UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 29, 2001
[ ] 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 (IRS Employer Identification No.)
Incorporation or Organization)
207 Queen's Quay West, Suite 340
Toronto, Ontario M5J 1A7
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (416) 203-3898
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Shares without nominal or par value
(Title of Class)
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. [ ]
The aggregate market value of the common equity held by non-affiliates
of the registrant as of February 28, 2002 (based on the closing sale price of
the registrant's common stock as reported on The Nasdaq Stock Market on such
date) was $774,010,196.
The number of shares outstanding of the registrant's common stock as of
February 28, 2002 was 61,526,622.
Documents Incorporated by Reference
Portions of the registrant's 2001 Annual Report to Shareowners are
incorporated by reference in Parts I, II and IV.
Portions of the registrant's definitive proxy statement, to be filed
within 120 days of December 29, 2001, are incorporated by reference in Part III.
Such reports, 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.
TABLE OF CONTENTS
PAGE
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PART I
Item 1. Business...................................................................................5
Item 2. Properties................................................................................12
Item 3. Legal Proceedings.........................................................................12
Item 4. Submission of Matters to a Vote of Security Holders.......................................13
PART II
Item 5. Market for the Registrant's Common Equity and Related Shareowner Matters..................15
Item 6. Selected Financial Data...................................................................16
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.....16
Item 7A. Quantitative and Qualitative Disclosures about Market Risk................................16
Item 8. Financial Statements and Supplementary Data...............................................16
Item 9. Changes in and Disagreements with Accountants and Financial Disclosure....................17
PART III
Item 10. Executive Officers and Directors..........................................................18
Item 11. Executive Compensation....................................................................18
Item 12. Security Ownership of Certain Beneficial Owners and Management............................18
Item 13. Certain Relationships and Related Transactions............................................18
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K...........................19
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Cott's consolidated financial statements are prepared in accordance with United
States 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.
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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 Cott's future results. These statements are
"forward-looking" within the meaning of the Private Securities Litigation Reform
Act of 1995 and include, but are not limited to, statements that relate to
projections of revenues, 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 Cott's business
strategy, goals and expectations concerning its 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," "will," 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.
Although Cott believes 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. Cott's operations involve risks and uncertainties, many of
which are outside its control, and any one or a combination of which could also
affect whether the forward-looking statements ultimately prove to be correct.
Actual results and trends in the future may differ materially from
forward-looking statements depending on a variety of factors, and are qualified
in their entirety by reference to the factors described in this report
including, but not limited to:
o loss of key customers, particularly Wal-Mart, and the
commitment of private label beverage customers to their
private label beverage programs;
o increases in competitor consolidations and other market-place
competition, particularly among branded beverage products;
o Cott's ability to identify and acquire acquisition candidates
and to integrate into its operations the businesses and
product lines that are acquired;
o fluctuations in the cost and availability of beverage
ingredients and packaging supplies, and Cott's ability to
maintain favorable arrangements and relationships with its
suppliers;
o unseasonably cold or wet weather, which could reduce demand
for Cott's beverages;
o Cott's ability to protect the intellectual property inherent
in new and existing products;
o adverse rulings, judgments or settlements in Cott's existing
litigation, and the possibility that additional litigation
will be brought against Cott;
o product recalls or changes in or increased enforcement of the
laws and regulations that affect Cott's business;
o currency fluctuations that adversely affect the exchange
between the U.S. dollar on one hand and the pound sterling,
the Canadian dollar and other currencies on the other hand;
o changes in interest rates;
o changes in consumer tastes and preference and market demand
for new and existing products;
o changes in general economic and business conditions; and
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o increased acts of terrorism or war.
Many of these factors are described in greater detail in this report
and in other filings with the SEC. All future written and oral forward-looking
statements attributable to Cott or persons acting on Cott's behalf are expressly
qualified in their entirety by the previous statements. These statements are
made as of the date of this report. Cott undertakes 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 that
Cott may become aware of after the date of this report. Undue reliance should
not be placed on forward-looking statements.
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF THE BUSINESS
Cott Corporation is the leading supplier of premium quality retailer
brand carbonated soft drinks in the United States, Canada and the United
Kingdom. Cott operates its United States business through an indirect wholly
owned subsidiary, Cott Beverages Inc., its Canadian business through the Cott
Beverages Canada division and its United Kingdom business through an indirect
wholly owned subsidiary, Cott Beverages Ltd. In addition to carbonated soft
drinks, product lines include clear, sparkling flavored beverages, juices and
juice-based products, bottled water, energy drinks and iced teas. Cott's
products are sold principally under customer controlled private labels, but Cott
also offers product under brand names that it either owns or licenses from
others.
Cott Corporation was incorporated in 1955 and is governed by the Canada
Business Corporations Act and its registered Canadian office is located at 333
Avro Avenue, Pointe-Claire, Quebec, Canada H9R 5W3. Cott's principal executive
offices are located at 207 Queen's Quay West, Suite 340, Toronto, Ontario,
Canada M5J 1A7.
NARRATIVE DESCRIPTION OF THE BUSINESS
Since 1998, Cott has taken several steps to strengthen its management
team and strategic focus. Management identified and addressed challenges during
this transitional period and initiated a turnaround based on a three pronged
strategy to:
o focus on carbonated soft drink business in core geographic
markets of the United States, Canada and the United Kingdom;
o fix the cost structure for its product lines; and
o strengthen its business generally.
For 2002, Cott intends to build on the turnaround strategy begun in
1998, and to broaden its strategy to:
o expand its business in core markets by increasing market
share, winning new customers, developing new products and
exploring new channels;
o make acquisitions or alliances to transform the business
structure to serve a growing customer base;
o build world class teams by empowering employees, by
communicating standards of excellence and accountability and
by leveraging best practices; and
o drive margins and cash flow by focusing on cash return on
assets, improving working capital turns, enriching product mix
and gaining efficiencies by applying Six Sigma across
operations.
Since 1995, Cott has expanded and strengthened its production and
distribution capabilities in core geographic markets through a series of
acquisitions and capital investments. Over 85% of Cott's
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beverages are produced in owned or leased facilities or by third party
manufacturers under long-term contract with Cott. Acquisitions over the last
five years include:
o in January 1997, Cott acquired the rights to the private label
carbonated soft drink business of Premium Beverage Packers,
Inc., including a long-term packing agreement through which
Cott secured approximately 75% of Premium's carbonated soft
drink production capacity at its plant in Wyommissing,
Pennsylvania;
o in March 1997, Cott acquired Texas Beverage Packers, Inc., a
carbonated soft drink manufacturer with a plant in San
Antonio, Texas;
o in 1997, Cott completed the construction of two new beverage
production facilities, one in Wilson, North Carolina and one
in Tampa, Florida;
o in the fall of 1997, Cott acquired Hero Drinks Group (UK)
Limited, through which it acquired Hero's state of the art
manufacturing facilities and established customer base;
o in the fall of 2000, Cott acquired the Honickman Group's
retailer brand beverage business, through which it acquired a
carbonated soft drink manufacturing facility in Concordville,
Pennsylvania, an established customer base and rights to the
Vintage (TM) brand of seltzer water;
o in July 2001, Cott acquired the right to manufacture the
retailer brand concentrate that it formerly obtained under a
long-term supply contract with the Royal Crown unit of Cadbury
Schweppes plc, and gained ownership of unique formulas,
proprietary information, a concentrate manufacturing facility
and RC's international business; and
o in September 2001, Cott formed a new business venture with
Polar Corp., the leading independent retailer brand beverage
supplier in New England, to enhance its position and customer
base in the Northeast United States. Cott has a 51% interest
and consolidates the new venture in its financial statements.
In recent years, Cott has grown its business and beverage offerings
primarily through acquisitions of other companies, new product lines and growth
with key customers. A part of Cott's strategy is to continue to expand its
business through acquisitions. To succeed in this strategy, Cott must identify
appropriate acquisition or strategic alliance candidates.
As Cott seeks to expand its operations, it expects to encounter a
number of risks, including:
o the need to add additional management and other critical
personnel;
o the need to add additional equipment and capacity or third
party manufacturing arrangements;
o the risk of failing to predict shifts in consumer preferences
and to match its acquisition strategy to these shifts;
o the risk associated with increasing the scope, geographic
diversity and complexity of its operations;
o the risk related to assuming the liabilities of the businesses
and product lines that Cott acquires; and
o the risk that Cott's acquisitions will not result in the
operating efficiencies or other benefits that it anticipates.
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Cott cannot provide assurance that acquisition opportunities will be
available, that it will have access to the capital required to finance potential
acquisitions, that it will continue to acquire businesses and product lines or
that any of the businesses or product lines that it acquires will be integrated
successfully into the business or prove profitable.
Cott's strategy of focusing on the beverage business within core
geographic markets led Cott to divest the following non-strategic operations:
o the Australian beverage operations, which were sold in April
1999;
o the frozen food business, which was sold in May 1999;
o the packaging design business, which was sold in May 1999,
subject to an agreement by which the new owners committed to
provide ongoing creative services to Cott at competitive rates
for ten years from the date of sale;
o the Featherstone carbonated soft drink manufacturing plant and
related business in the United Kingdom, which were sold in May
1999;
o a substantial portion of its minority interest in Menu Foods
Limited (a pet food manufacturer), which was sold in August
1999;
o the polyethylene terephthalate ("PET") preform manufacturing
plant in Leland, North Carolina and the PET bottle blowing
equipment in three of the carbonated soft drink manufacturing
plants in the United States, which were sold to
Schmalbach-Lubeca Plastic Containers USA, Inc. in April 2000,
in connection with which Cott entered into a long-term supply
agreement with Schmalbach for PET bottles in the United
States; and
o the U.K. PET preform manufacturing business, which was sold in
October 2000.
In prior years, Cott disposed of its bottling operations in Norway and
South Africa, and its beer and snack food businesses.
Recognizing the need for sustained long-term growth combined with
increased efficiency, Cott began a restructuring of its worldwide operations in
the fall of 1998 to centralize its organizational structure in each of three
core geographic markets. As a result of these efforts, Cott now operates its
Canadian business through the Cott Beverages Canada division, its United States
operations through its indirect wholly owned subsidiary, Cott Beverages Inc.,
and its U.K. operations through its indirect wholly owned subsidiary, Cott
Beverages Ltd.
In addition to changes in management and strategic focus, in July of
1998 Cott's shareowner composition underwent a significant transition. Along
with various members of the Pencer family, Cott completed a transaction
involving Thomas H. Lee Company and various of its related and affiliated
entities in which they purchased an aggregate of:
o 10,000,000 of common shares and an option to purchase an
additional 5,000,000 of common shares from members of the
Pencer family; and
o 4,000,000 of Convertible Participating Voting Second Preferred
Shares, Series 1, that are entitled to voting rights together
with the common shares on an as converted basis.
As a result of the transaction, upon exercise of the option and
conversion of the preferred shares, Thomas H. Lee Company and its affiliates
would own approximately 33.7% of the outstanding common shares on a fully
diluted basis.
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Additionally, in November 1999, Cott granted Thomas H. Lee Company and
its affiliates the right to purchase up to an additional 5% of the outstanding
voting shares on the open market. As of February 28, 2002, to Cott's knowledge
and based upon a review of public disclosure documents, the right to purchase
the additional 5% of voting shares had not been exercised. As consideration for
the grant of this right, Thomas H. Lee Company and its affiliates granted to
Cott's Chairman of the Board a proxy to vote enough of their voting shares to
ensure that at no time will Thomas H. Lee Company and its affiliates have voting
rights in respect of more than 35% of the voting shares on a fully diluted
basis. Thomas H. Lee Company and its affiliates have also agreed not to exercise
any options to acquire more of the common shares if, after giving effect to such
exercise, they would have the power to vote or hold more than 35% of the voting
shares on a fully diluted basis. The voting agreement expires on the first to
occur of the sale or other arm's length disposition by Thomas H. Lee Company and
its affiliates or the Pencer family shareowners of the voting shares of Cott
covered by the agreement together with other shares subject to options granted
to the Pencer family shareowners, and the expiration of the option to purchase
5,000,000 common shares of Cott granted by the Pencer family shareowners to
Thomas H. Lee Company and its affiliates. Cott anticipates converting the
preferred shares to common shares on or before July 7, 2002.
FINANCIAL INFORMATION ABOUT SEGMENTS
For financial information about segments, see note 26 to the
consolidated financial statements, found on pages 46 and 47 of the 2001 Annual
Report to Shareowners, which is incorporated in this report by reference.
PRINCIPAL PRODUCTS AND PRINCIPAL MARKETS
Cott's principal markets are in the United States, Canada and the
United Kingdom. Although Cott produces the majority of its products under
private labels for sale to retail customers, it also sells proprietary products
that include brands that Cott either owns or licenses from others.
Approximately 80% of Cott's beverages produced in the United States
were manufactured in facilities that are either owned or leased by Cott or by
third party manufacturers with whom Cott has long-term packing agreements. Cott
manufactures virtually all of the Canadian and United Kingdom beverages in
facilities that it either owns or leases. Cott relies on third parties to
produce and distribute products in areas or markets where it does not have its
own production facilities, such as continental Europe, or when additional
production capacity is required.
In 2001, sales of beverages, including concentrates, represented 100%
of total sales revenues, as compared to 100% in 2000 and 99.7% in 1999. Sales of
beverages in the United States totaled $779.4 million in 2001; $657.3 million in
2000; and $596.8 million in 1999. Sales of beverages in Canada totaled $163.7
million in 2001; $169.7 million in 2000; and $172.1 million in 1999. Sales of
beverages, including concentrates, in the United Kingdom and International
totaled $146.5 million in 2001; $162.6 million in 2000; and $210.7 million in
1999. Total sales revenue attributable to all countries other than Canada
totaled $926.4 million in 2001; $820.9 million in 2000; and $818.8 million in
1999. Cott believes that the opportunity exists to increase sales of beverages
in various markets by:
o leveraging existing customer relationships;
o obtaining new customers;
o exploring new channels of distribution; and
o increasing its presence in the alternative beverage segment.
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Cott distributes beverages in a variety of ways. Sales in the United
States and Canada are either:
o picked up by customers at Cott's facilities;
o distributed to store locations using third-party distributors;
or
o delivered by Cott or a common carrier to either the customer's
distribution centers or directly to retail locations.
In the United Kingdom, Cott generally uses third-party carriers to
deliver products to the customer's distribution centers or directly to stores,
although a few customers collect products directly from the point of
manufacture.
Cott may be liable if the consumption of any of its products causes
injury, illness or death. Cott also may be required to recall some of its
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 the results of operations or cash flows. As of
February 28, 2002, Cott was insured against product liability claims with a
limitation of $65 million and product recalls with a limitation of $10 million,
a $2 million deductible, and a 20% coinsurance provision. Cott cannot provide
assurance that its insurance coverage will be adequate.
INGREDIENTS AND PACKAGING SUPPLIES
The principal ingredients required to produce Cott's products are
concentrate, sweeteners and carbon dioxide. Since July 2001, Cott makes most of
the concentrates it needs using ingredients from third parties and sources the
remaining concentrates and other ingredients from outside vendors. In July 2001,
Cott purchased the right to the retailer brand concentrate that it formerly
obtained under a long-term supply contract with the Royal Crown unit of Cadbury
Schweppes plc. With this acquisition, Cott also gained ownership of unique
formulas, proprietary information, a concentrate manufacturing facility and RC's
international business. Cott purchases its primary packaging supplies, including
PET bottles, caps and preforms, cans and lids, labels, cartons and trays, from
outside vendors.
Cott has a variety of suppliers for many of its materials, and it
maintains long-standing relationships with many of these suppliers. Cott
typically enters into annual supply arrangements rather than long-term contracts
with suppliers, but has long-term agreements with respect to some of its key
packaging supplies, such as aluminum cans and lids and PET bottles, and some key
ingredients, such as artificial sweeteners. If Cott is forced to replace one or
more of these key suppliers, ingredient and packaging supply costs may increase
or decrease.
None of the ingredients or packaging supplies that are used to produce
or package Cott's products are currently in short supply, although the supply of
specific ingredients and packaging supplies could be adversely affected by
economic factors such as industry consolidation, energy shortages, governmental
controls, labor disputes, weather conditions and other factors.
The underlying commodity costs of the ingredients and packaging
supplies, such as resin for PET, aluminum for cans, and high fructose corn
syrup, are cyclical and historically have been subject to price volatility. The
majority of Cott's contracts allow suppliers to alter the costs they charge for
ingredients and packaging supplies based on changes in commodity costs, and in
some cases other factors, at certain predetermined times and subject to defined
guidelines. As a result, Cott bears the risk of shifts in the market costs of
these commodities. A portion of the ingredients and packaging supplies are
subject to fixed prices for one-year terms, after which Cott typically
negotiates new terms based upon prevailing market conditions. If the cost of
these ingredients or packaging supplies increases, Cott may be unable
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to pass these costs along to customers through corresponding or contemporaneous
adjustments to the selling prices.
TRADE SECRETS, TRADEMARKS AND LICENSES
Cott sells the majority of its beverages to private label customers who
own the trademarks associated with those products. Cott is the registered owner
of various trademarks, most notably Cott(TM) in North America, as well as Stars
& Stripes(TM), Vess(TM) and Vintage(TM) in the United States and Fruitfull(TM),
Edge(TM) and Red Rooster(TM) in the U.K. In 2001, Cott acquired the rights to
the Cott(TM) trademark in the United States from an unrelated third party. Cott
is licensed to use certain trademarks, including Chubby(TM) in Canada and RC(TM)
in certain regions of Canada, and Benshaws(TM) and Carters(TM) in the United
Kingdom.
Cott's success depends in part on its intellectual property. To protect
this intellectual property, Cott relies principally on contractual restrictions
(such as nondisclosure and confidentiality agreements) in agreements with
employees, consultants and customers, and on the common law of trade secrets and
proprietary "know-how." Cott also relies on trademark protection.
Cott may not be successful in protecting its intellectual property for
a number of reasons, including:
o competitors may independently develop intellectual property
that is similar to or better than Cott's;
o employees, consultants and 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;
o foreign intellectual property laws may not adequately protect
Cott's intellectual property rights; and
o trademarks may be challenged, invalidated or circumvented.
If Cott is unable to protect its intellectual property, it would weaken
Cott's competitive position, and it could face significant expense to protect or
enforce intellectual property rights.
If Cott is found to infringe on the intellectual property rights of
others, it 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.
Occasionally, third parties may assert that Cott is, or may be,
infringing on or misappropriating their intellectual property rights. In these
cases, Cott will defend against claims or negotiate licenses where it considers
these actions appropriate. Intellectual property cases are uncertain and involve
complex legal and factual questions. If Cott becomes involved in this type of
litigation, it could consume significant resources and divert its attention from
business operations.
SEASONALITY OF SALES
Sales of 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. Accordingly, sales volume tends to decrease
during cold and wet weather months and can be affected by unseasonably cold or
wet
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weather conditions in core geographic markets. On the other hand, when the
weather is unseasonably warm, Cott may not have access to adequate production
capacity to meet sales demands.
CUSTOMERS
Cott's customers include many large national and regional grocery,
mass-merchandise, drugstore, wholesale and convenience store chains in the core
markets of the United States, Canada and the U.K. For the year ended December
29, 2001, sales to Wal-Mart Stores, Inc. and Safeway, Inc. accounted for
approximately 39% and 11%, respectively, of total consolidated net sales. For
the same period, top ten customers accounted for approximately 72% of the total
consolidated net sales. Cott expects that sales of its products to a limited
number of customers will continue to account for a high percentage of sales for
the foreseeable future. The loss of Wal-Mart would, and the loss of one of
Cott's other significant customers could, have a material adverse effect on its
business, financial condition and results of operations.
COMPETITION
The markets for Cott's products are extremely competitive. Competition
in these markets could cause Cott to lose market share, reduce pricing or
increase capital and other expenditures. Companies that produce and sell the
major, national brand beverages located in Cott's core geographic markets
possess significantly greater financial and marketing resources than Cott
possesses. Private label beverages that Cott supplies to its customers compete
for access to shelf space with branded beverage products on the basis of quality
and price. Cott's customers primarily control the shelf space but there is no
guarantee that they will allocate space to their private label products. In
addition, entry of any of the national brand companies into the private label
segment of the beverage market could have a material adverse effect on Cott's
business, financial condition and results of operations. Cott also faces
competition from other private label beverage manufacturers in the United States
and the U.K., some of which possess substantial bottling facilities.
Cott differentiates itself from other private label beverage suppliers
by offering its customers superior service, efficient distribution methods,
manufacturing innovation, premium quality products, category management and
strategies for packaging and marketing. Cott strives to maintain the quality and
consistency of taste of its products through access to premium quality cola and
other concentrates.
RESEARCH AND DEVELOPMENT
Cott maintains a research facility in Columbus, Georgia where new
beverages are developed and customized. Cott believes that the provision of
these services and the expansion of its product lines are key to innovation, and
are an important part of its business strategy. During 2001, Cott spent
approximately $1.9 million on product research and development, as compared with
$1.5 million in 2000 and $1.9 million in 1999.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
Cott's operations and properties are subject to various federal, state,
local and foreign laws and regulations. Cott cannot provide assurance that it
has been or will at all times be in compliance with all regulatory requirements
or that it will not incur material costs or liabilities in connection with
regulatory requirements.
As a producer of beverages, Cott must comply with production,
packaging, quality, labeling and distribution standards in each of the countries
where it operates, including, in the United States,
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those of the federal Food, Drug and Cosmetic Act. Cott is also subject to
various federal, state, local and foreign environmental laws and workplace
regulations. These laws and regulations include, in the United States, the
Occupational Safety and Health Act, the Unfair Labor Standards Act, the Clean
Air Act, the Clean Water Act and laws relating to the maintenance of fuel
storage tanks.
The Ontario Environmental Protection Act provides that a minimum
percentage of a bottler's soft drink sales within specified areas in Ontario
must be made in refillable containers. To comply with these requirements, Cott
and many other industry participants would have to significantly increase sales
in refillable containers. While attempts to improve sales in refillable
containers is being undertaken, the requirements of the Ontario Act are not
being met by Cott or other industry participants. The Ontario government is not
enforcing the Ontario Act at this time, but if it chooses to enforce it in the
future Cott could incur fines for non-compliance and the possible prohibition of
sales of soft drinks in non-refillable containers in Ontario, while compliance
with the Ontario Act could result in reduced margins. Although Cott continues to
work with industry groups to review possible alternatives to the provisions of
the Ontario Act to propose to the Ontario government, the success of these
efforts cannot be predicted.
Management believes that Cott's current practices and procedures for the control
and disposition of wastes comply in all material respects with applicable laws,
and with the exception of the Ontario Act, that it is in compliance in all
material respects with the existing legislation in Cott's core markets.
EMPLOYEES
As of December 29, 2001, Cott had approximately 2,228 employees, of
whom an estimated 1,134 were located in the United States, 700 were located in
Canada and 394 were located in the United Kingdom and elsewhere. Cott has
entered into numerous collective bargaining agreements that management believes
contain terms that are typical in the beverage industry. As these agreements
expire, management believes that they can be renegotiated on terms satisfactory
to Cott. Cott considers its relations with employees to be good.
ITEM 2. PROPERTIES
Cott operates seven beverage production facilities in the United
States, five of which it owns and two of which it leases, as well as the global
concentrate manufacturing facility in Columbus, Georgia. Cott operates six
beverage production facilities in Canada; four of which it owns and two of which
it leases. In the United Kingdom, Cott owns and operates two beverage production
facilities. Total square footage of the production facilities operated by Cott
is approximately 1,490,425 in the United States including the concentrate
facility; 934,317 in Canada; and 469,442 in the United Kingdom. Lease terms for
those leased beverage production facilities expire between 2003 and 2012. Cott
believes that its facilities and production equipment, together with third-party
manufacturing arrangements, provide sufficient capacity to meet current intended
purposes, and that it will be sufficient to supply foreseeable demand from
customers, even in peak months. In addition, management believes that increased
demand can be met by increasing production in its facilities through increases
in personnel and the number of their shifts.
ITEM 3. LEGAL PROCEEDINGS
In August 1999, Cott was named as a defendant in an action styled North
American Container, Inc. v. Plastipak Packaging Inc., et al., filed in the
United States District Court for the Northern District of Texas, Dallas
Division. The plaintiff, North American Container, Inc., has sued over forty
defendants, alleging, among other things, that Cott has infringed on their
United States patent relating to plastic
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containers. The complaint subsequently was amended to include a Reissue Patent
based on the original patent in suit. The plaintiff alleges that the
infringement is willful, and seeks injunctive relief, treble damages and
recovery of attorneys' fees and costs. Cott has reached an agreement with its
major supplier of PET bottles in the United States to indemnify Cott for a
significant portion of its costs and damages, if any. This portion is based on
the supplier's pro rata share of those PET bottles supplied to Cott that Cott
sold in the United States during the period in issue in the litigation,
currently estimated to be 85%. Cott is not in a position to state the
anticipated outcome of this case at this time; however, it believes that any
damages that may be awarded to the plaintiff will not be material.
Cott is engaged in various litigation matters in the ordinary course of
its business. Cott believes that the resolution of these matters will not have a
material adverse effect on its 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 2001.
- 13 -
EXECUTIVE OFFICERS OF THE COMPANY
The following is a list of names and ages of all of Cott's executive
officers as of February 28, 2002, indicating all positions and offices that each
of them hold.
NAME AND MUNICIPALITY OF PERIOD SERVED
RESIDENCE OFFICE AGE AS OFFICER
- --------------------------------- -------------------------------------- --- ---------------
Frank E. Weise III ............. President, Chief Executive Officer and 57 1998 to present
Vero Beach, Florida Chairman of the Board of Cott
Corporation
Mark Benadiba ................... Executive Vice-President of Cott 48 1990 to present
Toronto, Ontario Corporation and President
of Cott Beverages Canada
Paul R. Richardson ............. Executive Vice-President, Global 45 1994 to present
Sarasota, Florida Procurement and Innovation of Cott
Corporation
John K. Sheppard................. Executive Vice-President of Cott 44 2002 to present
Hillsborough County, Florida Corporation and President of Cott
Beverages USA
Raymond P. Silcock .............. Executive Vice-President and 51 1998 to present
Loveladies, New Jersey Chief Financial Officer of Cott
Corporation
Mark R. Halperin ................ Senior Vice-President, General Counsel 44 1995 to present
Toronto, Ontario and Secretary of Cott Corporation
Colin D. Walker ................ Senior Vice-President, Human Resources 44 1998 to present
London, Ontario of Cott Corporation
Catherine M. Brennan ............ Vice-President, Treasurer of Cott 44 1999 to present
Toronto, Ontario Corporation
Tina Dell'Aquila ................ Vice-President, Controller of Cott 39 1998 to present
Toronto, Ontario Corporation
Ivano R. Grimaldi ............... Vice-President, Global Procurement of 44 2000 to present
Rosemere, Quebec Cott Corporation
Douglas P. Neary ................ Vice-President, Chief Information 46 2002 to present
Philadelphia, Pennsylvania Officer of Cott Corporation
Edmund P. O'Keeffe .............. Vice-President, Investor Relations and 38 1999 to present
Toronto, Ontario Corporate Development of Cott
Corporation
Prem Virmani .................... Vice-President, Technical Services of 55 1991 to present
Columbus, Georgia Cott Corporation
During the last five years, the above persons have been engaged in
their principal occupations or in other executive capacities with Cott except as
follows:
o prior to April 1998, Frank E. Weise III was Chairman of Confab Inc.
(manufacturer of retailer branded feminine hygiene and incontinence
products) and prior to January 1997, was Senior Vice President of
Campbell Soup Company, and President - Bakery and Confectionery
Division, of Campbell Soup Company;
o prior to January 2002, John K. Sheppard was president and chief
executive officer of Service Central Technologies, Inc. and prior to
February 2000 was Vice-President, President NW European division and
Vice-President, President Central European division of the Coca Cola
Company;
o Paul R. Richardson has held several senior management positions since
joining Cott in 1994;
- 14 -
o prior to September 1998, Raymond P. Silcock was Chief Financial Officer
of Delimex Holding Inc. (a holding company) and prior to 1997 was
Vice-President Finance - Bakery and Confectionery Division of Campbell
Soup Company;
o prior to September 1998, Mark R. Halperin held the position of Vice
President, General Counsel and Secretary and is the brother of Stephen
H. Halperin, a Director of the Company;
o prior to September 1998, Colin D. Walker was Senior Manager, Deloitte &
Touche Consulting and prior to September 1997 was Vice-President, Human
Resources of Imasco (consumer products and services);
o prior to February 1999, Catherine M. Brennan was Treasurer and Senior
Director, Taxation of Nabisco Ltd. (food and beverage company);
o prior to November 1997, Tina Dell'Aquila was Director, Corporate
Accounting of Dominion Textile Inc. (textile company);
o prior to February 2002, Douglas P. Neary was a management consultant to
Cott and various other companies. Prior to June 2001, he was Chief
Executive Officer of eonDigital, Inc. Prior to February 2000, he served
IBM as a Global Business Executive and prior to March 1997, he was
National Practice Manager, Document Technologies for Cap Gemini America
(management and IT consulting firm); and
o Edmund O'Keeffe has held several senior management positions since
joining Cott in October 1994.
- 15 -
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREOWNER
MATTERS
The Company's common shares are listed on the Toronto Stock Exchange
under the ticker symbol "BCB," and on Nasdaq under the ticker symbol "COTT."
The tables below show the high and low reported per share sales prices
of common shares on the Toronto Stock Exchange (in Canadian dollars) and on
Nasdaq (in U.S. dollars) for the indicated periods of the two years ended
December 29, 2001.
Toronto Stock Exchange (Cdn$)
2001 2000
-------------------- -----------------
HIGH LOW HIGH LOW
----- ----- ----- ----
January 1 - March 31........................ 18.90 11.00 10.25 7.25
April 1 - June 30........................... 18.60 13.10 9.50 6.60
July 1 - September 30....................... 24.06 16.68 9.20 7.30
October 1 - December 31..................... 27.40 20.40 12.15 8.50
Nasdaq (U.S.$)
2001 2000
-------------------- -----------------
HIGH LOW HIGH LOW
----- ----- ----- ----
January 1 - March 31........................ 12.13 7.25 7.00 5.00
April 1 - June 30........................... 12.00 8.43 7.25 4.38
July 1 - September 30....................... 15.49 10.95 6.06 4.88
October 1 - December 31..................... 17.43 12.85 7.88 5.53
As of February 28, 2002, Cott had 905 shareowners of record. This
number was determined from records maintained by Cott's 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
Cott's common shares on February 28, 2002 was Cdn$28.80 on the Toronto Stock
Exchange and U.S.$17.98 on Nasdaq.
Cott has not paid cash dividends since June 1998 and it is unlikely
that Cott will do so in 2002. There are certain restrictions on the payment of
dividends under the term loan and 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.
CALCULATION OF AGGREGATE MARKET VALUE OF NONAFFILIATE 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 shares
held by directors (other than Frank E. Weise III, who is also an officer),
Thomas H Lee Company and its affiliates, Legg Mason Inc., Nancy Pencer, the
estate of Gerald N. Pencer and Nancy Pencer, Stephen Halperin and Fraser Latta
as trustees of the Nancy Pencer Spouse Trust. However, this should not be deemed
to constitute an admission that any of these parties are, in fact, affiliates of
Cott, or that there are not other persons who may be deemed to be affiliates.
Further information concerning shareholdings of officers, directors and
principal stockholders is included or incorporated by reference in Item 12:
Security Ownership of Certain Beneficial Owners and Management.
- 16 -
RECENT SALES OF UNREGISTERED SECURITIES
On December 21, 2001, Cott completed a private offering, through an
indirect wholly owned subsidiary, Cott Beverages Inc., of $275 million principal
amount of senior subordinated notes that will mature on December 15, 2011 and
accrue interest at an annual rate of 8%. The 8% senior subordinated Notes due
2011 were offered and issued to Lehman Brothers, BMO Nesbitt Burns Corp. and
CIBC World Markets, as qualified institutional buyers under Rule 144A of the
Securities Act of 1933 and to persons outside the United States under Regulation
S of the Securities Act.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the periods 1997 through 2001, on page 49
of the 2001 Annual Report to Shareowners, is incorporated by reference in this
report.
Consolidated financial statements in accordance with Canadian GAAP are
made available to all shareowners and filed with Canadian regulatory
authorities. Under Canadian GAAP, Cott reported a net income of $30.2 million in
2001, $24.4 million in 2000, and $20.2 million in 1999, compared to a net income
under U.S. GAAP of $39.9 million in 2001, $25.4 million in 2000, and $18.5
million in 1999. See page 18 of "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the 2001 Annual Report to
Shareowners for the reasons for the significant difference between Canadian and
U.S. GAAP net income.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," on pages 14 to 23 of the 2001 Annual Report to
Shareowners, is incorporated by reference in this report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
"Quantitative and Qualitative Disclosures About Market Risk," on pages
21 and 22 of the 2001 Annual Report to Shareowners, is incorporated by reference
in this report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements, included in the 2001
Annual Report to Shareowners, are incorporated by reference in this report at
the pages indicated:
1. Report of Independent Accountants (page 24)
2. Consolidated Statements of Income - Years ended December 29,
2001, December 30, 2000 and January 1, 2000 (page 25)
3. Consolidated Balance Sheets - As of December 29, 2001 and
December 30, 2000 (page 26)
4. Consolidated Statements of Shareowners' Equity - Years ended
December 29, 2001, December 30, 2000 and January 1, 2000 (page
27)
- 17 -
5. Consolidated Statements of Cash Flows - Years ended December
29, 2001, December 30, 2000 and January 1, 2000 (page 28)
6. Notes to the Consolidated Financial Statements (pages 29 - 47)
7. Quarterly Financial Information (Unaudited) (page 48)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
- 18 -
PART III
ITEM 10. EXECUTIVE OFFICERS AND DIRECTORS
The information required by this item regarding directors is
incorporated by reference to, and will be contained in, the "Election of
Directors" section of the definitive proxy statement, which will be filed within
120 days after December 29, 2001. The information required by this item
regarding executive officers appears as the Supplementary Item in Part I.
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 the definitive proxy statement, which will be filed
within 120 days after December 29, 2001.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to,
and will be contained in, the "Executive Compensation" section of the definitive
proxy statement, which will be filed within 120 days after December 29, 2001.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to,
and will be contained in, the "Voting Shares and Principal Owners Thereof," and
the "Directors Table" sections of the definitive proxy statement, which will be
filed within 120 days after December 29, 2001.
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 the definitive proxy statement, which will be filed within 120 days
after December 29, 2001.
- 19 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
1. Financial Statements:
The financial statements filed as part of this report are listed on the
Index to Financial Statements, that is included in the 2001 Annual
Report to Shareowners, which is incorporated by reference in this
report. (See Item 8).
2. Financial Statement Schedules:
Report of Independent Accountants
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.
3. Exhibits:
Number Description
- ------ -----------
2.1+ Asset Purchase Agreement by and between Concord Beverage
Company and Concord Beverage LP, dated as of October 18, 2000
(incorporated by reference to Exhibit 2.1 to Cott's Form 8-K
dated as of October 18, 2000).
2.2+ Agreement of Sale by and between Concord Beverage Company and
Concord Beverage LP, dated as of October 18, 2000
(incorporated by reference to Exhibit 2.2 to Cott's Form 8-K
dated as of October 18, 2000).
2.3 Acquisition Agreement, dated November 20, 1997, among Cott UK
Limited, Cott Corporation and the several persons listed in
Schedule 1 to the Agreement relating to the acquisition of
Hero Drinks Group (U.K.) Limited (incorporated by reference to
Exhibit 10.2 to Cott's Form 10-K dated March 31, 2000).
2.4 (*) Asset Acquisition and Facility Use Agreement, dated April
13, 2000, between BCB USA Corp. (since renamed "Cott Beverages
Inc.") and Schmalbach-Lubeca Plastic Containers USA, Inc.
relating to the sale of the PET perform blow molding operation
(incorporated by reference to Exhibit 10.1 to Cott's Form 10-Q
dated May 16, 2000).
2.5+ (*) Asset Purchase Agreement by and among Royal Crown Company,
Inc., Cott Corporation and BCB USA Corp. (since renamed "Cott
Beverages Inc.") dated as of June 13, 2001 (incorporated by
reference to Exhibit 2.1 to Cott's Form 8-K dated July 19,
2001).
3.1 Articles of Incorporation of Cott (incorporated by reference
to Exhibit 3.1 to Cott's Form 10-K dated March 31, 2000).
- 20 -
3.2 By-laws of Cott (filed herewith).
4.1 Subscription Agreement dated as of June 12, 1998 for Cott's
(as issuer) Convertible Participating Voting Second Preferred
Shares, Series 1 (incorporated by reference to Exhibit 4.2 to
Cott's Form 10-K dated March 31, 2000).
4.2 Letter Agreement dated as of November 3, 1999, regarding
standstill provisions between Cott and the Thomas H. Lee
Company (incorporated by reference to Exhibit 4.3 to Cott's
Form 10-K dated March 31, 2000).
4.3 Indenture dated as of December 21, 2001, between Cott (as
issuer) and HSBC Bank USA (as trustee) (filed herewith).
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. (filed herewith).
10.1 (*) Termination Agreement, dated November 1, 1999, between
Cott Beverages USA, Inc. and Premium Beverages Packers, Inc,
(incorporated by reference to Exhibit 10. 1 to Cott's Form
10-K dated March 31, 2000).
10.2 (*) 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
Cott's Form 10-K dated March 31, 2000).
10.3 (**) Employment Agreement of Frank E. Weise III dated June 11,
1998 (incorporated by reference to Exhibit 10.5 to Cott's Form
10-K dated March 31, 2000), as amended July 3, 2001
(incorporated by reference to Exhibit 10.2 of Cott's Form 10-Q
for the period ended June 30, 2001).
10.4 (**) Employment Agreement of Mark Benadiba dated October 7,
1997, as amended December 19, 1997 (incorporated by reference
to Exhibit 10.7 to Cott's Form 10-K dated March 31, 2000), and
as further amended September 25, 2000 (incorporated by
reference to Exhibit 10.6 to Cott's Form 10-K dated March 7,
2001).
10.5 (**) Employment Agreement of Paul R. Richardson dated August
23, 1999 (incorporated by reference to Exhibit 10. 8 to Cott's
Form 10-K dated March 31, 2000), as amended February 18, 2002
(filed herewith).
10.6 (**) Employment Agreement of Raymond P. Silcock dated August
17, 1998 (incorporated by reference to Exhibit 10. 9 to Cott's
Form 10-K dated March 31, 2000).
10.7 (**) Employment Agreement of Mark R. Halperin dated July 14,
2000 (filed herewith).
10.8 (**) Amended 1999 Executive Incentive Share Compensation Plan
effective January 3, 1999 (incorporated by reference to
Exhibit 10.9 to Cott's Form 10-K dated March 7, 2001).
10.9 (**) 2000 Executive Incentive Share Compensation Plan
effective January 2, 2001 (incorporated by reference to
Exhibit 10.10 to Cott's Form 10-K dated March 7, 2001).
- 21 -
10.10 (**) 2001 Executive Incentive Share Compensation Plan
effective January 2, 2002 (filed herewith).
10.11 (**) Second Canadian Employee Share Purchase Plan effective
January 2, 2001 (incorporated by reference to Exhibit 10.11
to Cott's Form 10-K dated March 7, 2001).
10.12 Share Plan for Non-Employee Directors effective January 2,
2002 (filed herewith).
10.13 (*) Credit Agreement dated as of July 19, 2001 between BCB USA
Corp. (since renamed "Cott Beverages Inc."), Cott Corporation
and the several lenders, Lehman Brothers Inc., First Union
National Bank, Bank of Montreal and Lehman Commercial Paper,
Inc. (incorporated by reference to Exhibit 10.1 to Cott's Form
8-K dated July 19, 2001), as amended December 13, 2001 and
December 19, 2001 (filed herewith).
10.14 Services Agreement among Cott Corporation, Deuteronomy Inc.
and Don Watt dated June 1, 1999 (filed herewith).
13.1 Annual Report to Shareowners for the year ended December 29,
2001 (filed herewith).
21.1 List of Subsidiaries of Cott (filed herewith).
23.1 Consent of Independent Accountants (filed herewith).
- ----------
+ In accordance with Item 601(b)(2) of Regulation S-K, the exhibits to this
Exhibit have been omitted and a list briefly describing those exhibits is
contained in the Exhibit. The Registrant will furnish a copy of any
omitted exhibit to the Commission upon request.
(*) Document is subject to request for confidential treatment.
(**) Indicates a management contract or compensatory plan.
- 22 -
REPORTS ON FORM 8-K
On December 20, 2001, Cott filed a Current Report on Form 8-K dated
December 20, 2001 to report under Item 5 its intention to offer, through an
indirect wholly-owned subsidiary, Cott Beverages Inc., approximately $275
million principal amounts of 8% senior subordinated notes due December 15, 2011.
On December 20, 2001, Cott filed a Current Report on Form 8-K dated
December 20, 2001 to report under Item 5: (1) the credit facility amendment and
(2) the litigation with Crown, Cork & Seal Company, Inc.
- 23 -
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of
COTT CORPORATION
Our audits of the consolidated financial statements referred to in our
report dated January 30, 2002 appearing in the 2001 Annual Report to Shareowners
of Cott Corporation (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedules listed in Item 14(2) of this Form
10-K. In our opinion, these financial statement schedules present fairly, in all
material respects, the information set forth therein when read in conjunction
with the consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Toronto, Ontario
March 5, 2002
- 24 -
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
By: /s/ Frank E. Weise III
-----------------------------------
Frank E. Weise III
Chairman, President and Chief Executive
Officer
Date: March 8, 2002
Pursuant to the requirements of Section 13 or 15(d) 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.
/s/ Frank E. Weise III Chairman, President and Chief Date: March 8, 2002
- ------------------------------- Executive Officer
Frank E. Weise III (Principal Executive Officer)
/s/ Raymond P. Silcock Chief Financial Officer Date: March 8, 2002
- ------------------------------- (Principal Financial Officer)
Raymond P. Silcock
/s/ Tina Dell'Aquila Vice President, Controller Date: March 8, 2002
- ------------------------------- (Principal Accounting Officer)
Tina Dell'Aquila
/s/ Serge Gouin Director Date: March 8, 2002
- -------------------------------
Serge Gouin
/s/ Colin J. Adair Director Date: March 8, 2002
- -------------------------------
Colin J. Adair
/s/ W. John Bennett Director Date: March 8, 2002
- -------------------------------
W. John Bennett
/s/ C. Hunter Boll Director Date: March 8, 2002
- -------------------------------
C. Hunter Boll
/s/ Thomas M. Hagerty Director Date: March 8, 2002
- -------------------------------
Thomas M. Hagerty
/s/ Stephen H. Halperin Director Date: March 8, 2002
- -------------------------------
Stephen H. Halperin
/s/ David V. Harkins Director Date: March 8, 2002
- -------------------------------
David V. Harkins
/s/ True H. Knowles Director Date: March 8, 2002
- -------------------------------
True H. Knowles
/s/ Donald G. Watt Director Date: March 8, 2002
- -------------------------------
Donald G. Watt
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 29, 2001
-----------------------------------------------------------------------------
BALANCE AT CHARGED TO CHARGED BALANCE AT
BEGINNING OF COSTS AND TO OTHER END OF
DESCRIPTION YEAR EXPENSES ACCOUNTS * DEDUCTION YEAR
-----------------------------------------------------------------------------
RESERVES DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSETS TO WHICH THEY APPLY
Allowances for losses on:
Accounts receivables....................... $ (3.3) $ (0.2) $ (2.6) $ 1.0 $ (5.1)
Inventories................................ (5.1) (1.9) - 0.9 (6.1)
Intangibles and other assets............... (1.1) - - - (1.1)
Deferred income taxes...................... (10.1) 5.3 - 4.8 -
-----------------------------------------------------------------------------
$ (19.6) $ 3.2 $ (2.6) $ 6.7 $ (12.3)
=============================================================================
* includes $(2.9) million from acquisitions
YEAR ENDED DECEMBER 30, 2000
-----------------------------------------------------------------------------
BALANCE AT CHARGED TO CHARGED BALANCE AT
BEGINNING OF COSTS AND TO OTHER END OF
DESCRIPTION YEAR EXPENSES ACCOUNTS DEDUCTION YEAR
-----------------------------------------------------------------------------
RESERVES DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSETS TO WHICH THEY APPLY
Allowances for losses on:
Accounts receivables....................... $ (8.7) $ (0.4) $ - $ 5.8 $ (3.3)
Inventories................................ (5.9) (2.9) - 3.7 (5.1)
Property, plant and equipment.............. - (0.8) - 0.8 -
Goodwill................................... (1.2) - - 1.2 -
Intangibles and other assets............... (1.1) (0.4) - 0.4 (1.1)
Deferred income taxes...................... (9.3) (0.8) - - (10.1)
-----------------------------------------------------------------------------
$(26.2) $ (5.3) $ - $ 11.9 $(19.6)
=============================================================================
YEAR ENDED JANUARY 1, 2000
-----------------------------------------------------------------------------
BALANCE AT CHARGED TO CHARGED BALANCE AT
BEGINNING OF COSTS AND TO OTHER END OF
DESCRIPTION YEAR EXPENSES ACCOUNTS DEDUCTION YEAR
-----------------------------------------------------------------------------
RESERVES DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSETS TO WHICH THEY APPLY
Allowances for losses on:
Accounts receivables....................... $ (7.5) $ (2.7) $ - $ 1.5 $ (8.7)
Inventories................................ (13.3) 1.1 - 6.3 (5.9)
Property, plant and equipment.............. (3.5) 0.3 - 3.2 -
Goodwill................................... - (2.4) - 1.2 (1.2)
Intangibles and other assets............... (0.5) (0.1) (1.0) 0.5 (1.1)
Deferred income taxes...................... (20.2) 10.9 - - (9.3)
-----------------------------------------------------------------------------
$(45.0) $ 7.1 $ (1.0) $ 12.7 $(26.2)
=============================================================================
SCHEDULE III - CONSOLIDATING FINANCIAL STATEMENTS
Cott Beverages Inc., a wholly owned subsidiary of Cott, has entered into
financing arrangements which are guaranteed by Cott 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, balance sheets, statements of income and cash flows for Cott Corporation,
Cott Beverages Inc., Guarantor Subsidiaries and Cott's 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 the investments of Cott and Cott Beverages Inc.
in their respective subsidiaries using the equity method of accounting.
COTT CORPORATION
CONSOLIDATING STATEMENTS OF INCOME
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
FOR THE YEAR ENDED DECEMBER 29, 2001
---------------------------------------------------------------------------------
COTT
COTT BEVERAGES GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
---------------------------------------------------------------------------------
Sales $ 197.8 $ 775.4 $ - $153.0 (36.1) $ 1,090.1
Cost of sales 162.1 638.7 - 139.0 (37.1) 902.7
---------------------------------------------------------------------------------
Gross profit 35.7 136.7 - 14.0 1.0 187.4
Selling, general and
administrative expenses 22.3 54.9 0.2 16.7 - 94.1
Unusual items (0.1) - - 0.1 - -
---------------------------------------------------------------------------------
OPERATING INCOME 13.5 81.8 (0.2) (2.8) 1.0 93.3
Other income, net (0.2) (0.1) - (2.1) - (2.4)
Interest expense, net 5.4 5.1 20.4 1.3 - 32.2
Minority interest - - - 0.4 - 0.4
---------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME
TAXES AND EQUITY INCOME 8.3 76.8 (20.6) (2.4) 1.0 63.1
Income taxes (1.0) (25.0) - 2.2 0.6 (23.2)
Equity income 32.6 0.4 52.2 - (85.2) -
---------------------------------------------------------------------------------
Income (loss) from continuing
operations 39.9 52.2 31.6 (0.2) (83.6) 39.9
Extraordinary item - - - - - -
---------------------------------------------------------------------------------
NET INCOME (LOSS) $ 39.9 $ 52.2 $ 31.6 $ (0.2) $ (83.6) $ 39.9
=================================================================================
COTT CORPORATION
CONSOLIDATING BALANCE SHEETS
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
AS OF DECEMBER 29, 2001
-------------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION CONSOLIDATED
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES
-------------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ - $ 0.7 $ - $ 3.2 $ - $ 3.9
Cash in trust 297.3 - - - - 297.3
Accounts receivable 28.7 75.1 0.4 27.4 (9.6) 122.0
Inventories 11.7 46.0 - 10.8 (0.3) 68.2
Prepaid expenses 1.4 1.4 - 0.6 - 3.4
-------------------------------------------------------------------------------------
339.1 123.2 0.4 42.0 (9.9) 494.8
Property, plant and equipment 49.3 138.6 - 59.0 - 246.9
Goodwill 17.2 46.7 5.1 45.1 - 114.1
Intangibles and other assets 11.2 140.3 - 58.1 - 209.6
Due from affiliates 251.1 284.0 297.9 42.3 (875.3) -
Investments in subsidiaries 188.3 44.0 277.2 - (509.5) -
-------------------------------------------------------------------------------------
$ 856.2 $776.8 $ 580.6 $ 246.5 $(1,394.7) $1,065.4
=====================================================================================
LIABILITIES
Current liabilities
Short-term borrowings $ 1.7 $ 32.5 $ - $ - $ - $ 34.2
Current maturities of
long-term debt 276.4 5.4 - - - 281.8
Accounts payable and
accrued liabilities 39.8 68.4 0.2 26.6 (9.6) 125.4
-------------------------------------------------------------------------------------
317.9 106.3 0.2 26.6 (9.6) 441.4
Long-term debt - 359.4 - 0.1 - 359.5
Due to affiliates 328.0 12.3 497.7 37.3 (875.3) -
Other liabilities 14.9 7.4 - 17.9 0.8 41.0
-------------------------------------------------------------------------------------
660.8 485.4 497.9 81.9 (884.1) 841.9
-------------------------------------------------------------------------------------
Minority interest - - - 28.1 - 28.1
SHAREOWNERS' EQUITY
CAPITAL STOCK
Common shares 197.1 265.8 59.0 214.4 (539.2) 197.1
Second preferred shares,
Series 1 40.0 - - - - 40.0
-------------------------------------------------------------------------------------
237.1 265.8 59.0 214.4 (539.2) 237.1
RETAINED EARNINGS (DEFICIT) 2.0 25.6 23.7 (58.7) 9.4 2.0
ACCUMULATED OTHER
COMPREHENSIVE INCOME (43.7) - - (19.2) 19.2 (43.7)
-------------------------------------------------------------------------------------
195.4 291.4 82.7 136.5 (510.6) 195.4
-------------------------------------------------------------------------------------
$ 856.2 $776.8 $ 580.6 $ 246.5 $ (1,394.7) $1,065.4
=====================================================================================
COTT CORPORATION
CONSOLIDATING STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
FOR THE YEAR ENDED DECEMBER 29, 2001
----------------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
----------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Income (loss) from continuing
operations $ 39.9 $ 52.2 $ 31.6 $ (0.2) $ (83.6) $ 39.9
Depreciation and amortization 7.0 24.4 0.2 8.6 - 40.2
Amortization of financing fees 1.0 0.9 - - - 1.9
Deferred income taxes 0.8 11.4 - (2.2) (0.7) 9.3
Minority interest - - - 0.4 - 0.4
Equity income, net of
distributions (31.5) (0.4) (28.5) - 60.4 -
Other non-cash items 0.8 (1.2) - (0.5) 0.2 (0.7)
Net change in non-cash
working capital from
continuing operations 7.8 6.0 (3.0) (7.3) (1.1) 2.4
----------------------------------------------------------------------------------------
Cash provided by operating
activities 25.8 93.3 0.3 (1.2) (24.8) 93.4
----------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property, plant
and equipment (8.3) (23.4) - (4.1) - (35.8)
Acquisitions - (97.6) - (30.0) - (127.6)
Proceeds from disposal of
businesses - - - 3.5 - 3.5
Investment in subsidiaries 14.8 (29.5) (15.8) - 30.5 -
Advances to affiliates (20.9) (283.9) (283.6) 15.6 572.8 -
Other (6.1) 11.4 - (4.0) - 1.3
----------------------------------------------------------------------------------------
Cash used in investing
activities (20.5) (423.0) (299.4) (19.0) 603.3 (158.6)
----------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issue of long-term debt - 367.4 - - - 367.4
Increase in cash in trust (297.3) - - - - (297.3)
Payments of long-term debt (2.5) (4.4) - (0.3) - (7.2)
Short-term borrowings 1.6 (4.1) - - - (2.5)
Debt issue costs - (5.0) - - - (5.0)
Advances from affiliates 283.6 (15.6) 299.7 5.1 (572.8) -
Distributions to subsidiary
minority shareowner - - - (0.7) - (0.7)
Issue of common shares 8.0 15.8 - 29.5 (45.3) 8.0
Redemption of common shares - - - (14.8) 14.8 -
Dividends paid - (23.7) - (1.1) 24.8 -
----------------------------------------------------------------------------------------
Cash provided by (used in)
financing activities (6.6) 330.4 299.7 17.7 (578.5) 62.7
----------------------------------------------------------------------------------------
Net cash used in discontinued
operations - - (0.6) - - (0.6)
Effect of exchange rate
changes on cash and cash
equivalents (0.2) - - - - (0.2)
----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (1.5) 0.7 - (2.5) - (3.3)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 1.5 - - 5.7 - 7.2
----------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ - $ 0.7 $ - $ 3.2 $ - $ 3.9
========================================================================================
COTT CORPORATION
CONSOLIDATING STATEMENTS OF INCOME
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
FOR THE YEAR ENDED DECEMBER 30, 2000
--------------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
--------------------------------------------------------------------------------------
Sales $ 207.1 $ 663.2 $ - $ 157.6 $ (37.3) $ 990.6
Cost of sales 171.9 558.2 - 136.0 (40.6) 825.5
--------------------------------------------------------------------------------------
Gross profit 35.2 105.0 - 21.6 3.3 165.1
Selling, general and
administrative expenses 24.9 46.9 0.1 19.4 - 91.3
Unusual items (0.2) (0.2) - (1.7) - (2.1)
--------------------------------------------------------------------------------------
OPERATING INCOME 10.5 58.3 (0.1) 3.9 3.3 75.9
Other expense (income), net (5.0) 0.1 - 3.0 0.5 (1.4)
Interest expense, net 7.6 4.0 16.8 1.7 - 30.1
--------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME
TAXES AND EQUITY INCOME 7.9 54.2 (16.9) (0.8) 2.8 47.2
Income taxes (2.0) (16.3) - (1.0) (1.3) (20.6)
Equity income 19.5 - 37.9 - (57.4) -
--------------------------------------------------------------------------------------
Income (loss) from continuing
operations 25.4 37.9 21.0 (1.8) (55.9) 26.6
Extraordinary item - - - (1.2) - (1.2)
--------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 25.4 $ 37.9 $ 21.0 $ (3.0) $ (55.9) $ 25.4
======================================================================================
COTT CORPORATION
CONSOLIDATING BALANCE SHEETS
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
AS AT DECEMBER 30, 2000
-----------------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-----------------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 1.5 $ - $ - $ 5.7 $ - $ 7.2
Accounts receivable 41.2 60.9 0.3 23.2 (16.6) 109.0
Inventories 12.3 42.6 - 9.1 - 64.0
Prepaid expenses 0.8 0.8 - 0.6 - 2.2
-----------------------------------------------------------------------------------------
55.8 104.3 0.3 38.6 (16.6) 182.4
Property, plant and equipment 53.1 127.1 - 64.8 - 245.0
Goodwill 18.8 43.2 5.3 47.9 - 115.2
Intangibles and other assets 7.1 69.4 - 2.5 - 79.0
Due from affiliates 231.2 0.1 14.3 58.0 (303.6) -
Investments in subsidiaries 175.6 12.4 234.5 - (422.5) -
-----------------------------------------------------------------------------------------
$ 541.6 $ 356.5 $ 254.4 $ 211.8 $ (742.7) $ 621.6
=========================================================================================
LIABILITIES
Current liabilities
Short-term borrowings $ - $ 36.6 $ - $ - $ - $ 36.6
Current maturities of
long-term debt 0.3 1.0 - 0.3 - 1.6
Accounts payable and
accrued liabilities 46.4 48.7 3.3 31.3 (15.2) 114.5
Discontinued operations - - 0.6 - - 0.6
-----------------------------------------------------------------------------------------
46.7 86.3 3.9 31.6 (15.2) 153.3
Long-term debt 278.6 0.8 - 0.2 - 279.6
Due to affiliates 44.4 27.9 198.0 33.2 (303.5) -
Other liabilities 13.4 (5.4) 1.4 19.6 1.2 30.2
-----------------------------------------------------------------------------------------
383.1 109.6 203.3 84.6 (317.5) 463.1
SHAREOWNERS' EQUITY
CAPITAL STOCK
Common shares 189.1 250.0 59.0 199.7 (508.7) 189.1
Second preferred shares,
Series 1 40.0 - - - - 40.0
-----------------------------------------------------------------------------------------
229.1 250.0 59.0 199.7 (508.7) 229.1
RETAINED EARNINGS (DEFICIT) (37.9) (3.1) (7.9) (57.4) 68.4 (37.9)
ACCUMULATED OTHER
COMPREHENSIVE INCOME (32.7) - - (15.1) (15.1) (32.7)
-----------------------------------------------------------------------------------------
158.5 246.9 51.1 127.2 (425.2) 158.5
-----------------------------------------------------------------------------------------
$ 541.6 $ 356.5 $ 254.4 $ 211.8 $ (742.7) $ 621.6
=========================================================================================
COTT CORPORATION
CONSOLIDATING STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
FOR THE YEAR ENDED DECEMBER 30, 2000
--------------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
--------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Income (loss) from continuing
operations $ 25.4 $ 37.9 $ 21.0 $ (1.8) $ (55.9) $ 26.6
Depreciation and amortization 8.3 20.5 0.1 8.5 - 37.4
Amortization of financing fees 1.0 0.2 - 0.4 - 1.6
Deferred income taxes 1.8 16.3 - 0.7 1.3 20.1
Equity income, net of
distributions 12.6 - (24.2) - 11.6 -
Other non-cash items - 0.5 - (0.2) - 0.3
Net change in non-cash
working capital from
continuing operations (1.2) 0.6 3.2 5.7 (2.8) 5.5
--------------------------------------------------------------------------------------
Cash provided by operating
activities 47.9 76.0 0.1 13.3 (45.8) 91.5
--------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property, plant
and equipment (4.8) (15.2) - (3.9) - (23.9)
Acquisitions - (55.5) - - - (55.5)
Proceeds from disposal of
businesses - 15.9 - 3.0 - 18.9
Proceeds from disposal of
property, plant and
equipment 0.4 1.3 - 0.2 - 1.9
Advances to affiliates (198.9) - 0.3 190.6 8.0 -
Investment in subsidiary 164.6 - (197.9) - 33.3 -
Other - (3.8) - - - (3.8)
--------------------------------------------------------------------------------------
Cash used in investing
activities (38.7) (57.3) (197.6) 189.9 41.3 (62.4)
--------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Payments of long-term debt (4.6) (0.9) - (33.2) - (38.7)
Short-term borrowings - 18.3 - (0.8) - 17.5
Advances from affiliates 0.3 (220.2) 197.9 30.0 (8.0) -
Issue of common shares 0.1 197.9 - 2.4 (200.3) 0.1
Redemption of common shares - - - (167.0) 167.0 -
Other (2.1) - - - - (2.1)
Dividends paid - (13.8) - (32.0) 45.8 -
--------------------------------------------------------------------------------------
Cash provided by (used in)
financing activities (6.3) (18.7) 197.9 (200.6) 4.5 (23.2)
--------------------------------------------------------------------------------------
Net cash used in discontinued
operations - - (0.4) - - (0.4)
Effect of exchange rate
changes on cash and cash
equivalents (1.4) - - 0.5 - (0.9)
--------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 1.5 - - 3.1 - 4.6
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR - - - 2.6 - 2.6
--------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
OF YEAR $ 1.5 $ - $ - $ 5.7 $ - $ 7.2
======================================================================================
COTT CORPORATION
CONSOLIDATING STATEMENTS OF INCOME
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
FOR THE YEAR ENDED JANUARY 1, 2000
--------------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
--------------------------------------------------------------------------------------
Sales $ 191.6 $ 602.4 $ - $ 260.7 $ (61.0) $ 993.7
Cost of sales 158.3 525.4 - 227.3 (63.1) 847.9
--------------------------------------------------------------------------------------
Gross profit 33.3 77.0 - 33.4 2.1 145.8
Selling, general and
administrative expenses 21.2 50.1 - 29.5 - 100.8
Unusual items (2.0) (2.2) (1.3) 4.3 - (1.2)
--------------------------------------------------------------------------------------
OPERATING INCOME (LOSS) 14.1 29.1 1.3 (0.4) 2.1 46.2
Other expense (income), net (5.7) 0.2 - 0.4 - (5.1)
Interest expense, net 24.2 20.3 - (9.9) - 34.6
--------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME
TAXES AND EQUITY INCOME (4.4) 8.6 1.3 9.1 2.1 16.7
Income taxes 11.6 (4.2) (1.8) (1.8) - 3.8
Equity income 11.5 (1.1) 2.3 - (11.8) 0.9
--------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 18.7 3.3 1.8 7.3 (9.7) 21.4
Cumulative effect of change
in accounting principle - (2.1) - - - (2.1)
Discontinued operations (0.2) - (0.6) - - (0.8)
--------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 18.5 $ 1.2 $ 1.2 $ 7.3 $ (9.7) $ 18.5
======================================================================================
COTT CORPORATION
CONSOLIDATING BALANCE SHEETS
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
AS AT JANUARY 1, 2000
-----------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-----------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ - $ - $ - $ 2.6 $ - $ 2.6
Accounts receivable 35.5 54.3 15.0 32.8 (40.0) 97.6
Inventories 15.1 38.9 - 13.3 - 67.3
Prepaid expenses 0.7 3.2 - 0.5 - 4.4
-----------------------------------------------------------------------------------
51.3 96.4 15.0 49.2 (40.0) 171.9
Property, plant and equipment 59.6 128.4 - 78.4 - 266.4
Goodwill 22.1 30.4 5.4 50.2 - 108.1
Intangibles and other assets 8.7 26.0 - 2.8 5.7 43.2
Due from affiliates 30.9 0.2 - 248.3 (279.4) -
Investments in subsidiaries 354.7 12.4 13.6 - (380.7) -
-----------------------------------------------------------------------------------
$ 527.3 $ 293.8 $ 34.0 $ 428.9 $ (694.4) $ 589.6
==================================================================================
LIABILITIES
Current liabilities
Short-term borrowings $ 0.1 $ 0.4 $ - 1.3 $ - $ 1.8
Current maturities of
long-term debt 0.2 1.0 - 0.4 - 1.6
Accounts payable and
accrued liabilities 48.9 50.4 0.3 40.6 (35.4) 104.8
Discontinued operations - - 1.0 - - 1.0
-----------------------------------------------------------------------------------
49.2 51.8 1.3 42.3 (35.4) 109.2
Long-term debt 283.4 1.8 - 36.8 - 322.0
Due to affiliates 41.3 236.0 0.1 2.0 (279.4) -
Other liabilities 11.1 (21.7) 1.4 19.6 5.7 16.1
-----------------------------------------------------------------------------------
385.0 267.9 2.8 100.7 (309.1) 447.3
-----------------------------------------------------------------------------------
SHAREOWNERS' EQUITY
CAPITAL STOCK
Common shares 189.0 52.1 59.0 364.3 (475.4) 189.0
Second preferred shares,
Series 1 40.0 - - - - 40.0
-----------------------------------------------------------------------------------
229.0 52.1 59.0 364.3 (475.4) 229.0
RETAINED EARNINGS (DEFICIT) (63.3) (26.2) (27.8) (24.2) 78.2 (63.3)
ACCUMULATED OTHER
COMPREHENSIVE INCOME (23.4) - - (11.9) 11.9 (23.4)
-----------------------------------------------------------------------------------
142.3 25.9 31.2 328.2 (385.3) 142.3
-----------------------------------------------------------------------------------
$ 527.3 $ 293.8 $ 34.0 $ 428.9 $ (694.4) $ 589.6
==================================================================================
COTT CORPORATION
CONSOLIDATING STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(in millions of U.S. dollars)
FOR THE YEAR ENDED JANUARY 1, 2000
----------------------------------------------------------------------------------------
COTT COTT GUARANTOR NON-GUARANTOR ELIMINATION
CORPORATION BEVERAGES INC. SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
----------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Income (loss) from continuing
operations $ 18.7 $ 3.3 $ 1.8 $ 7.3 $ (9.7) $ 21.4
Depreciation and amortization 9.2 18.4 - 9.9 - 37.5
Amortization of financing fees 1.0 0.2 - 0.4 - 1.6
Deferred income taxes (12.2) 4.2 1.8 0.1 - (6.1)
Equity income, net of
distributions 10.9 1.1 (2.3) - (10.6) (0.9)
Gain on disposal of equity
investment (5.9) - - - - (5.9)
Other non-cash items (0.6) (1.4) - 2.9 - 0.9
Net change in non-cash
working capital from
continuing operations (11.0) 29.7 (8.3) 0.1 (2.1) 8.4
----------------------------------------------------------------------------------------
Cash provided by operating
activities 10.1 55.5 (7.0) 20.7 (22.4) 56.9
----------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property, plant
and equipment (3.0) (9.5) - (6.0) - (18.5)
Acquisitions - (25.0) - - - (25.0)
Proceeds from disposal of
businesses 17.6 - 6.9 14.6 - 39.1
Proceeds from disposal of
property, plant and
equipment - 1.4 - - - 1.4
Advances to affiliates 0.1 - - - (0.1) -
Investment in subsidiary (15.1) - - - 15.1 -
Other - (2.6) - - - (2.6)
----------------------------------------------------------------------------------------
Cash used in investing
activities (0.4) (35.7) 6.9 8.6 15.0 (5.6)
----------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Payments of long-term debt (8.1) (5.2) - (38.7) - (52.0)
Short-term borrowings (3.6) (15.0) - (5.8) - (24.4)
Advances from affiliates - 2.0 - (2.1) 0.1 -
Issue of common shares - - - 15.1 (15.1) -
Dividends paid - - - (22.4) 22.4 -
----------------------------------------------------------------------------------------
Cash provided by (used in)
financing activities (11.7) (18.2) - (53.9) 7.4 (76.4)
----------------------------------------------------------------------------------------
Net cash used in discontinued
operations (0.7) - (0.3) - - (1.0)
Effect of exchange rate
changes on cash and cash
equivalents 0.6 - - - - 0.6
----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (2.1) 1.6 (0.4) (24.6) - (25.5)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 2.1 (1.6) 0.4 27.2 - 28.1
----------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ - $ - $ - $ 2.6 $ - $ 2.6
========================================================================================