Note 22—Guarantor Subsidiaries

Guarantor Subsidiaries of DSS Notes

The DSS Notes assumed as part of the acquisition of DSS are guaranteed on a senior basis by Cott Corporation and certain of its 100% owned direct and indirect subsidiaries (the “DSS Guarantor Subsidiaries”). DSS and each DSS Guarantor Subsidiary is 100% owned by Cott Corporation. The DSS Notes are fully and unconditionally, jointly and severally, guaranteed by Cott Corporation and the DSS Guarantor Subsidiaries. The Indenture governing the DSS Notes (“DSS Indenture”) requires any 100% owned domestic restricted subsidiary (i) that guarantees or becomes a borrower under the Credit Agreement (as defined in the DSS Indenture) or the ABL facility or (ii) that guarantees any other indebtedness of Cott Corporation, DSS or any of the DSS Guarantor Subsidiaries (other than junior lien obligations) secured by collateral (other than Excluded Property (as defined in the DSS Indenture)) to guarantee on a secured basis the DSS Notes. The guarantees of Cott Corporation and the DSS Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indenture governing the DSS Notes.

We have not presented separate financial statements and separate disclosures have not been provided concerning the DSS Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with Securities and Exchange Commission (“SEC”) rules governing reporting of subsidiary financial information.

The following summarized condensed consolidating financial information of the Company sets forth on a consolidating basis: our Balance Sheets, Statements of Operations and Cash Flows for Cott Corporation, DSS, the DSS Guarantor Subsidiaries and our other non-guarantor subsidiaries (the “DSS Non-Guarantor Subsidiaries”). This supplemental financial information reflects our investments and those of DSS in their respective subsidiaries using the equity method of accounting.

The 2024 Notes were initially issued on June 30, 2016 by Cott Finance Corporation, which was not a DSS Guarantor Subsidiary. Cott Finance Corporation was declared an unrestricted subsidiary under the Indenture governing the DSS Notes. As a result, such entity is reflected as a DSS Non-Guarantor Subsidiary in the following summarized condensed consolidating financial information through August 2, 2016. Substantially simultaneously with the closing of the acquisition of Eden on August 2, 2016, we assumed all of the obligations of Cott Finance Corporation as issuer under the 2024 Notes, and Cott Corporation’s U.S., Canadian, U.K., Luxembourg and Dutch subsidiaries that are currently obligors under the 2022 Notes and the 2020 Notes (including Cott Beverages Inc.) entered into a supplemental indenture to guarantee the 2024 Notes. Currently, the obligors under the 2024 Notes are different than the obligors under the DSS Notes, but identical to the obligors under the 2020 Notes and the 2022 Notes. The 2024 Notes are listed on the official list of the Irish Stock Exchange and are traded on the Global Exchange Market thereof.

Condensed Consolidating Statement of Operations

For the year ended December 31, 2016

(in millions of U.S. dollars)


	Cott Corporation			DS Services of America, Inc.			DSS Guarantor Subsidiaries			DSS Non-Guarantor Subsidiaries			Elimination Entries			Consolidated
Revenue, net	$	157.5		$	1,006.2		$	1,850.9		$	278.3		$	(57.0	)	$	3,235.9
Cost of sales		132.7			393.1			1,539.9			153.0			(57.0	)		2,161.7

Gross profit		24.8			613.1			311.0			125.3			—			1,074.2
Selling, general and administrative expenses		38.4			560.1			246.2			113.4			—			958.1
(Gain) loss on disposal of property, plant & equipment		(0.7	)		7.1			(0.3	)		—			—			6.1
Acquisition and integration expenses		—			1.9			23.1			2.8			—			27.8

Operating (loss) income		(12.9	)		44.0			42.0			9.1			—			82.2
Other (income) expense, net		(1.9	)		(1.6	)		5.4			2.0			—			3.9
Intercompany interest (income) expense, net		(2.4	)		43.2			(43.2	)		2.4			—			—
Interest expense (income), net		14.7			29.3			80.4			(0.2	)		—			124.2

(Loss) income before income tax expense (benefit) and equity (loss) income		(23.3	)		(26.9	)		(0.6	)		4.9			—			(45.9	)
Income tax expense (benefit)		8.3			(16.6	)		34.0			(0.1	)		—			25.6
Equity (loss) income		(46.2	)		—			6.9			—			39.3			—

Net (loss) income	$	(77.8	)	$	(10.3	)	$	(27.7	)	$	5.0		$	39.3		$	(71.5	)
Less: Net income attributable to non-controlling interests		—			—			—			6.3			—			6.3

Net (loss) income attributed to Cott Corporation	$	(77.8	)	$	(10.3	)	$	(27.7	)	$	(1.3	)	$	39.3		$	(77.8	)

Comprehensive (loss) income attributed to Cott Corporation	$	(119.5	)	$	(10.3	)	$	115.8		$	(1.2	)	$	(104.3	)	$	(119.5	)

Condensed Consolidating Statement of Operations

For the year ended January 2, 2016

(in millions of U.S. dollars)


							DSS			DSS
	Cott			DS Services of			Guarantor			Non-Guarantor		Elimination
	Corporation			America, Inc.			Subsidiaries			Subsidiaries		Entries			Consolidated
Revenue, net	$	147.7		$	1,021.1		$	1,702.6		$	131.6	$	(59.0	)	$	2,944.0
Cost of sales		124.6			402.8			1,474.7			105.4		(59.0	)		2,048.5

Gross profit		23.1			618.3			227.9			26.2		—			895.5
Selling, general and administrative expenses		23.3			557.3			175.7			12.3		—			768.6
Loss on disposal of property, plant & equipment		0.1			5.3			1.5			—		—			6.9
Acquisition and integration expenses		—			16.7			3.9			—		—			20.6

Operating (loss) income		(0.3	)		39.0			46.8			13.9		—			99.4
Other (income) expense, net		(8.6	)		(1.2	)		0.2			0.1		—			(9.5	)
Intercompany interest (income) expense, net		(4.9	)		43.5			(38.6	)		—		—			—
Interest expense, net		0.2			30.1			80.7			—		—			111.0

Income (loss) before income tax expense (benefit) and equity income		13.0			(33.4	)		4.5			13.8		—			(2.1	)
Income tax expense (benefit)		1.6			(8.1	)		(16.3	)		0.1		—			(22.7	)
Equity income		3.1			—			5.8			—		(8.9	)		—

Net income (loss)	$	14.5		$	(25.3	)	$	26.6		$	13.7	$	(8.9	)	$	20.6
Less: Net income attributable to non-controlling interests		—			—			—			6.1		—			6.1
Less: Accumulated dividends on convertible shares		4.5			—			—			—		—			4.5
Less: Accumulated dividends on non-convertible shares		1.4			—			—			—		—			1.4
Less: Foreign exchange impact on redemption of preferred shares		12.0			—			—			—		—			12.0
Net (loss) income attributed to Cott Corporation	$	(3.4	)	$	(25.3	)	$	26.6		$	7.6	$	(8.9	)	$	(3.4	)

Comprehensive (loss) income attributed to Cott Corporation	$	(29.3	)	$	(25.6	)	$	45.6		$	11.4	$	(31.4	)	$	(29.3	)

Condensed Consolidating Statement of Operations

For the year ended January 3, 2015

(in millions of U.S. dollars)


							DSS			DSS
	Cott			DS Services of			Guarantor			Non-Guarantor		Elimination
	Corporation			America, Inc.			Subsidiaries			Subsidiaries		Entries			Consolidated
Revenue, net	$	166.3		$	28.7		$	1,819.0		$	137.9	$	(49.1	)	$	2,102.8
Cost of sales		144.8			15.9			1,600.1			114.6		(49.1	)		1,826.3

Gross profit		21.5			12.8			218.9			23.3		—			276.5
Selling, general and administrative expenses		23.1			14.5			164.1			12.0		—			213.7
Loss on disposal of property, plant & equipment		0.2			0.1			1.3			0.1		—			1.7
Restructuring		2.1			—			0.3			—		—			2.4
Asset impairments		0.9			—			0.8			—		—			1.7
Acquisition and integration expenses		—			—			41.3			—		—			41.3

Operating (loss) income		(4.8	)		(1.8	)		11.1			11.2		—			15.7
Other (income) expense, net		(10.9	)		(0.1	)		31.9			0.1		—			21.0
Intercompany interest (income) expense, net		(0.7	)		2.6			(1.9	)		—		—			—
Interest expense, net		0.2			1.0			38.4			0.1		—			39.7

Income (loss) before income tax expense (benefit) and equity income		6.6			(5.3	)		(57.3	)		11.0		—			(45.0	)
Income tax expense (benefit)		0.3			(2.5	)		(59.8	)		0.6		—			(61.4	)
Equity income		4.5			—			6.1			—		(10.6	)		—

Net income (loss)	$	10.8		$	(2.8	)	$	8.6		$	10.4	$	(10.6	)	$	16.4
Less: Net income attributable to non-controlling interests		—			—			—			5.6		—			5.6
Less: Accumulated dividends on convertible shares		0.6			—			—			—		—			0.6
Less: Accumulated dividends on non-convertible shares		0.2			—			—			—		—			0.2
Net income (loss) attributed to Cott Corporation	$	10.0		$	(2.8	)	$	8.6		$	4.8	$	(10.6	)	$	10.0

Comprehensive (loss) income attributed to Cott Corporation	$	(23.4	)	$	(26.7	)	$	10.6		$	8.5	$	7.6		$	(23.4	)

Consolidating Balance Sheet

As of December 31, 2016

(in millions of U.S. dollars)


							DSS			DSS
	Cott			DS Services of			Guarantor			Non-Guarantor			Elimination
	Corporation			America, Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
ASSETS
*Current assets*
Cash & cash equivalents	$	4.8		$	22.7		$	52.1		$	38.5		$	—		$	118.1
Accounts receivable, net of allowance		27.4			121.7			239.6			93.7			(78.5	)		403.9
Inventories		14.0			29.2			237.1			21.1			—			301.4
Prepaid expenses and other assets		1.4			7.1			16.6			4.7			—			29.8

Total current assets		47.6			180.7			545.4			158.0			(78.5	)		853.2
Property, plant & equipment, net		27.5			364.5			430.7			107.2			—			929.9
Goodwill		20.3			582.0			290.4			282.7			—			1,175.4
Intangible assets, net		0.1			356.8			385.0			197.8			—			939.7
Deferred tax assets		—			—			—			0.2			—			0.2
Other assets, net		1.2			14.6			23.1			2.4			—			41.3
Due from affiliates		943.2			—			544.3			—			(1,487.5	)		—
Investments in subsidiaries		361.9			—			400.5			—			(762.4	)		—

Total assets	$	1,401.8		$	1,498.6		$	2,619.4		$	748.3		$	(2,328.4	)	$	3,939.7

LIABILITIES AND EQUITY
*Current liabilities*
Short-term borrowings	$	—		$	—		$	207.0		$	—		$	—		$	207.0
Current maturities of long-term debt		—			—			2.7			3.0			—			5.7
Accounts payable and accrued liabilities		66.5			135.1			341.0			133.3			(78.5	)		597.4

Total current liabilities		66.5			135.1			550.7			136.3			(78.5	)		810.1
Long-term debt		464.3			384.2			1,136.7			2.8			—			1,988.0
Deferred tax liabilities		1.0			81.2			49.0			26.6			—			157.8
Other long-term liabilities		0.5			38.0			49.9			21.6			—			110.0
Due to affiliates		1.0			543.3			453.4			489.8			(1,487.5	)		—

Total liabilities		533.3			1,181.8			2,239.7			677.1			(1,566.0	)		3,065.9
*Equity*
Common shares, no par		909.3			355.4			691.5			149.7			(1,196.6	)		909.3
Additional paid-in-capital		54.2			—			—			—			—			54.2
Retained earnings (deficit)		22.9			(38.4	)		(469.6	)		(92.9	)		600.9			22.9
Accumulated other comprehensive (loss) income		(117.9	)		(0.2	)		157.8			9.1			(166.7	)		(117.9	)

Total Cott Corporation equity		868.5			316.8			379.7			65.9			(762.4	)		868.5
Non-controlling interests		—			—			—			5.3			—			5.3

Total equity		868.5			316.8			379.7			71.2			(762.4	)		873.8

Total liabilities and equity	$	1,401.8		$	1,498.6		$	2,619.4		$	748.3		$	(2,328.4	)	$	3,939.7

Consolidating Balance Sheet

As of January 2, 2016

(in millions of U.S. dollars)


							DSS			DSS
	Cott			DS Services of			Guarantor			Non-Guarantor			Elimination
	Corporation			America, Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
ASSETS
*Current assets*
Cash & cash equivalents	$	20.8		$	12.8		$	38.4		$	5.1		$	—		$	77.1
Accounts receivable, net of allowance		18.3			122.6			184.6			13.0			(45.2	)		293.3
Inventories		13.0			31.4			199.4			5.6			—			249.4
Prepaid expenses and other assets		2.2			5.3			10.9			0.4			—			18.8

Total current assets		54.3			172.1			433.3			24.1			(45.2	)		638.6
Property, plant & equipment, net		29.7			372.6			360.8			6.7			—			769.8
Goodwill		19.8			579.1			160.7			—			—			759.6
Intangible assets, net		0.1			390.6			290.6			2.8			—			684.1
Deferred tax assets		7.4			—			38.2			0.2			(38.2	)		7.6
Other assets, net		0.7			11.9			15.0			—			—			27.6
Due from affiliates		400.1			—			544.3			—			(944.4	)		—
Investments in subsidiaries		176.3			—			400.0			—			(576.3	)		—

Total assets	$	688.4		$	1,526.3		$	2,242.9		$	33.8		$	(1,604.1	)	$	2,887.3

LIABILITIES AND EQUITY
*Current liabilities*
Short-term borrowings	$	—		$	—		$	122.0		$	—		$	—		$	122.0
Current maturities of long-term debt		—			—			3.0			0.4			—			3.4
Accounts payable and accrued liabilities		47.6			131.8			295.1			8.3			(45.2	)		437.6

Total current liabilities		47.6			131.8			420.1			8.7			(45.2	)		563.0
Long-term debt		—			390.1			1,135.3			—			—			1,525.4
Deferred tax liabilities		—			97.7			17.0			—			(38.2	)		76.5
Other long-term liabilities		0.5			36.2			38.7			1.1			—			76.5
Due to affiliates		1.0			543.3			371.9			28.2			(944.4	)		—

Total liabilities		49.1			1,199.1			1,983.0			38.0			(1,027.8	)		2,241.4
*Equity*
Common shares, no par		534.7			355.5			683.1			38.6			(1,077.2	)		534.7
Additional paid-in-capital		51.2			—			—			—			—			51.2
Retained earnings (deficit)		129.6			(28.1	)		(437.5	)		(58.4	)		524.0			129.6
Accumulated other comprehensive (loss) income		(76.2	)		(0.2	)		14.3			9.0			(23.1	)		(76.2	)

Total Cott Corporation equity		639.3			327.2			259.9			(10.8	)		(576.3	)		639.3
Non-controlling interests		—			—			—			6.6			—			6.6

Total equity		639.3			327.2			259.9			(4.2	)		(576.3	)		645.9

Total liabilities and equity	$	688.4		$	1,526.3		$	2,242.9		$	33.8		$	(1,604.1	)	$	2,887.3

Condensed Consolidating Statement of Cash Flows

For the year ended December 31, 2016

(in millions of U.S. dollars)


							DSS			DSS
	Cott			DS Services of			Guarantor			Non-Guarantor			Elimination
	Corporation			America, Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
Net cash provided by operating activities	$	127.5		$	90.8		$	25.1		$	88.1		$	(61.7	)	$	269.8

Investing Activities
Acquisition, net of cash received		(954.0	)		(5.4	)		—			—			—			(959.4	)
Additions to property, plant & equipment		(1.5	)		(72.4	)		(54.4	)		(11.5	)		—			(139.8	)
Additions to intangible assets		—			(3.8	)		(3.9	)		(0.4	)		—			(8.1	)
Proceeds from sale of property, plant & equipment		0.8			0.7			5.4			1.9			—			8.8
Proceeds from insurance recoveries		—			—			1.5			—			—			1.5
Other investing activities		—			—			0.4			—			—			0.4

Net cash used in investing activities		(954.7	)		(80.9	)		(51.0	)		(10.0	)		—			(1,096.6	)

Financing Activities
Payments of long-term debt		—			—			(2.9	)		(0.7	)		—			(3.6	)
Issuance of long-term debt		498.7			—			—			—						498.7
Borrowings under ABL		176.4			—			2,225.2			1.6			—			2,403.2
Payments under ABL		(178.7	)		—			(2,140.2	)		(1.4	)		—			(2,320.3	)
Distributions to non-controlling interests		—			—			—			(7.7	)		—			(7.7	)
Issuance of common shares		366.8			—			—			—						366.8
Financing fees		(13.5	)		—			—			—			—			(13.5	)
Common shares repurchased and cancelled		(5.7	)		—			—			—			—			(5.7	)
Dividends paid to common shareholders		(31.4	)		—			—			—			—			(31.4	)
Payments of deferred consideration for acquisitions		—			—			(10.8	)		—			—			(10.8	)
Intercompany dividends		—			—			(27.0	)		(34.7	)		61.7			—

Net cash provided by (used in) financing activities		812.6			—			44.3			(42.9	)		61.7			875.7
Effect of exchange rate changes on cash		(1.4	)		—			(4.7	)		(1.8	)		—			(7.9	)

Net (decrease) increase cash & cash equivalents		(16.0	)		9.9			13.7			33.4			—			41.0

Cash & cash equivalents, beginning of period		20.8			12.8			38.4			5.1			—			77.1

Cash & cash equivalents, end of period	$	4.8		$	22.7		$	52.1		$	38.5		$	—		$	118.1

Condensed Consolidating Statement of Cash Flows

For the year ended January 2, 2016

(in millions of U.S. dollars)


							DSS			DSS
	Cott			DS Services of			Guarantor			Non-Guarantor			Elimination
	Corporation			America, Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
Net cash provided by operating activities	$	56.2		$	58.4		$	152.9		$	17.3		$	(30.2	)	$	254.6

Investing Activities
Acquisition, net of cash received		—			(24.0	)		—			—			—			(24.0	)
Additions to property, plant & equipment		(2.0	)		(67.2	)		(40.3	)		(1.3	)		—			(110.8	)
Additions to intangible assets		—			(3.1	)		(1.5	)		—			—			(4.6	)
Proceeds from sale of property, plant & equipment and sale-leaseback		—			14.3			26.6			—			—			40.9
Other investing activities		—			—			(1.2	)		—			—			(1.2	)

Net cash used in investing activities		(2.0	)		(80.0	)		(16.4	)		(1.3	)		—			(99.7	)

Financing Activities
Payments of long-term debt		(0.1	)		—			(2.9	)		(0.7	)		—			(3.7	)
Borrowings under ABL		—			—			994.5			—			—			994.5
Payments under ABL		—			—			(1,101.8	)		—			—			(1,101.8	)
Distributions to non-controlling interests		—			—			—			(8.5	)		—			(8.5	)
Issuance of common shares		143.1			—			—			—			—			143.1
Financing fees		—			—			(0.6	)		—			—			(0.6	)
Preferred shares repurchased and cancelled		(148.8	)		—			—			—			—			(148.8	)
Common shares repurchased and cancelled		(0.8	)		—			—			—			—			(0.8	)
Dividends to common and preferred shareholders		(31.0	)		—			—			—			—			(31.0	)
Payment of deferred consideration for acquisitions		—			—			(2.5	)		—			—			(2.5	)
Intercompany dividends		—			—			(21.4	)		(8.8	)		30.2			—

Net cash used in financing activities		(37.6	)		—			(134.7	)		(18.0	)		30.2			(160.1	)
Effect of exchange rate changes on cash		(2.0	)		—			(1.6	)		(0.3	)		—			(3.9	)

Net increase (decrease) in cash & cash equivalents		14.6			(21.6	)		0.2			(2.3	)		—			(9.1	)

Cash & cash equivalents, beginning of period		6.2			34.4			38.2			7.4			—			86.2

Cash & cash equivalents, end of period	$	20.8		$	12.8		$	38.4		$	5.1		$	—		$	77.1

Condensed Consolidating Statement of Cash Flows

For the year ended January 3, 2015

(in millions of U.S. dollars)


							DSS			DSS
	Cott			DS Services of			Guarantor			Non-Guarantor			Elimination
	Corporation			America, Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
Net cash provided by operating activities	$	42.0		$	9.2		$	56.6		$	12.7		$	(63.8	)	$	56.7

Investing Activities
Acquisition, net of cash received		—			—			(798.5	)		—			—			(798.5	)
Additions to property, plant & equipment		(1.9	)		(3.6	)		(40.4	)		(0.8	)		—			(46.7	)
Additions to intangible assets		—			—			(6.9	)		—			—			(6.9	)
Proceeds from sale of property, plant & equipment		—			—			1.8			—			—			1.8

Net cash used in investing activities		(1.9	)		(3.6	)		(844.0	)		(0.8	)		—			(850.3	)

Financing Activities
Payments of long-term debt		(0.1	)		—			(392.4	)		(1.1	)		—			(393.6	)
Issue of long-term debt		—			—			1,150.0			—			—			1,150.0
Borrowings under ABL		—			—			959.0			—			—			959.0
Payments under ABL		—			—			(779.6	)		—			—			(779.6	)
Distributions to non-controlling interests		—			—			—			(8.5	)		—			(8.5	)
Financing fees		—			—			(24.0	)		—			—			(24.0	)
Common shares repurchased and cancelled		(12.1	)		—			—			—			—			(12.1	)
Dividends to common shareholders		(22.8	)		—			—			—			—			(22.8	)
Payment of deferred consideration for acquisitions		—			—			(32.4	)		—			—			(32.4	)
Intercompany financing transactions		—			28.8			(28.8	)		—			—			—
Other financing activities		—			—			(0.3	)		—			—			(0.3	)
Intercompany dividends		—			—			(63.8	)		—			63.8			—

Net cash (used in) provided by financing activities		(35.0	)		28.8			787.7			(9.6	)		63.8			835.7
Effect of exchange rate changes on cash		(0.4	)		—			(2.3	)		(0.4	)		—			(3.1	)

Net increase (decrease) in cash & cash equivalents		4.7			34.4			(2.0	)		1.9			—			39.0

Cash & cash equivalents, beginning of period		1.5			—			40.2			5.5			—			47.2

Cash & cash equivalents, end of period	$	6.2		$	34.4		$	38.2		$	7.4		$	—		$	86.2

Guarantor Subsidiaries of 2020 Notes, 2022 Notes, and 2024 Notes

The 2020 Notes and 2022 Notes, each issued by Cott Corporation’s 100% owned subsidiary CBI, are fully and unconditionally, jointly and severally guaranteed on a senior basis by Cott Corporation and certain of its 100% owned direct and indirect subsidiaries (the “Cott Guarantor Subsidiaries”). The Indentures governing the 2020 Notes and the 2022 Notes require (i) any 100% owned direct and indirect restricted subsidiary that guarantees any indebtedness of CBI or any guarantor and (ii) any non-100% owned subsidiary that guarantees any other capital markets debt of CBI or any guarantor to guarantee the 2020 Notes and the 2022 Notes. No non-100% owned subsidiaries guarantee the 2020 Notes or the 2022 Notes. The guarantees of Cott Corporation and the Cott Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indentures governing the 2020 Notes and the 2022 Notes.

The 2024 Notes were initially issued on June 30, 2016 by Cott Finance Corporation, which was not a Cott Guarantor Subsidiary. Cott Finance Corporation was declared an unrestricted subsidiary under the Indentures governing the 2022 Notes and the 2020 Notes. As a result, such entity is reflected as a Cott Non-Guarantor Subsidiary in the following summarized condensed consolidating financial information through August 2, 2016. Substantially simultaneously with the closing of the Eden Acquisition on August 2, 2016, we assumed all of the obligations of Cott Finance Corporation as issuer under the 2024 Notes, and Cott Corporation’s U.S., Canadian, U.K., Luxembourg and Dutch subsidiaries that are currently obligors under the 2022 Notes and the 2020 Notes (including CBI) entered into a supplemental indenture to guarantee the 2024 Notes. The Indenture governing the 2024 Notes requires (i) any 100% owned domestic restricted subsidiary that guarantees any debt of the issuer or any guarantor and (ii) and any non-100% owned subsidiary that guarantees any other capital markets debt of Cott Corporation or any other guarantor to guarantee the 2024 Notes. No non-100% owned subsidiaries guarantee the 2024 Notes. The guarantees of CBI and the Cott Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indenture governing the 2024 Notes. Currently, the obligors under the 2024 Notes are identical to the obligors under the 2020 Notes and the 2022 Notes, but different than the obligors under the DSS Notes. The 2024 Notes are listed on the official list of the Irish Stock Exchange and are traded on the Global Exchange Market thereof.

We have not presented separate financial statements and separate disclosures have not been provided concerning the Cott Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with the SEC rules governing reporting of subsidiary financial information.

The following summarized condensed consolidating financial information of the Company sets forth on a consolidating basis: our Balance Sheets, Statements of Operations and Cash Flows for Cott Corporation, CBI, the Cott Guarantor Subsidiaries and our other non-guarantor subsidiaries (the “Cott Non-Guarantor Subsidiaries”). This supplemental financial information reflects our investments and those of CBI in their respective subsidiaries using the equity method of accounting.

Condensed Consolidating Statement of Operations

For the year ended December 31, 2016

(in millions of U.S. dollars)


							Cott			Cott
	Cott			Cott			Guarantor			Non-Guarantor			Elimination
	Corporation			Beverages Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
Revenue, net	$	157.5		$	701.3		$	2,155.8		$	278.3		$	(57.0	)	$	3,235.9
Cost of sales		132.7			593.3			1,339.7			153.0			(57.0	)		2,161.7

Gross profit		24.8			108.0			816.1			125.3			—			1,074.2
Selling, general and administrative expenses		38.4			89.8			716.5			113.4			—			958.1
(Gain) loss on disposal of property, plant & equipment		(0.7	)		0.8			6.0			—			—			6.1
Acquisition and integration expenses		—			17.9			7.1			2.8			—			27.8

Operating (loss) income		(12.9	)		(0.5	)		86.5			9.1			—			82.2
Other (income) expense, net		(1.9	)		(1.3	)		5.1			2.0			—			3.9
Intercompany interest (income) expense, net		(2.4	)		(42.5	)		42.5			2.4			—			0.0
Interest expense (income), net		14.7			80.4			29.3			(0.2	)		—			124.2

(Loss) income before income tax expense (benefit) and equity (loss) income		(23.3	)		(37.1	)		9.6			4.9			—			(45.9	)
Income tax expense (benefit)		8.3			34.0			(16.6	)		(0.1	)		—			25.6
Equity (loss) income		(46.2	)		6.6			0.3			—			39.3			—

Net (loss) income	$	(77.8	)	$	(64.5	)	$	26.5		$	5.0		$	39.3		$	(71.5	)
Less: Net income attributable to non-controlling interests		—			—			—			6.3			—			6.3

Net (loss) income attributed to Cott Corporation	$	(77.8	)	$	(64.5	)	$	26.5		$	(1.3	)	$	39.3		$	(77.8	)

Comprehensive (loss) income attributed to Cott Corporation	$	(119.5	)	$	(67.9	)	$	173.4		$	(1.2	)	$	(104.3	)	$	(119.5	)

Condensed Consolidating Statement of Operations

For the year ended January 2, 2016

(in millions of U.S. dollars)


							Cott			Cott
	Cott			Cott			Guarantor			Non-Guarantor		Elimination
	Corporation			Beverages Inc.			Subsidiaries			Subsidiaries		Entries			Consolidated
Revenue, net	$	147.7		$	715.0		$	2,008.7		$	131.6	$	(59.0	)	$	2,944.0
Cost of sales		124.6			611.5			1,266.0			105.4		(59.0	)		2,048.5

Gross profit		23.1			103.5			742.7			26.2		—			895.5
Selling, general and administrative expenses		23.3			91.6			641.4			12.3		—			768.6
Loss on disposal of property, plant & equipment		0.1			0.5			6.3			—		—			6.9
Acquisition and integration expenses		—			3.2			17.4			—		—			20.6

Operating (loss) income		(0.3	)		8.2			77.6			13.9		—			99.4
Other (income) expense, net		(8.6	)		—			(1.0	)		0.1		—			(9.5	)
Intercompany interest (income) expense, net		(4.9	)		(51.2	)		56.1			—		—			—
Interest expense, net		0.2			80.1			30.7			—		—			111.0

Income (loss) before income tax expense (benefit) and equity income (loss)		13.0			(20.7	)		(8.2	)		13.8		—			(2.1	)
Income tax expense (benefit)		1.6			(14.8	)		(9.6	)		0.1		—			(22.7	)
Equity income (loss)		3.1			6.1			(0.3	)		—		(8.9	)		—

Net income	$	14.5		$	0.2		$	1.1		$	13.7	$	(8.9	)	$	20.6
Less: Net income attributable to non-controlling interests		—			—			—			6.1		—			6.1
Less: Accumulated dividends on convertible shares		4.5			—			—			—		—			4.5
Less: Accumulated dividends on non-convertible shares		1.4			—			—			—		—			1.4
Less: Foreign exchange impact on redemption of preferred shares		12.0			—			—			—		—			12.0

Net (loss) income attributed to Cott Corporation	$	(3.4	)	$	0.2		$	1.1		$	7.6	$	(8.9	)	$	(3.4	)

Comprehensive (loss) income attributed to Cott Corporation	$	(29.3	)	$	(7.9	)	$	27.9		$	11.4	$	(31.4	)	$	(29.3	)

Condensed Consolidating Statement of Operations

For the year ended January 3, 2015

(in millions of U.S. dollars)


							Cott			Cott
	Cott			Cott			Guarantor			Non-Guarantor		Elimination
	Corporation			Beverages Inc.			Subsidiaries			Subsidiaries		Entries			Consolidated
Revenue, net	$	166.3		$	745.1		$	1,102.6		$	137.9	$	(49.1	)	$	2,102.8
Cost of sales		144.8			643.2			972.8			114.6		(49.1	)		1,826.3

Gross profit		21.5			101.9			129.8			23.3		—			276.5
Selling, general and administrative expenses		23.1			85.9			92.7			12.0		—			213.7
Loss on disposal of property, plant & equipment		0.2			0.1			1.3			0.1		—			1.7
Restructuring		2.1			0.3			—			—		—			2.4
Asset impairments		0.9			0.8			—			—		—			1.7
Acquisition and integration expenses		—			38.8			2.5			—		—			41.3

Operating (loss) income		(4.8	)		(24.0	)		33.3			11.2		—			15.7
Other (income) expense, net		(10.9	)		21.8			10.0			0.1		—			21.0
Intercompany interest (income) expense, net		(0.7	)		(18.4	)		19.1			—		—			—
Interest expense, net		0.2			37.2			2.2			0.1		—			39.7

Income (loss) before income tax expense (benefit) and equity income		6.6			(64.6	)		2.0			11.0		—			(45.0	)
Income tax expense (benefit)		0.3			(59.6	)		(2.7	)		0.6		—			(61.4	)
Equity income		4.5			6.1			—			—		(10.6	)		—

Net income	$	10.8		$	1.1		$	4.7		$	10.4	$	(10.6	)	$	16.4
Less: Net income attributable to non-controlling interests		—			—			—			5.6		—			5.6
Less: Accumulated dividends on convertible shares		0.6			—			—			—		—			0.6
Less: Accumulated dividends on non-convertible shares		0.2			—			—			—		—			0.2

Net income attributed to Cott Corporation	$	10.0		$	1.1		$	4.7		$	4.8	$	(10.6	)	$	10.0

Comprehensive (loss) income attributed to Cott Corporation	$	(23.4	)	$	(31.5	)	$	15.4		$	8.5	$	7.6		$	(23.4	)

Consolidating Balance Sheet

As of December 31, 2016

(in millions of U.S. dollars)


							Cott		Cott
	Cott			Cott			Guarantor		Non-Guarantor			Elimination
	Corporation			Beverages Inc.			Subsidiaries		Subsidiaries			Entries			Consolidated
ASSETS
*Current assets*
Cash & cash equivalents	$	4.8		$	3.1		$	71.7	$	38.5		$	—		$	118.1
Accounts receivable, net of allowance		27.4			73.3			443.1		93.7			(233.6	)		403.9
Inventories		14.0			72.0			194.3		21.1			—			301.4
Prepaid expenses and other assets		1.4			4.3			19.4		4.7			—			29.8

Total current assets		47.6			152.7			728.5		158.0			(233.6	)		853.2
Property, plant & equipment, net		27.5			154.4			640.8		107.2			—			929.9
Goodwill		20.3			4.5			867.9		282.7			—			1,175.4
Intangible assets, net		0.1			66.2			675.6		197.8			—			939.7
Deferred tax assets		—			6.0			—		0.2			(6.0	)		0.2
Other assets, net		1.2			17.0			20.7		2.4			—			41.3
Due from affiliates		943.2			580.2			343.1		—			(1,866.5	)		—
Investments in subsidiaries		361.9			847.3			989.8		—			(2,199.0	)		—

Total assets	$	1,401.8		$	1,828.3		$	4,266.4	$	748.3		$	(4,305.1	)	$	3,939.7

LIABILITIES AND EQUITY
*Current liabilities*
Short-term borrowings	$	—		$	207.0		$	—	$	—		$	—		$	207.0
Current maturities of long-term debt		—			2.5			0.2		3.0			—			5.7
Accounts payable and accrued liabilities		66.5			261.9			369.3		133.3			(233.6	)		597.4

Total current liabilities		66.5			471.4			369.5		136.3			(233.6	)		810.1
Long-term debt		464.3			1,135.6			385.3		2.8			—			1,988.0
Deferred tax liabilities		1.0			—			136.2		26.6			(6.0	)		157.8
Other long-term liabilities		0.5			24.4			63.5		21.6			—			110.0
Due to affiliates		1.0			142.1			1,233.6		489.8			(1,866.5	)		—

Total liabilities		533.3			1,773.5			2,188.1		677.1			(2,106.1	)		3,065.9
*Equity*
Common shares, no par		909.3			834.8			1,648.7		149.7			(2,633.2	)		909.3
Additional paid-in-capital		54.2			—			—		—			—			54.2
Retained earnings (deficit)		22.9			(759.9	)		251.9		(92.9	)		600.9			22.9
Accumulated other comprehensive (loss) income		(117.9	)		(20.1	)		177.7		9.1			(166.7	)		(117.9	)

Total Cott Corporation equity		868.5			54.8			2,078.3		65.9			(2,199.0	)		868.5
Non-controlling interests		—			—			—		5.3			—			5.3

Total equity		868.5			54.8			2,078.3		71.2			(2,199.0	)		873.8

Total liabilities and equity	$	1,401.8		$	1,828.3		$	4,266.4	$	748.3		$	(4,305.1	)	$	3,939.7

Consolidating Balance Sheet

As of January 2, 2016

(in millions of U.S. dollars)


							Cott			Cott
	Cott			Cott			Guarantor			Non-Guarantor			Elimination
	Corporation			Beverages Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
ASSETS
*Current assets*
Cash & cash equivalents	$	20.8		$	1.0		$	50.2		$	5.1		$	—		$	77.1
Accounts receivable, net of allowance		18.3			63.3			361.8			13.0			(163.1	)		293.3
Inventories		13.0			76.7			154.1			5.6			—			249.4
Prepaid expenses and other assets		2.2			5.2			11.0			0.4			—			18.8

Total current assets		54.3			146.2			577.1			24.1			(163.1	)		638.6
Property, plant & equipment, net		29.7			163.3			570.1			6.7			—			769.8
Goodwill		19.8			4.5			735.3			—			—			759.6
Intangible assets, net		0.1			69.8			611.4			2.8			—			684.1
Deferred tax assets		7.4			38.2			—			0.2			(38.2	)		7.6
Other assets, net		0.7			9.4			17.5			—						27.6
Due from affiliates		400.1			587.5			2.6			—			(990.2	)		—
Investments in subsidiaries		176.3			847.3			702.5			—			(1,726.1	)		—

Total assets	$	688.4		$	1,866.2		$	3,216.5		$	33.8		$	(2,917.6	)	$	2,887.3

LIABILITIES AND EQUITY
*Current liabilities*
Short-term borrowings	$	—		$	122.0		$	—		$	—		$	—		$	122.0
Current maturities of long-term debt		—			2.6			0.4			0.4			—			3.4
Accounts payable and accrued liabilities		47.6			234.6			310.2			8.3			(163.1	)		437.6

Total current liabilities		47.6			359.2			310.6			8.7			(163.1	)		563.0
Long-term debt		—			1,134.1			391.3			—			—			1,525.4
Deferred tax liabilities		—			—			114.7			—			(38.2	)		76.5
Other long-term liabilities		0.5			20.0			54.9			1.1			—			76.5
Due to affiliates		1.0			1.6			959.4			28.2			(990.2	)		—

Total liabilities		49.1			1,514.9			1,830.9			38.0			(1,191.5	)		2,241.4
*Equity*
Common shares, no par		534.7			701.5			1,486.9			38.6			(2,227.0	)		534.7
Additional paid-in-capital		51.2			—			—			—			—			51.2
Retained earnings (deficit)		129.6			(333.5	)		(132.1	)		(58.4	)		524.0			129.6
Accumulated other comprehensive (loss) income		(76.2	)		(16.7	)		30.8			9.0			(23.1	)		(76.2	)

Total Cott Corporation equity		639.3			351.3			1,385.6			(10.8	)		(1,726.1	)		639.3
Non-controlling interests		—			—			—			6.6			—			6.6

Total equity		639.3			351.3			1,385.6			(4.2	)		(1,726.1	)		645.9

Total liabilities and equity	$	688.4		$	1,866.2		$	3,216.5		$	33.8		$	(2,917.6	)	$	2,887.3

Condensed Consolidating Statement of Cash Flows

For the year ended December 31, 2016

(in millions of U.S. dollars)


							Cott			Cott
	Cott			Cott			Guarantor			Non-Guarantor			Elimination
	Corporation			Beverages Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
Net cash provided by (used in) operating activities	$	127.5		$	(37.0	)	$	152.9		$	88.1		$	(61.7	)	$	269.8

Investing Activities
Acquisition, net of cash received		(954.0	)		—			(5.4	)		—			—			(959.4	)
Additions to property, plant & equipment		(1.5	)		(24.7	)		(102.1	)		(11.5	)		—			(139.8	)
Additions to intangible assets		—			(3.3	)		(4.4	)		(0.4	)		—			(8.1	)
Proceeds from sale of property, plant & equipment		0.8			0.2			5.9			1.9			—			8.8
Proceeds from insurance recoveries		—			1.5			—			—			—			1.5
Other investing activities		—			—			0.4			—			—			0.4

Net cash used in investing activities		(954.7	)		(26.3	)		(105.6	)		(10.0	)		—			(1,096.6	)

Financing Activities
Payments of long-term debt		—			(2.7	)		(0.2	)		(0.7	)		—			(3.6	)
Issuance of long-term debt		498.7			—			—			—			—			498.7
Borrowings under ABL		176.4			2,225.2			—			1.6			—			2,403.2
Payments under ABL		(178.7	)		(2,140.2	)		—			(1.4	)		—			(2,320.3	)
Distributions to non-controlling interests		—			—			—			(7.7	)		—			(7.7	)
Issuance of common shares		366.8			—			—			—			—			366.8
Financing fees		(13.5	)		—			—			—			—			(13.5	)
Common shares repurchased and cancelled		(5.7	)		—			—			—			—			(5.7	)
Dividends to common shareholders		(31.4	)		—			—			—			—			(31.4	)
Payment of deferred consideration for acquisitions		—			—			(10.8	)		—			—			(10.8	)
Intercompany dividends		—			(16.9	)		(10.1	)		(34.7	)		61.7			—

Net cash provided by (used in) financing activities		812.6			65.4			(21.1	)		(42.9	)		61.7			875.7
Effect of exchange rate changes on cash		(1.4	)		—			(4.7	)		(1.8	)		—			(7.9	)

Net (decrease) increase in cash & cash equivalents		(16.0	)		2.1			21.5			33.4			—			41.0

Cash & cash equivalents, beginning of period		20.8			1.0			50.2			5.1			—			77.1

Cash & cash equivalents, end of period	$	4.8		$	3.1		$	71.7		$	38.5		$	—		$	118.1

Condensed Consolidating Statement of Cash Flows

For the year ended January 2, 2016

(in millions of U.S. dollars)


							Cott			Cott
	Cott			Cott			Guarantor			Non-Guarantor			Elimination
	Corporation			Beverages Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
Net cash provided by operating activities	$	56.2		$	127.4		$	106.5		$	17.3		$	(52.8	)	$	254.6

Investing Activities
Acquisition, net of cash received		—			—			(24.0	)		—			—			(24.0	)
Additions to property, plant & equipment		(2.0	)		(22.3	)		(85.2	)		(1.3	)		—			(110.8	)
Additions to intangible assets		—			(1.5	)		(3.1	)		—			—			(4.6	)
Proceeds from sale of property, plant & equipment and sale-leaseback		—			16.0			24.9			—			—			40.9
Other investing activities		—			—			(1.2	)		—			—			(1.2	)

Net cash used in investing activities		(2.0	)		(7.8	)		(88.6	)		(1.3	)		—			(99.7	)

Financing Activities
Payments of long-term debt		(0.1	)		(2.6	)		(0.3	)		(0.7	)		—			(3.7	)
Borrowings under ABL		—			950.2			44.3			—			—			994.5
Payments under ABL		—			(1,057.3	)		(44.5	)		—			—			(1,101.8	)
Distributions to non-controlling interests		—			—			—			(8.5	)		—			(8.5	)
Issuance of common shares		143.1			—			—			—			—			143.1
Financing fees		—			(0.6	)		—			—			—			(0.6	)
Preferred shares repurchased and cancelled		(148.8	)		—			—			—			—			(148.8	)
Common shares repurchased and cancelled		(0.8	)		—			—			—			—			(0.8	)
Dividends to common and preferred shareholders		(31.0	)		—			—			—			—			(31.0	)
Payment of deferred consideration for acquisitions		—			—			(2.5	)		—			—			(2.5	)
Intercompany dividends		—			(16.9	)		(27.1	)		(8.8	)		52.8			—

Net cash used in financing activities		(37.6	)		(127.2	)		(30.1	)		(18.0	)		52.8			(160.1	)
Effect of exchange rate changes on cash		(2.0	)		—			(1.6	)		(0.3	)		—			(3.9	)

Net increase (decrease) in cash & cash equivalents		14.6			(7.6	)		(13.8	)		(2.3	)		—			(9.1	)

Cash & cash equivalents, beginning of period		6.2			8.6			64.0			7.4			—			86.2

Cash & cash equivalents, end of period	$	20.8		$	1.0		$	50.2		$	5.1		$	—		$	77.1

Condensed Consolidating Statement of Cash Flows

For the year ended January 3, 2015

(in millions of U.S. dollars)


							Cott			Cott
	Cott			Cott			Guarantor			Non-Guarantor			Elimination
	Corporation			Beverages Inc.			Subsidiaries			Subsidiaries			Entries			Consolidated
Net cash provided by (used in) operating activities	$	42.0		$	(29.2	)	$	112.9		$	21.5		$	(90.5	)	$	56.7

Investing Activities
Acquisition, net of cash received		—			(798.5	)		—			—			—			(798.5	)
Additions to property, plant & equipment		(1.9	)		(27.1	)		(16.9	)		(0.8	)		—			(46.7	)
Additions to intangible assets		—			(6.9	)		—			—			—			(6.9	)
Proceeds from sale of property, plant & equipment		—			1.7			—			0.1			—			1.8

Net cash used in investing activities		(1.9	)		(830.8	)		(16.9	)		(0.7	)		—			(850.3	)

Financing Activities
Payments of long-term debt		(0.1	)		(392.0	)		(0.4	)		(1.1	)		—			(393.6	)
Issue of long-term debt		—			1,150.0			—			—			—			1,150.0
Borrowings under ABL		—			959.0			—			—			—			959.0
Payments under ABL		—			(746.2	)		(33.4	)		—			—			(779.6	)
Distributions to non-controlling interests		—			—			—			(8.5	)		—			(8.5	)
Financing fees		—			(24.0	)		—			—			—			(24.0	)
Common shares repurchased and cancelled		(12.1	)		—			—			—			—			(12.1	)
Dividends to common and preferred shareholders		(22.8	)		—			—			—			—			(22.8	)
Payment of deferred consideration for acquisitions		—			(32.4	)		—			—			—			(32.4	)
Intercompany financing transactions		—			(28.8	)		28.8			—			—			—
Other financing activities		—			(0.3	)		—			—			—			(0.3	)
Intercompany dividends		—			(17.8	)		(63.8	)		(8.9	)		90.5			—

Net cash (used in) provided by financing activities		(35.0	)		867.5			(68.8	)		(18.5	)		90.5			835.7
Effect of exchange rate changes on cash		(0.4	)		—			(2.3	)		(0.4	)		—			(3.1	)

Net increase in cash & cash equivalents		4.7			7.5			24.9			1.9			—			39.0

Cash & cash equivalents, beginning of period		1.5			1.1			39.1			5.5			—			47.2

Cash & cash equivalents, end of period	$	6.2		$	8.6		$	64.0		$	7.4		$	—		$	86.2