into transactions where the
ultimate tax determination may be uncertain. These uncertainties require us to
make estimates of the ultimate tax liabilities and, accordingly, the provision
for income taxes. While we believe our estimates are reasonable and appropriate,
additional income tax provisions may result if tax matters are resolved or
settled at amounts different from those estimates. Although we are currently the
subject of audits by taxation authorities in various jurisdictions, including
Canada and the United States, and while the liabilities, if any, resulting from
these audits are not determinable at this time, we do not believe that the
resolution of these audits will have a material adverse effect on our financial
position.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes."
FIN 48 is an interpretation of FASB Statement No. 109 "Accounting for Income
Taxes." We will adopt FIN 48 for our interim period ending March 31, 2007. This
interpretation prescribes a comprehensive model for recognizing, measuring,
presenting and disclosing in the financial statements uncertain tax positions
that we have taken or expect to take in our tax returns. We are currently
evaluating the impact of the new standard on our financial statements. Any
adjustment required to increase or decrease our tax liabilities as a result of
adopting the new standard will be accounted for as an adjustment to opening
retained earnings as of December 30, 2006. We will recognize interest and
penalties relating to unrecognized tax benefits within income tax expense. As of
December 30, 2006, we have recognized an income tax reserve of $10.3 million
relating to uncertain tax positions we have taken. Although we are currently the
subject of audits by taxation authorities in various jurisdictions, including
Canada and the United States, we do not believe that the resolution of these
audits will have a material adverse affect on our financial position.

INTERNAL CONTROL OVER FINANCIAL REPORTING

We are responsible for establishing and maintaining adequate internal control
over financial reporting. Internal control over financial reporting is defined
as a process designed by, or under the supervision of, our principal executive
and principal financial officer and effected by our Board of Directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of our financial
statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that:

- -     pertain to the maintenance of records that in reasonable detail accurately
      and fairly reflect our transactions and dispositions of our assets;

- -     provide reasonable assurance our transactions are recorded as necessary to
      permit preparation of our

                                       27


      financial statements in accordance with generally accepted accounting
      principles, and that receipts and expenditures are being made only in
      accordance with authorizations of our management and directors; and

- -     provide reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

      We assessed the effectiveness of our internal control over financial
reporting as of December 30, 2006. In making this assessment, we used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") in Internal Control-Integrated Framework.

      Based on this assessment, we determined that, as of December 30, 2006, our
internal control over financial reporting was not effective due to the existence
of material weaknesses. A material weakness is a control deficiency, or a
combination of control deficiencies, that results in more than a remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

      We did not maintain effective controls over the completeness, accuracy,
valuation and existence of inventory held by a supplier to our U.K. business and
the valuation of credit notes due from that supplier. In addition, we did not
maintain appropriate segregation of duties because an employee of our U.K.
business negotiated and entered into purchase contracts while maintaining
overall responsibility for the accounting for these transactions without
appropriate review or monitoring. These control deficiencies could result in a
material misstatement to the annual or interim financial statements that would
not be prevented or detected. As a result of the receivership of our U.K.
supplier of which we were advised subsequent to year-end, we identified an
adjustment of $9 million that was recorded in the financial statements for the
year ended December 30, 2006.

      We did not maintain effective internal controls over our procurement
process, specifically the authorization and approval of contracts and timely
communication of contracts to appropriate accounting personnel to evaluate their
accounting treatment. These control deficiencies could affect financial
statement balances of inventory, prepaids, property, plant and equipment and
related depreciation, accounts payable and capital lease obligations and could
result in a material misstatement to the annual or interim financial statements
that would not be prevented or detected.

      Our assessment of the effectiveness of our internal control over financial
reporting as of December 30, 2006 has been audited by PricewaterhouseCoopers
LLP, an independent registered public accounting firm, as stated in its report
which appears on pages 34 and 35.

PLAN FOR REMEDIATION OF MATERIAL WEAKNESSES

In response to the identified material weaknesses, we, with oversight from our
Audit Committee, are focused on improving our internal controls and remedying
the identified material weaknesses, through implementing  new controls and
policies and ensuring that all our controls and policies are followed.

     Our policies require periodic inventory counts and detailed reconciliation
procedures to ensure the completeness, accuracy and existence of inventory. In
addition, we have procedures in place to ensure appropriate valuation of
inventory and credit notes. We plan on monitoring adherence to our policies by
assigning appropriate personnel to undertake responsibility for these controls.
We have also begun implementing a functional reporting structure intended to
ensure appropriate segregation of duties.

      We have recently hired a Chief Manufacturing and Supply Chain Officer who
is responsible for the global procurement function. We will implement processes
to ensure that our policy that all contracts be appropriately authorized and
that appropriate review for accounting of contracts takes place on a timely
basis is followed.

      We believe that these corrective actions will remediate the material
weaknesses identified above. We will continue to monitor the effectiveness of
these actions and will make any changes and take such other actions that we deem
appropriate given the circumstances.

                                       28


2005 VERSUS 2004

RESULTS OF OPERATIONS



                                                2005                  2004
                                       -------------------  --------------------
                                        MILLIONS   PERCENT   MILLIONS    PERCENT
                                           OF         OF        OF         OF
                                        DOLLARS    REVENUE    DOLLARS    REVENUE
                                       ----------  -------  -----------  -------
                                                             
Revenue                                $ 1,755.3    100.0%  $  1,646.3    100.0%
Cost of sales                            1,505.8     85.8%     1,362.6     82.8%
                                       ---------    -----   ----------    -----
Gross margin                               249.5     14.2%       283.7     17.2%
SG&A                                       138.6      7.9%       138.1      8.4%
Loss/(gain) on sale of property,
   plant and equipment                       1.5      0.1%        (0.3)      --
Restructuring, asset impairments and
   other                                    37.5      2.1%         0.9       --
                                       ---------    -----   ----------    -----
Operating income                            71.9      4.1%       145.0      8.8%
Other expense                               (0.7)      --          0.2       --
Interest expense                            28.8      1.7%        26.0      1.6%
Minority interest                            4.5      0.3%         4.0      0.2%
Income taxes                                14.7      0.8%        35.8      2.2%
Equity loss                                   --       --          0.7       --
                                       ---------    -----   ----------    -----
Net income                             $    24.6      1.4%  $     78.3      4.8%
                                       =========    =====   ==========    =====

Depreciation & amortization                 70.2      4.0%        60.0      3.6%
                                       =========    =====   ==========    =====


REVENUE

Revenue in 2005 was $1,755.3 million, an increase of 7% from $1,646.3 million in
2004. The August 2005 Macaw Acquisition, the March 2004 acquisition of certain
assets of The Cardinal Companies of Elizabethtown, LLC ("Cardinal") and the
October 2004 acquisition of certain of the assets of Metro Beverage Co.
("Metro") added $55.5 million or 3%, in the aggregate, to revenue in 2005 as
compared with 2004. As shown in the following table, revenue increased 2% when
the impact of these acquisitions and foreign exchange are excluded. Total case
volume in 8-ounce equivalents for 2005 was 1,201 million, up 5% from 1,148
million in 2004. Excluding the impact of acquisitions, volume was up 1%.



                                                                NORTH    INTER-
                                                      COTT(1)   AMERICA  NATIONAL
                                                      ------   -------  --------
                                                               
Change in revenue                                     $109.0   $ 39.5   $  68.0
Impact of acquisitions                                  55.5     17.7      37.8
Impact of foreign exchange                              14.0     13.8       0.2
                                                      ------   ------   -------
Change excluding acquisitions & foreign exchange      $ 39.5   $  8.0   $  30.0
                                                      ------   ------   -------
Percentage change excluding acquisitions & foreign
   exchange                                                2%       1%       12%
                                                      ------   ------   -------


(1) Cott includes North America, International and Corporate & other.

In North America, our revenue was $1,428.0 million in 2005, an increase of 3%
from 2004. Excluding acquisitions and the impact of foreign exchange, revenue
increased by almost 1% from 2004. Case volume in 8-ounce equivalents decreased
by almost 2% in 2005, down 3% excluding the impact of acquisitions. The volume
decrease was driven by weakness in the North American CSD category and was
offset by selling price increases implemented in response to higher raw material
costs.

      The international segment includes U.K., Europe, Mexico, Royal Crown
International and Asia. In the U.K and Europe, our revenue was $251.9 million in
2005, an increase of 30% from $194.3 million in 2004. Excluding the impact of
the Macaw Acquisition and the weakened pound sterling, revenue increased 11% in
2005 reflecting higher volume. Case volume in 8-ounce equivalents was up 40%
from 2004, an increase of 10% excluding the Macaw Acquisition. Volume increased
as customers expanded their retailer brand product offerings and we grew our
contract packing business. Revenue from Mexico, Royal Crown International and
Asia was $71.6 million in 2005, an increase of 17% when compared with revenue of
$61.2 million in 2004. Excluding foreign exchange, revenue increased 14%.
Revenue in Mexico continue to expand, reaching $50.9 million for an increase of
25% over 2004.

COST OF SALES

Cost of sales was $1,505.8 million or 85.8% of revenue, a 3 percentage point
increase from $1,362.6 million or 82.8% of revenue in 2004. Variable costs
represented 89% of total cost of sales in 2005, down from 90% in 2004 as a
result of recent capacity additions. Major elements of these variable costs
included ingredient and packaging costs, fees paid to third party manufacturers
and distribution costs.

                                       29




                                         NORTH    INTER-
Increase (decrease)               COTT  AMERICA  NATIONAL
- -------------------               ----  -------  --------
                                        
Volume impact                     (1)%    (3)%      11%
Ingredients & packaging costs      5%      5%       --
Product mix                        1%      1%       --
Acquisitions                       4%      2%       17%
Depreciation & other fixed costs   1%      1%        1%
Foreign exchange                   1%      1%       --
Other                             --      --         1%
                                  --      --        --
Total cost of sales change        11%      7%       30%
                                  ==      ==        ==


      The increase in total cost of sales as a percent of revenue reflects an
increase in ingredients and packaging costs as well as higher fixed costs.
Ingredients and packaging cost increases were impacted by high fructose corn
syrup, PET bottles and cans cost. Higher fixed costs resulted from recently
added production capacity. Variable cost savings from the increase in the
proportion of our North American production manufactured in our own facilities
partially offset those increases. In 2005, cost of sales was reduced by the
proceeds from the HFCS litigation settlement.

GROSS PROFIT

Gross profit was 14.2% of revenue for 2005, down from 17.2% in 2004 as realized
selling price increases were more than offset by higher packaging and raw
material prices. The change in product mix toward lower margined bottled water
and the fixed cost of additional plant capacities also contributed to lower
margins.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

SG&A was $138.6 million in 2005, up slightly from $138.1 million in 2004. As a
percentage of revenue, SG&A declined to 7.9% for 2005, down from 8.4% in 2004.
Excluding the impact of acquisitions and foreign exchange, SG&A was down $5.0
million from 2004 primarily due to lower incentive compensation and lower bad
debt expense. A $3.1 million provision was recorded against a North American
export receivable in 2004.

RESTRUCTURING, ASSET IMPAIRMENTS AND OTHER

In 2005, we recorded restructuring, asset impairments and other charges of $37.5
million before tax. Restructuring, asset impairments and other charges were $0.9
million before tax in 2004 and were primarily related to the writedown of an
investment in an equity investee.

NORTH AMERICA - In 2005, we recorded asset impairment and restructuring charges
of $36.0 million relating to our North American operations.

      In September 2005 we announced a plan to realign the management of our
Canadian and U.S. businesses to a North American basis. We recorded
restructuring charges of $3.0 million, including $2.6 million for severance
payments and $0.4 million for contract termination payments as part of this
plan.

      Asset impairment charges relating to the realignment included $9.3 million
for the closure of the Columbus plant announced in December 2005, including
property, plant and equipment of $3.4 million and goodwill of $5.9 million; and
$3.7 million reflecting the write down of certain equipment and our remaining
investment in an equity investee.

      We also recorded an impairment loss of $20.0 million with respect to
customer relationships. As a result of declining sales and margins relating to
certain customers we reviewed related long-lived assets for impairment. This
review indicated that the customer relationship assets were impaired and as a
result the carrying value was written down to its estimated fair value.

OTHER - Other costs of $0.8 million in 2005 relate primarily to legal fees for
the U.K. Office of Fair Trading and Competition Commission reviews of the Macaw
Acquisition in the U.K. On April 28, 2006, we received final clearance of the
Macaw Acquisition from the Competition Commission.

OPERATING INCOME

Operating income was $73.4 million in 2005 including restructuring, asset
impairments and other charges of $37.5 million, as compared with $144.7 million
in 2004 which included a writedown of an investment of $0.9 million.

INTEREST EXPENSE

Net interest expense was $28.8 million in 2005, up 11% from $26.0 million in
2004. The increase was primarily due to higher borrowings on our credit
facilities during the year to finance the Macaw Acquisition.

INCOME TAXES

We recorded an income tax provision of $14.7 million in 2005 reflecting an
effective tax rate of 37.4% as compared with $35.8 million, or an effective rate
of 31.2%, in 2004. The effective tax rate increase is largely due to our
inability to recognize the tax benefit of our losses in Canada. A reduction in
reserves of $19.3 million partially offset the $21.0 million valuation allowance
recorded for Canadian tax losses.

                                       30


OUTLOOK

While we expect continued decline in the carbonated soft drinks
industry in the North American Food and Mass Channels, energy drinks and
non-carbonated beverages, including bottled water,  sports drinks and
ready-to-drink teas, are showing strong growth. However, the impact of higher
retail prices on CSD industry volumes, as beverage manufacturers pass through
significant commodity cost increases, is uncertain.

      Ingredients and packaging costs represent a significant portion of our
cost of sales. Most of these costs are subject to global and regional commodity
cost trends. Our three biggest commodities are aluminum, resin and HFCS. In
2006, most aluminum buyers, including ourselves, were protected by price caps
keeping the price paid below world prices. However, the cap on aluminum in our
contract with CCS expired in December 2006, and in 2007, the price paid for
aluminum has increased significantly to reflect world pricing. While we
currently expect aluminum prices to decrease through 2007, the degree of the
price decline and the timing are uncertain. Resin prices have increased
significantly in recent years but are expected to be down slightly in 2007 as
compared with 2006 levels. HFCS has a history of volatile price changes. We
typically purchase HFCS requirements for North America under 12 month contracts
and have locked in the majority of our requirements for the year. Our HFCS
prices will be up significantly in 2007 over prior year and we expect this trend
to continue in the future, as a result of growing demand for corn-related
products.

      To be successful in this environment, we will need to continue to cover
all raw material cost increases with pricing, work to strategically reduce
costs, aggressively improve the efficiency of our overall supply chain including
bottled water profitability, increase our penetration into the non-carbonated
beverages category and expand further into international markets.

      Our strategy for creating and sustaining long-term growth and
profitability is based on three key strategic priorities: 1) being the lowest
cost producer; 2) becoming the retailers' best partner; and 3) building and
sustaining an innovation pipeline.

      Our cost reduction program includes initiatives to optimize assets, reduce
fixed costs and implement world-class efficiencies, the adoption of a sub-zero
based budgeting system, optimization of selling, general and administrative
expenses, further centralization of procurement and suppliers, ongoing SKU
rationalization and optimization of all capital investments. In addition, we
intend to drive revenue and volume growth by focusing on in-store merchandising
and display, penetration of new, high-margin beverage segments, expansion of our
business to new, high-margin channels, and expansion to new global customers and
geographies.

      To support the Company's long-term growth, we have restructured our
organization under two business units responsible for North America and
International. These two business units are focused on customer management,
channel development, sales and marketing and are supported by six centralized
functions: 1) People; 2) Manufacturing & Supply Chain; 3) Finance; 4) Legal; 5)
Information Technology & Shared Services and 6) Communications. The new
organizational structure is designed to leverage our strengths in addressing
growth opportunities while driving efficiencies throughout the Company.

      Since September 29, 2005 through the end of our 2006 fiscal year, we have
recorded pretax charges of $86.0 million relating to our previously announced
North American realignment, various cost reduction programs and relating to
impairments of customer relationship intangible assets. These amounts are part
of our estimated $115 to $125 million in total charges related to cost
reduction. This range was revised from the initially announced range of $60 to
$80 million, as a result of additional plant closures, office consolidation and
organizational streamlining. In the near term, it is reasonably possible that
additional charges for exit costs and severances relating to our cost reduction
programs will be in the range of $29 million to $39 million.

Our business strategy, while focused on driving improved performance in our
North American core portfolio with current customers, also involves continued
expansion of our business outside North America. We continue to view Mexico as a
strong long-term growth opportunity and are working closely with our customers
to grow the retailer brand beverage segment in this market and expand into new
channels and product segments. Our U.K. division intends to continue to enhance
its performance through product innovation and expansion in aseptic products
with the installation of a second aseptic production line in our Nelson facility
in the spring of 2007.

      We have already taken significant costs out of the business but there is
more we can do. We have made good early progress in expanding into new
channels, new products and new customers, especially internationally. It takes
time to see the benefits of these initiatives, but we expect them to positively
impact the business and our financial results in 2007 and beyond.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FOREIGN EXCHANGE

We are exposed to changes in foreign currency exchange rates. Operations outside
of the U.S. accounted for approximately 35% of 2006 revenue and 29% of 2005
revenue, and are concentrated principally in the U.K., Canada and Mexico. Our
debt instruments, including debt of

                                       31


55.7 million pounds sterling are related to the U.K. operations. We translate
the revenues and expenses of our foreign operations using average exchange rates
prevailing during the period. The effect of a 10% change in foreign currency
exchange rates among the U.S. dollar versus the Canadian dollar and pound
sterling at current levels of foreign debt and operations could be material to
our financial condition and profitability.

      In 2005, we entered into cash flow hedges to mitigate exposure to declines
in the value of the Canadian dollar and pound sterling attributable to certain
forecasted U.S. dollar raw material purchases of the Canadian and U.K. and
European business segments. The hedges consisted of monthly foreign exchange
options to buy U.S. dollars at fixed rates per Canadian dollar and matured at
various dates through December 28, 2006. The fair market value of the foreign
exchange options, if any, is included in prepaid expenses and other assets.

      At December 30, 2006 there are no hedges outstanding. We recorded a $0.4
million decrease in the unrealized loss in other comprehensive income in 2006
relating to options maturing during the year.

      The instruments are cash flow hedges under SFAS 133; accordingly, changes
in the fair value of the cash flow hedge instruments are recognized in
accumulated other comprehensive income. Amounts recognized in accumulated other
comprehensive income and prepaid expenses and other assets are recorded in
earnings in the same periods in which the forecasted purchases or payments
affect earnings.

DEBT OBLIGATIONS AND INTEREST RATES

We have exposure to interest rate risk from our short-term and long-term debt.
Our long-term debt is fixed and our short-term debt is variable. Our short-term
credit facilities are most vulnerable to fluctuations in the U.K. short-term
base rate and the LIBOR rate. At current debt levels, a hypothetical increase of
10% in either interest rate measure would not be material to our cash flows or
our results of operations. The weighted average interest rate of our debt
outstanding at December 30, 2006 was 7.58%.

      We regularly review the structure of our indebtedness and consider changes
to the proportion of floating versus fixed rate debt through refinancing,
interest rate swaps or other measures in response to the changing economic
environment. Historically, we have not used derivative instruments to manage
interest rate risk. If we use and fail to manage these derivative instruments
successfully, or if we are unable to refinance our indebtedness or otherwise
increase our debt capacity in response to changes in the marketplace, the
expense associated with debt service could increase. This would negatively
impact our financial condition and profitability.

The information below summarizes our market risks associated with long-term debt
obligations as of December 30, 2006. The table presents principal cash flows and
related interest rates by year of maturity. Interest rates disclosed represent
the actual weighted average rates as of December 30, 2006.



                                  DEBT OBLIGATIONS
                             ------------------------------
                                          WEIGHTED AVERAGE
                                         INTEREST RATE FOR
(IN MILLIONS OF US DOLLARS)  FIXED RATE    DEBT MATURING
- ---------------------------  ----------  ------------------
                                   
DEBT MATURING IN:
2007                         $      2.0        5.3%
2008                                2.0        5.3%
2009                                1.4        5.4%
2010                                0.5        5.2%
2011                              275.0        8.0%
                             ----------        ---
Total                        $    280.9        7.9%
                             ----------        ---
Fair Value                   $    287.1
                             ----------


                                       32


ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF MANAGEMENT

The accompanying consolidated financial statements have been prepared by
management in conformity with generally accepted accounting principles in the
U.S. to reflect our financial position and our operating results. Financial
information appearing throughout this Annual Report is consistent with that in
the consolidated financial statements. Management is responsible for the
information and representations in such consolidated financial statements,
including the estimates and judgments required for their preparation.

      In order to meet our responsibility, management maintains a system of
internal controls including policies and procedures designed to provide
reasonable assurance that assets are safeguarded and reliable financial records
are maintained. We have contracted with Deloitte & Touche LLP to provide
internal audit services including monitoring and reporting on the adequacy of
and compliance with internal controls, in accordance with their approved annual
internal audit plan. The internal audit function reports regularly to the Audit
Committee of the Board of Directors and we take such actions as are appropriate
to address control deficiencies and other opportunities for improvement as they
are identified.

      For the year ended December 30, 2006, we identified material weaknesses in
the areas of procurement, segregation of duties and inventory. In response to
the identified material weaknesses, we, with oversight from our Audit Committee,
are focused on improving our internal controls over financial reporting and
remedying the identified material weaknesses, through implementing new
controls and policies and ensuring that all our controls and policies are
followed. The material weaknesses are disclosed on "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

      The report of PricewaterhouseCoopers LLP, our independent registered
public accounting firm, covering their audit of the consolidated financial
statements and internal control over financial reporting as of December 30, 2006
and December 31, 2005 and the audit of the January 1, 2005 financial statements,
is included in this Annual Report. We used PricewaterhouseCoopers LLP for audit
and tax compliance services in 2006 and plan to engage them only to provide
these services in the future.

      The Board of Directors annually appoints an Audit Committee, consisting of
at least three independent directors. The Audit Committee meets with management,
internal auditors and the independent auditors to review any significant
accounting and auditing matters and to discuss the results of audit
examinations. The Audit Committee also reviews the consolidated financial
statements, the Report of Independent Registered Public Accounting Firm and
other information in the Annual Report and recommends their approval to the
Board of Directors.

                         /s/ Brent D. Willis
                         -----------------------------------------------------
                         Brent D. Willis
                         Chief Executive Officer
                         February 19, 2007

                         /s/ Tina Dell'Aquila
                         -----------------------------------------------------
                         Tina Dell'Aquila
                         Chief Financial Officer, Vice President, Controller &
                         Assistant Secretary
                         February 19, 2007

                                       33


REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

TO THE SHAREOWNERS OF COTT CORPORATION:

We have completed integrated audits of Cott Corporation's December 30, 2006,
December 31, 2005 and January 1, 2005 consolidated financial statements and of
its internal control over financial reporting as of December 30, 2006, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Our opinions, based on our audits, are presented below.

CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

In our opinion, the consolidated financial statements appearing under Item 8 of
Form 10-K present fairly, in all material respects, the financial position of
Cott Corporation and its subsidiaries at December 30, 2006 and December 31, 2005
and the results of its operations and its cash flows for each of the three years
in the period ended December 30, 2006 in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statements schedules appearing under Item 15 of Form 10-K present
fairly, in all material respects, the information set therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit of
financial statements includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the financial statements, the Company adopted
Statement of Financial Accounting Standard ("SFAS") 123(R), Share-Based Payments
which changed its method of accounting for stock-based compensation. In
addition, the Company adopted SFAS 151, Inventory Costs, which changed its
method of accounting for fixed production overheads.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Also, we have audited management's assessment, included in Management's Report
on Internal Control over Financial Reporting appearing in Item 9A of Form 10-K,
that the Company did not maintain effective internal control over financial
reporting as of December 30, 2006, because of the effects of material weaknesses
relating to the Company not maintaining effective control over i) completeness,
accuracy, valuation and existence of inventory and segregation of duties, and
ii) procurement, specifically the authorization and approval of contracts and
timely communication of contracts to evaluate their accounting treatment, based
on criteria established in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company's management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting. Our responsibility is to express opinions on
management's assessment and on the effectiveness of the Company's internal
control over financial reporting based on our audit.

We conducted our audit of internal control over financial reporting in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. An audit of
internal control over financial reporting includes obtaining an understanding of
internal control over financial reporting, evaluating management's assessment,
testing and evaluating the design and operating effectiveness of internal
control, and performing such other procedures as we consider necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinions.

A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation

                                       34


of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected. The following material weaknesses have been identified and included
in management's assessment.

1.    The Company did not maintain effective controls over the completeness,
      accuracy, valuation and existence of inventory held by a supplier at the
      United Kingdom division and the valuation of credit notes due from that
      supplier. The Company did not maintain appropriate segregation of duties
      because an employee of the United Kingdom division negotiated and entered
      into purchase contracts while maintaining overall responsibility for the
      accounting for these transactions without appropriate review or
      monitoring.

2.    The Company did not maintain effective internal controls over the
      procurement process, specifically the authorization and approval of
      contracts and timely communication of contracts to appropriate accounting
      personnel to evaluate their accounting treatment. These control
      deficiencies could affect financial statement balances of inventory,
      prepaids, property, plant and equipment and related depreciation, accounts
      payable and capital lease obligations.

Each of these control deficiencies could result in a misstatement of the
Company's financial statement accounts and disclosures balances or disclosures
that would result in a material misstatement to the annual or interim financial
statements that would not be prevented or detected. Accordingly, management has
determined that each of these control deficiencies constitutes a material
weakness. These material weaknesses were considered in determining the nature,
timing, and extent of audit tests applied in our audit of the December 30, 2006
consolidated financial statements, and our opinion regarding the effectiveness
of the Company's internal control over financial reporting does not affect our
opinion on those consolidated financial statements.

In our opinion, management's assessment that the Company did not maintain
effective internal control over financial reporting as of December 30, 2006, is
fairly stated, in all material respects, based on criteria established in
Internal Control - Integrated Framework issued by the COSO. Also, in our
opinion, because of the effects of the material weaknesses described above on
the achievement of the objectives of the control criteria, the Company has not
maintained effective internal control over financial reporting as of December
30, 2006, based on criteria established in Internal Control - Integrated
Framework issued by the COSO.

                                      /s/ PricewaterhouseCoopers LLP
                                      ---------------------------------------
                                      PricewaterhouseCoopers LLP
                                      Chartered Accountants
                                      Toronto, Ontario
                                      February 19, 2007

                                       35


COTT CORPORATION
CONSOLIDATED STATEMENTS OF (LOSS) INCOME



                                                                         For the years ended
                                                               --------------------------------------
                                                               DECEMBER 30,  December 31,  January 1,
(IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)            2006          2005         2005
                                                               ------------  ------------  ----------
                                                                                  
REVENUE                                                        $   1,771.8   $   1,755.3   $ 1,646.3
Cost of sales                                                      1,554.9       1,505.8     1,362.6
                                                               -----------   -----------   ---------
GROSS PROFIT                                                         216.9         249.5       283.7
Selling, general and administrative expenses                         176.1         138.6       138.1
Loss (gain) on disposal of property, plant and equipment                --           1.5        (0.3)
Restructuring, asset impairments and other charges - note 2
   Restructuring                                                      20.5           3.2          --
   Asset impairments                                                  15.4          33.5         0.9
   Other                                                               2.6           0.8          --
                                                               -----------   -----------   ---------
 OPERATING INCOME                                                      2.3          71.9       145.0
 Other expense (income), net - note 3                                  0.1          (0.7)        0.2
 Interest expense, net - note 4                                       32.2          28.8        26.0
 Minority interest                                                     3.8           4.5         4.0
                                                               -----------   -----------   ---------
 (LOSS) INCOME BEFORE INCOME TAXES AND EQUITY LOSS                   (33.8)         39.3       114.8
 Income taxes - note 5                                               (16.3)         14.7        35.8
 Equity loss                                                            --            --         0.7
 NET (LOSS) INCOME - note 6                                    $     (17.5)  $      24.6   $    78.3
                                                               ===========   ===========   =========

 PER SHARE DATA - note 7

    NET (LOSS) INCOME PER COMMON SHARE
    Basic                                                      $     (0.24)  $      0.34   $    1.10
    Diluted                                                    $     (0.24)  $      0.34   $    1.09


The accompanying notes are an integral part of these consolidated financial
statements.

                                       36


COTT CORPORATION
CONSOLIDATED BALANCE SHEETS



                                                                  DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)                                         2006          2005
                                                                  ------------  ------------
                                                                          
ASSETS
   CURRENT ASSETS
    Cash                                                          $      13.4   $       21.7
    Accounts receivable - note 8                                        187.0          190.1
    Income taxes recoverable                                             16.6            1.0
    Inventories - note 9                                                131.2          144.2
    Prepaid expenses and other assets - note 10                          10.3            9.5
    Deferred income taxes - note 5                                       11.7            7.3
                                                                  -----------   ------------
                                                                        370.2          373.8
PROPERTY, PLANT AND EQUIPMENT - note 11                                 360.2          394.2
GOODWILL - note 12                                                      158.4          150.3
INTANGIBLES AND OTHER ASSETS - note 13                                  250.7          260.4
DEFERRED INCOME TAXES - note 5                                             --            0.4
                                                                  -----------   ------------
                                                                  $   1,139.5   $    1,179.1
                                                                  ===========   ============

LIABILITIES
CURRENT LIABILITIES
    Short-term borrowings - note 14                               $     107.7   $      157.9
    Current maturities of long-term debt - note 15                        2.0            0.8
    Accounts payable and accrued liabilities - note 16                  186.5          182.5
    Deferred income taxes - note 5                                         --            0.2
                                                                  -----------   ------------
                                                                        296.2          341.4
LONG-TERM DEBT - note 15                                                275.2          272.3
DEFERRED INCOME TAXES - note 5                                           58.5           61.0
                                                                  -----------   ------------
                                                                        629.9          674.7
                                                                  -----------   ------------
MINORITY INTEREST                                                        20.9           22.5

SHAREOWNERS' EQUITY
CAPITAL STOCK - note 17
    Common shares - 71,749,630 (2005 - 71,711,630) shares issued        273.4          273.0
RESTRICTED SHARES - note 18                                              (0.7)            --
ADDITIONAL PAID-IN-CAPITAL                                               29.8           18.4
RETAINED EARNINGS                                                       168.7          186.2
ACCUMULATED OTHER COMPREHENSIVE INCOME                                   17.5            4.3
                                                                  -----------   ------------
                                                                        488.7          481.9
                                                                  -----------   ------------
                                                                  $   1,139.5   $    1,179.1
                                                                  ===========   ============


The accompanying notes are an integral part of these consolidated financial
statements.

Approved by the Board of Directors

/s/ Serge Gouin                                 /s/ Philip B. Livingston
- ---------------------------------               --------------------------------
Director                                        Director

                                       37


COTT CORPORATION
CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY



                                             NUMBER OF                                               ACCUMULATED
                                              COMMON                          ADDITIONAL                OTHER
                                              SHARES      COMMON  ESTRICTED    PAID-IN-   RETAINED  COMPREHENSIVE   TOTAL
(IN MILLIONS OF U.S. DOLLARS)             (IN THOUSANDS)  SHARES   SHARES      CAPITAL    EARNINGS      INCOME     EQUITY
                                          --------------  ------  ---------   ----------  --------  -------------  ------
                                                                                              
Balance at January 3, 2004                      70,259    $255.2  $      --   $     12.7  $  83.3   $       (6.1)  $345.1
Options exercised, including tax benefit
    of $4.9 million - note 18                    1,181      14.2         --          4.9       --             --     19.1
Comprehensive income - note 6
     Currency translation adjustment                --        --         --           --       --           15.8     15.8
     Unrealized losses on cash flow
       hedges - note 10                             --        --         --           --       --           (1.0)    (1.0)
     Net income                                     --        --         --           --     78.3             --     78.3
                                                ------    ------  ---------   ----------  -------   ------------   ------
                                                    --        --         --           --     78.3           14.8     93.1
                                                ------    ------  ---------   ----------  -------   ------------   ------

Balance at January 1, 2005                      71,440     269.4         --   $     17.6    161.6            8.7     457.3

Options exercised, including tax benefit
    of $0.8 million - note 18                      272       3.6         --          0.8       --             --      4.4
Comprehensive income - note 6
     Currency translation adjustment                --        --         --           --       --           (5.0)    (5.0)
    Change in unrealized loss on cash
     flow hedges - note 10                          --        --         --           --       --            0.6      0.6
     Net income                                     --        --         --           --     24.6             --     24.6
                                                ------    ------  ---------   ----------  -------   ------------   ------
                                                    --        --         --           --     24.6           (4.4)    20.2
                                                ------    ------  ---------   ----------  -------   ------------   ------

Balance at December 31, 2005                    71,712     273.0         --   $     18.4    186.2            4.3    481.9

Options exercised, including tax benefi
    of nil                                          38       0.4         --           --       --             --      0.4
Restricted shares - note 18                         --        --       (0.7)          --       --             --     (0.7)
Share-based compensation                            --        --         --         11.4       --             --     11.4
Comprehensive income - note 6
     Currency translation adjustment                --        --         --           --       --           12.8     12.8
    Change in unrealized loss on cash
     flow hedges - note 10                          --        --         --           --       --            0.4      0.4
     Net loss                                       --        --         --           --    (17.5)            --    (17.5)
                                                ------    ------  ---------   ----------  -------   ------------   ------
                                                    --        --         --           --    (17.5)          13.2     (4.3)
                                                ------    ------  ---------   ----------  -------   ------------   ------

BALANCE AT DECEMBER 30, 2006                    71,750    $273.4  $    (0.7)  $     29.8  $ 168.7   $       17.5   $488.7
                                                ======    ======  =========   ==========  =======   ============   ======


The accompanying notes are an integral part of these consolidated financial
statements.

                                       38


COTT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                      For the years ended
                                                            --------------------------------------
                                                            DECEMBER 30,  December 31,  January 1,
(IN MILLIONS OF U.S. DOLLARS)                                   2006          2005         2005
                                                            ------------  ------------  ----------
                                                                               
OPERATING ACTIVITIES
Net (loss) income                                           $     (17.5)  $      24.6   $    78.3
Depreciation and amortization                                      86.8          70.2        60.0
Amortization of financing fees                                      1.1           0.8         0.7
Share-based compensation - note 18                                 11.4            --          --
Deferred income taxes - note 5                                     (6.6)         (6.5)        9.1
Minority interest                                                   3.8           4.5         4.0
Loss (gain) on disposal of property, plant and equipment             --           1.5        (0.3)
Equity loss                                                          --            --         0.7
Asset impairments                                                  15.4          33.5         1.5
Other non-cash items                                               12.0           1.5         1.1
Net change in non-cash working capital - note 19                    3.0          (1.0)      (52.4)
                                                            -----------   -----------   ---------

Cash provided by operating activities                             109.4         129.1       102.7
INVESTING ACTIVITIES
Additions to property, plant and equipment                        (35.1)        (75.8)      (50.3)
Additions to intangibles and other assets                         (13.0)         (9.0)      (10.1)
Proceeds from disposition of property, plant and equipment          1.6           2.2         5.4
Acquisitions - note 20                                               --        (135.1)      (34.6)
Acquisition of production capacity                                   --            --        (3.8)
                                                            -----------   -----------   ---------

Cash used in investing activities                                 (46.5)       (217.7)      (93.4)
FINANCING ACTIVITIES
Payments of long-term debt                                         (1.0)         (0.9)       (3.5)
Short-term borrowings                                             (65.9)         91.8        (7.0)
Distributions to subsidiary minority shareowner                    (5.4)         (5.8)       (5.9)
Issue of common shares                                              0.4           3.6        14.3
Financing costs                                                      --          (3.8)         --
Other financing activities                                          0.6          (0.4)       (0.4)
                                                            -----------   -----------   ---------

Cash (used in) provided by financing activities                   (71.3)         84.5        (2.5)
                                                            -----------   -----------   ---------

Effect of exchange rate changes on cash                             0.1          (0.8)        1.4
                                                            -----------   -----------   ---------
NET (DECREASE) INCREASE IN CASH                                    (8.3)         (4.9)        8.2
                                                            -----------   -----------   ---------

CASH, BEGINNING OF YEAR                                            21.7          26.6        18.4
                                                            -----------   -----------   ---------
CASH, END OF YEAR                                           $      13.4   $      21.7   $    26.6
                                                            ===========   ===========   =========


The accompanying notes are an integral part of these consolidated financial
statements.

                                       39


COTT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE FISCAL YEARS ENDED 2006, 2005 AND 2004

NOTE 1

Summary of Significant Accounting Policies

BASIS OF PRESENTATION

These consolidated financial statements have been prepared in accordance with
United States ("U.S.") generally accepted accounting principles ("GAAP") using
the U.S. dollar as the reporting currency, as the majority of our business and
the majority of our shareowners are in the U.S.

      Comparative amounts in prior years have been reclassified to conform to
the financial statement presentation adopted in the current year.

BASIS OF CONSOLIDATION

The financial statements consolidate our accounts and our wholly-owned and
majority-owned subsidiaries where we are exposed to the majority of the expected
losses or returns.

ESTIMATES

The preparation of these consolidated financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying
notes. We review long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amounts may not be recoverable.
Determining whether impairment has occurred requires various estimates and
assumptions including estimates of cash flows that are directly related to the
potentially impaired asset, the useful life over which cash flows will occur and
their amounts. The measurement of an impairment loss requires an estimate of
fair value, which is based on cash flow estimates and the application of an
appropriate discount rate.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes."
FIN 48 is an interpretation of FASB Statement No. 109 "Accounting for Income
Taxes." We will adopt FIN 48 for our interim period ending March 31, 2007. This
interpretation prescribes a comprehensive model for recognizing, measuring,
presenting and disclosing in the financial statements uncertain tax positions
that we have taken or expect to take in our tax returns. We are currently
evaluating the impact of the new standard on our financial statements. Any
adjustment required to increase or decrease our tax liabilities as a result of
adopting the new standard will be accounted for as an adjustment to opening
retained earnings as of December 30, 2006. We will recognize interest and
penalties relating to unrecognized tax benefits within income tax expense. As of
December 30, 2006, we have recognized an income tax reserve of $10.3 million
relating to uncertain tax positions we have taken. Although we are currently the
subject of audits by taxation authorities in various jurisdictions, including
Canada and the United States, we do not believe that the resolution of these
audits will have a material adverse affect on our financial position.

REVENUE RECOGNITION

We recognize revenue, net of sales returns, at the time ownership passes to the
customer. This may be upon shipment of goods or upon delivery to the customer,
depending on contractual terms. Shipping and handling costs paid by the customer
to us are included in revenue. Although we accept returns of products from our
customers occasionally, such returns, historically, have not been material.

SALES INCENTIVES

We participate in various incentive programs with our customers including volume
based incentives, promotional allowance incentives and contractual rebate
incentives. Sales incentives are deducted in arriving at sales. Sales
incentives, based on our customers achieving volume targets or remaining loyal
for a period of time, are accrued as the incentives are earned and are based on
management's estimate of the total rebate the customer is expected to earn and
claim. We regularly review customer sales forecasts to ensure volume targets
will be met and adjust incentive accruals accordingly.

COSTS OF SALES

We record shipping and handling and finished goods inventory costs in cost of
sales. Finished goods inventory costs include the cost of direct labor and
materials and the applicable share of overhead expense chargeable to production.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

We record all other expenses not charged to production as general and
administrative expenses.

                                       40


SHARE-BASED COMPENSATION

Effective January 1, 2006, we adopted Statement of Financial Accounting Standard
("SFAS") 123R, Share-Based Payments, using the modified prospective approach and
therefore have not restated results for prior periods. Under the modified
prospective approach, share-based compensation expense for the year ended
December 30, 2006 includes compensation expense for all share-based compensation
awards granted, prior to, but not yet vested as of January 1, 2006, based on the
grant date fair value estimated in accordance with the original provision of
SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").
Share-based compensation expense for all share-based compensation awards granted
after January 1, 2006 is based on the grant-date fair value estimated in
accordance with the provisions of SFAS 123R. We recognized these compensation
costs net of a forfeiture rate on a straight-line basis over the requisite
service period of the award, which is generally the vesting term of three years.
We estimated the forfeiture rate for fiscal 2006 based on our historical
experience with forfeitures during the preceding three fiscal years. For the
year ended December 30, 2006, net loss includes compensation expense of $11.4
million, or $8.4 million net of tax recovery of $3.0 million, or $0.12 per basic
and diluted share. Had compensation expense for the plans been determined based
on the fair value at the date of grant for the year ended December 31, 2005 our
income before taxes would have been $29.5 million, income tax expense would have
been $12.2 million and net income would have been $17.3 million or $0.24 per
basic and diluted share as described in note 18.

      Upon adoption of SFAS 123R, we used the long form method for calculating
the tax effect of share-based compensation. Under this method, we determine the
beginning balance of additional paid-in-capital related to the tax effects of
the employee share-based compensation as if we had adopted the recognition
provisions of SFAS 123 since its effective date of January 1, 1995. On an
ongoing basis, additional paid-in-capital is adjusted by the tax impact related
to the difference between the amount deducted for tax purposes and the
compensation cost for accounting purposes. Where the tax deduction exceeds book
compensation cost, an increase in additional paid-in-capital is recorded. Where
the tax deduction is less than book compensation cost, a reduction in additional
paid-in-capital is recorded to the extent there is an accumulated balance or
charged to income tax expense if a shortfall remains after the accumulated
additional paid-in-capital is brought to zero.

INVENTORIES

Inventories are stated at the lower of cost, determined on the first-in,
first-out method, or net realizable value. Returnable bottles and plastic shells
are valued at the lower of cost, deposit value or net realizable value. Finished
goods and work-in-process include the cost of raw materials, direct labor and
manufacturing overhead costs.

      Effective January 1, 2006, we adopted SFAS 151, Inventory Costs. The
statement requires that the allocation of fixed production overheads to
inventory be based on the normal capacity of the production facilities.
Unallocated overheads resulting from abnormally low production and certain other
costs are to be recognized as an expense in the period in which they are
incurred. There was no material impact from the adoption of this standard.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost less accumulated depreciation.
Depreciation is provided using the straight-line method over the estimated
useful lives of the assets as follows:



                                                    
- ------------------------------------------------------------------------
Buildings                                              20 to 40 years
Machinery and equipment                                 7 to 15 years
Furniture and fixtures                                  3 to 10 years
Plates and films                                        up to 5 years
- ------------------------------------------------------------------------


Leasehold improvements are amortized over the remaining life of the lease.

GOODWILL

Goodwill represents the excess purchase price of acquired businesses over the
fair value of the net assets acquired. We test the goodwill for impairment at
least annually. We evaluate goodwill for impairment on a reporting unit basis.
Reporting units are operating segments or components of operating segments for
which discrete financial information is available. We compare the fair value of
a reporting unit to its carrying value. If the carrying value is greater than
the fair value, the implied fair value of the reporting unit goodwill is
determined by allocating the fair value of the reporting unit to all the assets
and liabilities of that unit with any of the remainder being allocated to
goodwill. The implied fair value of the reporting unit goodwill is then compared
to the carrying value of that goodwill. Any impairment in value is recognized in
net income.

INTANGIBLES AND OTHER ASSETS

Issuance costs for credit facilities and long-term debt are deferred and
amortized over the term of the credit agreement or related debt, respectively.

      Rights to manufacture concentrate formulas, with all the related
inventions, processes and technical expertise, are recorded as intangible assets
at the cost of acquisition. The rights are not amortized because their useful
lives extend indefinitely. We compare the carrying amount of the rights to

                                       41


their fair value, at least annually, and recognize in net income any impairment
in value.

      Customer relationships are amortized over periods of up to 15 years.
Trademarks are recorded at the cost of acquisition and are amortized over 15
years.

      Information technology includes computer software and licenses, computer
programs and information systems, which are amortized over a period of 3 to 5
years.

IMPAIRMENT OF LONG-LIVED ASSETS

If events and changes in circumstances indicate that the carrying values of
long-lived assets or, if appropriate, groups of long-lived assets may not be
recoverable, we compare the undiscounted future cash flows from the use and
eventual disposal of the assets to the carrying amounts. If the carrying amounts
exceed these cash flows, we recognize an impairment to the extent that the
carrying amounts exceed the fair values of the assets.

FOREIGN CURRENCY TRANSLATION

The assets and liabilities of foreign operations, all of which are
self-sustaining, are translated at the exchange rates in effect at the balance
sheet dates. Revenues and expenses are translated using average exchange rates
prevailing during the period. The resulting gains or losses are accumulated in
the other comprehensive income account in shareowners' equity.

TAXATION

We account for income taxes under the asset and liability method. Deferred tax
assets and liabilities are recognized based on the differences between the
accounting values of assets and liabilities and their related tax bases using
currently enacted income tax rates. A valuation allowance is established to
reduce deferred income tax assets if, on the basis of available evidence, it is
not more likely than not that all or a portion of any deferred tax assets will
be realized.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reflected in the consolidated balance sheets for cash,
receivables, payables, short-term borrowings and long-term debt approximate
their respective fair values, except as otherwise indicated.

DERIVATIVE FINANCIAL INSTRUMENTS

We enter into foreign exchange option and forward contracts to mitigate exposure
to declines in the value of the Canadian dollar and pound sterling. We account
for foreign exchange options as cash flow hedges. Changes in the fair value of
the cash flow hedge instruments are recognized in accumulated other
comprehensive income. Amounts recognized in accumulated other comprehensive
income and prepaid expenses and other assets are recorded in earnings in the
same periods in which the forecasted purchases or payments affect earnings.

TRANSFERS OF FINANCIAL ASSETS

We account for accounts receivables sold through our receivable securitization
facility in accordance with SFAS 125 Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Debt. The transactions are accounted for
as short-term borrowings as we have not surrendered control of the receivables.
The accounts receivables and related debt have both been recorded in the
consolidated financial statements.

COMPREHENSIVE INCOME

Comprehensive income is comprised of net income adjusted for changes in the
cumulative foreign currency translation adjustment account and unrealized gains
and losses on cash flow hedges.

NOTE 2
Restructuring, Asset Impairments and Other Charges



                                         For the years ended
                            -------------------------------------------
                            DECEMBER 30,      December 31,   January 1,
                                2006              2005          2005
                            ------------      ------------   ----------
                                (IN MILLIONS OF U.S. DOLLARS)
                                                    
Restructuring               $       20.5      $        3.2   $       --
Asset impairments                   15.4              33.5          0.9
Other                                2.6               0.8           --
                            ------------      ------------   ----------
                            $       38.5      $       37.5   $      0.9
                            ============      ============   ==========


In September 2005 we announced our plan to realign the management of our
Canadian and U.S. businesses to a North American basis, rationalize product
offerings, eliminate under performing assets and increase focus on high
potential accounts.

      In conjunction with this plan, we closed our Lachine, Quebec juice plant
("Lachine") in February 2006 and in March 2006 we closed our Columbus, Ohio soft
drink plant and warehouse ("Columbus") to bring production capacity in line with
the needs of our customers.

      On July 27, 2006, we announced the realignment of the management of our
U.K. and Europe business, our Mexican business, our Royal Crown International
business and our business in Asia to an International basis, to focus on
customer management, channel development, sales and marketing.

                                       42


      In addition, on October 26, 2006, we announced the closures of our
manufacturing plant in Elizabethtown, Kentucky ("Elizabethtown") and our
manufacturing plant and warehousing operations in Wyomissing, Pennsylvania
("Wyomissing"). We ceased production at both plants on December 30, 2006, and
have reallocated production volume to other manufacturing sites in North
America. The Wyomissing warehouse was still in operation as of December 30,
2006, and is expected to be closed in 2007.

YEAR ENDED DECEMBER 30, 2006

The following table sets out our restructuring, asset impairments and other
charges on a segmented basis for the year ended December 30, 2006.



                               For the year ended December 30, 2006
                               -------------------------------------
                                North    Inter-
(IN MILLIONS OF U.S. DOLLARS)  America  national  Corporate   Total
- -----------------------------  -------  --------  ---------   -----
                                                 
Restructuring                  $  15.6   $  0.7    $   4.2   $  20.5
Asset impairments                 15.3       --        0.1      15.4
Other                               --      2.6         --       2.6
                               -------   ------    -------   -------
                               $  30.9   $  3.3    $   4.3   $  38.5
                               =======   ======    =======   =======


RESTRUCTURING - We recorded restructuring charges of $20.5 million including
$14.7 million for severance and contract termination costs relating to the
closures of Columbus, Lachine, Elizabethtown and Wyomissing, $0.9 million of
other severance costs relating to sales and marketing employees and $4.2 million
for severance relating to organizational streamlining. The remaining
restructuring cost of $0.7 million relates to consulting fees incurred in
connection with restructuring activities.

The following table is a summary of our cash restructuring charges for the year
ended December 30, 2006:



                 Balance at  Charged to   Payments    Balance at
(IN MILLIONS OF  January 1,  Costs and   made during   December
U.S. DOLLARS)       2006      Expenses    the year     30, 2006
- ---------------  ----------  ----------  -----------  ----------
                                          
Severance and
 termination
 benefits         $    1.0    $   12.1    $    (7.7)   $    5.4
Contract loss           --         7.7         (0.4)        7.3
Other                   --         0.7         (0.7)         --
                  --------    --------    ---------    --------
                  $    1.0    $   20.5    $    (8.8)   $   12.7
                  ========    ========    =========    ========


ASSET IMPAIRMENTS - We recorded an impairment loss of $15.4 million, which is
comprised of charges of $14.2 million for the writedown of property, plant and
equipment related to the closures of Elizabethtown and Wyomissing, $1.6 million
for the writedown of property, plant and equipment, customer list and
information technology software related to the closure of Columbus and $0.1
million for the writedown of property, plant and equipment relating to Lachine,
net of a $0.5 million recovery from the sale of other assets.

OTHER - Other unusual items includes primarily legal and consulting fees
relating to the United Kingdom ("U.K.") Competition Commission review of our
acquisition of 100% of the shares of Macaw (Holdings) Limited (now known as Cott
Nelson (Holdings) Limited), the parent company of Macaw (Soft Drinks) Limited
(now known as Cott (Nelson) Limited) (the "Macaw Acquisition") in the U.K. On
April 28, 2006, we received final clearance of the Macaw Acquisition from the
Competition Commission.

      We are currently evaluating various actions to reduce costs and are
developing detailed plans which may result in additional exit and other costs
being incurred. In the near term, we expect to incur additional charges relating
to contract termination costs associated with the closure of Elizabethtown and
Wyomissing. Since September 29, 2005 through the end of the year ended December
30, 2006, we have recorded pre-tax charges of $86.0 million relating to our
previously announced North American realignment, cost reduction programs and
impairments of customer relationship intangible assets, of which $20.0 million
was recorded in 2005 relating to customer relationship impairment. In connection
with the plant and warehouse closures announced on October 26, 2006, we have
recorded pre-tax charges of $30.4 million, of which $10.6 million relates to
accelerated depreciation and amortization recorded in cost of sales and $14.2
million in impairment charges relating to property, plant and equipment and
intangible assets, and the remainder relates to contract termination costs and
severance costs for the termination of approximately 350 employees. The
remainder of these costs will be taken in the first half of 2007. These amounts
are part of the estimated $115 to $125 million in charges for cost reduction
programs including additional plant closures, office consolidation and
organizational streamlining. This range was revised from the initially announced
$60 to $80 million in charges associated with the North American realignment
plan and other asset impairments. In the near term, it is reasonably possible
that additional charges for exit costs and severances relating to our cost
reduction programs will be in the range of $29 million to $39 million.

      We may also rationalize products and production capacity further but have
not yet completed our analysis nor have we completed our detailed plans.
Accordingly, the ultimate amount of any asset impairment charges or change in
useful lives of assets that may result is uncertain. It is reasonably possible
that our estimates of future cash flows or the useful lives, or both, related to
certain equipment and intangibles will be significantly reduced in the near
term. As a result, the

                                       43


carrying value of the related assets may also be reduced materially in the near
term.

YEAR ENDED DECEMBER 31, 2005

The following table sets out our restructuring, asset impairments and other
charges on a segmented basis for the year ended December 31, 2005.



                   For the year ended December 31, 2005
                   -------------------------------------
(IN MILLIONS OF     North    Inter-
U.S. DOLLARS)      America  national  Corporate   Total
                   -------  --------  ---------  -------
                                     
Restructuring      $   3.0  $    --   $     0.2  $   3.2
Asset impairments     33.0     (0.2)        0.7     33.5
Other                   --      0.8          --      0.8
                   -------  -------   ---------  -------
                   $  36.0  $   0.6   $     0.9  $  37.5
                   =======  =======   =========  =======


RESTRUCTURING - Restructuring charges for the year ended December 31, 2005 are
comprised of severance and contract termination costs relating to the North
American realignment plan.

      The following table is a summary of our cash restructuring charges for the
year ended December 30, 2005:



                 Balance at  Charged to   Payments     Balance at
(IN MILLIONS OF  January 2,  Costs and   made during  December 31,
U.S. DOLLARS)       2005      Expenses    the year       2005
- ---------------  ----------  ----------  -----------  ------------
                                          
Severance and
 termination
 benefits         $    --     $   2.6     $    (1.6)    $   1.0
Contract loss          --         0.6          (0.6)         --
                  -------     -------     ---------     -------
                  $    --     $   3.2     $    (2.2)    $   1.0
                  =======     =======     =========     =======


ASSET IMPAIRMENTS - Asset impairments for the year ended December 31, 2005 are
comprised of writedown of a customer relationship intangible asset of $20.0
million as well as writedown of property, plant and equipment of $7.1 million
and goodwill of $5.9 million in connection with the closure of our Lachine,
Quebec juice plant and our Columbus, Ohio soft drink plant.

OTHER - Other costs of $0.8 million relate primarily to legal fees for the U.K
Office of Fair Trading and Competition Commission reviews of the Macaw
Acquisition.

YEAR ENDED JANUARY 1, 2005

During the year ended January 1, 2005 asset impairment charges were $0.9
million, including a charge of $1.5 million relating to provision for a note due
from an equity investee.

NOTE 3

Other Expense (Income), Net



                                            For the years ended
                                  ---------------------------------------
                                  DECEMBER 30,  December 31,   January 1,
(IN MILLIONS OF U.S. DOLLARS)        2006           2005          2005
- -----------------------------     ------------  ------------   ----------
                                                      
Foreign exchange (gain) loss       $   (0.1)     $  (0.5)        $   0.7
Other                                   0.2         (0.2)           (0.5)
                                   --------      -------         -------
                                   $    0.1      $  (0.7)        $   0.2
                                   ========      =======         =======


NOTE 4

Interest Expense, Net



                                            For the years ended
                                  ----------------------------------------
                                  DECEMBER 30,  December 31,    January 1,
(IN MILLIONS OF U.S. DOLLARS)        2006           2005           2005
- ------------------------------    ------------  ------------    ----------
                                                       
Interest on long-term debt         $   23.0      $  23.1         $  23.3
Other interest expense                 10.3          6.2             3.2
Interest income                        (1.1)        (0.5)           (0.5)
                                   --------      -------         -------
                                   $   32.2      $  28.8         $  26.0
                                   ========      =======         =======


Interest paid during the year was approximately $32.1 million ($27.2 million -
December 31, 2005; $25.0 million - January 1, 2005).

NOTE 5

Income Taxes

Income (loss) before income taxes and equity loss consisted of the following:



                                               For the years ended
                                 --------------------------------------------
                                 DECEMBER 30,     December 31,     January 1,
(IN MILLIONS OF U.S. DOLLARS)       2006              2005            2005
- -----------------------------    ------------     ------------     ----------
                                                          
Canada                             $     7.3       $   (10.2)      $     (1.9)
Outside Canada                         (41.1)           49.5            116.7
                                   ---------       ---------       ----------
                                   $   (33.8)      $    39.3       $    114.8
                                   =========       =========       ==========


                                       44


Provision for income taxes consisted of the following:



                                            For the years ended
                              -------------------------------------------
(IN MILLIONS OF U.S.          DECEMBER 30,    December 31,     January 1,
DOLLARS)                           2006           2005           2005
- --------------------          ------------    ------------     ----------
                                                      
CURRENT
Canada                          $      --      $     0.2       $      0.1
Outside Canada                       (9.7)          21.0             26.6
                                ---------      ---------       ----------
                                $    (9.7)     $    21.2       $     26.7
                                ---------      ---------       ----------
DEFERRED
Canada                          $     0.4      $     0.8       $     (1.5)
Outside Canada                       (7.0)          (7.3)            10.6
                                ---------      ---------       ----------
                                $    (6.6)     $    (6.5)      $      9.1
                                ---------      ---------       ----------
PROVISION (RECOVERY) FOR
  INCOME TAXES                  $   (16.3)     $    14.7       $     35.8
                                =========      =========       ==========


Income taxes paid during the year were $7.7 million ($14.3 million - December
31, 2005; $27.3 million - January 1, 2005).

      The following table reconciles income taxes calculated at the basic
Canadian corporate rates with the income tax provision:



                                         For the years ended
                               --------------------------------------
(IN MILLIONS OF U.S.           DECEMBER 30,  December 31,  January 1,
DOLLARS)                          2006          2005         2005
- --------------------           ------------  ------------  ----------
                                                  
Income tax provision based
  on Canadian statutory rates   $   (11.6)      $  13.6      $ 39.8
Foreign tax rate differential        (7.0)         (4.6)       (1.7)
(Decrease) increase in
  valuation allowance                (3.5)         21.0        (0.6)
Increase (reduction) to
  reserve                             5.3         (19.3)       (2.0)
Non-deductible and other
  items                               0.5           4.0         0.3
                                ---------       -------      ------
Provision for income taxes      $   (16.3)      $  14.7      $ 35.8
                                =========       =======      ======


As a result of a change in our estimated tax liabilities, we increased our
reserve by $5.3 million.

      Deferred income tax assets and liabilities were recognized on temporary
differences between the financial and tax bases of existing assets and
liabilities as follows:



                               DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)     2006          2005
- -----------------------------  ------------  ------------
                                       
DEFERRED TAX ASSETS
Loss carryforwards              $     1.0     $   12.4
Property, plant and equipment        16.1          8.3
Liabilities and reserves             11.5          7.5
Other                                 0.6          0.5
                                ---------     --------
                                     29.2         28.7
Valuation allowance                 (17.5)       (21.0)
                                ---------     --------
                                     11.7          7.7
                                ---------     --------
DEFERRED TAX LIABILITIES
Property, plant and equipment        31.4         45.5
Intangible assets                    16.3         10.7
Other                                10.8          5.0
                                ---------     --------
                                     58.5         61.2
                                ---------     --------
NET DEFERRED TAX LIABILITY      $   (46.8)    $  (53.5)
                                =========     ========


As of December 30, 2006, operating loss carryforwards primarily attributed to
U.S. state tax, of $10.4 million are available to reduce future taxable income.
These losses expire as follows:



(IN MILLIONS OF U.S. DOLLARS)
                                           
2007                                          $    --
2008                                               --
2009                                               --
2010                                              1.1
2011                                              0.3
2012                                              9.0
                                              -------
                                              $  10.4
                                              =======


Although we are currently the subject of audits by taxation authorities in
various jurisdictions, including Canada and the United States, and while the
ultimate resolution of these audits is not determinable at this time, we do not
believe that the resolution of these audits will have a material adverse effect
on our financial position.

NOTE 6

Other Comprehensive (Loss) Income



                                        For the years ended
                               --------------------------------------
                               DECEMBER 30,  December 31,  January 1,
(IN MILLIONS OF U.S. DOLLARS)     2006           2005         2005
- -----------------------------  ------------  ------------  ----------
                                                  
Net (loss) income               $   (17.5)    $    24.6     $  78.3
Foreign currency translation
  gain (loss)                        12.8          (5.0)       15.8
Change in unrealized loss on
  cash flow hedges                    0.4           0.6        (1.0)
                                ---------     ---------     -------
                                $    (4.3)    $    20.2     $  93.1
                                =========     =========     =======


                                       45


NOTE 7

(Loss) Income per Common Share

Basic net (loss) income per common share is computed by dividing net (loss)
income by the weighted average number of common shares outstanding during the
period. Diluted net (loss) income per share is calculated using the weighted
average number of common shares outstanding adjusted to include the effect, if
dilutive, that would occur if in-the-money stock options were exercised.

The following table reconciles the basic weighted average number of shares
outstanding to the diluted weighted average number of shares outstanding:



                                   For the years ended
                               ---------------------------
                               DECEMBER  December  January
(IN THOUSANDS)                 30, 2006  31, 2005  1, 2005
- --------------                 --------  --------  -------
                                          
Weighted average number of
  shares outstanding -- basic   71,726    71,628    71,006
Dilutive effect of stock
  options                           47       272     1,065
                                ------    ------    ------
Adjusted weighted average
  number of shares
  outstanding -- diluted        71,773    71,900    72,071
                                ======    ======    ======


At December 30, 2006, options to purchase 2,333,964 (December 31, 2005 --
4,102,864; January 1, 2005 -- 1,493,000) shares of common stock at a weighted
average exercise price of C$31.98 (December 31, 2005 -- C$32.60; January 1, 2005
- -- C$40.83) per share were outstanding, but were not included in the computation
of diluted net income per share because the options' exercise price was greater
than the average market price of the common stock.

NOTE 8

Accounts Receivable



                                 DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)       2006          2005
- -------------------------------  ------------  ------------
                                         
Trade receivables                 $   177.9     $   178.7
Allowance for doubtful accounts        (5.0)         (7.8)
Other                                  14.1          19.2
                                  ---------     ---------
                                  $   187.0     $   190.1
                                  =========     =========


NOTE 9

Inventories



                                 DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)        2006          2005
- -------------------------------  ------------  ------------
                                         
Raw materials                     $     52.2    $    63.9
Finished goods                          61.5         62.9
Other                                   17.5         17.4
                                  ----------    ---------
                                  $    131.2    $   144.2
                                  ==========    =========


In December 2006, a $9 million inventory loss was recorded as a result of the
receivership of our U.K. resin supplier.

NOTE 10

Derivative Financial Instruments

In 2005, we entered into cash flow hedges to mitigate exposure to declines in
the value of the Canadian dollar and pound sterling attributable to certain
forecasted U.S. dollar raw material purchases of the Canadian and U.K. and
European business segments. The hedges consisted of monthly foreign exchange
options to buy U.S. dollars at fixed rates per Canadian dollar and pound
sterling and matured at various dates through December 28, 2006.

      At December 30, 2006, there are no hedges outstanding. We recorded a $0.4
million decrease in the unrealized loss in other comprehensive income in 2006
relating to options maturing during the year.

      As of December 31, 2005, the hedges consisted of foreign exchange options
to buy U.S. dollars at fixed rates per Canadian dollar at a cost of $0.8
million. The fair value of the options of $0.4 million had been included in
prepaid expenses and other assets at December 31, 2005 and the unrealized loss
of $0.4 million was recorded in comprehensive income, reflecting a $0.6 million
decrease in the unrealized loss in comprehensive income in 2005.

                                       46


NOTE 11

Property, Plant and Equipment



                                      DECEMBER 30, 2006                 December 31, 2005
                               --------------------------------  --------------------------------
                                          ACCUMULATED                      Accumulated
(IN MILLIONS OF U.S. DOLLARS)    COST    DEPRECIATION     NET      Cost    Depreciation      Net
- -----------------------------  --------  ------------  --------  --------  ------------  --------
                                                                       
Land                           $   22.5   $       --   $   22.5  $   20.6     $    --    $   20.6
Buildings                         122.7         33.1       89.6     119.0        27.7        91.3
Machinery and equipment
  Owned                           476.6        255.2      221.4     480.8       229.1       251.7
  Capital leases                    7.8          1.9        5.9       3.5         0.9         2.6
Plates and film                    25.6         15.8        9.8      23.1        14.0         9.1
Leasehold improvements             16.7          7.6        9.1      21.4         4.7        16.7
Furniture and fixtures             12.8         10.9        1.9      12.4        10.2         2.2
                               --------   ----------   --------  --------     -------    --------
                               $  684.7   $    324.5   $  360.2  $  680.8     $ 286.6    $  394.2
                               ========   ==========   ========  ========     =======    ========


Depreciation expense for fiscal 2006 was $61.8 million ($49.8 million --
December 31, 2005; $41.7 million -- January 1, 2005).

NOTE 12

Goodwill



                                        DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)               2006         2005
- --------------------------------------  ------------  ------------
                                                
Balance at beginning of year              $ 150.3      $   88.8
Acquisitions -- note 20                        --          69.4
Impairment losses recognized -- note 2         --          (5.9)
Foreign exchange                              8.6          (2.0)
Other                                        (0.5)           --
                                          -------      --------
Balance at end of year                    $ 158.4      $  150.3
                                          =======      ========


NOTE 13

Intangibles and Other Assets



                                          DECEMBER 30, 2006                December 31, 2005
                                    ------------------------------  --------------------------------
                                            ACCUMULATED                       Accumulated
(IN MILLIONS OF U.S. DOLLARS)        COST   AMORTIZATION     NET      Cost    Amortization     Net
- ----------------------------------  ------  ------------  --------  --------  ------------  --------
                                                                          
INTANGIBLES
Not subject to amortization
   Rights                           $ 80.4    $    --     $   80.4  $   80.4   $     --     $   80.4
Subject to amortization
   Customer relationships - note 2   165.7        50.0       115.7     166.7        40.1       126.6
   Trademarks                         29.4        11.3        18.1      29.0         9.3        19.7
   Information technology             57.0        32.8        24.2      49.1        24.1        25.0
   Other                               3.6         1.2         2.4       3.6         1.0         2.6
                                    ------    --------    --------  --------   ---------    --------
                                     255.7        95.3       160.4     248.4        74.5       173.9
                                    ------    --------    --------  --------   ---------    --------
                                     336.1        95.3       240.8     328.8        74.5       254.3
                                    ------    --------    --------  --------   ---------    --------
OTHER ASSETS
Financing costs                        4.8         2.3         2.5       4.6         1.2         3.4
Other                                 11.2         3.8         7.4       5.4         2.7         2.7
                                    ------    --------    --------  --------   ---------    --------
                                      16.0         6.1         9.9      10.0         3.9         6.1
                                    ------    --------    --------  --------   ---------    --------
                                    $352.1    $  101.4    $  250.7  $  338.8   $    78.4    $  260.4
                                    ======    ========    ========  ========   =========    ========


Amortization expense of intangibles was $24.6 million ($20.0 million - December
31, 2005; $17.8 million - January 1, 2005). Amortization of intangibles includes
$8.8 million ($6.4 million - December 31, 2005; $6.2 million - January 1, 2005)
relating to information technology assets.

                                       47


      The estimated amortization expense for intangibles over the next five
years is:



(IN MILLIONS OF U.S. DOLLARS)
                                                        
  2007                                                     $    20.0
  2008                                                          20.0
  2009                                                          24.0
  2010                                                          13.2
  2011                                                          13.2
                                                           ---------
                                                           $    90.4
                                                           =========


NOTE 14

Short-Term Borrowings

Short-term borrowings include bank overdrafts, and borrowings under our credit
facilities and receivables securitization facility.

      We maintain committed senior secured credit facilities that provide for
financing in North America, the U.K. and Mexico expiring on March 31, 2010.

      The facilities allow for revolving credit borrowings in a principal amount
of up to $225.0 million provided we are in compliance with the covenants and
conditions of the agreement and are comprised of two separate facilities:

(1)   a $220.0 million multicurrency facility for our North American and U.K.
      operations, and

(2)   a $5.0 million Mexican facility.

      Each facility includes subfacilities for swingline loans and letters of
credit. The $225.0 million facilities can be increased up to an additional
$125.0 million under certain conditions.

      The facilities are collateralized by substantially all our personal
property with certain exceptions including the receivables sold as part of our
receivables securitization facility discussed below.

      In general, borrowings under the credit facilities bear interest at either
a floating or fixed rate for the applicable currency plus a margin based on our
consolidated total leverage ratio. A facility fee of between 0.15% and 0.375%
per annum is payable on the entire line of credit. The level of the facility fee
is dependent on financial covenants.

      As at December 30, 2006, credit of $110.6 million was available after
borrowings of $109.2 million (55.7 million pounds sterling) and standby letters
of credit of $5.2 million. The weighted average interest rate was 6.63% on these
facilities as of December 30, 2006 (5.83% - December 31, 2005).

      Our principal U.S. operating subsidiaries maintain a receivables
securitization facility under which they agreed to sell substantially all of
their receivables generated from their ordinary course operations, to our
special purpose indirect subsidiary, Cott USA Receivables Corporation. This
subsidiary in turn sells and assigns undivided interests in the receivables and
related assets to an unaffiliated entity and certain other financial
institutions in exchange for cash. These transfers are treated as financing
activities for purposes of our consolidated financial statements. The agreement
contains representations, warranties, covenants, and indemnities customary for
facilities of this type. The facility does not contain any covenants that we
view as materially constraining its activities or the activities of its
subsidiaries, except for Cott USA Receivables Corporation.

      The amount of funds available under the receivables facility is based upon
the amount of eligible receivables and various reserves required by the
facility. Accordingly, availability may fluctuate over time given changes in
eligible receivables balances and calculation of reserves, but will not exceed
the $75.0 million program limit. This facility bears interest at a variable
rate, based on the cost of borrowing of the lenders. A fee of between 0.20% and
0.40% per annum is currently payable on the unused portion of the facility. The
level of the facility fee is dependent on financial covenants. As of December
30, 2006, $41.3 million of eligible receivables, net of reserves, were available
for purchase. There were no balances outstanding under the receivables facility
as of December 30, 2006. The weighted average interest rate on borrowings under
the receivables facility was 5.08% as of December 31, 2005.

      We are in compliance with our covenants as of December 30, 2006. Our
financial covenants are calculated and determined at the end of each quarter. We
expect that we will not maintain compliance with the total leverage ratio
financial covenant set forth in our senior secured credit facilities  in the
first quarter of 2007 and accordingly, we are in discussions with our lenders to
change that financial covenant. We believe we can reach agreement with our
lenders on a new covenant that is acceptable to us, although there can be no
assurance that we will. Since a covenant default in our senior secured credit
facilities would result in a default in our unsecured senior subordinated notes
due in 2011, our notes due in 2011 would, in the event of such default, become
currently due and accordingly, classified as a current liability. If our lenders
do not agree to amend the covenant on terms that are acceptable to us, our
lenders could terminate our facilities and we would have to replace them. Should
our credit facilities and 2011 notes become currently due, we may have to incur
additional fees and higher interest costs to replace them.

                                       48



NOTE 15

Long-Term Debt



                                     DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)            2006          2005
- -----------------------------------  ------------  ------------
                                             
Senior subordinated unsecured notes
   at 8% due 2011 (a)                 $   271.3    $    270.5
Capital leases & other                      5.9           2.6
                                      ---------    ----------
                                          277.2         273.1
Less current maturities                    (2.0)         (0.8)
                                      ---------    ----------
                                      $   275.2    $    272.3
                                      =========    ==========


- ----------
a)    Our 8% senior subordinated unsecured notes were issued at a discount of
      2.75% on December 21, 2001. The fair value of the notes as of December 30,
      2006 is estimated to be $281.2 million (December 31, 2005 - $283.3
      million). The notes contain a number of financial covenants including
      limitations on capital stock repurchases, dividend payments and incurrence
      of indebtedness. Penalties exist if we redeem the notes prior to December
      15, 2009.



                                        DECEMBER 30,     December 31,
(IN MILLIONS OF U.S. DOLLARS)               2006             2005
- -----------------------------           ------------     ------------
                                                   
Face value                               $    275.0       $    275.0
Discount                                       (3.7)            (4.5)
                                         ----------       ----------
                                         $    271.3       $    270.5
                                         ==========       ==========


b)    Long-term debt payments required in each of the next five years and
      thereafter are as follows:



(IN MILLIONS OF U.S. DOLLARS)
                                                     
2007                                                    $      2.0
2008                                                           2.0
2009                                                           1.4
2010                                                           0.5
2011                                                         275.0
Thereafter                                                      --
                                                        ----------
                                                        $    280.9
                                                        ==========


      We are in compliance with our covenants as of December 30, 2006. Our
financial covenants are calculated and determined at the end of each quarter. We
expect that we will not maintain compliance with the total leverage ratio
financial covenant set forth in our senior secured credit facilities in the
first quarter of 2007 and accordingly, we are in discussions with our lenders to
change that financial covenant.  We believe we can reach agreement with our
lenders on a new covenant that is acceptable to us, although there can be no
assurance that we will. Since a covenant default in our senior secured credit
facilities would result in a default in our unsecured senior subordinated notes
due in 2011, our notes due in 2011 would, in the event of such default, become
currently due and accordingly, classified as a current liability. If our lenders
do not agree to amend the covenant on terms that are acceptable to us, our
lenders could terminate our facilities and we would have to replace them. Should
our credit facilities and 2011 notes become currently due, we may have to incur
additional fees and higher interest costs to replace them.

NOTE 16

Accounts Payable and Accrued Liabilities



                                DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)        2006         2005
- ------------------------------  ------------  ------------
                                        
Trade payables                   $     89.8    $    112.6
Accrued compensation                   27.7          14.7
Accrued sales incentives               23.9          27.6
Accrued interest                        1.2           1.8
Restructuring - note 2                 12.7           1.0
Payroll, sales and other taxes         13.3           8.9
Other accrued liabilities              17.9          15.9
                                 ----------    ----------
                                 $    186.5    $    182.5
                                 ==========    ==========


NOTE 17

Capital Stock

Our authorized capital stock consists of an unlimited number of common shares.

NOTE 18

Share-based Compensation

As of December 30, 2006, we had three share-based compensation plans, which are
described below. The share-based compensation plans have been approved by
shareholders.

      Effective January 1, 2006, we adopted the fair value recognition
provisions of SFAS 123R, using the modified prospective approach and therefore
have not restated prior years' results. Under the modified prospective approach,
share-based compensation expense for the year ended December 30, 2006 includes
compensation expense for all share-based compensation awards granted prior to,
but not yet vested as of January 1, 2006, based on the grant date fair value
estimated in accordance with the original provision of SFAS 123. Share-based
compensation expense for all share-based compensation awards granted after
January 1, 2006 is based on the grant date fair value estimated in accordance
with the provisions of SFAS 123R. We recognize these compensation costs net of a
forfeiture rate on a straight-line basis over the requisite service period of
the award, which is generally the vesting term of three years. We estimated the
forfeiture rate for the year ended December 30, 2006 based on our historical
experience with forfeitures during the preceding three fiscal years. For the
year ended December 30, 2006, net income includes compensation expense of $11.4
million, or $8.4 million net of tax recovery of $3.0 million ($0.12 per basic
and diluted

                                       49


share). There is no effect on cash from operating or financing activities from
the adoption of SFAS 123R.

      The table below summarizes the compensation expense for the year ended
December 30, 2006 and the unrecognized compensation expense on non-vested awards
at that date. This compensation expense was recorded in selling, general and
administrative expenses.



                                             UNRECOGNIZED
                               COMPENSATION  COMPENSATION
(IN MILLIONS OF U.S. DOLLARS)    EXPENSE       EXPENSE
- -----------------------------  ------------  ------------
                                       
Stock options                    $    9.7     $      5.2
Performance share units               1.2            5.7
Share appreciation rights             0.3            1.4
Other                                 0.2            0.7
                                 --------     ----------
Total                            $   11.4     $     13.0
                                 ========     ==========


The fair value of each option and share appreciation rights grant is estimated
on the date of grant using the Black-Scholes option pricing model. The
assumptions are based on three factors: risk-free interest rate, expected term
and expected volatility. The risk-free interest rate is based on the implied
yield available on zero coupon Government of Canada bond with an equivalent
remaining term. The expected term of the options represents the estimated period
of time until exercise and is based on historical experience of similar awards,
giving consideration to the contractual terms, vesting schedules and
expectations of future employee behavior. The expected stock price volatility is
based on a combination of historical volatility of our stock and the implied
volatility of our traded options.

COMMON SHARE OPTION PLAN

Under the 1986 Common Share Option Plan, as amended, we have reserved 14.0
million common shares for future issuance. Options are granted at a price not
less than fair value of the shares on the date of grant.

      Options granted on or after April 12, 1996 but before September 1, 1998
expire after 10 years and vest at 25% per annum commencing on the second
anniversary date of the grant. Options granted after September 1, 1998 expire
after 7 years and vest at 30% per annum on the anniversary date of the grant for
the first two years and the balance on the third anniversary date of the grant.
Certain options granted under the plan vest monthly over a period of 24 or 36
months. Options granted after July 17, 2001 to the non-management members of the
Board of Directors vest immediately. All options are non-transferable. When
options are exercised we issue new shares. As a result, these options are
dilutive to our shareowners.

      Effective January 1, 2006, we adopted the fair value recognition
provisions of SFAS 123R. Prior to adopting SFAS 123R, we accounted for our
share-based payment awards using the intrinsic value method under APB 25. Under
APB 25, we did not record compensation expense for common share options as
awards under this plan were granted with exercise prices equal to the closing
price for our common stock on the Toronto Stock Exchange on the last day of
trading immediately before the date of award.

      The pro forma table below reflects net earnings and basic and diluted net
earnings per share as if a fair value based method had been applied to all
awards, as follows:



(IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE  December  January 1,
AMOUNTS)                                        31, 2005    2005
- ----------------------------------------------  --------  ----------
                                                    
NET INCOME
   As reported                                  $  24.6    $  78.3
   Proforma compensation expense, net of tax
     (December 31, 2005 -- $2.5 million;
     January 1, 2005 -- $2.9 million)              (7.3)      (8.6)
                                                -------    -------
   Pro forma                                    $  17.3    $  69.7
                                                =======    =======

NET INCOME PER SHARE -- BASIC
   As reported                                  $  0.34    $  1.10
   Pro forma                                    $  0.24    $  0.98
NET INCOME PER SHARE -- DILUTED
   As reported                                  $  0.34    $  1.09
   Pro forma                                    $  0.24    $  0.97


The pro forma compensation expense has been tax effected to the extent it
relates to stock options granted to employees in jurisdictions where the related
benefits are deductible for income tax purposes.

      The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:



                               December 31,   January 1,
                                   2005          2005
                               ------------  -------------
                                       
Risk-free interest rate        3.3% - 3.9%     3.3% - 3.9%
Average expected life (years)           4               4
Expected volatility                  40.0%   40.0% - 45.0%
Expected dividend yield                --              --
                               ----------    ------------


There were no options granted during the year ended December 30, 2006. The
weighted average fair value of options granted in 2005 and 2004 at fair market
value was $9.55 per option and $15.96 per option respectively.

                                       50


Option activity was as follows:



                                                  WEIGHTED    AGGREGATE
                                    WEIGHTED      AVERAGE    INTRINSIC
                          SHARES     AVERAGE     REMAINING     VALUE
                            (IN     EXERCISE    CONTRACTUAL   (C$)(IN
                        THOUSANDS)  PRICE (C$)     TERM      THOUSANDS)
                        ----------  ----------  -----------  ----------
                                                 
Balance at
January 3, 2004           4,067      $  22.90
   Granted                1,539      $  40.70
   Exercised             (1,181)     $  16.06
   Forfeited or
    expired                (219)     $  31.22
                          -----      --------
 Balance at
 January 1, 2005          4,206      $  30.90       5.1       $ 11,584
   Granted                1,309      $  29.07
   Exercised               (272)     $  15.65
   Forfeited or
    expired                (639)     $  33.23
                          -----      --------
Balance at  December
31, 2005                  4,605      $  30.69       4.8       $  1,099
   Exercised                (38)     $  13.61
   Forfeited or
    expired              (1,871)     $  32.53
                          -----      --------       ---       --------
BALANCE AT
DECEMBER 30, 2006         2,696      $  29.65       3.6       $    746
                          =====      ========       ===       ========
VESTED AND EXPECTED TO
VEST AT DECEMBER 30,
2006(1)                   2,630      $  29.60       4.6       $    746
                          =====      ========       ===       ========
EXERCISABLE AT
DECEMBER 30, 2006         2,034      $  28.59       4.3       $    746
                          =====      ========       ===       ========


- ----------
(1)   The number of options expected to vest is based on non-vested options
      outstanding at December 30, 2006 adjusted for estimated forfeitures.

      The aggregate intrinsic value amounts in the table above represent the
difference between the closing price of our common stock on December 29, 2006,
which was C$16.69 (December 30, 2005 - C$17.23; December 31, 2004 - C$29.68),
and the exercise price, multiplied by the number of in-the-money stock options
as of the same date. The total intrinsic value of stock options exercised during
the year ended December 30, 2006 was $0.1 million (December 31, 2005 - $0.4
million; January 1, 2005 - $16.1 million).

Total compensation cost related to non-vested awards not yet recognized is $5.2
million. The weighted average period over which this is expected to be
recognized is 0.9 year. The total fair value of shares that vested during the
year ended December 30, 2006 was $10.4 million.

Outstanding options at December 30, 2006 are as follows:



                    Options Outstanding            Options Exercisable
            ------------------------------------  -----------------------
Range of       Number     Remaining    Weighted      Number     Weighted
  Exercise  Outstanding  Contractual   Average    Exercisable   Average
  Prices       (IN           Life      Exercise      (IN       Exercise
  (C$)       THOUSANDS)    (Years)    Price (C$)  THOUSANDS)   Price (C$)
- ----------  -----------  -----------  ----------  -----------  ----------
                                                
$5.95 -
  $16.10         112         1.3       $  10.08        112      $  10.08
$16.68 -
  $24.25         472         2.3       $  17.93        414      $  17.67
$26.00 -
  $33.30       1,458         4.0       $  29.89      1,112      $  30.13
$35.21 -
  $43.64         654         4.3       $  40.93        398      $  40.90
               -----         ---       --------      -----      --------
               2,696         3.6       $  29.65      2,034      $  28.59
               =====         ===       ========      =====      ========


NEW LONG-TERM INCENTIVE PLANS

During the second quarter of 2006, our shareowners approved and adopted two new
long-term incentive plans for 2006 and future periods, the Performance Share
Unit ("PSU Plan") and the Share Appreciation Rights Plan ("SAR Plan").

PSU Plan

Under the PSU Plan, performance share units ("PSUs") may be granted to employees
of our Company and its subsidiaries. The value of an employee's award under our
PSU Plan will depend on (i) our performance over a three-year performance cycle;
and (ii) the market price of our common shares at the time of vesting. The
performance targets are not market based. Performance targets will be
established annually by the Human Resources and Compensation Committee of the
Board of Directors. PSUs granted will vest over a term not to exceed three
fiscal years.

      At the start of each performance cycle, we will establish three tiers of
performance goals for our Company to achieve over the three-year period: a
minimum threshold level, a target level and an outstanding performance level. A
target number of PSUs for each participant will be established at the beginning
of each three-year performance cycle. Each PSU represents the right, on vesting,
to receive one Company common share. If performance over the three-year
performance cycle falls below the threshold level, no PSUs will vest.

      Throughout the performance cycle, there are no dividends paid to
participants on the PSUs, and holders do not have the right to vote the common
shares represented by their PSUs. Following the vesting of a participant's PSUs,
we will contribute cash to an independent trust to be used for the purpose of
purchasing an equivalent number of our common shares on the New York Stock
Exchange at the prevailing market price. The common shares purchased by

                                       51


the trustee will then be registered in the name of the participant and delivered
to the participant upon his or her request.

      No shares are issued from treasury and the PSU Plan is not dilutive to our
shareowners.

SAR Plan

Under the SAR Plan, share appreciation rights ("SARs") may be granted to
employees and directors of our Company and its subsidiaries. SARs will typically
vest on the third anniversary of the grant date. On vesting, each SAR will
represent the right to be paid the difference, if any, between the price of our
common shares on the date of grant and their price on the SAR's vesting date.
Payments in respect of vested in-the-money SARs will be made in the form of our
common shares purchased on the open market by an independent trust with cash
contributed by us. If our share price on the date of vesting is lower than on
the date of grant, no payment will be made in respect of those vested SARs.
Prior to vesting, there are no dividends paid on the share appreciation rights,
and holders do not have the right to vote the common shares represented by their
SARs.

      No shares are issued from treasury and the SAR Plan is not dilutive to our
shareowners.

      We recognize the compensation cost of the PSUs and SARs based on the fair
value of the grant. We recognize these compensation costs net of a forfeiture
rate on a straight-line basis over the requisite service period of the award,
which is generally the vesting term of three years. Compensation cost of the
PSUs may vary depending on management's estimates of the probability of the
performance measures being achieved and the number of PSUs expected to vest.

During the period ended December 30, 2006, the PSU activity was as follows:



                                                           Total Value
                   Number of   Target value  Total Value  (IN MILLIONS
                    PSUs (IN     per PSU       (C$ - IN      OF U.S.
                   THOUSANDS)       (C$)      MILLIONS)     DOLLARS)
                   ----------  ------------  -----------  ------------
                                              
Granted
  October 25,
   2006                 25       $  18.58      $   0.5      $   0.4
  August 1, 2006        38          14.98          0.6          0.5
  July 26, 2006        438          14.21          6.2          5.3
  May 16, 2006          98          17.05          1.7          1.5
                       ---       --------      -------      -------
                       598       $  14.90          8.9          7.7
Forfeited              (67)      $  14.21         (0.9)        (0.8)
                       ---       --------      -------      -------
BALANCE AT
DECEMBER 30, 2006      531       $  14.99      $   8.0      $   6.9
                       ===       ========      =======      =======


The number of PSUs granted and target values per PSU noted above are based on an
assumption that our performance target will be achieved. The number of units and
target values can vary from 0 to 150% depending on the level of performance
achieved relative to the performance target. Subject to the terms of the PSU
plan, the vesting date for the above PSUs granted will be December 27, 2008.

      The target value per PSU noted above was determined based on the closing
market price of our common shares on the Toronto Stock Exchange on the last
trading day prior to the grant date. Compensation costs of $1.2 million were
recognized in selling, general and administrative expenses in the period ended
December 30, 2006. As of December 30, 2006 there was approximately $5.7 million
of unearned compensation relating to the grant that is expected to be recognized
on a straight-line basis over a period of 29 months.

      We granted 458,050 units of SARs on July 26, 2006 and 6,750 units on
October 25, 2006 at a fair value of $1.7 million to our employees. Subject to
the terms of the SAR plan, the vesting date for these units will be July 26,
2009 and October 25, 2009, respectively. Compensation costs of $0.3 million were
recognized in selling, general and administrative expenses in the period ended
December 30, 2006. As of December 30, 2006 there was $1.4 million of unearned
compensation relating to the grant that is expected to be recognized on a
straight-line basis over a period of three years.

      The fair value of the SARs grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions:



                                             DECEMBER 30, 2006
                                             -----------------
                                          
Risk-free interest rate                            5.05%
Average expected life (years)                         4
Expected volatility                                33.9%
Expected dividend yield                              --
                                                   ----


OTHER SHARE BASED COMPENSATION

During the second quarter of 2006, Brent Willis, our Chief Executive Officer,
received a net cash award of $0.9 million at commencement of employment to
purchase shares of the Company. At the end of September 30, 2006, Mr. Willis
purchased a total of 62,484 common shares of the Company with the net cash award
received. The purchased shares must be held for a minimum of three years and
must be transferred to the Company (or as the Company may otherwise direct) for
no additional consideration on a prorated basis if the service condition of
three years is not met. This award is recognized as compensation expense over
the vesting period. As of December 30, 2006, $0.2 million was expensed as
compensation expense and the remaining balance is classified as restricted
shares which is a reduction in shareowners' equity. In addition, 204,000

                                       52


common shares with a fair value of $3.2 million, which vest over three years,
have been granted to Mr. Willis. Compensation costs of $0.7 million were
recognized in selling, general and administrative expenses in the period ended
December 30, 2006 with respect to this grant. As of December 30, 2006 there was
$2.5 million of unearned compensation relating to the grant that is expected to
be recognized on a straight-line basis over a period of three years.

NOTE 19

Net Change in Non-Cash Working Capital

The changes in non-cash working capital components, net of effects of
acquisitions and divestitures of businesses and unrealized foreign exchange
gains and losses, are as follows:



                                             For the years ended
                                   --------------------------------------
(IN MILLIONS OF                    DECEMBER 30,  December 31,  January 1,
U.S. DOLLARS)                          2006          2005         2005
- ---------------                    ------------  ------------  ----------
                                                      
Decrease (increase) in
  accounts receivable                $   9.9       $  (5.0)     $ (21.3)
Decrease (increase) in
  inventories                           15.2         (15.4)       (22.8)
(Increase) decrease in
  prepaid expenses                       0.5           0.5         (4.8)
(Decrease) increase in accounts
  payable and accrued liabilities      (22.6)         18.9         (3.5)
                                     -------       -------      -------
                                     $   3.0       $  (1.0)     $ (52.4)
                                     =======       =======      =======


NOTE 20

Acquisitions

All acquisitions have been accounted for using the purchase method, and
accordingly, the results of operations are included in our consolidated
statements of income from the effective dates of purchase, except as otherwise
indicated. There were no acquisitions in the year ended December 30, 2006.

      The total purchase prices of the acquisitions and equity investments were
allocated as follows based on the fair value of the net assets:



(IN MILLIONS OF                December 31,  January 1,
U.S. DOLLARS)                      2005         2005
- ---------------                ------------  ----------
                                       
Current assets                   $   23.2     $    6.0
Property, plant and equipment        50.1         19.3
Customer relationships               24.9          6.8
Trademarks                             --         0.8
Goodwill                             69.4          5.7
                                 --------     --------
                                    167.6         38.6
                                 --------     --------
Current liabilities                  22.0          4.0
Deferred taxes                       10.5           --
                                 --------     --------
PURCHASE PRICE                   $  135.1     $   34.6
                                 ========     ========


Year ended December 31, 2005

Effective August 10, 2005 we acquired 100% of the shares of Macaw (Holdings)
Limited, the parent company of Macaw (Soft Drinks) Limited, the largest
privately owned manufacturer of retailer brand carbonated soft drinks in the
U.K. The Macaw Acquisition represents a significant strategic investment in our
U.K. business with additional production capacity and manufacturing capabilities
in the fast-growing aseptic beverage segment. The purchase price for the
acquisition was $135.1 million (75.4 million pounds sterling) including
acquisition costs of $2.4 million (1.3 million pounds sterling). The acquisition
was financed under our senior secured credit facility, which was increased from
$100.0 million to $225.0 million in connection with this transaction. The
goodwill recognized on the transaction is not deductible for tax purposes. The
value of customer relationships acquired is being amortized over 15 years.

Year ended January 1, 2005

Effective March 17, 2004, we acquired certain of the assets of The Cardinal
Companies of Elizabethtown, LLC, located in Kentucky. The purchase of $17.8
million was allocated primarily to machinery and equipment. Effective October
19, 2004, we acquired for $16.8 million certain of the assets of Metro Beverage
Co. The purchase price was allocated to customer relationships, goodwill and
machinery and equipment.

      The total purchase price for all acquisitions was $34.6 million, including
acquisition costs of $0.8 million. The acquisitions were funded from cash and
borrowings on our revolving credit facility.

NOTE 21

Benefit Plans

Cott primarily maintains defined contribution retirement plans covering
qualifying employees. The total expense with respect to these plans was $6.5
million for the year

                                       53



ended December 30, 2006 ($5.6 million - December 31, 2005; $5.6 million --
January 1, 2005).

NOTE 22
Commitments and Contingencies

a)    We lease buildings, machinery & equipment, computer software and furniture
      & fixtures. All contractual increases and rent free periods included in
      the lease contract are taken into account when calculating the minimum
      lease payment and recognized on a straight line basis over the lease term.
      Certain leases have renewal periods and contingent rentals which are not
      included in the table below. The minimum annual payments under operating
      leases are as follows:



(IN MILLIONS OF U.S. DOLLARS)
- -----------------------------
                                                     
2007                                                    $      17.3
2008                                                           13.4
2009                                                           11.4
2010                                                           10.2
2011                                                            6.9
Thereafter                                                     42.2
                                                        -----------
                                                        $     101.4
                                                        ===========


      Operating lease expenses were:



(IN MILLIONS OF U.S. DOLLARS)
- -----------------------------
                                                     
Year ended December 30, 2006                            $      17.8
Year ended December 31, 2005                            $      17.6
Year ended January 1, 2005                              $      11.9


b)    As of December 30, 2006, we had commitments for capital expenditures of
      approximately $7.3 million and commitments for inventory of approximately
      $41.4 million. In addition, we have certain contracts with suppliers and
      co-packers which would require us to pay an aggregate of $0.8 million in
      order to cancel these contracts.

c)    We are subject to various claims and legal proceedings with respect to
      matters such as governmental regulations, income taxes, and other actions
      arising out of the normal course of business. Management believes that the
      resolution of these matters will not have a material adverse effect on our
      financial position or results from operations.

            In January 2005, we were named as one of many defendants in a class
      action suit alleging the unauthorized use by the defendants of container
      deposits and the imposition of recycling fees on consumers. On June 2,
      2006, the British Columbia Supreme Court granted the summary trial
      application, which resulted in the dismissal of the plaintiffs' action
      against us and the other defendants. The plaintiffs appealed the
      dismissal, and we and the other defendants are defending the appeal, which
      we expect to be heard in the next eight to twelve months. It is too early
      to assess the chances of success of the appeal. In February 2005 similar
      class action claims were filed in a number of other Canadian provinces.
      The claims which were filed in Quebec have since been discontinued.

d)    We had $5.2 million in standby letters of credit outstanding as of
      December 30, 2006 ($4.9 million -- December 31, 2005).

                                       54


NOTE 23

Segment Reporting

We produce, package and distribute retailer brand and branded bottled and canned
soft drinks to regional and national grocery, mass-merchandise and wholesale
chains in North America and International business segments. The International
segment includes our United Kingdom business, our European business, our Mexican
business, our Royal Crown International business and our business in Asia. The
Other in the Corporate & Other segment represents the concentrate manufacturing
plant assets, sales and related expenses. For comparative purposes, segmented
information has been restated to conform to the way we currently manage our
beverage business.

BUSINESS SEGMENTS



                                                                                DECEMBER 30, 2006
                                                              --------------------------------------------------
                                                                 NORTH                    CORPORATE
(IN MILLIONS OF U.S. DOLLARS)                                   AMERICA    INTERNATIONAL   & OTHER       TOTAL
                                                              -----------  -------------  ---------  -----------
                                                                                         
External revenue                                              $   1,339.4   $     427.1   $    5.3   $   1,771.8
Depreciation and amortization                                        64.0          17.5        5.3          86.8
Restructuring, asset impairments and other charges - note 2
   Restructuring                                                     15.6           0.7        4.2          20.5
   Asset impairments                                                 15.3            --        0.1          15.4
   Other                                                               --           2.6         --           2.6
Operating income (loss)                                              26.1          23.3      (47.1)          2.3
Property, plant and equipment                                       227.9         124.9        7.4         360.2
Goodwill                                                             74.1          79.2        5.1         158.4
Intangibles and other assets                                        118.1          34.2       98.4         250.7
Total assets                                                        626.0         421.3       92.2       1,139.5
Additions to property, plant and equipment                           26.4           7.7        1.0          35.1




                                                                              December 31, 2005
                                                              --------------------------------------------------
                                                                 North                    Corporates
(IN MILLIONS OF U.S. DOLLARS)                                   America    International    Other       Total
                                                              -----------  -------------  ---------- -----------
                                                                                         
External revenue                                              $   1,428.0  $      323.5   $    3.8   $   1,755.3
Depreciation and amortization                                        54.3          12.9        3.0          70.2
Restructuring, asset impairments and other charges - note 2
   Restructuring and other                                            3.0            --        0.2           3.2
   Goodwill impairment                                                5.9            --         --           5.9
   Other asset impairments                                           27.1          (0.2)       0.7          27.6
   Other                                                               --           0.8         --           0.8
Operating income (loss)                                              61.1          24.5      (13.7)         71.9
Property, plant and equipment                                       266.2         119.7        8.3         394.2
Goodwill                                                             74.1          71.1        5.1         150.3
Intangibles and other assets                                        136.0          27.4       97.0         260.4
Total assets                                                        709.4         390.8       78.9       1,179.1
Additions to property, plant and equipment                           62.3          11.2        2.3          75.8
Goodwill acquired                                                      --          69.4         --          69.4




                                                                                January 1, 2005
                                                              --------------------------------------------------
                                                                 North                    Corporate
(IN MILLIONS OF U.S. DOLLARS)                                   America    International   & Other      Total
                                                              -----------  -------------  ---------  -----------
                                                                                         
External revenue                                              $   1,388.5   $     255.5   $    2.3   $   1,646.3
Depreciation and amortization                                        48.5           9.4        2.1          60.0
Restructuring, asset impairments and other charges - note 2          (1.5)          0.4        0.2          (0.9)
Operating income (loss)                                             130.9          23.1       (9.0)        145.0
Property, plant and equipment                                       227.9          78.3        7.5         313.7
Goodwill                                                             79.1           4.6        5.1          88.8
Intangibles and other assets                                        182.7           5.1       88.3         276.1
Total assets                                                        720.4         220.3       81.3       1,022.0
Additions to property, plant and equipment                           41.2           6.5        2.6          50.3
Acquisition of production capacity                                    3.8            --         --           3.8


                                       55


Total assets under the Corporate & Other caption include the elimination of
intersegment receivables and investments.

      For the year ended December 30, 2006, sales to Wal-Mart accounted for 38%
(2005 -- 40%, 2004 -- 40%) of our total sales.

      Credit risk arises from the potential default of a customer in meeting its
financial obligations with us. Concentrations of credit exposure may arise with
a group of customers which have similar economic characteristics or that are
located in the same geographic region. The ability of such customers to meet
obligations would be similarly affected by changing economic, political or other
conditions. We are not currently aware of any facts that would create a material
credit risk.

      Revenues by geographic area are as follows:



                               DECEMBER 30,  December 31,  January 1,
(IN MILLIONS OF U.S. DOLLARS)      2006          2005         2005
- -----------------------------  ------------  ------------  ----------
                                                  
United States                  $    1,159.1  $    1,251.3  $1,221.8
Canada                                208.9         201.2       189.5
United Kingdom                        332.1         244.4       186.9
Other countries                        71.7          58.4        48.1
                               ------------  ------------  ----------
                               $    1,771.8  $    1,755.3  $  1,646.3
                               ============  ============  ==========


Revenues are attributed to countries based on the location of the plant.

      Property, plant and equipment by geographic area are as follows:



                               DECEMBER 30,  December 31,
(IN MILLIONS OF U.S. DOLLARS)       2006         2005
- -----------------------------  ------------  ------------
                                       
United States                   $    181.5    $    216.8
Canada                                53.8          57.7
United Kingdom                       114.9         109.4
Other countries                       10.0          10.3
                                ----------    ----------
                                $    360.2    $    394.2
                                ==========    ==========


                                       56


COTT CORPORATION
QUARTERLY FINANCIAL INFORMATION

(UNAUDITED)



                                                                   YEAR ENDED DECEMBER 30, 2006
                                                          ----------------------------------------------
                                                           FIRST    SECOND     THIRD   FOURTH
(IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)   QUARTER   QUARTER   QUARTER  QUARTER   TOTAL
- --------------------------------------------------------  -------   -------   -------  -------  --------
                                                                                 
Revenue                                                   $ 394.2   $ 502.0   $475.5   $400.1   $1,771.8
Cost of sales                                               341.5     429.7    413.5    370.2    1,554.9
                                                          -------   -------   ------   ------   --------

Gross profit                                                 52.7      72.3     62.0     29.9      216.9

Selling, general and administrative expenses                 39.9      48.7     40.8     46.7      176.1

Loss (gain) on disposal of property, plant and equipment      0.1      (0.1)      --       --         --
Restructuring, asset impairments and other charges
     Restructuring                                            1.6       0.2      9.4      9.3       20.5
     Asset impairments (recoveries)                           1.4      (0.1)    (0.1)    14.2       15.4
     Other                                                    2.0       0.6       --       --        2.6
                                                          -------   -------   ------   ------   --------

Operating income (loss)                                       7.7      23.0     11.9    (40.3)       2.3
                                                          -------   -------   ------   ------   --------

Net (loss) income                                         $  (2.1)  $   7.6   $  6.6   $(29.6)  $  (17.5)
                                                          =======   =======   ======   ======   ========

Per share data:
   Net (loss) income per common share
      Basic                                               $ (0.03)  $  0.11   $ 0.09   $(0.41)  $  (0.24)
      Diluted                                             $ (0.03)  $  0.11   $ 0.09   $(0.41)  $  (0.24)




                                                                   YEAR ENDED DECEMBER 31, 2005
                                                          ----------------------------------------------
                                                           FIRST    SECOND     THIRD   FOURTH
(IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)   QUARTER   QUARTER   QUARTER  QUARTER   TOTAL
- --------------------------------------------------------  -------   -------   -------  -------  --------
                                                                                 
Revenue                                                   $ 395.5   $ 492.7   $469.9   $397.2   $1,755.3
Cost of sales                                               339.5     412.0    404.5    349.8    1,505.8
                                                          -------   -------   ------   ------   --------

Gross profit                                                 56.0      80.7     65.4     47.4      249.5
Selling, general and administrative expenses                 36.9      35.5     34.2     32.0      138.6
(Gain) loss on disposal of property, plant and equipment     (0.7)      0.5       --      1.7        1.5
Restructuring, asset impairments and other charges
     Restructuring                                             --        --      2.0      1.2        3.2
     Asset (recovery) impairments                            (0.2)       --     23.7     10.0       33.5
     Other                                                     --        --       --      0.8        0.8
                                                          -------   -------   ------   ------   --------

 Operating income                                            20.0      44.7      5.5      1.7       71.9
                                                          -------   -------   ------   ------   --------

Net income (loss)                                         $   8.3   $  25.0   $ (1.8)  $ (6.9)  $   24.6
                                                          =======   =======   ======   ======   ========

Per share data:

   Net income (loss) per common share
      Basic                                               $  0.12   $  0.35   $(0.03)  $(0.10)  $   0.34
      Diluted                                             $  0.12   $  0.35   $(0.03)  $(0.10)  $   0.34


                                       57


ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

ITEM 9A.

CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Our disclosure controls and procedures are designed to provide reasonable
assurance that information required to be disclosed by the company in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. We performed an evaluation, under the
supervision and participation of our management, including our Chief Executive
Officer and Chief Financial Officer of the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the period
covered by this report. Based on this evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures were not effective as of the end of the period covered by this report
due to the reasons described in "Management's Report on Internal Control Over
Financial Reporting".

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

We are responsible for establishing and maintaining adequate internal control
over financial reporting. Internal control over financial reporting is defined
in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a
process designed by, or under the supervision of, our principal executive and
principal financial officer and effected by our Board of Directors, management
and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of our financial statements for
external purposes in accordance with generally accepted accounting principles
and includes those policies and procedures that:

- -     pertain to the maintenance of records that in reasonable detail accurately
      and fairly reflect our transactions and dispositions of our assets;

- -     provide reasonable assurance our transactions are recorded as necessary to
      permit preparation of our financial statements in accordance with
      generally accepted accounting principles, and that receipts and
      expenditures are being made only in accordance with authorizations of our
      management and directors; and

- -     provide reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

      We assessed the effectiveness of our internal control over financial
reporting as of December 30, 2006. In making this assessment, we used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") in Internal Control-Integrated Framework.

      Based on this assessment, we determined that, as of December 30, 2006, our
internal control over financial reporting was not effective due to the existence
of material weaknesses. A material weakness is a control deficiency, or a
combination of control deficiencies, that results in more than a remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

      We did not maintain effective controls over the completeness, accuracy,
valuation and existence of inventory held by a supplier to our U.K. business and
the valuation of credit notes due from that supplier. In addition, we did not
maintain appropriate segregation of duties because an employee of our U.K.
business negotiated and entered into purchase contracts while maintaining
overall responsibility for the accounting for these transactions without
appropriate review or monitoring. These control deficiencies could result in a
material misstatement to the annual or interim financial statements that would
not be prevented or detected. As a result of the receivership of our U.K.
supplier of which we were advised subsequent to year-end, we identified an
adjustment of $9 million that was recorded in the financial statements for the
year ended December 30, 2006.

      We did not maintain effective internal controls over our procurement
process, specifically the authorization and approval of contracts and timely
communication of contracts to appropriate accounting personnel to evaluate their
accounting treatment. These control deficiencies could affect financial
statement balances of inventory, prepaids, property, plant and equipment and
related depreciation,

                                       58



accounts payable and capital lease obligations and could result in a material
misstatement to the annual or interim financial statements that would not be
prevented or detected.

      Our assessment of the effectiveness of our internal control over financial
reporting as of December 30, 2006 has been audited by PricewaterhouseCoopers
LLP, an independent registered public accounting firm, as stated in its report
which appears on pages 35 and 36.

PLAN FOR REMEDIATION OF MATERIAL WEAKNESSES

In response to the identified material weaknesses, we, with oversight from our
Audit Committee, are focused on improving our internal controls and remedying
the identified material weaknesses through implementing  new controls and
polices and ensuring that all our controls and policies are followed.

      Our policies require periodic inventory counts and detailed reconciliation
procedures to ensure the completeness, accuracy and existence of inventory. In
addition, we have procedures in place to ensure appropriate valuation of
inventory and credit notes. We plan on monitoring adherence to our policies by
assigning appropriate personnel to undertake responsibility for these controls.
We have also begun implementing a functional reporting structure intended to
ensure appropriate segregation of duties.

      We have recently hired a Chief Manufacturing and Supply Chain Officer who
is responsible for the global procurement function. We will implement processes
to ensure that our policy that all contracts be appropriately authorized and
that appropriate review for accounting of contracts takes place on a timely
basis is followed.

      We believe that these corrective actions will remediate the material
weaknesses identified above. We will continue to monitor the effectiveness of
these actions and will make any changes and take such other actions that we deem
appropriate given the circumstances.

                                       59


PART III

ITEM 10.

DIRECTORS AND EXECUTIVE OFFICERS

The information required by this item regarding directors is incorporated by
reference to, and will be contained in, the "Election of Directors" section of
our definitive proxy statement for the 2007 Annual and Special Meeting of
Shareowners, which will be filed within 120 days after December 30, 2006. The
information required by this item regarding audit committee financial expert
disclosure is incorporated by reference to, and will be contained in, the
"Corporate Governance" section of our definitive proxy statement for the 2007
Annual and Special Meeting of Shareowners. The information required by this item
regarding executive officers appears as the Supplemental Item in Part I.

      The Audit Committee of our Board of Directors is an "audit committee" for
the purposes of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended. The Audit Committee charter is posted on our website at www.cott.com.
The members of the Audit Committee are Philip B. Livingston (Chairman), W. John
Bennett and Andrew Prozes. The Board of Directors has determined that our Audit
Committee has a financial expert, Philip B. Livingston, an independent director.

      The Audit Committee has reviewed and discussed the audited financial
statements with management and has had discussions with the independent
accountants on matters required under Auditing Standard No. 61. The Audit
Committee has received written disclosures and the letter from the independent
accountants required by ISB No. 1 and has discussed with the independent
accountants their independence. The Audit Committee has recommended to the Board
of Directors that the audited financial statements be included in the Annual
Report on Form 10-K.

      All of our directors, officers and employees must comply with our Code of
Business Conduct and Ethics. In addition, our Chief Executive Officer, Chief
Financial Officer and principal accounting officer and certain other employees
have a further obligation to comply with our Code of Ethics for Senior Officers.
Our Code of Business Conduct and Ethics and our Code of Ethics for Senior
Officers are posted on our website, www.cott.com, and we intend to disclose any
amendment to, or waiver from, any provision of these codes by posting such
information on our website.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The information required by this item is incorporated by reference to, and will
be contained in, the "Section 16(a) Beneficial Ownership Reporting Compliance"
section of our definitive proxy statement for the 2007 Annual and Special
Meeting of Shareowners, which will be filed within 120 days after December 30,
2006.

ITEM 11.

EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to, and will
be contained in, the "Compensation of Executive Officers" section of our
definitive proxy statement for the 2007 Annual and Special Meeting of
Shareowners, which will be filed within 120 days after December 30, 2006.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREOWNER MATTERS

The information required by this item is incorporated by reference to, and will
be contained in, the "Principal Shareowners," the "Security Ownership of
Directors and Management" and "Equity Compensation Plan Information" sections of
our definitive proxy statement for the 2007 Annual and Special Meeting of
Shareowners, which will be filed within 120 days after December 30, 2006.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by reference to, and will
be contained in, the "Certain Relationships and Related Transactions" section of
our definitive proxy statement for the 2007 Annual and Special Meeting of
Shareowners, which will be filed within 120 days after December 30, 2006.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to, and will
be contained in, the "Auditors" section of our definitive proxy statement for
the 2007 Annual and Special Meeting of Shareowners, which will be filed within
120 days after December 30, 2006.

                                       60


PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1. FINANCIAL STATEMENTS:

The consolidated financial statements are included in Item 8 of this Annual
Report on Form 10-K.

2. FINANCIAL STATEMENT SCHEDULES:

Schedule II -- Valuation and Qualifying Accounts

Schedule III -- Consolidating Financial Statements

All other schedules called for by the applicable SEC accounting regulations are
not required under the related instructions or are inapplicable and, therefore,
have been omitted.

                                       61


3. EXHIBITS:



 NUMBER                                     DESCRIPTION
- ----------     -----------------------------------------------------------------
            
  2.1          Agreement Relating to the Sale and Purchase of the Whole of the
               Issued Share Capital of Macaw (Holdings) Limited, dated August
               10, 2005, between Andrew Cawthray and Others and Martyn Rose and
               Cott Beverages Limited (incorporated by reference to Exhibit 2.1
               to our Form 8-K dated August 16, 2005).

  3.1          Articles of Amalgamation of Cott Corporation (filed herewith).

  3.2          By-laws of Cott Corporation (incorporated by reference to Exhibit
               3.2 to our Form 10-K filed March 8, 2002).

  4.1          Subscription Agreement dated as of June 12, 1998 for Cott
               Corporation's (as issuer) Convertible Participating Voting Second
               Preferred Shares, Series 1 (incorporated by reference to Exhibit
               4.2 to our Form 10-K filed March 31, 2000).

  4.2          Letter Agreement dated as of November 3, 1999, regarding
               standstill provisions between Cott Corporation and the Thomas H.
               Lee Company (incorporated by reference to Exhibit 4.3 to our Form
               10-K filed March 31, 2000).

  4.3          Indenture dated as of December 21, 2001, between Cott Beverages
               Inc. (as issuer) and HSBC Bank USA (as trustee) (incorporated by
               reference to Exhibit 4.3 to our Form 10-K filed March 8, 2002).

  4.4          Registration Rights Agreement dated as of December 21, 2001,
               among Cott Beverages Inc., the Guarantors named therein and
               Lehman Brothers Inc., BMO Nesbitt Burns Corp. and CIBC World
               Markets Corp. (incorporated by reference to Exhibit 4.4 to our
               Form 10-K filed March 8, 2002).

  10.1(1)      Supply Agreement, dated December 21,1998, between Wal-Mart
               Stores, Inc. and Cott Beverages USA, Inc. (now "Cott Beverages
               Inc.") (incorporated by reference to Exhibit 10.3 to our Form
               10-K filed March 31, 2000).

  10.2(2)      Amended 1999 Executive Incentive Share Compensation Plan
               effective January 3,1999 (incorporated by reference to Exhibit
               10.9 to our Form 10-K filed March 20, 2001).

  10.3(2)      2000 Executive Incentive Share Compensation Plan effective
               January 2, 2001 (incorporated by reference to Exhibit 10.10 to
               our Form 10-K filed March 20, 2001).

  10.4(2)      2001 Executive Incentive Share Compensation Plan effective
               January 2, 2002 (incorporated by reference to Exhibit 10.10 to
               our Form 10-K filed March 8, 2002).

  10.5(2)      2002 Executive Incentive Share Compensation Plan effective
               January 2, 2003 (incorporated by reference to Exhibit 10.11 to
               our Form 10-K filed March 17, 2003).

  10.6(2)      Second Canadian Employee Share Purchase Plan effective January 2,
               2001 (incorporated by reference to Exhibit 10.11 to our Form 10-K
               filed March 20, 2001).

  10.7(1)      Supply Agreement executed November 11, 2003, effective January 1,
               2002 between Crown Cork & Seal Company, Inc. and Cott Corporation
               (incorporated by reference to Exhibit 10.14 to our Form 10-Q/A
               filed August 5, 2004).

  10.8(2)      Share Purchase Plan for Non-employee Directors effective November
               1, 2003 (incorporated by reference to Exhibit 10.15 to our Form
               10-K filed March 18, 2004).

  10.9(2)      Cott Corporation Executive Investment Share Purchase Plan
               (incorporated by reference to Exhibit 10.14 to our Form 10-K
               filed March 16, 2005).

  10.10(2)     Restated 1986 Common Share Option Plan of Cott
               Corporation/Corporation Cott as amended through October 20, 2004
               (incorporated by reference to Exhibit 10.15 to our Form 10-K
               filed March 16, 2005).

  10.11(2)     Letter Agreement with Frank E. Weise III, dated April 28, 2004
               (incorporated by reference to Exhibit 10.5 to our Form S-3/A
               filed on June 18, 2004).

  10.12(1)     Amendment to Supply Agreement between Crown Cork & Seal USA, Inc.
               (successor to Crown Cork & Seal Company, Inc.) and Cott
               Corporation, dated December 23, 2004 (incorporated by reference
               to Exhibit 10.17 to our Form 10-K filed March 16, 2005).


                                       62




 NUMBER                                     DESCRIPTION
- ----------     -----------------------------------------------------------------
            
  10.13(2)     Employment Agreement of Mark R. Halperin dated July 14, 2000
               (incorporated by reference to Exhibit 10.7 to our Form 10-K filed
               March 8, 2002) (including Confidentiality & Restrictive Covenants
               (incorporated by reference to Exhibit 10.19 to our Form 10-K
               filed March 16, 2005)).

  10.14(1)     Credit Agreement, dated as of March 31, 2005, by and among Cott
               Corporation, Cott Beverages Inc., Cott Beverages Limited, and
               Cott Embotelladores de Mexico, S.A. de C.V., as Borrowers, the
               Lenders referred to herein, Wachovia Bank, National Association,
               as Administrative Agent and Security Trustee, Bank of Montreal,
               as Syndication Agent, and HSBC Bank Canada, Cooperatieve Centrale
               Raiffeisen-BoerenleenBank B.A., "Rabobank International", New
               York Branch, each as a Documentation Agent, Wachovia Capital
               Markets, LLC as a Lead Arranger and the Sole Book Manager, BMO
               Nesbitt Burns, as a Lead Arranger (incorporated by reference to
               Exhibit 10.1 to our Form 10-Q filed May 12, 2005).

  10.15(1)     Receivables Purchase Agreement, dated as of April 1, 2005, among
               Cott USA Receivables Corporation, Cott Beverages Inc., Park
               Avenue Receivables Company, LLC, the financial institutions from
               time to time parties to the agreement, and JPMorgan Chase Bank,
               N.A. (incorporated by reference to Exhibit 10.1 to our Form 10-Q
               filed May 12, 2005).

  10.16        First Amendment, Consent and Joinder Agreement, dated August 10,
               2005, by and among Cott Corporation, Cott Beverages Inc., Cott
               Beverages Limited, Macaw (Soft Drinks) Limited, Cott
               Embotelladores de Mexico, S.A. de C.V., certain Cott Corporation
               subsidiaries, the Lenders specified therein and Wachovia Bank,
               National Association (incorporated by reference to Exhibit 10.1
               to our Form 8-K dated August 16, 2005).

  10.17(2)     Employment Agreement of Tina Dell'Aquila dated May 25, 2005 and
               confidentiality undertaking dated October 27, 1998 (incorporated
               by reference to Exhibit 10.21 to our Form 10-K dated March 6,
               2006).

  10.18(2)     Employment Agreement between Cott Corporation and Brent D. Willis
               dated May 16, 2006 (incorporated by reference to Exhibit 10.1 to
               our Form 10-Q dated August 10, 2006).

  10.19(2)     Termination Letter Agreement between Cott Corporation and John K.
               Sheppard dated May 13, 2006 (incorporated by reference to Exhibit
               10.2 to our Form 10-Q dated August 10, 2006).

  10.20(2)     Cott Corporation Performance Share Unit Plan (incorporated by
               reference to Exhibit 10.3 to our Form 10-Q dated August 10,
               2006).

  10.21(2)     Cott Corporation Share Appreciation Rights Plan (incorporated by
               reference to Exhibit 10.4 to our Form 10-Q dated August 10,
               2006).

  10.22(2)     Termination Letter Agreement between Cott Corporation and Mark
               Benadiba dated August 2, 2006 (incorporated by reference to
               Exhibit 10.1 to our Form 10-Q dated November 9, 2006).

  10.23(2)     Termination Letter Agreement between Cott Corporation and Andrew
               J. Murfin dated August 2, 2006 (incorporated by reference to
               Exhibit 10.2 to our Form 10-Q dated November 9, 2006).

  10.24(2)     Termination Letter Agreement between Cott Corporation and Colin
               Walker dated August 8, 2006 (incorporated by reference to Exhibit
               10.3 to our Form 10-Q dated November 9, 2006).

  10.25(2)     Employment Agreement between Cott Corporation and Wynn A. Willard
               dated August 23, 2006 (incorporated by reference to Exhibit 10.4
               to our Form 10-Q dated November 9, 2006).

  10.26(2)     Employment Agreement between Cott Corporation and John Dennehy
               dated September 12, 2006 (incorporated by reference to Exhibit
               10.5 to our Form 10-Q dated November 9, 2006).

  10.27(2)     Employment Offer Letter between Cott Corporation and Rick Dobry
               dated September 21, 2006 and modification dated October 24, 2006
               (incorporated by reference to Exhibit 10.6 to our Form 10-Q dated
               November 9, 2006).

  10.28(2)     Employment Agreement between Cott Corporation and Abilio Gonzales
               dated August 1, 2006 (incorporated by reference to Exhibit 10.7
               to our Form 10-Q dated November 9, 2006).

  10.29(2)     Termination Letter Agreement between Cott Corporation and B.
               Clyde Preslar dated as of December 13, 2006 (filed herewith).


                                       63




 NUMBER                                     DESCRIPTION
- ----------     -----------------------------------------------------------------
            
  10.30(2)     Employment Agreement between Cott Corporation and Tina
               Dell'Aquila dated February 21, 2007 (filed herewith).

  21.1         List of Subsidiaries of Cott Corporation (filed herewith).

  23.1         Consent of Independent Registered Public Accounting Firm (filed
               herewith).

  31.1         Certification of the Chief Executive Officer pursuant to section
               302 of the Sarbanes-Oxley Act of 2002 for the year ended December
               30, 2006 (filed herewith).

  31.2         Certification of the Chief Financial Officer, Vice President,
               Controller & Assistant Secretary pursuant to section 302 of the
               Sarbanes-Oxley Act of 2002 for the year ended December 30, 2006
               (furnished herewith).

  32.1         Certification of the Chief Executive Officer pursuant to section
               906 of the Sarbanes-Oxley Act of 2002 for the year ended December
               30, 2006 (furnished herewith).

  32.2         Certification of the Chief Financial Officer, Vice President,
               Controller & Assistant Secretary pursuant to section 906 of the
               Sarbanes-Oxley Act of 2002 for the year ended December 30, 2006
               (furnished herewith).


- ----------
(1)   Document is subject to request for confidential treatment.

(2)   Indicates a management contract or compensatory plan.

                                       64


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Cott Corporation

/s/ Brent D. Willis
- ----------------------------
Brent D. Willis
Chief Executive Officer
Date: February 28, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:

/s/ Brent D. Willis                         Date: February 28, 2007
- ------------------------------
Brent D. Willis
Chief Executive Officer

/s/ Tina Dell'Aquila                        Date: February 28, 2007
- ------------------------------
Tina Dell'Aquila
Chief Financial Officer, Vice
President, Controller
& Assistant Secretary
(Principal Financial Officer &
Principal Accounting Officer)

/s/ Colin J. Adair                          Date: February 28, 2007
- ------------------------------
Colin J. Adair
Director

/s/ W. John Bennett                         Date: February 28, 2007
- ------------------------------
W. John Bennett
Director

/s/ George A. Burnett                       Date: February 28, 2007
- ------------------------------
George A. Burnett
Director

/s/ Serge Gouin                             Date: February 28, 2007
- ------------------------------
Serge Gouin
Director

/s/ Stephen H. Halperin                     Date: February 28, 2007
- ------------------------------
Stephen H. Halperin
Director

/s/ Betty Jane Hess                         Date: February 28, 2007
- ------------------------------
Betty Jane Hess
Director

/s/ Philip B. Livingston                    Date: February 28, 2007
- ------------------------------
Philip B. Livingston
Director

/s/ Christine A. Magee                      Date: February 28, 2007
- ------------------------------
Christine A. Magee
Director

/s/ Andrew Prozes                           Date: February 28, 2007
- ------------------------------
Andrew Prozes
Director

/s/ Donald G. Watt                          Date: February 28, 2007
- ------------------------------
Donald G. Watt
Director

/s/ Frank E. Weise                          Date: February 28, 2007
- ------------------------------
Frank E. Weise
Chairman, Director

                                       65


SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS



                                                                       YEAR ENDED DECEMBER 30, 2006
                                              -----------------------------------------------------------------------------------
                                                                            Charged to   Charged to
                                                  Balance at     Reduction  Costs and       Other               Balance at End of
Description                                   Beginning of Year  of Sales    Expenses     Accounts   Deduction        Year
- ------------------                            -----------------  ---------  -----------  ----------  ---------  -----------------
                                                                                              
RESERVES DEDUCTED IN THE BALANCE SHEET FROM
  THE ASSETS TO WHICH THEY APPLY
Allowances for losses on:
Accounts receivables                          $            (7.8) $      --  $      (1.8) $       --  $     4.6  $            (5.0)
Inventories                                                (7.6)        --         (1.9)         --        0.2               (9.3)
Deferred income tax assets                                (21.0)        --          3.5          --         --              (17.5)
Accrued sales incentives                                  (27.6)     (45.9)          --          --       49.6              (23.9)
                                              -----------------  ---------  -----------  ----------  ---------  -----------------
                                              $           (64.0) $   (45.9) $      (0.2) $       --  $    54.4  $           (55.7)
                                              =================  =========  ===========  ==========  =========  =================





                                                                        YEAR OF ENDED DECEMBER 31, 2005
                                              -----------------------------------------------------------------------------------
                                                                            Charged to   Charged to
                                                  Balance at     Reduction  Costs and       Other               Balance at End of
Description                                   Beginning of Year  of Sales    Expenses     Accounts   Deduction        Year
- ------------------                            -----------------  ---------  -----------  ----------  ---------  -----------------
                                                                                              
RESERVES DEDUCTED IN THE BALANCE SHEET FROM
  THE ASSETS TO WHICH THEY APPLY
Allowances for losses on:
Accounts receivables                          $           (12.1) $      --  $      (0.5) $     (0.1) $     4.9  $            (7.8)
Inventories                                                (6.8)        --         (1.0)       (0.5)       0.7               (7.6)
Intangibles and other assets                               (0.4)        --           --          --        0.4                 --
Deferred income tax assets                                   --         --        (21.0)         --         --              (21.0)
Accrued sales incentives                                  (24.9)     (55.4)          --          --       52.7              (27.6)
                                              -----------------  ---------  -----------  ----------  ---------  -----------------
                                              $           (44.2) $   (55.4) $     (22.5) $     (0.6) $    58.7  $           (64.0)
                                              =================  =========  ===========  ==========  =========  =================





                                                                       YEAR ENDED JANUARY 1, 2005
                                              -----------------------------------------------------------------------------------
                                                                            Charged to   Charged to
                                                  Balance at     Reduction  Costs and       Other               Balance at End of
Description                                   Beginning of Year  of Sales    Expenses     Accounts   Deduction        Year
- --------------------                          -----------------  ---------  -----------  ----------  ---------  -----------------
                                                                                              
RESERVES DEDUCTED IN THE BALANCE SHEET FROM
  THE ASSETS TO WHICH THEY APPLY
Allowances for losses on:
Accounts receivables                          $            (6.8) $      --  $      (6.5) $       --  $     1.2  $           (12.1)
Inventories                                                (7.2)        --          0.1        (0.2)       0.5               (6.8)
Intangibles and other assets                               (0.6)        --          0.2          --         --               (0.4)
Accrued sales incentives                                  (24.2)     (46.6)          --          --       45.9              (24.9)
                                              -----------------  ---------  -----------  ----------  ---------  -----------------
                                              $           (38.8) $   (46.6) $      (6.2) $     (0.2) $    47.6  $           (44.2)
                                              =================  =========  ===========  ==========  =========  =================



                                       66


SCHEDULE III -- CONSOLIDATING FINANCIAL STATEMENTS

Cott Beverages Inc., our wholly owned subsidiary, has entered into financing
arrangements that are guaranteed by Cott Corporation and certain other wholly
owned subsidiaries (the "Guarantor Subsidiaries"). Such guarantees are full,
unconditional and joint and several.

The following supplemental financial information sets forth on an unconsolidated
basis, our balance sheets, statements of income and cash flows for Cott
Corporation, Cott Beverages Inc., Guarantor Subsidiaries and our other
subsidiaries (the "Non-guarantor Subsidiaries"). The balance sheets, statements
of income and cash flows for Cott Beverages Inc. have been adjusted
retroactively to include Concord Beverage Company, Concord Holdings GP and
Concord Holdings LP that were amalgamated with Cott Beverages Inc. on December
29, 2001. The supplemental financial information reflects our investments and
those of Cott Beverages Inc. in their respective subsidiaries using the equity
method of accounting.

CONSOLIDATING STATEMENTS OF INCOME



                                                                     For the year ended December 30, 2006
                                           --------------------------------------------------------------------------------------
                                               Cott          Cott         Guarantor     Non-guarantor  Elimination
(IN MILLIONS OF U.S. DOLLARS)              Corporation  Beverages Inc.   Subsidiaries   Subsidiaries     Entries     Consolidated
- --------------------------------------     -----------  --------------  -------------  --------------  ------------  ------------
                                                                                                   
REVENUE                                    $     229.7  $      1,091.8  $       396.0  $        126.9  $      (72.6) $    1,771.8
Cost of sales                                    188.4           968.3          360.4           110.4         (72.6)      1,554.9
                                           -----------  --------------  -------------  --------------  ------------  ------------

GROSS PROFIT                                      41.3           123.5           35.6            16.5            --         216.9
Selling, general and administrative
  expenses                                        34.1            94.6           36.9            10.5            --         176.1
Loss on disposal of property, plant &
  equipment                                       (0.5)            0.6           (0.1)                                         --
Restructuring, asset impairments and
  other charges
    Restructuring                                  2.1            16.8            1.4             0.2                        20.5
    Asset Impairments (recovery)                  (0.2)           15.6             --              --                        15.4
    Other                                           --              --            2.6              --            --           2.6
                                           -----------  --------------  -------------  --------------  ------------  ------------

OPERATING INCOME (LOSS)                            5.8            (4.1)          (5.2)            5.8            --           2.3
Other expense (income), net                       (0.1)            9.2           (1.9)           (5.6)         (1.5)          0.1
Interest expense (income), net                    (0.2)           31.4            1.1            (0.1)           --          32.2
Minority interest                                   --              --             --             3.8            --           3.8
                                           -----------  --------------  -------------  --------------  ------------  ------------

INCOME (LOSS) BEFORE INCOME TAXES AND
  EQUITY INCOME (LOSS)                             6.1           (44.7)          (4.4)            7.7           1.5         (33.8)
Income taxes                                        --           (18.4)           0.3             8.5          (6.7)        (16.3)
Equity (loss) income                             (23.6)           (9.9)         (10.9)             --          44.4            --
                                           -----------  --------------  -------------  --------------  ------------  ------------

NET INCOME (LOSS)                          $     (17.5) $        (36.2) $       (15.6) $         (0.8) $       52.6  $      (17.5)
                                           ===========  ==============  =============  ==============  ============  ============


                                       67


CONSOLIDATING BALANCE SHEETS



                                                                            As of December 30, 2006
                                           --------------------------------------------------------------------------------------
                                               Cott           Cott        Guarantor     Non-guarantor  Elimination
(IN MILLIONS OF U.S. DOLLARS)               Corporation  Beverages Inc.  Subsidiaries   Subsidiaries     Entries     Consolidated
- ---------------------------------------    ------------- -------------  -------------  --------------  ------------  ------------
                                                                                                   
ASSETS
CURRENT ASSETS
   Cash                                    $        1.8  $         4.9  $         1.2  $          5.5  $         --  $       13.4
   Accounts receivable                             37.2           24.6           85.0            84.3         (44.1)        187.0
   Income taxes recoverable                         0.2           15.1            1.5            (0.2)           --          16.6
   Inventories                                     21.6           71.6           33.0             5.0            --         131.2
   Prepaid expenses and other assets                1.5            3.2            4.6             1.0            --          10.3
   Deferred income taxes                             --           10.3            0.2             1.2            --          11.7
                                           ------------  -------------  -------------  --------------  ------------  ------------

                                                   62.3          129.7          125.5            96.8         (44.1)        370.2
Property, plant and equipment                      49.5          172.5          128.0            10.2            --         360.2
Goodwill                                           23.5           46.0           88.9              --            --         158.4
Intangibles and other assets                       14.9          155.4           43.9            36.5            --         250.7
Due from affiliates                               102.5           36.2          190.8            41.9        (371.4)           --
Investments in subsidiaries                       377.8           59.9           38.3           137.8        (613.8)           --
                                           ------------  -------------  -------------  --------------  ------------  ------------

                                           $      630.5  $       599.7  $       615.4  $        323.2  $   (1,029.3) $   1,139.5
                                           ============  =============  =============  ==============  ============  ============

LIABILITIES
CURRENT LIABILITIES
   Short-term borrowings                   $         --  $          --  $       107.7  $           --  $         -- $       107.7
   Current maturities of long-term debt              --            2.0             --              --            --           2.0
   Accounts payable and accrued
    liabilities                                    33.8          108.4           65.3            24.6         (45.6)        186.5
                                           ------------  -------------  -------------  --------------  ------------  ------------

                                                   33.8          110.4          173.0            24.6         (45.6)        296.2
Long-term debt                                       --          275.2             --              --            --         275.2
Due to affiliates                                 108.0          124.7           99.9            38.8        (371.4)           --
Deferred income taxes                                --           26.4           22.5             9.6            --          58.5
                                           ------------  -------------  -------------  --------------  ------------  ------------

                                                  141.8          536.7          295.4            73.0        (417.0)       629.9
                                           ------------  -------------  -------------  --------------  ------------  ------------

Minority interest                                    --             --             --            20.9            --          20.9
SHAREOWNERS' EQUITY
Capital stock
   Common shares                                  273.4          275.8          615.1           175.0      (1,065.9)        273.4
Restricted shares                                  (0.7)            --             --              --            --          (0.7)
Additional paid-in capital                         29.8             --             --              --            --          29.8
Retained earnings (deficit)                       168.7         (212.8)        (201.0)           (5.2)        418.9         168.7
Accumulated other comprehensive income
  (loss)                                           17.5             --          (94.1)           59.5          34.6          17.5
                                           ------------  -------------  -------------  --------------  ------------  ------------
                                                  488.7           63.0          320.0           229.3        (612.3)        488.7
                                           ------------  -------------  -------------  --------------  ------------  ------------

                                           $      630.5  $       599.7  $       615.4  $        323.2  $   (1,029.3) $    1,139.5
                                           ============  =============  =============  ==============  ============  ============


                                       68


CONSOLIDATING STATEMENTS OF CASH FLOWS



                                                                   For the year ended December 30, 2006
                                           --------------------------------------------------------------------------------------
                                                Cott         Cott          Guarantor   Non-guarantor   Elimination
(IN MILLIONS OF U.S. DOLLARS)               Corporation  Beverages Inc.  Subsidiaries   Subsidiaries      Entries    Consolidated
- -------------------------------------      ------------- -------------  -------------  --------------  ------------  ------------
                                                                                                   
OPERATING ACTIVITIES
Net income (loss)                          $      (17.5) $       (36.2) $       (15.6) $         (0.8) $       52.6  $      (17.5)
Depreciation and amortization                      12.3           40.2           29.2             5.1            --          86.8
Amortization of financing fees                      0.1            0.2            0.5             0.3            --           1.1
Share-based compensation                           11.4             --             --              --                        11.4
Deferred income taxes                                --           (6.4)          (1.3)            7.8          (6.7)         (6.6)
Minority interest                                    --             --             --             3.8            --           3.8
Loss on disposal of property, plant &
  equipment                                        (0.5)           0.6           (0.1)             --            --            --
Equity loss, net of distributions                  23.6           15.5           24.3              --         (63.4)           --
Asset impairments                                  (0.2)          15.6             --              --            --          15.4
Other non-cash items                               (0.1)           7.9            4.1             0.1            --          12.0
Net change in non-cash working capital             18.3            7.2          (25.8)            4.8          (1.5)          3.0
                                           ------------  -------------  -------------  --------------  ------------  ------------

Cash provided by (used in) operating
  activities                                       47.4           44.6           15.3            21.1         (19.0)        109.4
                                           ------------  -------------  -------------  --------------  ------------  ------------

INVESTING ACTIVITIES
Additions to property, plant and
  equipment                                        (3.7)         (20.3)         (10.1)           (1.0)           --         (35.1)
Additions to intangible and other assets           (4.2)          (3.9)          (4.9)             --            --         (13.0)
Proceeds from disposal of property,
  plant & equipment                                 0.7            0.6            0.3              --            --           1.6
Advances to affiliates                            (47.7)           0.1           (8.8)             --          56.4            --
                                           ------------  -------------  -------------  --------------  ------------  ------------

Cash (used in) provided by investing
  activities                                      (54.9)         (23.5)         (23.5)           (1.0)         56.4         (46.5)
                                           ------------  -------------  -------------  --------------  ------------  ------------

FINANCING ACTIVITIES
Payments of long-term debt                           --           (1.0)            --              --            --          (1.0)
Short-term borrowings                                --          (10.4)         (45.5)          (10.0)           --         (65.9)
Advances from affiliates                             --            8.8           47.7            (0.1)        (56.4)           --
Distributions to subsidiary minority
  shareowner                                         --             --             --            (5.4)           --          (5.4)
Issue of common shares                              0.4             --             --              --            --           0.4
Dividends paid                                       --          (13.4)            --            (5.6)         19.0            --
Other financing activities                           --           (0.2)           0.8              --            --           0.6
                                           ------------  -------------  -------------  --------------  ------------  ------------

Cash provided by (used in) financing
  activities                                        0.4          (16.2)           3.0           (21.1)        (37.4)        (71.3)
                                           ------------  -------------  -------------  --------------  ------------  ------------

Effect of exchange rate changes on cash             0.1             --            0.1            (0.1)           --           0.1
                                           ------------  -------------  -------------  --------------  ------------  ------------

NET (DECREASE) INCREASE IN CASH                    (7.0)           4.9           (5.1)           (1.1)           --          (8.3)
CASH, BEGINNING OF YEAR                             8.8             --            6.3             6.6            --          21.7
                                           ------------  -------------  -------------  --------------  ------------  ------------

CASH, END OF YEAR                          $        1.8  $         4.9  $         1.2  $          5.5  $         --  $       13.4
                                           ============  =============  =============  ==============  ============  ============


                                       69


CONSOLIDATING STATEMENTS OF INCOME



                                                                     For the year ended December 31, 2005
                                           --------------------------------------------------------------------------------------
                                               Cott          Cott         Guarantor     Non-guarantor  Elimination
(IN MILLIONS OF U.S. DOLLARS)               Corporation  Beverages Inc.  Subsidiaries   Subsidiaries     Entries     Consolidated
- ------------------------------------       ------------- -------------  -------------  --------------  ------------  ------------
                                                                                                   
REVENUE                                    $      214.3  $     1,140.4  $       310.4  $        119.6  $      (29.4) $    1,755.3
Cost of sales                                     183.3          979.8          271.5           100.6         (29.4)      1,505.8
                                           ------------  -------------  -------------  --------------  ------------  ------------

GROSS PROFIT                                       31.0          160.6           38.9            19.0            --         249.5
Selling, general and administrative
  expenses                                         35.5           73.9           21.1             8.1            --         138.6
Loss on disposal of property, plant &
  equipment                                         0.3            2.1           (0.9)             --            --           1.5
Restructuring, asset impairments and
  other charges
    Restructuring                                   0.4            2.8             --              --            --           3.0
    Asset impairments                               4.4           29.1             --              --            --          33.7
    Other                                            --             --            0.8              --            --           0.8
                                           ------------  -------------  -------------  --------------  ------------  ------------

OPERATING (LOSS) INCOME                            (9.6)          52.7           17.9            10.9            --          71.9
Other (income) expense, net                        (0.6)           8.6           (0.7)           (8.0)           --          (0.7)
Interest (income) expense, net                     (0.1)          32.6           (5.1)            1.4            --          28.8
Minority interest                                    --             --             --             4.5            --           4.5
                                           ------------  -------------  -------------  --------------  ------------  ------------

(LOSS) INCOME BEFORE INCOME TAXES AND
  EQUITY INCOME (LOSS)                             (8.9)          11.5           23.7            13.0            --          39.3
Income taxes                                        0.8            7.1            9.1             5.2          (7.5)         14.7
Equity income (loss)                               34.3            8.5           13.8              --         (56.6)           --
                                           ------------  -------------  -------------  --------------  ------------  ------------
NET INCOME (LOSS)                          $       24.6  $        12.9  $        28.4  $          7.8  $      (49.1) $       24.6
                                           ============  =============  =============  ==============  ============  ============


                                       70


CONSOLIDATING BALANCE SHEETS



                                                                         As of December 31, 2005
                                         ----------------------------------------------------------------------------------------
                                             Cott         Cott         Guarantor     Non-guarantor    Elimination
(IN MILLIONS OF U.S. DOLLARS)            Corporation  Beverages Inc.  Subsidiaries   Subsidiaries      Entries       Consolidated
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                                                                                   
ASSETS
CURRENT ASSETS
   Cash                                  $       8.8  $           --  $        6.3   $        6.6    $          --   $       21.7
   Accounts receivable                          35.6            26.5          70.2          103.2            (44.4)         191.1
   Inventories                                  18.8            76.6          43.6            5.2               --          144.2
   Prepaid expenses and other assets             1.3             2.2           4.7            1.3               --            9.5
   Deferred income taxes                          --             6.7          (0.2)           0.8               --            7.3
                                         -----------   -------------  ------------   ------------    -------------   ------------

                                                64.5           112.0         124.6          117.1            (44.4)         373.8
Property, plant and equipment                   53.0           195.6         135.1           10.5               --          394.2
Goodwill                                        23.5            46.0          80.8             --               --          150.3
Intangibles and other assets                    17.0           164.1          38.4           40.9               --          260.4
Due from affiliates                             60.8            60.0         168.8           41.9           (331.5)            --
Investments in subsidiaries                    395.2            75.4          62.6          137.8           (671.0)            --
Deferred income taxes                             --              --           0.4             --               --            0.4
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                         $     614.0   $       653.1  $      610.7   $      348.2    $    (1,046.9)  $    1,179.1
                                         ===========  ==============  ============   ============    =============   ============

LIABILITIES
CURRENT LIABILITIES
   Short-term borrowings                 $        --  $         10.4  $      137.5   $       10.0    $          --   $      157.9
   Current maturities of long-term debt           --             0.8            --             --               --            0.8
   Accounts payable and accrued
    liabilities                                 36.7           109.6          63.6           17.0            (44.4)         182.5
   Deferred income taxes                          --              --           0.1            0.1               --            0.2
                                         -----------  --------------  ------------   ------------    -------------   ------------

                                                36.7           120.8         201.2           27.1            (44.4)         341.4
Long-term debt                                    --           272.3            --             --               --          272.3
Due to affiliates                               95.4           115.8          58.1           62.2           (331.5)            --
Deferred income taxes                             --            29.0          27.3            4.7               --           61.0
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                               132.1           537.9         286.6           94.0           (375.9)         674.7
                                         -----------  --------------  ------------   ------------    -------------   ------------

Minority interest                                 --              --            --           22.5               --           22.5
SHAREOWNERS' EQUITY
Capital stock
   Common shares                               273.0           275.8         599.5          175.0         (1,050.3)         273.0
Additional paid-in capital                      18.4              --            --             --               --           18.4
Retained earnings (deficit)                    186.2          (160.6)       (191.2)          (2.3)           354.1          186.2
Accumulated other comprehensive
 income (loss)                                   4.3              --         (84.2)          59.0             25.2            4.3
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                               481.9           115.2         324.1          231.7           (671.0)         481.9
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                         $     614.0   $       653.1  $      610.7   $      348.2    $    (1,046.9)  $    1,179.1
                                         ===========  ==============  ============   ============    =============   ============


                                       71


CONSOLIDATING STATEMENTS OF CASH FLOWS



                                                                         For the year ended December 31, 2005
                                         ----------------------------------------------------------------------------------------
                                             Cott         Cott         Guarantor     Non-guarantor    Elimination
(IN MILLIONS OF U.S. DOLLARS)            Corporation  Beverages Inc.  Subsidiaries   Subsidiaries       Entries      Consolidated
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                                                                                   
OPERATING ACTIVITIES
Net income                               $      24.6  $         12.9  $       28.4   $        7.8    $       (49.1)  $       24.6
Depreciation and amortization                   11.6            35.9          17.6            5.1               --           70.2
Amortization of financing fees                    --             0.3           0.2            0.3               --            0.8
Deferred income taxes                            0.5            (8.8)          5.2            4.1             (7.5)          (6.5)
Minority interest                                 --              --            --            4.5               --            4.5
Loss on disposal of property,
 plant & equipment                               0.3             2.1          (0.9)            --               --            1.5
Equity loss, net of distributions              (34.3)           (2.2)         (0.6)            --             37.1             --
Asset impairments                                4.4            29.3          (0.2)            --               --           33.5
Other non-cash items                             0.1             1.3            --            0.1               --            1.5
Net change in non-cash working capital          48.1            42.7         (54.5)         (37.3)              --           (1.0)
                                         -----------  --------------  ------------   ------------    -------------   ------------

Cash provided by (used in) operating
 activities                                     55.3           113.5          (4.8)         (15.4)           (19.5)         129.1
                                         -----------  --------------  ------------   ------------    -------------   ------------

INVESTING ACTIVITIES
Additions to property, plant and
 equipment                                     (11.8)          (47.0)        (15.4)          (1.6)              --          (75.8)
Additions to intangible and other
 assets                                         (9.6)            3.7          (2.1)          (1.0)              --           (9.0)
Acquisitions                                      --              --        (135.1)            --               --         (135.1)
Proceeds from disposal of property,
  plant & equipment                             (0.2)            0.6           1.8             --               --            2.2
Advances to affiliates                         (14.9)            0.1           9.9             --              4.9             --
Investment in subsidiaries                     (15.0)             --         (15.0)            --             30.0             --
                                         -----------  --------------  ------------   ------------    -------------   ------------

Cash used in investing activities              (51.5)          (42.6)       (155.9)          (2.6)            34.9         (217.7)
                                         -----------  --------------  ------------   ------------    -------------   ------------

FINANCING ACTIVITIES
Payments of long-term debt                        --            (0.9)           --             --               --           (0.9)
Short-term borrowings                           (0.1)          (56.1)        138.0           10.0               --           91.8
Advances from affiliates                       (13.2)            3.2          15.0           (0.1)            (4.9)            --
Distributions to subsidiary minority
 shareowner                                       --              --            --           (5.8)              --           (5.8)
Issue of common shares                           3.6              --          15.0           15.0            (30.0)           3.6
Financing costs                                   --            (3.8)           --             --               --           (3.8)
Dividends paid                                    --           (13.2)           --           (6.3)            19.5             --
Other financing activities                       0.1            (0.1)         (0.4)            --               --           (0.4)
                                         -----------  --------------  ------------   ------------    -------------   ------------

Cash (used in) provided by financing
 activities                                     (9.6)          (70.9)        167.6           12.8            (15.4)          84.5
                                         -----------  --------------  ------------   ------------    -------------   ------------

Effect of exchange rate changes on cash         (0.1)             --          (0.6)          (0.1)              --           (0.8)
                                         -----------  --------------  ------------   ------------    -------------   ------------

NET (DECREASE) INCREASE IN CASH                 (5.9)             --           6.3           (5.3)              --           (4.9)
CASH, BEGINNING OF YEAR                         14.7              --            --           11.9               --           26.6
                                         -----------  --------------  ------------   ------------    -------------   ------------

CASH, END OF YEAR                        $       8.8  $           --  $        6.3   $        6.6    $          --   $       21.7
                                         ===========  ==============  ============   ============    =============   ============


                                       72


CONSOLIDATING STATEMENTS OF INCOME



                                                                       For the year ended January 1, 2005
                                         ----------------------------------------------------------------------------------------
                                             Cott         Cott         Guarantor     Non-guarantor    Elimination
(IN MILLIONS OF U.S. DOLLARS)            Corporation  Beverages Inc.  Subsidiaries   Subsidiaries       Entries      Consolidated
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                                                                                   
REVENUE                                  $     208.3  $      1,113.5  $      250.7   $      107.2    $       (33.4)  $    1,646.3
Cost of sales                                  172.9           919.0         214.9           89.2            (33.4)       1,362.6
                                         -----------  --------------  ------------   ------------    -------------   ------------
GROSS PROFIT                                    35.4           194.5          35.8           18.0               --          283.7
Selling, general and administrative
 expenses                                       35.8            75.4          19.1            7.8               --          138.1

Loss on disposal of property,
 plant & equipment                                --            (0.2)         (0.1)            --               --           (0.3)
Restructuring, asset impairments and
 other charges                                   1.3              --          (0.4)            --               --            0.9
                                         -----------  --------------  ------------   ------------    -------------   ------------

OPERATING (LOSS) INCOME                         (1.7)          119.3          17.2           10.2               --          145.0
Other expense (income), net                      0.5             1.3          (1.8)           0.2               --            0.2
Interest (income) expense, net                  (0.2)           32.9          (6.6)          (0.1)              --           26.0
Minority interest                                 --              --            --            4.0               --            4.0
                                         -----------  --------------  ------------   ------------    -------------   ------------

(LOSS) INCOME BEFORE INCOME TAXES
 AND EQUITY INCOME (LOSS)                       (2.0)           85.1          25.6            6.1               --          114.8
Income taxes                                    (2.7)           35.5           8.3            2.2             (7.5)          35.8
Equity income (loss)                            77.6             9.3          55.1             --           (142.7)          (0.7)
                                         -----------  --------------  ------------   ------------    -------------   ------------

NET INCOME (LOSS)                        $      78.3  $         58.9  $       72.4   $        3.9    $      (135.2)  $       78.3
                                         ===========  ==============  ============   ============    =============   ============


                                       73


CONSOLIDATING BALANCE SHEETS



                                                                        As of January 1, 2005
                                         ----------------------------------------------------------------------------------------
                                             Cott         Cott         Guarantor     Non-guarantor    Elimination
(IN MILLIONS OF U.S. DOLLARS)            Corporation  Beverages Inc.  Subsidiaries   Subsidiaries       Entries       Consolidated
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                                                                                   
ASSETS
CURRENT ASSETS
   Cash                                  $      14.7  $           --  $         --   $       11.9    $          --   $       26.6
   Accounts receivable                          52.2           109.3          49.4           12.9            (39.5)         184.3
   Inventories                                  20.9            72.4          24.6            4.9               --          122.8
   Prepaid expenses and other assets             3.0             3.3           3.0            0.4               --            9.7
   Deferred income taxes                        --               7.7           0.6             --               --            8.3
                                         -----------  --------------  ------------   ------------    -------------   ------------

                                                90.8           192.7          77.6           30.1            (39.5)         351.7
Property, plant and equipment                   48.3           162.0          93.6            9.8               --          313.7
Goodwill                                        22.8            51.8          14.2             --               --           88.8
Intangibles and other assets                    11.6           203.7          16.8           44.0               --          276.1
Due from affiliates                             47.0             4.7         151.1           41.9           (244.7)            --
Investments in subsidiaries                    354.0            74.2          47.1          133.3           (608.6)            --
                                         -----------  --------------  ------------   ------------    -------------   ------------

                                         $     574.5  $        689.1  $      400.4   $      259.1    $      (892.8)  $    1,030.3
                                         ===========  ==============  ============   ============    =============   ============

LIABILITIES
CURRENT LIABILITIES
   Short-term borrowings                 $        --  $         66.5  $        4.9   $         --    $          --   $       71.4
   Current maturities of long-term debt           --             0.8            --             --               --            0.8
   Accounts payable and accrued
    liabilities                                 31.7            82.5          52.4           18.1            (39.5)         145.2
                                         -----------  --------------  ------------   ------------    -------------   ------------

                                                31.7           149.8          57.3           18.1            (39.5)         217.4
Long-term debt                                    --           272.5            --             --               --          272.5
Due to affiliates                               80.4           112.6          44.7            7.0           (244.7)            --
Deferred income taxes                            5.1            37.2          17.0             --               --           59.3
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                               117.2           572.1         119.0           25.1           (284.2)         549.2
                                         -----------  --------------  ------------   ------------    -------------   ------------

Minority interest                                 --              --            --           23.8               --           23.8
SHAREOWNERS' EQUITY
Capital stock
   Common shares                               269.4           275.8         587.2          147.6         (1,010.6)         269.4
Additional paid-in-capital                      17.6              --            --             --               --           17.6
Retained earnings (deficit)                    161.6          (158.8)       (223.4)          (4.0)           386.2          161.6
Accumulated other comprehensive
 income (loss)                                   8.7              --         (82.4)          66.6             15.8            8.7
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                               457.3           117.0         281.4          210.2           (608.6)         457.3
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                         $     574.5  $        689.1  $      400.4   $      259.1    $      (892.8)  $    1,030.3
                                         ===========  ==============  ============   ============    =============   ============


                                       74


CONSOLIDATING STATEMENTS OF CASH FLOWS



                                                                     For the year ended January 1, 2005
                                         ----------------------------------------------------------------------------------------
                                             Cott         Cott         Guarantor     Non-guarantor    Elimination
(IN MILLIONS OF U.S. DOLLARS)            Corporation  Beverages Inc.  Subsidiaries   Subsidiaries       Entries      Consolidated
                                         -----------  --------------  ------------   ------------    -------------   ------------
                                                                                                   
OPERATING ACTIVITIES
Net income                               $      78.3  $         58.9  $       72.4   $        3.9    $      (135.2)  $       78.3
Depreciation and amortization                    9.5            31.2          14.3            5.0               --           60.0
Amortization of financing fees                    --             0.7            --             --               --            0.7
Deferred income taxes                           (0.8)           10.3           7.3           (0.2)            (7.5)           9.1
Minority interest                                 --              --            --            4.0               --            4.0
Gain on disposal of property, plant &
 equipment                                        --            (0.2)         (0.1)            --               --           (0.3)
Equity income, net of distributions            (68.7)           (3.3)        (50.6)            --            123.3            0.7
Non-cash unusual items                           1.5              --            --             --               --            1.5
Other non-cash items                             1.2            (1.0)          0.8            0.1               --            1.1
Net change in non-cash working capital         (36.8)          (27.2)          0.5           11.1               --          (52.4)
                                         -----------  --------------  ------------   ------------    -------------   ------------

Cash provided by (used in) operating
 activities                                    (15.8)           69.4          44.6           23.9            (19.4)         102.7
                                         -----------  --------------  ------------   ------------    -------------   ------------

INVESTING ACTIVITIES
Additions to property, plant and
 equipment                                      (4.8)          (34.4)         (9.0)          (2.1)              --          (50.3)
Additions to intangible and other
 assets                                         (6.7)           (0.5)         (3.3)           0.4               --          (10.1)
Acquisitions                                      --           (34.6)           --             --               --          (34.6)
Acquisition of production capacity                --            (3.8)           --             --               --           (3.8)
Proceeds from disposal of property,
 plant & equipment                               1.9             3.1           0.4             --               --            5.4
Advances to affiliates                          13.9             0.1         (21.1)            --              7.1             --
Investment in subsidiaries                     (15.0)             --            --             --             15.0             --
                                         -----------  --------------  ------------   ------------    -------------   ------------

Cash (used in) provided by investing
 activities                                    (10.7)          (70.1)        (33.0)          (1.7)            22.1          (93.4)
                                         -----------  --------------  ------------   ------------    -------------   ------------

FINANCING ACTIVITIES
Payments of long-term debt                        --            (1.3)         (1.9)          (0.3)              --           (3.5)
Short-term borrowings                             --            (5.6)         (1.4)            --               --           (7.0)
Advances from affiliates                        12.8            21.5         (27.1)          (0.1)            (7.1)            --
Distributions to subsidiary minority
 shareowner                                       --              --            --           (5.9)              --           (5.9)
Issue of common shares                          14.3              --          15.0             --            (15.0)          14.3
Dividends paid                                    --           (13.3)           --           (6.1)            19.4             --
Other financing activities                        --              --          (0.4)            --               --           (0.4)
                                         -----------  --------------  ------------   ------------    -------------   ------------

Cash provided by (used in) financing
 activities                                     27.1             1.3         (15.8)         (12.4)            (2.7)          (2.5)
                                         -----------  --------------  ------------   ------------    -------------   ------------

Effect of exchange rate changes on cash          0.7              --           0.7             --               --            1.4
                                         -----------  --------------  ------------   ------------    -------------   ------------

NET INCREASE (DECREASE) IN CASH                  1.3             0.6          (3.5)           9.8               --            8.2
CASH, BEGINNING OF YEAR                         13.4            (0.6)          3.5            2.1               --           18.4
                                         -----------  --------------  ------------   ------------    -------------   ------------

CASH, END OF YEAR                        $      14.7  $           --  $         --   $       11.9    $          --   $       26.6
                                         ===========  ==============  ============   ============    =============   ============


                                       75