TRIARC COMPANIES INC - 10-K Annual Report

Back to GetFilings.com

[TRIARC LOGO]

TRIARC COMPANIES, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED

DECEMBER 29, 2002

================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-K

(MARK ONE)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 29, 2002.

OR

[ ] 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 1-2207
-------------------
TRIARC COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------

DELAWARE 38-0471180
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

280 PARK AVENUE 10017
NEW YORK, NEW YORK (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 451-3000
-------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None

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 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. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [x] No [ ]

The aggregate market value of the outstanding shares of the registrant's
Class A Common Stock (the only outstanding class of the registrant's common
equity) held by non-affiliates of the registrant was approximately $396,516,780
as of June 30, 2002. There were 20,448,722 shares of the registrant's Class A
Common Stock outstanding as of March 15, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

Items 10, 11, 12 and 13 of Part III of this 10-K incorporates information by
reference from an amendment hereto or to the registrant's definitive proxy
statement, in either case which will be filed no later than 120 days after
December 29, 2002.

================================================================================

PART I
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND PROJECTIONS

Certain statements in this Annual Report on Form 10-K, including statements
under 'Item 1. Business' and 'Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations,' that are not historical facts,
including most importantly, information concerning possible or assumed future
results of operations of Triarc Companies, Inc. and its subsidiaries and those
statements preceded by, followed by, or that include the words 'may,'
'believes,' 'expects,' 'anticipates,' or the negation thereof, or similar
expressions, constitute 'forward-looking statements' within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements which address
operating performance, events or developments that are expected or anticipated
to occur in the future, including statements relating to revenue growth,
earnings per share growth or statements expressing general optimism about future
operating results, are forward-looking statements within the meaning of the
Reform Act. These forward-looking statements are based on our current
expectations, speak only as of the date of this Form 10-K and are susceptible to
a number of risks, uncertainties and other factors. Our actual results,
performance and achievements may differ materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. For those statements, we claim the protection of the safe-harbor for
forward-looking statements contained in the Reform Act. Many important factors
could affect our future results and could cause those results to differ
materially from those expressed in the forward-looking statements contained
herein. Such factors include, but are not limited to, the following:

Competition, including pricing pressures, the potential impact of
competitors' new units on sales by Arby's'r' restaurants and consumers'
perceptions of the relative quality, variety and value of the food
products offered;

Success of operating initiatives;

Development and operating costs;

Advertising and promotional efforts;

Brand awareness;

The existence or absence of positive or adverse publicity;

Market acceptance of new product offerings;

New product and concept development by competitors;

Changing trends in consumer tastes and preferences (including changes
resulting from health or safety concerns with respect to the
consumption of beef, french fries or other foods or the effects of
food-borne illnesses) and in spending and demographic patterns;

The business and financial viability of key franchisees;

Availability, location and terms of sites for restaurant development by
the Company and its franchisees;

The ability of franchisees to open new restaurants in accordance with
their development commitments, including the ability of franchisees to
finance restaurant development;

Delays in opening new restaurants or completing remodels;

Anticipated and unanticipated restaurant closures by the Company and
its franchisees;

The ability to identify, attract and retain potential franchisees with
sufficient experience and financial resources to develop and operate
Arby's restaurants;

Changes in business strategy or development plans;

Quality of the Company's and franchisees' management;

Availability, terms and deployment of capital;

Business abilities and judgment of the Company's and franchisees'
personnel;

Availability of qualified personnel to the Company and to franchisees;

Labor and employee benefit costs;

1

Availability and cost of energy, raw materials, ingredients and
supplies;

The potential impact that interruptions in the distribution of supplies
of food and other products to Arby's restaurants could have on sales at
Company-owned restaurants and the royalties that Arby's receives from
franchisees;

Availability and cost of workers' compensation and general liability
premiums and claims experience;

Changes in national, regional and local economic, business or political
conditions in the countries and other territories in which the Company
and its franchisees operate;

Changes in government regulations, including franchising laws,
accounting standards, environmental laws, minimum wage rates and
taxation requirements;

The costs, uncertainties and other effects of legal, environmental and
administrative proceedings;

The impact of general economic conditions on consumer spending,
including a slower consumer economy and the effects of war or terrorist
activities;

Adverse weather conditions; and

Other risks and uncertainties affecting the Company and its
subsidiaries referred to in this Form 10-K (see especially 'Item 1.
Business -- Risk Factors' and 'Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations') and in our
other current and periodic filings with the Securities and Exchange
Commission, all of which are difficult or impossible to predict
accurately and many of which are beyond our control.

We will not undertake and specifically decline any obligation to publicly
release the result of any revisions which may be made to any forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events. In
addition, it is our policy generally not to make any specific projections as to
future earnings, and we do not endorse any projections regarding future
performance that may be made by third parties.

ITEM 1. BUSINESS.

INTRODUCTION

We are a holding company and, through our subsidiaries, the franchisor of
the Arby's restaurant system and an operator of 239 Arby's restaurants located
in the United States. Our corporate predecessor was incorporated in Ohio in
1929. We reincorporated in Delaware in June 1994. Our principal executive
offices are located at 280 Park Avenue, New York, New York 10017 and our
telephone number is (212) 451-3000. The Company makes its annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to such reports, available, free of charge, on its website as soon as
reasonably practicable after such reports are electronically filed with, or
furnished to, the Securities and Exchange Commission. Our website address is:
www.triarc.com. Information contained on our website is not part of this Annual
Report on Form 10-K.

BUSINESS STRATEGY

The key elements of our business strategy include (i) using our resources to
grow our restaurant franchising business and our restaurant operations, (ii)
evaluating and making various acquisitions and business combinations, whether in
the restaurant industry or otherwise, (iii) building strong operating management
teams for each of our current and future businesses and (iv) providing strategic
leadership and financial resources to enable these management teams to develop
and implement specific, growth-oriented business plans. The implementation of
this business strategy may result in increases in expenditures for, among other
things, acquisitions and, over time, marketing and advertising. See 'Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.' It is our policy to publicly announce an acquisition or business
combination only after an agreement with respect to such acquisition or business
combination has been reached.

2

The Company's cash, cash equivalents and investments (including restricted
cash, but excluding investments related to deferred compensation arrangements)
at December 29, 2002 totaled approximately $668 million. At such date, the
Company's consolidated indebtedness was approximately $387 million, including
approximately $255 million of debt issued by a subsidiary of Arby's, Inc. and
$98 million of debt issued by Sybra, Inc. None of the debt of the Arby's
subsidiary or Sybra has been guaranteed by Triarc. The Company's cash, cash
equivalents and investments (other than approximately $30.6 million of
restricted cash) do not secure such debt. The Company is evaluating its options
for the use of this significant cash, cash equivalents and investment position,
including acquisitions, share repurchases and investments.

ACQUISITION OF SYBRA, INC.

On December 27, 2002, the Company completed the acquisition of Sybra, Inc.,
the second largest franchisee of the Arby's'r' brand, pursuant to a plan of
reorganization previously confirmed by the United States Bankruptcy Court for
the Southern District of New York on November 25, 2002.

Sybra, Inc., formerly a subsidiary of I.C.H. Corporation which filed for
reorganization under Chapter 11 of the Bankruptcy Code in February 2002, owned
and operated, as of December 27, 2002, 239 Arby's restaurants in nine states
located primarily in Michigan, Texas, Pennsylvania, Florida and New Jersey. In
fiscal years 2001 and 2002, Sybra had revenues of approximately $200 million and
$209 million, respectively.

In return for 100% of the equity of a reorganized Sybra, the Company paid
approximately $8.3 million to ICH's creditors. In addition, the Company invested
approximately $14.2 million in Sybra and Sybra remains exclusively liable for
its long-term debt and capital lease obligations, which aggregated approximately
$98 million as of December 29, 2002. The Company has also made available to
Sybra a $5.0 million standby financing facility for each of three years (up to
$15.0 million in the aggregate) to fund any operating shortfalls of Sybra.

SALE OF BEVERAGE BUSINESS

As previously reported, on October 25, 2000, we completed the sale of our
beverage business by selling all the outstanding capital stock of Snapple
Beverage Group, Inc. and Royal Crown Company, Inc. to affiliates of Cadbury
Schweppes plc. The purchase and sale agreement for the transaction provided for
a post-closing adjustment, the amount of which is in dispute. Cadbury initially
stated that it believed that it was entitled to receive from us a post-closing
adjustment of approximately $27.6 million, and we initially stated, on the other
hand, that we believed that we were entitled to receive from Cadbury a
post-closing adjustment of approximately $5.6 million, in each case plus
interest from the closing date. An arbitrator was selected by Triarc and Cadbury
for the purpose of determining the amount of the post-closing adjustment. On
September 6, 2002 we filed a submission with the arbitrator in which we stated
that we believed that we are entitled to receive from Cadbury a post-closing
adjustment of approximately $0.8 million, plus interest from the closing date.
On October 21, 2002, Cadbury filed a submission with the arbitrator in which it
stated that it believes that it is entitled to receive from us a post-closing
adjustment of approximately $23.2 million, plus interest from the closing date.
In response to Cadbury's October 21, 2002 submission, on December 3, 2002, we
filed a reply submission with the arbitrator in which we stated that we believed
that neither party was entitled to a post-closing adjustment. Subsequent to the
filing of our reply submission, Cadbury requested the arbitrator to convene a
hearing for the purposes of taking witness testimony. By a letter to the
arbitrator dated December 20, 2002, we opposed such request. A decision on
Cadbury's request for a hearing has been deferred by the arbitrator pending
review of the parties' submissions. We currently expect the post-closing
adjustment process to be completed during 2003.

FISCAL YEAR

We use a 52/53 week fiscal year convention for Triarc and our subsidiaries
whereby our fiscal year ends each year on the Sunday that is closest to December
31 of that year. Each fiscal year generally is comprised of four 13 week fiscal
quarters, although in some years the fourth quarter represents a 14 week period.

3

BUSINESS SEGMENT

RESTAURANT FRANCHISING AND OPERATIONS (ARBY'S)

THE ARBY'S RESTAURANT SYSTEM

Through subsidiaries of Arby's, Inc. (which does business as the Triarc
Restaurant Group), which are the franchisors of the Arby's restaurant system, we
participate in the quick service restaurant segment of the domestic restaurant
industry. There are over 3,300 Arby's restaurants in the United States and
Canada and Arby's is the largest restaurant franchising system specializing in
the roast beef sandwich segment of the quick service restaurant industry.
According to Nation's Restaurant News, Arby's is the 9th largest quick service
restaurant chain in the United States. In addition to various slow-roasted roast
beef sandwiches, Arby's also offers an extensive menu of chicken, turkey, ham
and submarine sandwiches, side-dishes and salads. In 2001, Arby's introduced its
Market Fresh'r' line of turkey, ham, chicken and roast beef premium sandwiches
on a nationwide basis. Arby's also owns the T.J. Cinnamons'r' concept, which
consists of gourmet cinnamon rolls, gourmet coffees and other related products,
and the Pasta Connection'r' concept, which includes pasta dishes with a variety
of different sauces. Some Arby's franchisees multi-brand with T.J. Cinnamons or
Pasta Connection within their Arby's restaurants. Prior to the December 27, 2002
acquisition of Sybra (See Item 1. 'Business -- Acquisition of Sybra, Inc.'), all
of the Arby's restaurants were owned and operated by franchisees. As of December
29, 2002, there were 239 company-owned Arby's restaurants and 3,164 Arby's
restaurants were owned by franchisees. As of December 29, 2002, 469 franchisees
operated the 3,164 restaurants, of which 3,011 operated within the United States
and 153 operated outside the United States. Of the domestic restaurants, 264 are
multi-branded locations that sell T.J. Cinnamons products and 42 are
multi-branded locations that sell Pasta Connection products. At December 29,
2002, T.J. Cinnamons gourmet coffees were also sold in approximately 1,182
additional Arby's restaurants. Arby's is not currently offering to sell any
additional Pasta Connection franchises.

From 1998 to 2002, Arby's system-wide sales grew at a compound annual growth
rate of 4.8% to $2.7 billion. Through December 29, 2002, the Arby's system has
experienced six consecutive years of domestic same store sales growth compared
to the prior year. During 2002, our franchisees opened 116 new Arby's
restaurants and closed 64 Arby's restaurants. In addition, Arby's franchisees
opened 16 T.J. Cinnamons units in Arby's units in 2002. As of December 29, 2002,
franchisees have committed to open 553 Arby's restaurants over the next eight
years. You should read the information contained in 'Risk Factors -- Arby's is
dependent on restaurant revenues and openings;' and ' -- The number of Arby's
restaurants that open may not meet current commitments.'

GENERAL

As the franchisor of the Arby's restaurant system, Arby's, through its
subsidiaries, licenses the owners and operators of independent businesses to use
the Arby's brand name and trademarks in the operation of Arby's restaurants.
Arby's provides its franchisees with services designed to increase both the
revenue and profitability of their Arby's restaurants. The more important of
these services are providing strategic leadership for the brand, quality control
services, operational training and counseling regarding, and approval of, site
selection.

Prior to the acquisition of Sybra, the Company and its subsidiaries derived
all their revenues from two principal sources: (i) franchise royalties received
from all Arby's restaurants; and (ii) up-front franchise fees from its
restaurant operators for each new unit opened. As a result of the acquisition of
Sybra, the Company and its subsidiaries will derive a significant portion of
their revenues from sales at company-owned restaurants. Arby's current domestic
franchise royalty rate for new franchises is 4.0%.

On November 21, 2000, our subsidiary Arby's Franchise Trust completed an
offering of $290 million of 7.44% fixed rate insured notes due 2020 pursuant to
Rule 144A of the Securities Act. As a result of the financing and related
restructuring, Arby's continues to service the franchise agreements relating to
U.S. franchises and a subsidiary services the franchise agreements relating to
Canadian franchises with the assistance of Arby's. In connection with the
financing, Arby's engaged in a corporate restructuring pursuant to which it
formed a wholly-owned Delaware statutory business trust, Arby's Franchise Trust,
which became the franchisor of the Arby's restaurant system in the United States
and Canada. Arby's contributed its U.S. and Canadian franchise agreements,
development agreements, license option agreements and the rights to the revenues
from

4

those agreements to Arby's Franchise Trust. Arby's also formed a new
wholly-owned Delaware statutory business trust, Arby's IP Holder Trust, and
contributed to it all of the intellectual property, including the Arby's
trademark, necessary to operate the Arby's franchise system in the United States
and Canada. Arby's IP Holder Trust has granted Arby's Franchise Trust a 99-year
exclusive license to use such intellectual property. Arby's continues to service
the franchise agreements relating to U.S. franchises, and Arby's of Canada,
Inc., a wholly-owned subsidiary of Arby's, services the franchise agreements
relating to Canadian franchises with the assistance of Arby's. The servicing
functions are performed pursuant to separate servicing agreements with Arby's
Franchise Trust pursuant to which the servicers receive servicing fees from
Arby's Franchise Trust equal to their expenses, subject to a specified cap for
any 12-month period. Any residual cash flow received by Arby's Franchise Trust,
after taking into account all required monthly payments under the notes,
including interest and targeted principal repayments, may be distributed by
Arby's Franchise Trust to Arby's. See Note 10 to our Consolidated Financial
Statements.

ARBY'S RESTAURANTS

Arby's opened its first restaurant in Youngstown, Ohio in 1964. As of
December 29, 2002, franchisees operated Arby's restaurants in 49 states and five
foreign countries. As of December 29, 2002, the six leading states by number of
operating units were: Ohio, with 267 restaurants; Michigan, with 174
restaurants; Indiana, with 174 restaurants; Texas, with 160 restaurants;
Georgia, with 158 restaurants; and Florida, with 151 restaurants. The country
outside the United States with the most operating units is Canada with 130
restaurants.

Arby's restaurants in the United States and Canada typically range in size
from 2,500 square feet to 3,000 square feet. Restaurants in other countries
typically are larger than U.S. and Canadian restaurants. At December 29, 2002,
more than 96% of freestanding Arby's restaurants (including more than 96% of the
Company's freestanding Arby's restaurants) feature drive-thru windows.
Restaurants typically have a manager, at least one assistant manager and as many
as 30 full and part-time employees. Staffing levels, which vary during the day,
tend to be heaviest during the lunch hours.

The following table sets forth the number of Arby's restaurants at the
beginning and end of each year from 2000 to 2002:

During the period from January 1, 2000 through December 29, 2002, 403 new
Arby's restaurants were opened and 228 Arby's restaurants (generally,
underperforming restaurants) were closed by franchisees. We believe that closing
underperforming Arby's restaurants has contributed to an increase in the average
annual unit sales volume of the Arby's system, as well as to an improvement of
the overall brand image of Arby's.

As of December 29, 2002, the Company operated 239 domestic Arby's
restaurants. Of such 239 restaurants, 212 were free-standing units, 14 were
located in shopping malls, eight were in food courts and five were in strip
center locations.

FRANCHISE NETWORK

Arby's seeks to identify potential franchisees that have experience in
owning and operating quick-service restaurant units, have a willingness to
develop and operate Arby's restaurants and have sufficient net worth. Arby's
identifies applicants through targeted mailings, maintaining a presence at
industry trade shows and conventions, existing customer and supplier contacts
and regularly placed advertisements in trade and other publications. Prospective
franchisees are contacted by an Arby's sales agent and complete an application
for a franchise. As part of the application process, Arby's requires and reviews
substantial documentation, including financial statements and documents relating
to the corporate or other business organization of the applicant. Franchisees
that already operate one or more Arby's restaurants must satisfy certain
criteria in order to be

5

eligible to enter into additional franchise agreements, including capital
resources commensurate with the proposed development plan submitted by the
franchisee, a commitment by the franchisee to employ trained restaurant
management and to maintain proper staffing levels, compliance by the franchisee
with all of its existing franchise agreements, a record of operation in
compliance with Arby's operating standards, a satisfactory credit rating and the
absence of any existing or threatened legal disputes with Arby's. The initial
term of the typical 'traditional' franchise agreement is 20 years. Arby's does
not offer any financing arrangements to its franchisees.

During 2002, Arby's franchisees opened seven new restaurants in one foreign
country and closed seven restaurants in three foreign countries. Arby's also had
territorial agreements with international franchisees in two countries as of
December 29, 2002. Under the terms of these territorial agreements, these
international franchisees have the exclusive right to open Arby's restaurants in
specific regions or countries.

Arby's offers franchises for the development of both single and multiple
'traditional' restaurant locations. Both new and existing franchisees may enter
into either a master development agreement, which requires the franchisee to
develop two or more Arby's restaurants in a particular geographic area within a
specified time period, or a license option agreement that grants the franchisee
the option, exercisable for a one year period, to build an Arby's restaurant on
a specified site. All franchisees are required to execute standard franchise
agreements. Arby's standard U.S. franchise agreement for new franchises
currently requires an initial $37,500 franchise fee for the first franchised
unit and $25,000 for each subsequent unit and a monthly royalty payment equal to
4.0% of restaurant sales for the term of the franchise agreement. Franchisees
typically pay a $10,000 commitment fee, credited against the franchise fee
during the development process for a new restaurant. Because of lower royalty
rates still in effect under earlier agreements, the average royalty rate paid by
franchisees was approximately 3.3% in 2001 and 3.4% in 2002.

Franchised restaurants are required to be operated under uniform operating
standards and specifications relating to the selection, quality and preparation
of menu items, signage, decor, equipment, uniforms, suppliers, maintenance and
cleanliness of premises and customer service. Arby's monitors franchisee
operations and inspects restaurants periodically to ensure that company
practices and procedures are being followed.

ADVERTISING AND MARKETING

Arby's advertises primarily through regional television, radio and
newspapers. Payment for advertising time and space is made by local advertising
cooperatives in which owners of local franchised restaurants and the Company, to
the extent that it owns local company owned restaurants, participate. The
Company and Arby's franchisees contribute 0.7% of net sales of their Arby's
restaurants to the AFA Service Corporation, which produces advertising and
promotional materials for the system. The Company and Arby's franchisees are
also required to spend a reasonable amount, but not less than 3% of monthly net
sales of their Arby's restaurants, for local advertising. This amount is divided
between the individual local market advertising expense and the expenses of a
cooperative area advertising program with the Company operated restaurants and
those franchisees who are operating Arby's restaurants in that area.
Contributions to the cooperative area advertising program are determined by the
participants in the program and are generally in the range of 3% to 5% of
monthly net sales. Arby's and AFA Service Corporation have entered into an
agreement pursuant to which the Arby's system had two flights of national
advertising in 2001, three flights of national advertising in 2002 and will have
an additional three flights of national advertising in 2003. Under the
agreement, Arby's is contributing $8.2 million over the three-year period ($3.1
million of which was expensed in 2002 and $3.1 million of which will be expensed
in 2003) for the eight flights. The Company and Arby's franchisees are also
required to contribute incremental dues to AFA Service Corporation equal to 0.5%
of net sales of their Arby's restaurants (bringing their total contribution to
advertising and marketing to 1.2% of net sales) to help fund the program. In
addition, during the first two years of the program, AFA Service Corporation has
contributed $3.8 million to the program and will contribute an additional $1.6
million to the program in 2003.

PROVISIONS AND SUPPLIES

Three independent meat processors provide all of Arby's roast beef in the
United States. Franchise operators are required to obtain roast beef from one of
these three approved suppliers. ARCOP, Inc., a non-profit purchasing
cooperative, negotiates contracts with approved suppliers on behalf of the
Company and

6

Arby's franchisees. Arby's believes that satisfactory arrangements could be made
to replace any of the current roast beef suppliers, if necessary, on a timely
basis.

Franchisees may obtain other products, including food, beverage,
ingredients, paper goods, equipment and signs, from any source that meets Arby's
specifications and approval. Suppliers to the Arby's system must comply with
USDA and USFDA regulations governing the manufacture, packaging, storage,
distribution and sale of all food and packaging products. Through ARCOP, the
Company and Arby's franchisees purchase food, proprietary paper and operating
supplies through national contracts employing volume purchasing. You should read
the information contained in 'Item 1 -- Risk Factors -- Arby's is dependent on
restaurant revenues and openings.'

QUALITY ASSURANCE

Arby's has developed a quality assurance program designed to maintain
standards and uniformity of the menu selections at each of its franchised
restaurants. Arby's assigns a full-time quality assurance employee to each of
the five independent processing facilities that processes roast beef for Arby's
domestic restaurants. The quality assurance employee inspects the roast beef for
quality and uniformity and to assure compliance with quality and safety
specifications of the United States Department of Agriculture and the United
States Food and Drug Administration. In addition, a laboratory at Arby's
headquarters periodically tests samples of roast beef from franchisees. Each
year, Arby's representatives conduct unannounced inspections of operations of a
number of franchisees to ensure that Arby's policies, practices and procedures
are being followed. Arby's field representatives also provide a variety of
on-site consulting services to franchisees. Arby's has the right to terminate
franchise agreements if franchisees fail to comply with quality standards.

GENERAL

TRADEMARKS

We own several trademarks that are considered material to our business,
including Arby's'r', T.J. Cinnamons'r', Pasta Connection'r', Arby's Market
Fresh'TM', Market Fresh'r' and Sidekickers'r'.

Our material trademarks are registered or pending trademarks in the U.S.
Patent and Trademark Office and various foreign jurisdictions. Registrations for
such trademarks in the United States will last indefinitely as long as the
trademark owners continue to use and police the trademarks and renew filings
with the applicable governmental offices. There are no pending challenges to our
right to use any of our material trademarks in the United States.

COMPETITION

Arby's faces direct and indirect competition from numerous well-established
competitors, including national and regional quick service restaurant chains,
such as McDonald's, Burger King and Wendy's, and quick casual restaurant chains.
In addition, Arby's competes with locally owned restaurants, drive-ins, diners
and other similar establishments. Key competitive factors in the quick service
restaurant industry are price, quality of products, quality and speed of
service, advertising, name identification, restaurant location and
attractiveness of facilities.

Many of the leading restaurant chains have focused on new unit development
as one strategy to increase market share through increased consumer awareness
and convenience. This has led to increased competition for available development
sites and higher development costs for those sites. This has also led some
competitors to employ other strategies, including frequent use of price
promotions and heavy advertising expenditures. In 2002, there was increased
price competition among national fast food hamburger chains. Although Arby's
experienced an increase in sales in 2002, continued price discounting in the QSR
industry could have an adverse impact on Arby's and the Company.

Additional competitive pressures for prepared food purchases have come more
recently from operators outside the restaurant industry. Several major grocery
chains have begun offering fully prepared food and meals to go as part of their
deli sections. Some of these chains also have added in-store cafes with service
counters and tables where consumers can order and consume a full menu of items
prepared especially for that portion of the operation.
7

Many of our competitors have substantially greater financial, marketing,
personnel and other resources than we do.

GOVERNMENTAL REGULATIONS

Various state laws and the Federal Trade Commission regulate Arby's
franchising activities. The Federal Trade Commission requires that franchisors
make extensive disclosure to prospective franchisees before the execution of a
franchise agreement. Several states require registration and disclosure in
connection with franchise offers and sales and have 'franchise relationship
laws' that limit the ability of franchisors to terminate franchise agreements or
to withhold consent to the renewal or transfer of these agreements. Furthermore,
the United States Congress has also considered, and there is currently pending,
legislation governing various aspects of the franchise relationship. In
addition, the Company and Arby's franchisees must comply with the Fair Labor
Standards Act and the Americans with Disabilities Act (the 'ADA'), which
requires that all public accommodations and commercial facilities meet federal
requirements related to access and use by disabled persons, and various state
and local laws governing matters that include, for example, the handling,
preparation and sale of food and beverages, minimum wages, overtime and other
working and safety conditions. Compliance with the ADA requirements could
require removal of access barriers and non-compliance could result in imposition
of fines by the U.S. government or an award of damages to private litigants.
Although we believe that our facilities are substantially in compliance with all
applicable government rules and regulations, including requirements under the
ADA, the Company may incur additional costs to comply with the ADA. However, we
do not believe that any such costs would have a material adverse effect on the
Company's consolidated financial position or results of operations. We cannot
predict the effect on our operations, particularly on our relationship with
franchisees, of any pending or future legislation.

ENVIRONMENTAL MATTERS

Our past and present operations are governed by federal, state and local
environmental laws and regulations concerning the discharge, storage, handling
and disposal of hazardous or toxic substances. These laws and regulations
provide for significant fines, penalties and liabilities, sometimes without
regard to whether the owner or operator of the property knew of, or was
responsible for, the release or presence of the hazardous or toxic substances.
In addition, third parties may make claims against owners or operators of
properties for personal injuries and property damage associated with releases of
hazardous or toxic substances. We cannot predict what environmental legislation
or regulations will be enacted in the future or how existing or future laws or
regulations will be administered or interpreted. We similarly cannot predict the
amount of future expenditures which may be required to comply with any
environmental laws or regulations or to satisfy any claims relating to
environmental laws or regulations. We believe that our operations comply
substantially with all applicable environmental laws and regulations.
Accordingly, the environmental matters in which we are involved generally relate
either to properties that our subsidiaries own, but on which they no longer have
any operations, or properties that we or our subsidiaries have sold to third
parties, but for which we or our subsidiaries remain liable or contingently
liable for any related environmental costs. Our company-owned Arby's restaurants
have not been the subject of any material environmental matters. Based on
currently available information, including defenses available to us and/or our
subsidiaries, and our current reserve levels, we do not believe that the
ultimate outcome of the environmental matter discussed below or in which we are
otherwise involved will have a material adverse effect on our consolidated
financial position or results of operations. See 'Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations' below.

In 2001, a vacant property owned by our indirect subsidiary, Adams Packing
Association, Inc., was listed by the U.S. Environmental Protection Agency on the
Comprehensive Environmental Response, Compensation and Liability Information
System ('CERCLIS') list of known or suspected contaminated sites. The CERCLIS
listing appears to have been based on an allegation that a former tenant of
Adams Packing conducted drum recycling operations at the site from some time
prior to 1971 until the late 1970s. The business operations of Adams Packing
were sold in December 1992. Adams Packing engaged an environmental consultant
that, under the supervision of the Florida Department of Environmental
Protection (the 'FDEP'), conducted an investigation of the site that was
intended to develop additional information on the extent and nature of the soil
and groundwater contamination and the appropriate remediation for that
contamination. Adams Packing's

8

environmental consultant has submitted to the FDEP a summary of the results of
this investigation and Adams Packing and the FDEP have negotiated a work plan
for further investigation of the site and limited remediation of the identified
contamination. The work plan is embodied in a consent order between Adams
Packing and the FDEP. The consent order has been executed by Adams Packing and
the FDEP and is effective, subject to a petition for administrative hearing
being filed during the statutory public comment period. Based on a preliminary
cost estimate of approximately $1.0 million for completion of the work plan,
developed by Adams Packing's environmental consultant, and Adams Packing's
current reserve levels, and after taking into consideration various legal
defenses available to us and/or Adams Packing, the cost of further
investigation and remediation at the site is not expected to have a material
adverse effect on our consolidated financial position or results of operations.
See 'Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources.'

SEASONALITY

Our consolidated results are not significantly impacted by seasonality,
however, our restaurant franchising royalty revenues and our restaurant sales
are somewhat lower in our first quarter.

EMPLOYEES

As of December 29, 2002, we had 5,030 employees, including 422 salaried
employees and 4,608 hourly employees. As of December 29, 2002, none of our
employees were covered by a collective bargaining agreement. We believe that
employee relations are satisfactory.

RISK FACTORS

We wish to caution readers that in addition to the important factors
described elsewhere in this Form 10-K, the following important factors, among
others, sometimes have affected, or in the future could affect, our actual
results and could cause our actual consolidated results during 2003, and beyond,
to differ materially from those expressed in any forward-looking statements made
by us or on our behalf.

HOLDING COMPANY STRUCTURE.

Because we are a holding company, our ability to service debt and pay
dividends, including dividends on our common stock, is primarily dependent upon,
in addition to our cash, cash equivalents and short-term investments on hand,
cash flows from our subsidiaries, including loans, cash dividends and
reimbursement by subsidiaries to us in connection with providing certain
management services and payments by subsidiaries under certain tax sharing
agreements.

Under the terms of the indenture relating to the notes issued in the Arby's
securitization and the agreements relating to debt issued by Sybra, there are
restrictions on the ability of certain of our subsidiaries to pay dividends
and/or make loans or advances to us. The ability of any of our subsidiaries to
pay cash dividends and/or make loans or advances to us is also dependent upon
the respective abilities of such entities to achieve sufficient cash flows after
satisfying their respective cash requirements, including debt service, to enable
the payment of such dividends or the making of such loans or advances. In
addition, in connection with the December 2002 acquisition of Sybra, Triarc
agreed that Sybra would not pay dividends to it for a period of two years from
the closing.

In addition, our equity interests in our subsidiaries rank junior to all of
the respective indebtedness, whenever incurred, of such entities in the event of
their respective liquidation or dissolution. As of December 29, 2002, our
subsidiaries had aggregate indebtedness of approximately $387 million excluding
intercompany indebtedness.

WE HAVE BROAD DISCRETION IN THE USE OF OUR SIGNIFICANT CASH, CASH
EQUIVALENTS AND INVESTMENT POSITION.

We have not designated any specific use for our significant cash, cash
equivalents and investment position. We are evaluating options for the use of
these funds, including acquisitions, share repurchases and investments.

9

We have significant flexibility in selecting the opportunities that we will
pursue. See 'Item 1. Business -- Business Strategy.'

ACQUISITIONS ARE A KEY ELEMENT OF OUR BUSINESS STRATEGY, BUT WE CANNOT
ASSURE YOU THAT WE WILL BE ABLE TO IDENTIFY APPROPRIATE ACQUISITION TARGETS
IN THE FUTURE AND THAT WE WILL BE ABLE TO SUCCESSFULLY INTEGRATE ANY FUTURE
ACQUISITIONS INTO OUR EXISTING OPERATIONS.

Acquisitions involve numerous risks, including difficulties assimilating new
operations and products. In addition, acquisitions may require significant
management time and capital resources. We cannot assure you that we will have
access to the capital required to finance potential acquisitions on satisfactory
terms, that any acquisition would result in long-term benefits to us or that
management would be able to manage effectively the resulting business. Future
acquisitions are likely to result in the incurrence of additional indebtedness
or the issuance of additional equity securities.

WE MAY HAVE TO TAKE ACTIONS THAT WE WOULD NOT OTHERWISE TAKE SO AS NOT TO BE
DEEMED AN 'INVESTMENT COMPANY.'

The Investment Company Act of 1940, as amended (the '1940 Act'), requires
the registration of, and imposes various restrictions on, companies that do not
meet certain financial tests regarding the composition of their assets and
source of income. A company may be deemed to be an investment company if it owns
'investment securities' with a value exceeding 40% of its total assets
(excluding government securities and cash items) on an unconsolidated basis or
if more than 45% of the value of its total assets consists of, or more than 45%
of its net after-tax income/loss is derived from, securities of companies it
does not control. Our acquisition strategy may require us to take actions that
we would not otherwise take so as not to be deemed an 'investment company' under
the 1940 Act. Investment companies are subject to registration under, and
compliance with, the 1940 Act unless a particular exclusion or safe harbor
provision applies. Presently, the total amount of investment securities that we
hold is substantially less than 40% of our total assets and substantially less
than 45% of our total assets consist of, and substantially less than 45% of our
net after-tax income/loss is derived from, securities of companies we do not
control. If in the future we were to be deemed an investment company, we would
become subject to the requirements of the 1940 Act. We intend to make
acquisitions and other investments in a manner so as not to be deemed an
investment company. As a result, we may forego investments that we might
otherwise make or retain or dispose of investments or assets that we might
otherwise sell or hold.

IN THE FUTURE WE MAY HAVE TO TAKE ACTIONS THAT WE WOULD NOT OTHERWISE TAKE
SO AS NOT TO BE SUBJECT TO TAX AS A 'PERSONAL HOLDING COMPANY.'

If at any time during the last half of our taxable year, five or fewer
individuals own or are deemed to own more than 50% of the total value of our
shares and if during such taxable year we receive 60% or more of our gross
income from specified passive sources, we would be classified as a 'personal
holding company' for the U.S. federal income tax purposes. If this were the
case, we would be subject to additional taxes at the rate of 38.6% on a portion
of our income, to the extent this income is not distributed to shareholders. We
do not currently expect to have any liability for tax under the personal holding
company rules in 2003. However, we cannot assure you that we will not become
liable for such tax in the future. Because we do not wish to be classified as a
personal holding company or to incur any personal holding company tax, we may be
required in the future to take actions that we would not otherwise take. These
actions may influence our strategic and business decisions, including causing us
to conduct our business and acquire or dispose of investments differently than
we otherwise would.

OUR SUBSIDIARIES ARE SUBJECT TO VARIOUS RESTRICTIONS, AND SUBSTANTIALLY ALL
OF THEIR ASSETS ARE PLEDGED, UNDER CERTAIN DEBT AGREEMENTS.

Under our subsidiaries' debt agreements, substantially all of our
subsidiaries' assets, other than cash, cash equivalents and short-term
investments, are pledged as collateral security. The indenture relating to the
notes issued in the Arby's securitization and the agreements relating to debt
issued by Sybra contain financial covenants that, among other things, require
Arby's Franchise Trust and Sybra, as applicable, to maintain certain

10

financial ratios and restrict their ability to incur debt, enter into certain
fundamental transactions (including sales of all or substantially all of their
assets and certain mergers and consolidations) and create or permit liens. If
either Arby's Franchise Trust or Sybra is unable to generate sufficient cash
flow or otherwise obtain the funds necessary to make required payments of
interest or principal under, or is unable to comply with covenants of, its
respective debt agreements, it would be in default under the terms of such
agreements which would, under certain circumstances, permit the insurer of the
notes issued in the Arby's securitization or the lenders to Sybra, as
applicable, to accelerate the maturity of the balance of its indebtedness. You
should read the information in Note 10 to the Consolidated Financial Statements.

ARBY'S IS DEPENDENT ON RESTAURANT REVENUES AND OPENINGS.

Prior to the acquisition of Sybra, the principal source of revenues for our
restaurant business was royalty fees received from franchisees. Following the
acquisition, such royalties and fees will continue to comprise a significant
portion of our revenues and earnings. Our future revenues and earnings will be
highly dependent on the gross revenues of company-owned Arby's restaurants and
of Arby's franchisees' restaurants and the number of Arby's restaurants that we
and Arby's franchisees operate. In addition, it is possible that interruptions
in the distribution of supplies to Arby's restaurants could adversely affect
sales at Company-owned restaurants and result in a decline in royalty fees that
we receive from Arby's franchisees.

THE LEVEL OF GROSS REVENUES OF ARBY'S RESTAURANTS MAY NOT CONTINUE.

Competition is intense among national brand franchisors and smaller chains
in the restaurant industry to grow their franchise systems. Arby's restaurants
are generally in competition for customers with franchisees of other national
and regional quick service and quick casual restaurant chains and with locally
owned restaurants. We cannot assure you that the level of gross revenues of
Company-owned restaurants and of restaurants owned by Arby's franchisees, upon
which our royalty fees are dependent, will continue.

THE NUMBER OF ARBY'S RESTAURANTS THAT OPEN MAY NOT MEET CURRENT COMMITMENTS.

Numerous factors beyond our control affect restaurant openings. These
factors include the ability of potential restaurant owners to obtain financing,
locate appropriate sites for restaurants and obtain all necessary state and
local construction, occupancy and other permits and approvals. Although as of
December 29, 2002 franchisees had signed commitments to open 553 Arby's
restaurants and have made or are required to make non-refundable deposits of
$10,000 per restaurant, we cannot assure you that these commitments will result
in open restaurants. See 'Item 1. Business -- Business Segment -- Restaurant
Franchising and Operations (Arby's) -- Franchise Network.' In addition, we
cannot assure you that our franchisees will successfully develop and operate
their restaurants in a manner consistent with our standards.

ARBY'S FRANCHISE REVENUES DEPEND, TO A SIGNIFICANT EXTENT, ON ITS LARGEST
FRANCHISEE AND A DECLINE IN ITS REVENUE MAY INDIRECTLY ADVERSELY AFFECT US.

During 2002, Arby's received approximately 27% of its royalties and
franchise and related fees from RTM Restaurant Group, Inc. ('RTM') (which as of
December 29, 2002, operated 783 Arby's restaurants). Arby's revenues could
decline from their present levels if RTM suffered a significant decline in its
business.

COMPETITION FROM RESTAURANT COMPANIES COULD ADVERSELY AFFECT US.

A significant portion of our revenues and earnings comes from restaurant
franchising and operations. The business sectors in which we and Arby's
franchisees compete are highly competitive (e.g., with respect to price, food
quality and presentation, service, location, and the nature and condition of the
financed business unit/location), and are affected by changes in tastes and
eating habits, local, regional and national economic conditions and population
and traffic patterns. Arby's restaurants compete with a variety of locally-owned
restaurants, as well as competitive regional and national chains and franchises.
Moreover, new companies may enter the Company's or a franchisee's respective
market area and target sales audience. Such competition may have, among other
things, lower operating costs, lower debt service requirements, better
locations, better facilities, better management, more effective marketing and
more efficient operations. All such competition

11

may adversely affect our revenues and profits or those of Arby's franchisees and
could adversely affect the ability of franchisees to make required payments to
Arby's. Furthermore, we and Arby's franchisees face competition for competent
employees and high levels of employee turnover, which also can have an adverse
effect on our operations and revenues and those of Arby's franchisees and on
franchisees' abilities to make required payments to Arby's. Many of Arby's
competitors have substantially greater financial, marketing, personnel and other
resources than Arby's.

CHANGES IN CONSUMER TASTES AND PREFERENCES AND IN SPENDING AND DEMOGRAPHIC
PATTERNS, AS WELL AS HEALTH AND SAFETY CONCERNS ABOUT FOOD QUALITY, COULD
RESULT IN A LOSS OF CUSTOMERS AND REDUCE THE ROYALTIES THAT WE RECEIVE.

The quick service restaurant industry is often affected by changes in
consumer tastes, national, regional and local economic conditions, discretionary
spending priorities, demographic trends, traffic patterns and the type, number
and location of competing restaurants. Consumer preferences could also be
affected by health or safety concerns with respect to the consumption of beef,
french fries or other foods or with respect to the effects of food borne
illnesses. As is generally the case in the restaurant franchise business, we and
our franchisees may, from time to time, be the subject of complaints or
litigation from customers alleging illness, injury or other food quality, health
or operational concerns. Adverse publicity resulting from these allegations may
harm the reputation of Arby's restaurants, even if the allegations are not
valid, we are not found liable or those concerns relate only to a single
restaurant or a limited number of restaurants. Moreover, complaints, litigation
or adverse publicity experienced by one or more of our franchisees could also
adversely affect our business as a whole. If Arby's is unable to adapt to
changes in consumer preferences and trends, or we have adverse publicity due to
any of these concerns, we and our franchisees may lose customers and the
resulting revenues from company-owned restaurants and the royalties that Arby's
receives from its franchisees may decline.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, WHICH
COULD HARM THE VALUE OF OUR BRANDS AND ADVERSELY AFFECT OUR BUSINESS.

Our intellectual property is material to the conduct of our business. We
rely on a combination of trademarks, copyrights, service marks, trade secrets
and similar intellectual property rights to protect our brands and other
intellectual property. The success of our business strategy depends, in part, on
our continued ability to use our existing trademarks and service marks in order
to increase brand awareness and further develop our branded products in both
domestic and international markets. If our efforts to protect our intellectual
property are not adequate, or if any third party misappropriates or infringes on
our intellectual property, either in print or on the Internet, the value of our
brands may be harmed, which could have a material adverse effect on our
business, including the failure of our brands to achieve and maintain market
acceptance.

We franchise our restaurant brands to various franchisees. While we try to
ensure that the quality of our brands is maintained by all of our franchisees,
we cannot assure you that these franchisees will not take actions that adversely
affect the value of our intellectual property or the reputation of the Arby's
restaurant system.

We have registered certain trademarks and have other trademark registrations
pending in the U.S. and certain foreign jurisdictions. The trademarks that we
currently use have not been registered in all of the countries outside of the
United States in which we do business and may never be registered in all of
these countries.

We cannot assure you that all of the steps we have taken to protect our
intellectual property in the U.S. and foreign countries will be adequate. In
addition, the laws of some foreign countries do not protect intellectual
property rights to the same extent as the laws of the U.S.

WE REMAIN CONTINGENTLY LIABLE WITH RESPECT TO CERTAIN OBLIGATIONS RELATING
TO BUSINESSES THAT WE HAVE SOLD.

As previously reported, in 1997 we sold all of our then company-owned Arby's
restaurants to subsidiaries of RTM, Arby's largest franchisee. In connection
with the sale, an aggregate of approximately $54.7 million of mortgage and
equipment notes were assumed by subsidiaries of RTM, of which approximately
$42.0 million was outstanding at December 29, 2002. RTM has guaranteed the
payment of these notes by its subsidiaries. Notwithstanding the assumption of
this debt and guaranty, we remain contingently liable as a guarantor of the
notes. In addition, the subsidiaries of RTM also assumed substantially all of
the lease obligations relating to the

12

purchased restaurants (which aggregate a maximum of approximately $66.0 million
at December 29, 2002) and RTM has indemnified us for any losses we might incur
with respect to such leases. Notwithstanding such assumption, we remain
contingently liable if RTM's subsidiaries fail to make the required payments
under those leases.

In addition, in July 1999, the Company sold 41.7% of its remaining 42.7%
interest in National Propane Partners, L.P. and a sub-partnership, National
Propane, L.P. to Columbia Energy Group, and retains less than a 1% special
limited partner interest in AmeriGas Eagle Propane, L.P. (formerly known as
National Propane, L.P. and as Columbia Propane, L.P.). As part of the
transaction, our subsidiary, National Propane Corporation, agreed that while it
remains a special limited partner of AmeriGas, it would indemnify the owner of
AmeriGas for any payments the owner makes under certain debt of AmeriGas
(aggregating approximately $138.0 million as of December 29, 2002), if AmeriGas
is unable to repay or refinance such debt, but only after recourse to the assets
of AmeriGas. Either National Propane Corporation or AmeriGas Propane, L.P., the
owner of AmeriGas, may require AmeriGas to repurchase the special limited
partner interest. However, we believe it is unlikely that either party would
require repurchase prior to 2009 as either AmeriGas Propane, L.P. would owe us
tax indemnification payments or we would accelerate payment of deferred taxes
associated with our sale of the propane business.

Although the Company believes that it is unlikely that it will be called
upon to make any payments under the guaranty, leases or indemnification
described above, if the Company were required to make such payments it could
have a material adverse effect on the financial position or results of
operations of the Company. You should read the information in 'Item. 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources' and in Note 22 to the
Consolidated Financial Statements.

CHANGES IN GOVERNMENTAL REGULATION MAY ADVERSELY AFFECT OUR ABILITY TO OPEN
NEW RESTAURANTS OR OTHERWISE ADVERSELY AFFECT OUR EXISTING AND FUTURE
OPERATIONS AND RESULTS.

Each of our restaurants is subject to licensing and regulation by health,
sanitation, safety and other agencies in the state and/or municipality in which
the restaurant is located. There can be no assurance that we will not experience
material difficulties or failures in obtaining the necessary licenses or
approvals for our restaurants which could delay the opening of such restaurants
in the future. In addition, more stringent and varied requirements of local and
tax governmental bodies with respect to zoning, land use and environmental
factors could delay or prevent development of new restaurants in particular
locations. We are also subject to the Fair Labor Standards Act which governs
such matters as minimum wages, overtime and other working conditions, along with
the Americans with Disabilities Act, family leave mandates and a variety of
other laws enacted by the states that govern these and other employment law
matters. We cannot predict the amount of future expenditures which may be
required in order to comply with any changes in existing regulations or to
comply with any future regulations that may become applicable to our business.

Certain of our current and past operations are or have been subject to
federal, state and local environmental laws and regulations concerning the
discharge, storage, handling and disposal of hazardous or toxic substances. Such
laws and regulations provide for significant fines, penalties and liabilities,
in certain cases without regard to whether the owner or operator of the property
knew of, or was responsible for, the release or presence of such hazardous or
toxic substances. In addition, third parties may make claims against owners or
operators of properties for personal injuries and property damage associated
with releases of hazardous or toxic substances. Although we believe that our
operations comply in all material respects with all applicable environmental
laws and regulations, we cannot predict what environmental legislation or
regulations will be enacted in the future or how existing or future laws or
regulations will be administered or interpreted. We cannot predict the amount of
future expenditures which may be required in order to comply with any
environmental laws or regulations or to satisfy any such claims. See 'Item 1.
Business -- General -- Environmental Matters.'

ITEM 2. PROPERTIES.

We believe that our properties, taken as a whole, are generally well
maintained and are adequate for our current and foreseeable business needs. We
lease each of our material properties.

13

The following table contains information about our material facilities as of
December 29, 2002:

- ---------

* We are currently seeking to sublet approximately 4,600 square feet of this
space.

** Approximately 1,140 square feet of this space is subleased from Arby's by a
third party.

Arby's also owns two and leases five properties which are leased or sublet
principally to franchisees and has a lease for one inactive property. Our other
subsidiaries also own or lease a few inactive facilities and undeveloped
properties, none of which are material to our financial condition or results of
operations.

At December 29, 2002, Sybra's 239 restaurants were located in the following
states: 75 were in Michigan, 67 in Texas, 39 in Pennsylvania, 21 in Florida, 14
in New Jersey, 10 in Maryland, 8 in Connecticut, 4 in Virginia and 1 in West
Virginia. In addition to its Arby's restaurant locations, Sybra also leases
office space in San Diego, California and New York, New York for its corporate
and executive offices and in Flint, Michigan, Sinking Spring, Pennsylvania,
Plano, Texas and Temple Terrace, Florida for its regional operations centers.

ITEM 3. LEGAL PROCEEDINGS.

On March 23, 1999, Norman Salsitz, a stockholder of Triarc, filed a
complaint in the United States District Court for the Southern District of New
York against Triarc, Nelson Peltz and Peter May. In an amended complaint filed
in April 2000, Mr. Salsitz purported to assert a claim for alleged violation of
Section 14(e) of the Securities Exchange Act of 1934, as amended, on behalf of
all persons who held our stock as of March 10, 1999. The amended complaint
alleged that our tender offer statement in connection with the 1999 'Dutch
Auction' self-tender offer was materially false and misleading in that, among
other things, it failed to disclose alleged recent valuations of Triarc. The
amended complaint sought damages in an amount to be determined, together with
prejudgment interest, the costs of suit, including attorneys' fees, an order
permitting all shareholders who tendered their shares in the Dutch Auction
Tender Offer to rescind the transaction, and unspecified other relief. On
November 16, 2001, the defendants moved for summary judgment dismissing the
action in its entirety, and the plaintiff moved to certify a class consisting of
all persons or entities who held stock in Triarc as of March 10, 1999 and
allegedly suffered damages thereby. On October 17, 2002, the court denied the
plaintiff's motion for class certification and granted the defendants' motion
for summary judgment, and subsequently entered judgment dismissing the case. On
November 21, 2002, plaintiff filed a notice of appeal to the United States Court
of Appeals for the Second Circuit. On February 28, 2003, the plaintiff withdrew
his appeal.

In October 1998, various class actions were brought on behalf of our
stockholders in the Court of Chancery of the State of Delaware. These class
actions name Triarc, Messrs. Peltz and May and directors of Triarc as
defendants. On March 26, 1999, four of the plaintiffs in these actions filed an
amended complaint making allegations substantially similar to those asserted in
the Salsitz case described above. In October 2000, the plaintiffs agreed to stay
these actions pending determination of the Salsitz action.

We believe that the outcome of any of the matters described above or any of
the other matters that have arisen in the ordinary course of our business
(including those arising in the ordinary course of the operation of our
company-owned restaurants) will not have a material adverse effect on our
consolidated financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We held an Annual Meeting of Stockholders on June 4, 2002. The matters acted
upon by the stockholders at that meeting were reported in our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2002.

14

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The principal market for our Class A Common Stock is the New York Stock
Exchange ('NYSE') (symbol: TRY). The high and low market prices for our Class A
Common Stock, as reported in the consolidated transaction reporting system, are
set forth below:

We did not pay any dividends on our common stock in 2001, 2002 or in 2003 to
date and do not presently anticipate the declaration of cash dividends on our
Class A Common Stock in the near future. However, the declaration of future
dividends is subject to the discretion of our Board of Directors, which may from
time to time review whether to declare dividends in light of all of the then
existing relevant facts and circumstances. We have no class of equity securities
currently issued and outstanding except for the Class A Common Stock. However,
we are currently authorized to issue up to 100 million shares of Class B Common
Stock and up to 100 million shares of preferred stock.

Because we are a holding company, our ability to meet our cash requirements,
including required interest and principal payments on our indebtedness, is
primarily dependent upon, in addition to our cash, cash equivalents and
short-term investments on hand, cash flows from our subsidiaries. Under the
terms of the indenture relating to the notes issued in the Arby's securitization
and the agreements related to debt issued by Sybra (see 'Item 1. Business --
Business Segment -- Restaurant Franchising and Operations (Arby's) -- General'
and 'Item 1. Business -- Acquisition of Sybra, Inc.'), the ability of Arby's
and Sybra to pay any dividends or make any loans or advances to us is limited
by the debt service requirements of its subsidiaries. In addition, in connection
with the acquisition of Sybra, Triarc agreed that Sybra would not pay dividends
to it for a period of two years from the closing. You should read the
information in 'Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources' and
Note 10 to our Consolidated Financial Statements.

On January 18, 2001, our management was authorized, when and if market
conditions warrant, to purchase from time to time up to an aggregate of $50
million worth of our Class A Common Stock pursuant to a $50 million stock
repurchase program that ended on January 18, 2003. During the period from
January 18, 2001 through January 18, 2003, we repurchased 438,500 shares, at an
average cost of approximately $23.89 per share (including commissions), for an
aggregate cost of approximately $10.5 million, pursuant to the stock repurchase
program.

On January 17, 2003, the stock repurchase program was extended until January
18, 2004 and the amount available under the stock repurchase program was
replenished to permit the Company to repurchase up to a total of $50 million
worth of our Class A Common Stock on or after January 18, 2003 (in addition to
the $10.5 million previously spent under the program). We cannot assure you that
we will repurchase any additional shares pursuant to this stock repurchase
program.

As of March 15, 2003, there were approximately 3,569 holders of record of
our Class A Common Stock.

15

ITEM 6. SELECTED FINANCIAL DATA (1)

- ---------

(1) Selected Financial Data for the years ended on or prior to the fiscal year
ended December 31, 2000 reflect the discontinuance of the Company's
beverage businesses sold in October 2000 and for the years ended on or
prior to the fiscal year ended January 2, 2000 reflect the discontinuance
of the Company's propane business sold in July 1999.

(2) The Company reports on a fiscal year basis consisting of 52 or 53 weeks
ending on the Sunday closest to December 31. In accordance with this
method, the Company's 1998 fiscal year contained 53 weeks and each of the
Company's 1999, 2000, 2001 and 2002 fiscal years contained 52 weeks.

(3) Basic and diluted income (loss) per share are the same for the fiscal years
2000 and 2002 since all potentially dilutive securities would have had an
antidilutive effect based on the loss from continuing operations for each
of those years. The shares used in the calculation of diluted income (loss)
per share for the fiscal years 1998 (31,527,000), 1999 (26,943,000) and
2001 (22,692,000) consist of the weighted average common shares outstanding
and potential common shares reflecting the effect of dilutive stock options
of 1,221,000, 818,000 and 1,160,000, respectively, and for the fiscal year
1999 the effect of a dilutive forward purchase obligation for common stock
of 110,000 shares.

(4) The Company has not paid any dividends on its common shares during any of
the years presented.
(footnotes continued on next page)

16

(footnotes continued from previous page)

(5) Reflects certain significant credits recorded during fiscal 1998 as
follows: $7,074,000 credited to net income representing (1) $3,067,000
included in the income from operations of the discontinued businesses
consisting of $5,016,000 of gain on sale of businesses less $1,949,000 of
related income taxes and (2) $4,007,000 of gain on disposal of discontinued
operations.

(6) Reflects certain significant charges and credits recorded during fiscal
1999 as follows: $926,000 credited to income from continuing operations
before income taxes and minority interests representing $3,052,000 of
reversal of excess interest expense accruals for interest due the Internal
Revenue Service (the 'IRS') in connection with the completion of their
examinations of the Company's Federal income tax returns for prior years
less a $2,126,000 charge for a capital structure reorganization related
charge related to equitable adjustments made to the terms of outstanding
stock options for stock of a former subsidiary held by corporate employees;
$5,789,000 credited to income from continuing operations representing (1)
the aforementioned $926,000 credited to income from continuing operations
before income taxes and minority interests less $264,000 of related income
taxes and (2) $5,127,000 of release of excess reserves for income taxes in
connection with the completion of IRS examinations of the Company's Federal
income tax returns; and $3,897,000 credited to net income representing (1)
the aforementioned $5,789,000 credited to income from continuing
operations, (2) $15,102,000 of gain on disposal of discontinued operations,
less (i) $4,897,000 of charges reported in income from operations of the
discontinued businesses consisting of (a) a $3,348,000 charge for a capital
structure reorganization related charge, similar to the charge in
continuing operations, relating to option holders who were employees of the
sold businesses, (b) $411,000 of provision for interest due the IRS in
connection with the completion of their examination of the Company's
Federal income tax returns, both less $1,464,000 of related income taxes
and (c) $2,602,000 of provision for income taxes in connection with the
completion of IRS examinations of the Company's Federal income tax returns
and (ii) a $12,097,000 extraordinary charge from the early extinguishment
of debt.

(7) In fiscal 1999 the Company repurchased for treasury 3,805,015 shares of its
class A common stock and 1,999,208 shares of class B common stock for an
aggregate $117,160,000 and recorded a forward purchase obligation for two
future purchases of class B common stock that occurred on August 10, 2000
and on August 10, 2001 for $42,343,000 and $43,843,000, respectively. These
transactions resulted in an aggregate $203,346,000 reduction to
stockholders' equity in fiscal 1999 resulting in a stockholders' deficit as
of January 2, 2000 and a reduction of 3,376,000 shares in the
weighted-average common shares outstanding.

(8) Reflects certain significant charges and credits recorded during fiscal
2000 as follows: $36,432,000 charged to income from continuing operations
before income taxes and minority interests representing (1) a $26,010,000
charge for capital market transaction related compensation and (2) a
$10,422,000 charge resulting from the Company's repurchase of 1,045,834
shares of its class A common stock from certain of the Company's officers
and a director within six months after exercise of the related stock
options by the officers and director; $32,914,000 charged to loss from
continuing operations representing the aforementioned $36,432,000 less
$3,518,000 of related income tax benefit; and $427,352,000 credited to net
income representing $480,946,000 of the then estimated gain on disposal of
the Company's former beverage business credited to income from discontinued
operations less (1) the aforementioned $32,914,000 charged to loss from
continuing operations and (2) a $20,680,000 extraordinary charge from the
early extinguishment of debt.

(9) The increase in stockholders' equity during fiscal 2000 principally
reflects net income of $441,241,000 which includes a gain on disposal of
discontinued operations of $480,946,000.

(10) Reflects certain significant credits recorded during fiscal 2001 as
follows: $5,000,000 credited to income from continuing operations before
income taxes and minority interests representing the receipt of a
$5,000,000 note receivable from the Chairman and Chief Executive Officer
and the President and Chief Operating Officer (the 'Executives') of the
Company received in connection with the settlement of a class action
lawsuit involving certain awards of compensation to the Executives;
$3,200,000 credited to income from continuing operations representing the
aforementioned $5,000,000 less $1,800,000 of related income tax expense;
and $46,650,000 credited to net income representing the aforementioned
$3,200,000 credited
(footnotes continued on next page)

17

(footnotes continued from previous page)

to income from continuing operations and $43,450,000 of additional gain on
disposal of the Company's beverage businesses.

(11) Reflects a decline in investment income of $32,781,000 in fiscal 2002
compared with fiscal 2001.

(12) Reflects a significant credit recorded during fiscal 2002 as follows:
$11,100,000 credited to net income representing adjustments to the
previously recognized gain on disposal of the Company's beverage business
due to the release of reserves for income taxes associated with the
discontinued beverage operations in connection with the receipt of related
income tax refunds.

18

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

INTRODUCTION

We currently operate in one business, franchising and operating Arby's
restaurants.

On December 27, 2002, we completed the acquisition of all of the voting
equity interests of Sybra, Inc. from I.C.H. Corporation in a transaction we
refer to as the Sybra Acquisition. The acquisition was under a plan of
reorganization confirmed by a United States Bankruptcy Court for I.C.H. and
Sybra following their filing in February 2002 for protection under Chapter 11 of
the United States Bankruptcy Code in order to restructure their financial
obligations. Sybra owns and operates 239 Arby's restaurants in nine states and,
prior to the Sybra Acquisition, was the second largest franchisee of Arby's
restaurants. We acquired Sybra with the expectation of strengthening and
increasing the value of our Arby's brand. Sybra's results of operations
following the December 27, 2002 date of the Sybra Acquisition through December
29, 2002 have been included in the accompanying consolidated income statement
for the year ended December 29, 2002. The results of operations before income
taxes for that two-day period have been reported in 'Other income, net' for
convenience since the results were not material to our consolidated income
before income taxes.

As discussed below under 'Liquidity and Capital Resources,' we are presently
evaluating our options for the use of our significant cash, cash equivalent and
investment position, including additional business acquisitions, repurchases of
our common shares and investments.

Throughout the years presented in this discussion, we derived our revenues
in the form of royalties and franchise and related fees but, as a result of the
Sybra Acquisition, we have also begun deriving revenues from the sales by the
restaurants we now operate which, commencing with fiscal 2003, will be reported
as sales. While the majority of our existing royalty agreements and all of our
new domestic royalty agreements provide for royalties of 4% of franchise
revenues, our average rate was 3.4% in fiscal 2002. We also derive investment
income from our investments.

We incur general and administrative expenses, depreciation and amortization
and interest expense, but no cost of sales, in our restaurant franchising
operations. In addition, we incur general corporate expenses, including
investment activity related expenses, in those same expense categories. As a
result of the Sybra Acquisition we will also report cost of sales and
advertising and selling expenses commencing with fiscal 2003. Recently we have
not had significant capital expenditures; however, as a result of the Sybra
Acquisition, we will increase capital expenditures to support our recently
acquired company-owned restaurants.

We previously operated in the premium beverage and soft drink concentrate
businesses. On October 25, 2000 we completed the sale of these businesses, which
we refer to as the Snapple Beverage Sale, of Snapple Beverage Group, Inc., the
parent company of Snapple Beverage Corp., Mistic Brands, Inc. and Stewart's
Beverages, Inc., and Royal Crown Company, Inc. to affiliates of Cadbury
Schweppes plc, which we refer to as Cadbury. The premium beverage and soft drink
concentrate businesses, formerly reported as business segments, have been
accounted for as discontinued operations in 2000 through the date of sale.

In recent years our restaurant business has experienced the following
trends:

Continued growth of food consumed away from home as a percentage of
total food-related spending;

Increases in the cost and overall difficulty of developing new units in
many areas of the country, primarily as a result of increased
competition among quick service restaurant competitors for available
development sites, higher development costs associated with those sites
and continued tightening in the lending markets typically used to
finance new unit development;

Increased price competition in the quick service restaurant industry,
particularly as evidenced by the value menu concept which offers
comparatively lower prices on some menu items, the combination meals
concept which offers a combination meal at an aggregate price lower
than the individual food and beverage items, couponing and other price
discounting;

The continuing proliferation of competitors in the higher end of the
sandwich category, many of whom are competing with Arby's by offering
higher priced sandwiches with perceived higher levels of freshness,
quality and customization;
19

Additional competitive pressures for prepared food purchases from
operators outside the quick service restaurant industry such as deli
sections and in-store cafes of several major grocery store chains,
convenience stores and casual dining outlets; and

The addition of selected higher-priced quality items to menus, which
appeal more to adult tastes and offer an opportunity to recover some of
the dollar margins lost in the discounting of other menu items.

We have experienced the effects of these trends to the extent they affect
sales by our franchisees and, accordingly, impact the royalties and franchise
fees we receive from them. Effective December 27, 2002 we also experienced these
effects directly to the extent they affect the operations of our recently
acquired restaurants.

PRESENTATION OF FINANCIAL INFORMATION

This 'Management's Discussion and Analysis of Financial Condition and
Results of Operations' of Triarc Companies, Inc., which we refer to as Triarc,
and its subsidiaries should be read in conjunction with our consolidated
financial statements included elsewhere herein. Certain statements we make under
this Item 7 constitute 'forward-looking statements' under the Private Securities
Litigation Reform Act of 1995. See 'Special Note Regarding Forward-Looking
Statements and Projections' in 'Part I' preceding 'Item 1.'

We report on a fiscal year consisting of 52 or 53 weeks ending on the Sunday
closest to December 31. Each of our 2000, 2001 and 2002 fiscal years contained
52 weeks. Our 2000 fiscal year commenced on January 3, 2000 and ended on
December 31, 2000, our 2001 fiscal year commenced on January 1, 2001 and ended
on December 30, 2001, and our 2002 fiscal year commenced on December 31, 2001
and ended on December 29, 2002. When we refer to '2000' we mean the period from
January 3, 2000 to December 31, 2000; when we refer to '2001' we mean the period
from January 1, 2001 to December 30, 2001; and when we refer to '2002' we mean
the period from December 31, 2001 to December 29, 2002.

Certain amounts presented in this 'Management's Discussion and Analysis of
Financial Condition and Results of Operations' for 2000 and 2001 have been
reclassified to conform with the current year's presentation.

20

RESULTS OF OPERATIONS

Set forth below is a table that summarizes our results of operations and
compares the amount and percent of the change between (1) 2000 and 2001, which
we refer to as the 2001 Change, and (2) 2001 and 2002, which we refer to as the
2002 Change. We consider certain percentage changes between years to be not
measurable or not meaningful, and we refer to these as 'n/m.' The percentage
changes used in the following discussion have been rounded to the nearest whole
percentage.

2002 COMPARED WITH 2001

Royalties and Franchise and Related Fees

Our royalties and franchise and related fees, which were generated entirely
from our restaurant business, increased $5.0 million, or 5%, to $97.8 million in
2002 from $92.8 million in 2001 reflecting a $5.7 million, or 6%, increase in
royalties partially offset by a $0.7 million, or 17%, decrease in franchise and
related fees. The increase in royalties consisted of (1) a $3.3 million
improvement resulting from the royalties from the 116

21

restaurants opened in 2002, with generally higher than average sales volumes,
replacing the royalties from the 64 generally underperforming restaurants closed
in 2002, (2) a $1.7 million improvement due to a 2% increase in same-store sales
of franchised restaurants and (3) a $0.7 million improvement due to an increase
in the average royalty rate to 3.4% in 2002 from 3.3% in 2001. The decrease in
franchise and related fees was principally due to a decrease in the amount of
revenues recognized from forfeited deposits upon the termination of commitments
to open new franchised restaurants and the opening of 15 fewer franchised
restaurants in 2002 compared with 2001, partially offset by an increase in
franchise license renewal fees and a decrease in franchise fee credits earned by
franchisees under our remodeling incentive program.

During the fourth quarter of 2002, we experienced a 3% decline in the
same-store sales of franchised restaurants and, based on early results, this
trend appears to be continuing into the first quarter of 2003. We believe this
decline is affected by the adverse effects of worse weather conditions, price
discounting in the quick service restaurant industry, the generally sluggish
economy and for the fourth quarter of 2002, strong same-store sales comparisons.
During the balance of 2003, we intend to continue Arby's national cable
television advertising with a new campaign and introduce new operational,
product and marketing initiatives which we expect will favorably impact the
trend of same-store sales.

Our royalties and franchise fees have no associated cost of sales. However,
commencing in 2003 we will report net sales and related cost of sales due to the
Sybra Acquisition. Included in royalties and franchise and related fees in 2002
and 2001 are $7.5 million and $7.4 million, respectively, of franchise revenues
from Sybra prior to the Sybra Acquisition. Franchise revenues from Sybra will no
longer be included in our consolidated results of operations in future periods
but instead Sybra's results of operations will be included in our future
consolidated operating results.

Investment Income, Net

The following table summarizes and compares the major components of
investment income, net:

The decrease in interest income is due to lower average interest rates and,
to a lesser extent, lower average amounts of cash equivalents and
interest-bearing short-term investments during 2002 compared with 2001. Average
rates on our interest-bearing investments declined from 4.8% in 2001 to 1.8% in
2002 principally due to the general decline in the money market and short-term
interest rate environment which has continued into 2003. The average amount of
our interest-bearing investments declined principally due to our payment in
mid-March 2001 of $239.3 million of estimated income taxes related to the
Snapple Beverage Sale in October 2000. Our recognized net gains and other than
temporary unrealized losses are dependent upon the underlying economics and/or
volatility in the value of our investments in available-for-sale securities and
cost basis investments and/or the timing of the sales of those investments.
Accordingly, our recognized net gains and our other than temporary unrealized
losses presented in the above table may not recur in future periods.

As of December 29, 2002, we had pretax unrealized holding gains and (losses)
on available-for-sale marketable securities of $1.2 million and $(1.0) million,
respectively, included in accumulated other comprehensive deficit. Should either
(1) we decide to sell any of these investments or (2) any of the unrealized
losses continue such that we believe they have become other than temporary, we
would recognize the gains or losses on the related investments at that time. In
addition, through 280 BT Holdings LLC, a 57.4%-owned consolidated subsidiary, we
hold a $1.7 million cost basis investment in Scientia Health Group Limited, an
entity which we refer to as Scientia, representing original cost less
adjustments for unrealized losses in investments made by Scientia that were
deemed to be other than temporary of $3.3 million during 2002. Such

22

amounts have been effectively reduced by minority interests of $0.7 million and
$1.4 million, respectively. In addition, as of December 29, 2002 we have $0.8
million of non-recourse notes receivable from management officers and employees
relating to a portion of their investments in 280 BT Holdings, less an allowance
of $0.4 million for uncollectible amounts. If the value of the investments of
280 BT Holdings decline further and, accordingly, we recognize additional other
than temporary losses, we would also provide additional allowances relating to
the non-recourse notes receivable in 'General and administrative' expenses.

Gain (Loss) on Sale of Businesses

The loss on sale of businesses of $1.2 million in 2002 represents a
reduction of a gain related to a business previously sold due to a charge for
estimated environmental clean-up and related costs. The gain on sale of
businesses of $0.5 million in 2001 reflects the release of sales tax accruals no
longer necessary due to the expiration of statutory audit periods. These
accruals were originally provided as a component of the loss on sale of all the
355 then company-owned restaurants in 1997.

Other Income, Net

The following table summarizes and compares the major components of other
income, net:

Other income, net decreased $8.8 million principally due to $8.3 million of
interest income recorded in 2001 which did not recur in 2002 related to our
election in June 2001 to treat certain portions of the Snapple Beverage Sale as
an asset sale for income tax purposes, as explained in more detail under
'Discontinued Operations.' The written call option on our common stock relates
to the right of Cadbury to have caused us to issue our common stock upon
conversion of our zero coupon convertible debentures that had been assumed by
Cadbury. Cadbury called the debentures for redemption in full with a redemption
date of February 9, 2003, and the written call option terminated without any of
our common stock being called under the option. The $0.5 million increase in
equity in (losses) earnings of investees, other than investment limited
partnerships and similar investment entities, was primarily attributable to the
$0.3 million of equity in earnings of Encore Capital Group, Inc., formerly MCM
Capital Group, Inc., which we refer to as Encore, in 2002 compared with equity
in losses of Encore of less than $0.1 million in 2001 as Encore returned to
profitability in 2002. We own 7.2% of the issued and outstanding common stock of
Encore and 17.5% of convertible preferred stock of Encore. If all of the
convertible preferred stock were converted, the Company's ownership in Encore
common stock would increase to 13.1%.

General and Administrative

Our general and administrative expenses decreased $1.5 million, or 2%,
principally reflecting (1) a $5.3 million decrease in incentive compensation
costs, (2) a $0.7 million decrease in legal fees, (3) a $0.6 million decrease in
the provision for doubtful accounts due to the realization in 2002 of
collections on two fully-reserved notes from franchisees and (4) a $0.5 million
decrease in deferred compensation expense. The $5.3 million decrease in
incentive compensation was principally due to lower executive bonuses relating
to 2002 as compared with 2001. Deferred compensation expense of $1.4 million in
2002 and $1.9 million in 2001 represents the increase in the fair value of
investments in two deferred compensation trusts, which we refer to as the
Trusts, for the benefit of our Chairman and Chief Executive Officer and
President and Chief Operating Officer, whom we refer to as the Executives, as
explained in more detail below under 'Income (Loss) From

23

Continuing Operations Before Income Taxes and Minority Interests.' These
decreases were partially offset by (1) a $5.0 million reduction in compensation
expense in 2001 which did not recur in 2002 related to a note that we received
from the Executives in partial settlement of a class action shareholder lawsuit
which effectively represented an adjustment of prior period compensation expense
and (2) an increase of $1.1 million in insurance costs principally reflecting
higher premiums.

Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs

Our depreciation and amortization, excluding amortization of deferred
financing costs, in total was relatively unchanged at $6.6 million in 2002
compared with $6.5 million in 2001.

Interest Expense

Interest expense decreased $4.2 million, or 14%, principally reflecting
(1) interest of $3.1 million recorded in 2001 which did not recur in 2002 on the
estimated income tax liability paid with the filing of our election in June 2001
to treat certain portions of the Snapple Beverage Sale as an asset sale for
income tax purposes, as explained below under 'Discontinued Operations,' and (2)
a $1.4 million decrease in interest expense due to lower outstanding balances of
our 7.44% insured non-recourse securitization notes, which we refer to as the
Securitization Notes. These decreases were partially offset by a $0.6 million
increase in interest expense due to the full period effect in 2002 of a term
loan and related interest rate swap agreement used to finance the purchase of an
airplane in July 2001.

Insurance Expense Related to Long-Term Debt

Insurance expense related to long-term debt decreased $0.3 million, or 6%,
to $4.5 million in 2002 from $4.8 million in 2001 due to lower outstanding
balances of the Securitization Notes.

Costs of Proposed Business Acquisitions Not Consummated

The $2.2 million of costs of proposed business acquisitions not consummated
in 2002 were primarily for a business acquisition proposal which was not
accepted. The $0.6 million of costs in 2001 were for other proposed business
acquisitions not consummated.

Income (Loss) From Continuing Operations Before Income Taxes and Minority
Interests

Our income (loss) from continuing operations before income taxes and
minority interests decreased $34.0 million to a loss of $16.6 million in 2002
from income of $17.4 million in 2001 due to the effect of the variances
explained in the captions above.

As disclosed above, we recognized $1.9 million in 2001 and $1.4 million in
2002 of deferred compensation expense for the increase in the fair value of the
investments in the Trusts. Under accounting principles generally accepted in the
United States of America, we recognized investment income of $0.2 million on the
investments in the Trusts in 2001, but were not permitted to recognize any
investment income on the investments in the Trusts in 2002. This disparity
between compensation expense and investment income recognized will reverse in
the future periods as either (1) the investments in the Trusts are sold and
previously unrealized gains are recognized without any offsetting increase in
compensation expense or (2) the fair values of the investments in the Trusts
decrease resulting in the recognition of a reduction of deferred compensation
expense without any offsetting losses recognized in investment income.

Income Taxes

The benefit from and provision for income taxes represented effective rates
of 20% in 2002 and 50% in 2001 on the respective loss or income from continuing
operations before income taxes and minority interests. The effective benefit
rate in 2002 is lower than the United States Federal statutory rate of 35%
principally due to (1) the tax provision related to minority interests in loss
of a consolidated subsidiary, which is not included in income or loss from
continuing operations before income taxes and minority interests, (2) the state
income taxes, net of Federal income tax benefit, of the consolidated entities
due to the differing mix of pretax income
24

or loss among the consolidated entities which file state tax returns on an
individual company basis and (3) the effect of non-deductible compensation
costs. The effective provision rate in 2001 was higher than the 35% rate
principally due to (1) the effect of non-deductible compensation costs and
(2) state income taxes, both of which had a greater effect in 2001 compared with
2002.

Minority Interests in Loss of a Consolidated Subsidiary

The minority interests in loss of a consolidated subsidiary of $3.5 million
in 2002 and $0.3 million in 2001 principally reflect provisions for unrealized
losses by 280 BT Holdings on its cost basis investments deemed to be other than
temporary.

Discontinued Operations

Income from discontinued operations, which resulted entirely from
adjustments to the previously recognized gain on the Snapple Beverage Sale, was
$11.1 million in 2002 compared with $43.4 million in 2001. The adjustment to the
gain in 2002 was due to the release of reserves for income taxes associated with
the discontinued beverage operations in connection with the receipt of related
income tax refunds. The adjustment to the gain in 2001 resulted from the
realization of $200.0 million of proceeds from Cadbury for our electing in June
2001 to treat certain portions of the Snapple Beverage Sale as an asset sale in
lieu of a stock sale under the provisions of Section 338(h)(10) of the United
States Internal Revenue Code, net of estimated income taxes, partially offset by
additional accruals relating to the Snapple Beverage Sale.

2001 COMPARED WITH 2000

Royalties and Franchise and Related Fees

Our royalties and franchise and related fees, which were generated entirely
from our restaurant business, increased $5.4 million, or 6%, to $92.8 million in
2001 from $87.4 million in 2000 reflecting a $5.3 million, or 6%, increase in
royalties and a $0.1 million, or 2%, increase in franchise and related fees. The
increase in royalties consisted of (1) a $3.9 million improvement resulting from
the royalties from the 131 restaurants opened in 2001, with generally higher
than average sales volume, replacing the royalties from the 99 generally
underperforming restaurants closed in 2001, (2) a $1.2 million improvement due
to a 2% increase in same-store sales of franchised restaurants and (3) a $0.2
million improvement due to a higher average royalty rate. The slight increase in
franchise and related fee revenue was principally due to (1) an increase in fees
from franchise license transfers and franchisee training and (2) an increase in
revenues recognized from forfeited deposits upon the termination of commitments
to open new franchised restaurants, both substantially offset by a decrease in
franchise fee revenue principally due to the opening of 25 fewer franchised
restaurants in 2001 compared with 2000.

Our royalties and franchise fees have no associated cost of sales.

Investment Income, Net

The following table summarizes and compares the major components of
investment income, net:

The increase in interest income was due to higher average amounts of cash
equivalents and short-term investments in 2001 compared with 2000 as a result of
the full year effect in 2001 of the cash provided from
25

the Snapple Beverage Sale and $277.0 million of proceeds, net of $13.0 million
of expenses, from the issuance of the Securitization Notes on November 21, 2000.
The decrease in recognized net gains on our investments includes $10.3 million
which was attributable to our gain on the sale of one particular common stock
investment in 2000 which did not recur in 2001.

Gain on Sale of Businesses

The gain on sale of businesses of $0.5 million in 2001 reflects the release
of sales tax accruals no longer necessary as previously discussed in more detail
in the comparison of 2002 and 2001. There was no gain on sale of businesses
included in continuing operations in 2000.

Other Income, Net

The following table summarizes and compares the major components of other
income, net:

Other income, net, increased $8.9 million principally due to (1) $8.3
million of interest income recorded in 2001, which did not occur in 2000,
related to our election to treat certain portions of the Snapple Beverage Sale
as an asset sale for income tax purposes, as previously discussed in more detail
in the comparison of 2002 and 2001 and (2) a $2.1 million decrease in our equity
in the losses of investees other than investment limited partnerships and
similar investment entities accounted for under the equity method, principally
due to $1.8 million of equity in the write-down of certain assets by an investee
in 2000 which did not recur in 2001. These increases were partially offset by
the non-recurring collection in 2000 of $0.9 million of a receivable from a
former affiliate which was written off in years prior to 2000 due to the former
affiliate filing for bankruptcy protection.

General and Administrative

Our general and administrative expenses decreased $3.1 million, or 4%,
reflecting (1) an $11.4 million decrease in stock option compensation costs due
to costs incurred in 2000 which did not recur in 2001 consisting of (a) $10.4
million resulting from our repurchase of class A common stock from certain
officers and a director within six months after the exercise of related stock
options by such officers and director and (b) $1.0 million resulting from other
stock option activity relating to the Snapple Beverage Sale, (2) a $5.0 million
reduction in compensation expense related to a note receivable from the
Executives that we received in 2001, as previously explained in more detail in
the comparison of 2002 and 2001, (3) provisions of $1.2 million in 2000 which
did not recur in 2001 for costs to support a change in distributors of food and
other products for a majority of franchisees in our restaurant franchising
operations and (4) a $1.2 million decrease in charitable contributions in 2001.
These decreases were partially offset by (1) higher incentive compensation costs
of $5.0 million under our executive bonus plan principally reflecting the
positive impact of the Snapple Beverage Sale on our capitalization, (2) a $2.5
million increase in insurance expense due to (a) a $1.5 million reduction of
insurance expense recognized in 2000 which did not recur in 2001 relating to the
favorable settlement of insurance claims by the purchaser of a former insurance
subsidiary that we sold in 1998 resulting in the collection of a $1.5 million
note receivable that we received as a portion of the sales proceeds which was
fully reserved at the time of sale and (b) a $1.0 million increase in insurance
premiums in 2001, (3) $2.1 million of

26

expenses in connection with an Arby's national cable television advertising
campaign introduced in 2001, (4) $1.9 million of deferred compensation
expense recognized in 2001 representing the increase in the fair value of
investments in the Trusts for the benefit of the Executives, as previously
explained in more detail in the comparison of 2002 and 2001 under 'Income (Loss)
from Continuing Operations Before Income Taxes and Minority Interests' and (5)
other general increases. The $1.5 million gain in 2000 from realization of the
note receivable discussed above was included as a reduction of general and
administrative expenses since the gain effectively represented an adjustment of
prior period insurance reserves.

Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs

Our depreciation and amortization, excluding amortization of deferred
financing costs, increased $1.2 million, or 22%, principally reflecting (1) a
$0.5 million increase in depreciation related to an airplane that was placed in
service in September 2001 which replaced fractional interests in two airplanes
under timeshare agreements which were terminated and (2) a $0.5 million increase
in amortization related to leasehold improvements completed during the 2001
second quarter.

Capital Market Transaction Related Compensation

The capital market transaction related compensation charge of $26.0 million
in 2000 resulted from incentive compensation costs directly related to the
completion of the Snapple Beverage Sale and the issuance of our Securitization
Notes. This compensation consisted of an aggregate of $22.5 million to the
Executives which was invested in the Trusts for their benefit in January 2001
and $3.5 million paid to other officers and employees in January 2001. There was
no similar charge in 2001.

Interest Expense

Interest expense increased $25.6 million to $30.4 million in 2001 primarily
reflecting (1) $18.5 million of additional interest in 2001 on our
Securitization Notes and $1.9 million of additional amortization of related
deferred financing costs, due to the full year effect on interest expense in
2001 of the Securitization Notes which were issued on November 21, 2000,
(2) interest of $3.1 million for the period from March 15, 2001 through June 14,
2001 on the estimated income tax liability paid with the filing of our election
in June 2001 to treat certain portions of the Snapple Beverage Sale as an asset
sale for income tax purposes as previously explained in more detail in the
comparison of 2002 and 2001 under 'Discontinued Operations' and (3) interest of
$1.3 million in connection with a term loan and a related interest rate swap
agreement used to finance the purchase of an airplane in July 2001.

Insurance Expense Related to Long-Term Debt

Insurance expense related to long-term debt increased $4.2 million to $4.8
million in 2001 reflecting increased charges relating to the full year effect in
2001 of insuring the payment of principal and interest on the Securitization
Notes which were issued on November 21, 2000.

Income from Continuing Operations Before Income Taxes and Minority Interests

Our income from continuing operations before income taxes and minority
interests increased $15.2 million to $17.4 million in 2001 due to the effect of
the variances explained in the captions above.

Income Taxes

The provision for income taxes represented effective rates of 50% in 2001
and 559% in 2000. The effective rate is unusually high in 2000 principally due
to the relatively low amount of pretax income and the effect thereon of
non-deductible compensation costs. The effective rate is lower in 2001, but
still exceeds the United States Federal statutory rate of 35%, principally due
to (1) the effect of non-deductible compensation costs, which were significantly
lower in 2001 compared with 2000, and (2) the effect of state income taxes,
which was lower in 2001 compared with 2000, due to the differing mix of pretax
income or loss among the consolidated entities which file state tax returns on
an individual company basis.

27

Minority Interests in Loss of a Consolidated Subsidiary

The minority interests in loss of a consolidated subsidiary was $0.3 million
in 2001 as previously explained in more detail in the comparison of 2002 and
2001. In 2000 this consolidated subsidiary had no income or loss and,
accordingly, no minority interests.

Discontinued Operations

Income from discontinued operations was $43.4 million in 2001 compared with
$472.1 million in 2000. The 2001 income from discontinued operations resulted
entirely from adjustments to the previously recognized estimated gain on the
Snapple Beverage Sale as previously explained in more detail in the comparison
of 2002 and 2001. The 2000 income from discontinued operations consisted of the
then estimated gain on disposal of the discontinued beverage businesses of
$481.0 million less the loss from operations of the discontinued businesses of
$8.9 million through the October 25, 2000 Snapple Beverage Sale.

Revenues and other income of the beverage businesses were $681.0 million in
2000 through the October 25, 2000 Snapple Beverage Sale reflecting in part the
impact of the acquisition of two premium beverage distributors on February 26,
1999 and January 2, 2000. The beverage businesses generated a net loss of $8.9
million in 2000 through the October 25, 2000 Snapple Beverage Sale principally
reflecting the negative impact of operating costs and expenses associated with
the acquisition of the two premium beverage distributors referred to above and
interest expense related to additional borrowings and the effect of an
increasing interest rate environment on the variable-rate debt of our beverage
businesses.

Extraordinary Charges

The extraordinary charges of $20.7 million in 2000 resulted from the early
assumption by Cadbury or extinguishment by us, as applicable, of (1) borrowings
under a senior bank credit facility maintained by Snapple, Mistic, Stewart's,
Royal Crown and RC/Arby's Corporation, the former parent company of Royal Crown
and Arby's, Inc., (2) 10 1/4% senior subordinated notes due 2009 co-issued by
Snapple Beverage Group and Triarc Consumer Products Group, LLC, a subsidiary of
ours and the former parent of Snapple Beverage Group and Royal Crown, and (3)
zero coupon convertible subordinated debentures due 2018. These extraordinary
charges consisted of (1) the write-off of previously unamortized deferred
financing costs of $27.5 million and (2) the payment of prepayment penalties and
fees of $5.5 million, both less income tax benefit of $12.3 million. There were
no similar charges in 2001.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows from Continuing Operating Activities

Our consolidated operating activities from continuing operations provided
cash and cash equivalents, which we refer to in this discussion as cash, of
$12.0 million during 2002 reflecting (1) net operating investment adjustments of
$17.6 million, (2) net non-cash charges of $6.3 million and (3) the collection
of a litigation settlement receivable of $1.7 million, all partially offset by
(1) a loss from continuing operations of $9.8 million and (2) cash used by
changes in operating assets and liabilities of $3.8 million.

The net operating investment adjustments of $17.6 million consisted of (1)
net recognized losses of $11.8 million principally due to the recognition of
non-cash other than temporary losses on available-for-sale securities and other
cost basis investments, (2) $5.2 million of net sales of trading securities in
excess of purchases and (3) a $0.6 million adjustment for the non-cash net
amortization of premium on debt securities.

The net non-cash charges of $6.3 million consisted principally of $8.4
million of depreciation and amortization and $1.4 million of deferred
compensation, both partially offset by $3.5 million of minority interests in
loss of a consolidated subsidiary. The cash used by changes in operating assets
and liabilities of $3.8 million reflects a decrease in accounts payable and
accrued expenses of $6.1 million partially offset by decreases in receivables of
$1.6 million, prepaid expenses of $0.6 million and inventories of $0.1 million.
The decrease in accounts payable and accrued expenses was principally due to a
$4.0 million decrease in accrued incentive compensation. The decrease in
receivables was principally due to the collection of past due amounts from
franchisees.
28

Cash flows from continuing operating activities were positive in 2002 even
after excluding the effect of the net sales of trading securities which
represent the discretionary investment of excess cash. However, we currently
expect that our continuing operating activities will require the net use of cash
in 2003, even after excluding the effect of any net purchases of trading
securities. This expected net use of cash results from the required funding of
net negative working capital of $20.8 million assumed in the Sybra Acquisition.
We expect to meet this operating cash flow requirement through the use of our
aggregate $623.5 million of existing cash and cash equivalents and short-term
investments, net of $9.2 million short-term investments sold with an obligation
for us to purchase.

Working Capital and Capitalization

Working capital, which equals current assets less current liabilities, was
$510.4 million at December 29, 2002, reflecting a current ratio, which equals
current assets divided by current liabilities, of 4.2:1. Working capital
decreased $46.2 million from $556.6 million at December 30, 2001 principally due
to (1) the effect of the Sybra Acquisition consisting of the $9.7 million cost
and the $20.8 million of net negative working capital assumed in the acquisition
and (2) the reclassification of $25.9 million of long-term debt to current.

Our total capitalization at December 29, 2002 was $719.8 million consisting
of stockholders' equity of $332.7 million and $387.1 million of long-term debt,
including current portion. Our total capitalization increased $73.7 million from
$646.1 million at December 30, 2001 principally due to (1) the assumption of
$103.2 million of debt in the Sybra Acquisition, (2) proceeds of $6.1 million
from stock option exercises and (3) net income of $1.3 million, all partially
offset by (1) repayments of long-term debt of $29.8 million, including $5.5
million related to debt assumed in the Sybra Acquisition, (2) repurchases of
$7.0 million of our common stock discussed below under 'Treasury Stock
Purchases' and (3) adjustments of $1.7 million in deriving comprehensive loss
from net income.

Contractual Obligations

The following table summarizes the expected payments under our outstanding
contractual obligations at December 29, 2002:

- ---------

(a) Excludes capitalized lease obligations, which are shown separately in the
table, and interest.

(b) Excludes interest on capitalized lease obligations.

(c) Represents the future minimum rental obligations including $12.2 million of
net unfavorable lease amounts we have provided and which will not be
included in rent expense in future periods.

(d) Represents amounts due to the Executives in 2004, which can be settled
either by the payment of cash or transfer of the investments held in the
Trust. The Executives may elect to defer receipt beyond 2004.

Securitization Notes and Sybra Long-Term Debt

We have outstanding, through our ownership of Arby's Franchise Trust,
Securitization Notes with a remaining principal balance of $254.8 million as of
December 29, 2002 which are due no later than December 2020. However, based on
current projections and assuming the adequacy of available funds, as defined
under the indenture for the Securitization Notes, which we refer to as the
Indenture, we currently estimate that we will repay $20.7 million in 2003 with
increasing annual payments to $37.4 million in 2011 in accordance with

29

a targeted principal payment schedule. The Securitization Notes are redeemable
by Arby's Franchise Trust at an amount equal to the total of remaining
principal, accrued interest and the excess, if any, of the discounted value of
the remaining principal and interest payments over the outstanding principal
amount of the Securitization Notes.

Obligations under the Securitization Notes are insured by a financial
guarantee company and are collateralized by assets with a total net book value
of $46.0 million as of December 29, 2002 consisting of cash and cash equivalents
of $9.2 million, the cash equivalent reserve account of $30.5 million referred
to above and royalty receivables of $6.3 million.

We have outstanding, through our ownership of Sybra, leasehold notes,
equipment notes and mortgage notes. The leasehold notes have a remaining
principal of $82.0 million and are due generally in equal monthly installments
including interest through 2021, of which $5.9 million is due in 2003. The
leasehold notes are secured by leasehold improvements, equipment and inventories
with respective net book values of $32.0 million, $12.8 million and $2.1
million. The equipment notes have a remaining principal of $6.3 million and are
generally due in equal monthly installments including interest through 2009, of
which $1.3 million is due in 2003. The equipment notes are secured by restaurant
equipment with a net book value of $7.1 million. The mortgage notes have a
remaining principal of $3.3 million and are generally due in equal monthly
installments including interest through 2018, of which $0.1 million is due in
2003. The mortgage notes are secured by land and buildings of restaurants each
with net book values of $1.1 million.

The loan agreements for most of the Sybra leasehold notes, mortgage notes
and equipment notes contain various prepayment provisions that provide for
prepayment penalties of up to 5% of the principal amount prepaid or are based
upon specified 'yield maintenance' formulas.

The Indenture and the agreements for the leasehold notes and mortgage notes
contain various covenants, the most restrictive of which (1) require periodic
financial reporting, (2) require meeting certain debt service coverage ratio
tests and (3) restrict, among other matters, (a) the incurrence of indebtedness,
(b) certain asset dispositions and (c) the payment of distributions by Arby's
Franchise Trust and Sybra. Arby's Franchise Trust and Sybra were in compliance
with all of these covenants as of December 29, 2002.

As of December 29, 2002, Arby's Franchise Trust had no amounts available for
the payment of distributions. However, on January 21, 2003, $1.6 million
relating to cash flows for the calendar month of December 2002 became available
for the payment of distributions by Arby's Franchise Trust through its parent to
Arby's which, in turn, would be available to Arby's to pay management service
fees or Federal income tax sharing payables to Triarc or, to the extent of any
excess, make distributions to Triarc. In connection with Sybra's reorganization,
Sybra is unable to pay any distributions prior to December 27, 2004.

Sybra is required to maintain a fixed charge coverage ratio under the
agreements for the leasehold notes and equipment notes. In the event that Sybra
fails to maintain the minimum fixed charge coverage ratio, such failure may be
cured by a capital contribution in cash to Sybra in the quarter immediately
following such period of an amount such that the minimum fixed charge coverage
ratio would have been met.

Other Long-Term Debt

We have a secured bank term loan payable through 2008 with an outstanding
principal amount of $18.3 million as of December 29, 2002, of which $3.2 million
is due during 2003. We also have an 8.95% secured promissory note payable
through 2006 with an outstanding principal amount of $13.3 million as of
December 29, 2002, of which $1.9 million is due during 2003.

Our total scheduled long-term debt repayments during 2003 are $34.4 million
consisting principally of the $20.7 million expected to be paid under the
Securitization Notes, $7.3 million under Sybra's leasehold, equipment and
mortgage notes, $3.2 million due on the secured bank term loan and $1.9 million
due on the 8.95% secured promissory note.

Guarantees and Commitments

Our wholly-owned subsidiary, National Propane Corporation, retains a less
than 1% special limited partner interest in our former propane business, now
known as AmeriGas Eagle Propane, L.P., which we refer to as AmeriGas Eagle.
National Propane agreed that while it remains a special limited partner of
AmeriGas Eagle,

30

it would indemnify the owner of AmeriGas Eagle for any payments the owner makes
related to the owner's obligations under certain of the debt of AmeriGas Eagle,
aggregating approximately $138.0 million as of December 29, 2002, if AmeriGas
Eagle is unable to repay or refinance such debt, but only after recourse by the
owner to the assets of AmeriGas Eagle. National Propane's principal asset is an
intercompany note receivable from Triarc in the amount of $30.0 million as of
December 29, 2002 which amount was increased to $50.0 million as of January 1,
2003. We believe it is unlikely that we will be called upon to make any payments
under this indemnity. In August 2001, AmeriGas Propane, L.P., which we refer to
as AmeriGas Propane, purchased all of the interests in AmeriGas Eagle other than
National Propane's special limited partner interest. Either National Propane or
AmeriGas Propane may require AmeriGas Eagle to repurchase the special limited
partner interest. However, we believe it is unlikely that either party would
require repurchase prior to 2009 as either AmeriGas Propane would owe us tax
indemnification payments if AmeriGas Propane required the repurchase or we would
accelerate payment of deferred taxes, which would amount to $43.4 million as of
December 29, 2002, associated with our July 1999 sale of the propane business if
National Propane required the repurchase. In the event the interest is not
repurchased prior to 2009, we estimate our actual related taxes payable to be
$4.0 million in 2003 with further payments in 2004 through 2008 reducing the
taxes payable in 2009 to approximately $36.0 million.

Triarc guarantees mortgage and equipment notes payable through 2015 of
approximately $42.0 million as of December 29, 2002 related to 355 restaurants
sold by us in 1997. The purchaser of the restaurants also assumed substantially
all of the associated lease obligations which extend through 2031, including all
then existing extension or renewal option periods, although Arby's remains
contingently liable if the purchaser does not make the required future lease
payments. Those lease obligations total approximately $66.0 million as of
December 29, 2002, assuming the purchaser has made all scheduled payments
through that date under those lease obligations.

We guarantee up to $6.7 million of senior notes that mature in January 2007
issued by Encore to a major financial institution. During 2002, the outstanding
principal amount of these notes was reduced from $10.0 million to $7.2 million
as the lender forgave $2.8 million of principal and $2.5 million of related
accrued interest upon an investment by certain significant stockholders,
including us, of $5.0 million in newly-issued convertible preferred stock of
Encore. Our portion of the preferred stock investment was $0.9 million and
certain of our present officers, including entities controlled by them, invested
an aggregate of $1.4 million. Our guarantee will be reduced by (1) any
repayments of these senior notes, (2) any purchases of these senior notes by us
and (3) the amount of certain investment banking or financial advisory services
fees paid to the financial institution by us, Encore or another significant
stockholder of Encore or any of their affiliates. Some of our present and former
officers, including entities controlled by them, who collectively owned 15.7% of
Encore at the time of Encore's initial public offering in July 1999 are not
parties to this note guarantee and could indirectly benefit from it.

In addition to the note guarantee, we and certain other stockholders of
Encore, including our present and former officers referred to above who had
invested in Encore prior to its initial public offering, on a joint and several
basis, have entered into guarantees and agreements to guarantee up to $15.0
million of revolving credit borrowings of a subsidiary of Encore. We would be
responsible for approximately $1.8 million assuming the full $15.0 million was
borrowed and all of the parties, besides us, to the guarantees of the revolving
credit borrowings and certain related agreements fully perform thereunder. As of
Encore's year end of December 31, 2002, Encore had $3.9 million of outstanding
revolving credit borrowings. At December 29, 2002 we had a $15.0 million
interest-bearing bank custodial account at the financial institution providing
the revolving credit facility. Under the guarantees of the revolving credit
borrowings, this deposit is subject to set off under certain circumstances if
the parties to these guarantees of the revolving credit borrowings and related
agreements fail to perform their obligations thereunder.

Encore had encountered cash flow and liquidity difficulties in the past.
However, Encore's liquidity and capital were positively impacted by the debt
forgiveness and preferred stock investment discussed above. Encore also has
returned to profitability, and it reported net income available to common
stockholders for its year ended December 31, 2002. We currently believe it is
unlikely that we will be required to make payments under the note guarantee
and/or the bank guarantees.

31

Capital Expenditures

During 2002 cash capital expenditures included in 'Properties' in our
accompanying consolidated balance sheet amounted to $0.1 million and we
purchased a fractional interest in the use of a helicopter for $1.2 million. We
expect that cash capital expenditures will be approximately $3.6 million during
2003, principally to remodel company-owned restaurants, for which there were no
outstanding commitments as of December 29, 2002.

Acquisitions and Investments

On December 27, 2002 we completed the Sybra Acquisition for $9.7 million,
including estimated fees and expenses of $1.5 million, as discussed in more
detail in the 'Introduction' to this 'Management's Discussion and Analysis of
Financial Condition and Results of Operations.' The purchase price, less cash of
Sybra of $9.4 million, resulted in a net use of our cash of $0.3 million.

As of December 29, 2002, we have $658.2 million of cash, cash equivalents
and investments, including $34.7 million of investments classified as
non-current and net of $9.2 million of securities sold with an obligation for us
to purchase included in 'Accrued expenses' in our accompanying consolidated
balance sheet. We also had $32.5 million of restricted cash equivalents
including $30.5 million held in a reserve account discussed above under
Securitization Notes. The non-current investments include $22.7 million of
investments, at cost, in the Trusts designated to satisfy deferred compensation.
We continue to evaluate strategic opportunities for the use of our significant
cash and investment position, including additional business acquisitions,
repurchases of Triarc common shares (see 'Treasury Stock Purchases' below) and
investments.

Income Taxes

Our Federal income tax returns for years subsequent to 1993 have not been
examined by the Internal Revenue Service, which we refer to as the IRS. However,
should any income taxes or interest be assessed as the result of any Federal or
state examinations for periods through the October 25, 2000 date of the Snapple
Beverage Sale, Cadbury has agreed to pay up to $5.0 million of any resulting
income taxes or associated interest relating to the operations of the former
beverage businesses.

Treasury Stock Purchases

Our management is currently authorized, when and if market conditions
warrant, to repurchase up to $50.0 million of our class A common stock through
January 18, 2004. We cannot assure you that we will repurchase any shares under
this program. We repurchased 299,600 shares for a total cost of $7.2 million
during 2001 and 289,500 shares for a total cost of $7.0 million during 2002.

Discontinued Operations

The agreement relating to the October 25, 2000 Snapple Beverage Sale
provides for a post-closing adjustment, the amount of which is in dispute.
Cadbury has stated that it currently believes that it is entitled to receive
from us a post-closing adjustment of $23.2 million plus interest at 7.19% from
October 25, 2000 while we, on the other hand, have stated that we currently
believe that no post-closing adjustment is required. We are in arbitration with
Cadbury to determine the amount of the post-closing adjustment, if any. We
currently expect the arbitration process to be completed in 2003.

Cash Requirements

As of December 29, 2002, our consolidated cash requirements for continuing
operations for 2003, exclusive of operating cash flow requirements, consist
principally of (1) a maximum of $50.0 million of payments for repurchases of our
class A common stock for treasury under our current stock repurchase program,
(2) scheduled debt principal repayments aggregating $34.4 million, (3) capital
expenditures of approximately $3.6 million and (4) the cost of business
acquisitions, if any. Our consolidated cash requirements relating to
discontinued operations for 2003 consist principally of the Snapple Beverage
Sale post-closing adjustment, if any, of up to $23.2 million plus related
accrued interest. We anticipate meeting all of these requirements

32

through the use of our aggregate $623.5 million of existing cash and cash
equivalents and short-term investments, net of $9.2 million of short-term
investments sold with an obligation for us to purchase.

LEGAL AND ENVIRONMENTAL MATTERS

In 2001, a vacant property owned by Adams Packing Association, Inc., a
non-operating subsidiary of ours, was listed by the United States Environmental
Protection Agency on the Comprehensive Environmental Response, Compensation and
Liability Information System, which we refer to as CERCLIS, list of known or
suspected contaminated sites. The CERCLIS listing appears to have been based on
an allegation that a former tenant of Adams Packing conducted drum recycling
operations at the site from some time prior to 1971 until the late 1970s. The
business operations of Adams Packing were sold in December 1992. Adams Packing
engaged an environmental consultant that, under the supervision of the Florida
Department of Environmental Protection, which we refer to as the Florida DEP,
conducted an investigation of the site that was intended to develop additional
information on the extent and nature of the soil and groundwater contamination
and the appropriate remediation for that contamination. Adams Packing's
environmental consultant has submitted to the Florida DEP a summary of the
results of this investigation and Adams Packing and the Florida DEP have
negotiated a work plan for further investigation of the site and limited
remediation of the identified contamination. The work plan is embodied in a
consent order between Adams Packing and the Florida DEP. The consent order has
been executed by Adams Packing and by the Florida DEP subsequent to December 29,
2002 and will become effective upon expiration without incident of a public
comment period. Based on a preliminary cost estimate of approximately $1.0
million for completion of the work plan developed by Adams Packing's
environmental consultant and, after taking into consideration various legal
defenses available to us, including Adams Packing, Adams Packing has provided
for its estimate of its liability for this matter, including related legal and
consulting fees.

On March 23, 1999, a stockholder filed a complaint on behalf of persons who
held Triarc class A common stock as of March 10, 1999 which, as amended in April
2000, alleged that our tender offer statement filed with the Securities and
Exchange Commission in 1999, pursuant to which we repurchased 3,805,015 shares
of our class A common stock for $18.25 per share, was materially false and
misleading. The amended complaint sought damages in an unspecified amount,
together with prejudgment interest, the costs of suit, including attorneys'
fees, an order permitting all stockholders who tendered their shares in the
tender offer to rescind the transaction and unspecified other relief. The
amended complaint names us and the Executives as defendants. On October 17,
2002, the court presiding over the matter granted our motion to dismiss this
action and subsequently entered a judgment dismissing the case. On November 21,
2002, the plaintiff filed a notice of appeal. Subsequent to December 29, 2002,
the plaintiff withdrew the appeal.

In October 1998, various class action lawsuits were filed on behalf of our
stockholders. Each of these actions names us, the Executives and members of our
board of directors as defendants. On March 26, 1999, certain plaintiffs in these
actions filed an amended complaint making allegations substantially similar to
those asserted in the March 23, 1999 action described in the preceding
paragraph. In October 2000, the plaintiffs agreed to stay this action pending
determination of the March 23, 1999 action discussed in the preceding paragraph.

In addition to the environmental matter and stockholder lawsuits described
above, we are involved in other litigation and claims incidental to our
business. We and our subsidiaries have reserves for all of our legal and
environmental matters aggregating $2.7 million as of December 29, 2002. Although
the outcome of these matters cannot be predicted with certainty and some of
these matters may be disposed of unfavorably to us, based on currently available
information, including legal defenses available to us and/or our subsidiaries,
and given the aforementioned reserves, we do not believe that the outcome of
these legal and environmental matters will have a material adverse effect on our
consolidated financial position or results of operations.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make estimates and assumptions in applying our critical
accounting policies that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amount of

33

revenues and expenses during the reporting period. Our estimates and assumptions
concern, among other things, contingencies for legal, environmental, tax and
other matters and the valuations of some of our investments. We evaluate those
estimates and assumptions on an ongoing basis based on historical experience and
on various other factors which we believe are reasonable under the
circumstances.

We believe that the following represent our more critical estimates and
assumptions used in the preparation of our consolidated financial statements:

The amount of the post-closing adjustment, if any, being arbitrated in
connection with the Snapple Beverage Sale:

Cadbury has stated that it currently believes it is entitled to receive
from us a post-closing adjustment of $23.2 million, plus interest at
7.19% from October 25, 2000, while we, on the other hand, have stated
we currently believe that no post-closing adjustment is required. To
the extent that the actual post-closing adjustment differs from the
estimate we have accrued, that difference will be reflected net of
income tax effect in the gain or loss on disposal component of total
income or loss from discontinued operations in the fiscal quarter the
adjustment is finalized, which we currently expect will be in 2003. To
the extent the actual interest differs from the estimate we have
accrued, that difference will be reflected in interest expense in the
same fiscal quarter the post-closing adjustment is finalized.

Reserves for the resolution of income tax contingencies which are
subject to future examinations of our Federal and state income tax
returns by the IRS, or state taxing authorities, including remaining
provisions included in 'Net current liabilities relating to
discontinued operations' in our consolidated balance sheets:

Our Federal income tax returns subsequent to 1993 have not been
examined by the IRS. However, should any income taxes or interest be
assessed as the result of any Federal or state examinations through the
October 25, 2000 date of the Snapple Beverage Sale, Cadbury has agreed
to pay up to $5.0 million of any resulting income taxes or associated
interest relating to the operations of the discontinued beverage
businesses.

Reserves which total $2.7 million at December 29, 2002 for the
resolution of all of our legal and environmental matters as discussed
immediately above under 'Legal and Environmental Matters':

Should the actual cost of settling these matters differ from the
reserves we have accrued, that difference will be reflected in our
results of operations in the fiscal quarter in which the matter is
resolved or when our estimate of the cost changes.

Valuations of some of our investments:

Our investments in short-term available-for-sale and trading marketable
securities are valued based on quoted market prices or statements of
account received from investment managers which are principally based
on quoted market or brokered/dealer prices. Accordingly, we do not
anticipate any significant changes from the valuations of these
investments. Our investments in other short-term investments accounted
for under the cost method, which we refer to as Cost Investments, and
investments accounted for under the equity method, which we refer to as
Equity Investments, and the majority of our non-current investments are
valued almost entirely based on statements of account received from the
investment managers or the investees which are principally based on
quoted market or brokered/dealer prices. To the extent that some of
these investments, including the underlying investments in investment
limited partnerships, do not have available quoted market or
brokered/dealer prices, we rely on third-party appraisals or valuations
performed by the investment managers or the investees in valuing those
securities. These valuations are subjective and thus subject to
estimates which could change significantly from period to period. Those
changes in estimates in Cost Investments would impact our earnings only
to the extent of losses which are deemed to be other than temporary.
The total carrying value of these investments was approximately $16.1
million as of December 29, 2002. Those changes in estimates related to
the underlying income or losses of our Equity Investments in investment
limited partnerships would directly impact our earnings for our share
of the investments. However, the total carrying value of these
investments is only $1.8 million as of December 29, 2002. We also have
$4.1 million of non-marketable Cost Investments in securities for which
it is not practicable to estimate fair value

34

because the investments are non-marketable and are in start-up
enterprises for which we currently believe the carrying amount is
recoverable.

Provisions for unrealized losses on certain investments deemed to be
other than temporary:

We review all of our investments that have unrealized losses for any
that we might deem other than temporary. The losses we have recognized
were deemed to be other than temporary due to declines in the
underlying economics of specific securities or volatility in capital
and lending markets. This includes the underlying investments of any of
our investment limited partnerships and similar investment entities in
which we have an overall unrealized loss. This process is subjective
and subject to estimation. We have aggregate unrealized holding losses
on our available-for-sale marketable securities of $1.0 million as of
December 29, 2002 which, if not recovered, may result in the
recognition of future losses. Also, should any of our Cost Investments,
which total approximately $50.8 million as of December 29, 2002,
experience declines in value due to conditions that we deem to be other
than temporary, we may recognize additional other than temporary
losses. We have permanently reduced the cost basis component of the
investments for which we have recognized other than temporary losses of
$3.7 million, $3.5 million and $14.5 million during 2000, 2001 and
2002, respectively. As such, recoveries in the value of the
investments, if any, will not be recognized in income until the
investments are sold.

Our estimates of each of these items historically have been adequate.
However, due to uncertainties inherent in the estimation process, it is
reasonably possible that the actual resolution of any of these items could vary
significantly from the estimate and, accordingly, there can be no assurance that
the estimates may not materially change in the near term.

INFLATION AND CHANGING PRICES

We believe that inflation did not have a significant effect on our
consolidated results of operations during 2000, 2001 and 2002 since inflation
rates generally remained at relatively low levels.

SEASONALITY

Our continuing operations are not significantly impacted by seasonality.
However, our restaurant revenues are somewhat lower in our first quarter.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, 'Accounting for Asset Retirement
Obligations.' Statement 143 addresses financial accounting and reporting for
legal obligations associated with the retirement of tangible long-lived assets
and the associated asset retirement costs. Statement 143 requires that the
discounted fair value of an asset retirement obligation be recorded as a
liability in the period in which it is incurred or as soon thereafter as a
reasonable estimate of fair value can be made, with a corresponding increase to
the carrying amount of the long-lived asset. The capitalized cost is depreciated
over the useful life of the related asset. The provisions of Statement 143 are
effective starting with the first quarter of 2003. We do not believe that any of
our tangible long-lived assets presently have material associated retirement
obligations and, accordingly, we do not expect that the adoption of Statement
143 will have any immediate effect on our consolidated financial position or
results of operations.

In April 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 145, 'Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.'
Statement 145 most significantly rescinds Statement 4, 'Reporting Gains and
Losses from Extinguishment of Debt,' which required that gains and losses from
extinguishment of debt that were included in the determination of net income be
aggregated and, if material, classified as an extraordinary item, net of related
tax effect. Under Statement 145, any gains and losses from extinguishment of
debt will be classified as extraordinary items only if they meet the criteria in
Accounting Principles Board Opinion No. 30, 'Reporting the Results of
Operations -- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions.'
Those criteria specify that

35

extraordinary items must be both unusual in their nature and infrequent in their
occurrence. The provisions of Statement 145 with respect to the rescission of
Statement 4 must be adopted no later than our fiscal year beginning December 30,
2002 and require that prior periods presented be reclassified accordingly. Upon
adoption of Statement 145, we expect that any future charges relating to the
early extinguishment of debt will not meet the criteria of extraordinary items
under Opinion 30 and, therefore, will be reported as a component of costs and
expenses on a pretax basis with any applicable income tax benefit included in
our provision for or benefit from income taxes. This change in classification
would not have any impact on our reported net income or loss.

In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146, 'Accounting for Costs Associated with
Exit or Disposal Activities.' Statement 146 replaces the previous accounting
guidance provided by Issue No. 94-3, 'Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring),' of the Emerging Issues Task Force of the
Financial Accounting Standards Board. Under Statement 146, costs associated with
exit or disposal activities, other than those associated with a business
acquisition, will be recognized when they are incurred rather than at the date
of a commitment to an exit or disposal plan under Issue 94-3. Examples of costs
covered by Statement 146 include contract termination costs, including leases,
and certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
Statement 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. Since we do not presently have any exit or
disposal plans other than severance pay, relocation costs and other costs
associated with relocating the Sybra corporate offices, Statement 146 will not
have any immediate effect on our consolidated financial position or results of
operations.

In November 2002, The Financial Accounting Standards Board issued
Interpretation No. 45, 'Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others,' an
interpretation of Statements No. 5, 57 and 107 and rescission of Interpretation
No. 34. Interpretation No. 45 elaborates on the existing disclosure requirements
for most guarantees. Interpretation No. 45 also expands on the accounting
guidance of Statement No. 5 'Accounting for Contingencies' and provides that at
the time a guarantee is issued a liability must be recognized for the fair value
of the obligation undertaken in issuing the guarantee, including the ongoing
obligation to stand ready to perform over the term of the guarantee in the event
that the specified triggering events or conditions occur. Certain types of
guarantees are not included in the scope of Interpretation No. 45. In the past,
we have occasionally guaranteed debt or lease obligations in connection with the
sale of businesses or to support our investment in an affiliate. The initial
recognition provisions of Interpretation No. 45 are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002 and, accordingly,
will not have any immediate effect on our consolidated financial position or
results of operations. However, to the extent we enter into any similar
guarantees commencing January 1, 2003, we would be required to recognize the
fair value of the guarantees in our consolidated financial statements. The
disclosure requirements of Interpretation No. 45 are effective for our year
ended December 29, 2002 and our disclosure of our guarantees conforms with these
requirements.

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46 'Consolidation of Variable Interest Entities,' an
interpretation of Accounting Research Bulletin No. 51, 'Consolidated Financial
Statements.' Variable interest entities, which were formerly referred to as
special purpose entities, are generally entities that either (1) have equity
investors that do not provide significant financial resources for the entity to
sustain its activities or (2) have equity investors without voting rights. Under
Interpretation No. 46 variable interest entities must be consolidated by the
primary beneficiary. The primary beneficiary is generally defined as having the
majority of the risks and rewards of ownership arising from the variable
interest entity. Interpretation No. 46 also requires certain disclosures if a
significant, but not majority, variable interest is held. Interpretation No. 46
applies immediately for variable interests in entities created or obtained after
January 31, 2003 and in the first fiscal period beginning after June 15, 2003
for variable interests in entities acquired before February 1, 2003. Since we do
not presently have interests in any variable interest entities, the application
of Interpretation No. 46 will not have any immediate effect on our consolidated
financial position or results of operations.

36

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Certain statements we make under this Item 7A constitute 'forward-looking
statements' under the Private Securities Litigation Reform Act of 1995. See
'Special Note Regarding Forward-Looking Statements and Projections' in 'Part I'
preceding 'Item 1.'

We are exposed to the impact of interest rate changes, changes in the market
value of our investments and, to a lesser extent, foreign currency fluctuations.

Policies and procedures -- In the normal course of business, we employ
established policies and procedures to manage our exposure to changes in
interest rates, changes in the market value of our investments and fluctuations
in the value of foreign currencies using financial instruments we deem
appropriate.

Interest Rate Risk

Our objective in managing our exposure to interest rate changes is to limit
the impact of interest rate changes on earnings and cash flows. As of December
29, 2002, our long-term debt, including current portion, aggregated $387.1
million and consisted of $368.8 million of fixed-rate debt, including $5.6
million of capitalized leases, and $18.3 million of a variable-rate bank loan.
The fair value of our fixed-rate debt will increase if interest rates decrease.
We generally use interest rate caps or interest rate swap agreements on a
portion of our variable-rate debt to limit our exposure to the effects of
increases in short-term interest rates on our earnings and cash flows. As of
December 29, 2002 we did not have any interest rate cap agreements outstanding.
However, we do have an interest rate swap agreement in connection with our
variable-rate bank term loan. The swap agreement effectively establishes a fixed
interest rate on this variable-rate debt, but with an embedded written call
option whereby the swap agreement will no longer be in effect if, and for as
long as, the one-month London Interbank Offered Rate, which we refer to as
LIBOR, is at or above the specified rate of 6.5% which was 3% higher than the
one-month LIBOR at the time the swap agreement was entered into. This swap
agreement, therefore, does not fully protect us from exposure to significant
increases in interest rates due to the written call option. In addition to our
fixed-rate and variable-rate debt, our investment portfolio includes debt
securities that are subject to interest rate risk with maturities which range
from less than one year to nearly thirty years. The fair market value of all of
our investments in debt securities will decline if interest rates increase.

Equity Market Risk

Our objective in managing our exposure to changes in the market value of our
investments is to balance the risk of the impact of these changes on earnings
and cash flows with our expectations for long-term investment returns. Our
primary exposure to equity price risk relates to our investments in equity
securities, equity derivatives, securities sold with an obligation for us to
purchase and investment limited partnerships and similar investment entities. We
have established policies and procedures governing the type and relative
magnitude of investments we may make. We have a management investment committee
which supervises the investment of certain funds not currently required for our
operations and our board of directors has established certain investment
policies to be followed with respect to the investment of funds.

Foreign Currency Risk

Our objective in managing our exposure to foreign currency fluctuations is
to limit the impact of these fluctuations on earnings and cash flows. Our
primary exposure to foreign currency risk relates to our investments in certain
investment limited partnerships and similar investment entities that hold
foreign securities. To a more limited extent, we have foreign currency exposure
when one of our investment funds buys or sells foreign currencies or financial
instruments denominated in foreign currencies. However, some of the investment
managers hedge the foreign currency exposure, thereby substantially mitigating
the risk. We monitor these exposures and periodically determine our need for the
use of strategies intended to lessen or limit our exposure to these
fluctuations. We also have a relatively limited amount of exposure to (1)
investments in foreign subsidiaries and (2) export revenues and related
receivables denominated in foreign currencies which are subject to foreign
currency fluctuations. Our foreign subsidiary exposures relate to operations in
Canada and our export revenue exposures primarily relate to royalties in Canada.
Foreign operations and foreign export revenues of continuing operations for the
years ended December 30, 2001 and December 29, 2002 together represented

37

only 3% and 2%, respectively, of our total royalties and franchise and related
fees, and an immediate 10% change in foreign currency exchange rates versus the
United States dollar from their levels at December 30, 2001 and December 29,
2002 would not have a material effect on our consolidated financial position or
results of operations.

Overall Market Risk

We balance our exposure to overall market risk by investing a portion of our
portfolio in cash and cash equivalents with relatively stable and risk-minimized
returns. We periodically interview and select asset managers to avail ourselves
of higher, but more risk-inherent, returns from the investment strategies of
these managers. We also seek to identify alternative investment strategies that
may earn higher returns with attendant increased risk profiles for a portion of
our investment portfolio. We continue to evaluate whether to adjust our asset
allocations to increase the portion of our investments which offer the
opportunity for higher, but more risk-inherent, returns and lower the portion of
our risk-minimized investments. We periodically review the returns from each of
our investments and may maintain, liquidate or increase selected investments
based on this review and our assessment of potential future returns.

We maintain investment portfolio holdings of various issuers, types and
maturities. As of December 30, 2001 and December 29, 2002, such investments
consisted of the following (in thousands):

Our cash equivalents are short-term, highly liquid investments with
maturities of three months or less when acquired and consisted principally of
money market mutual funds, interest-bearing brokerage and bank accounts with a
stable value, commercial paper of high credit-quality entities and United States
government agency debt securities. Our short-term investments included $30.0
million and $75.4 million as of December 30, 2001 and December 29, 2002,
respectively, of United States government and government agency debt securities
with maturities ranging from ten months to two years when acquired. The $30.0
million and $75.4 million together with our cash equivalents were highly liquid
investments that combined constituted over 80% of our total cash equivalents and
short-term investments in each year shown above.

38

At December 30, 2001 our investments were classified in the following
general types or categories (in thousands):

At December 29, 2002 our investments were classified in the following
general types or categories (in thousands):

Our marketable securities are classified and accounted for either as
'available-for-sale' or 'trading' and are reported at fair market value with the
resulting net unrealized holding gains or losses, net of income taxes, reported
as a separate component of comprehensive income or loss bypassing net income or
included as a component of net income, respectively. Investment limited
partnerships and similar investment entities and

39

other non-current investments in which we do not have significant influence over
the investee are accounted for at cost (see below). Realized gains and losses on
investment limited partnerships and similar investment entities and other
non-current investments recorded at cost are reported as investment income or
loss in the period in which the securities are sold. Investment limited
partnerships and similar investment entities and other non-current investments
in which we have significant influence over the investee are accounted for in
accordance with the equity method of accounting under which our results of
operations include our share of the income or loss of each of the investees. We
review all of our investments in which we have unrealized losses for any
unrealized losses deemed to be other than temporary. We recognize an investment
loss currently for any resulting other than temporary loss with a permanent
reduction in the cost basis component of the investment. The cost of investments
reflected in the tables above represents original cost less unrealized losses
that were deemed to be other than temporary.

SENSITIVITY ANALYSIS

For purposes of this disclosure, market risk sensitive instruments are
divided into two categories: instruments entered into for trading purposes and
instruments entered into for purposes other than trading. Our measure of market
risk exposure represents an estimate of the potential change in fair value of
our financial instruments. Market risk exposure is presented for each class of
financial instruments held by us at December 30, 2001 and December 29, 2002 for
which an immediate adverse market movement causes a potential material impact on
our financial position or results of operations. We believe that the rates of
adverse market movements described below represent the hypothetical loss to
future earnings and do not represent the maximum possible loss nor any expected
actual loss, even under adverse conditions, because actual adverse fluctuations
would likely differ. In addition, since our investment portfolio is subject to
change based on our portfolio management strategy as well as market conditions,
these estimates are not necessarily indicative of the actual results which may
occur.

The following tables reflect the estimated effects on the market value of
our financial instruments as of December 30, 2001 and December 29, 2002 based
upon assumed immediate adverse effects as noted below (in thousands):

TRADING PURPOSES:

The debt securities included in the trading portfolio were entirely
investments in convertible bonds which trade primarily on the conversion feature
of the securities rather than on the stated interest rate and, as such, there
was no material interest rate risk since a change in interest rates of one
percentage point would not have had a material impact on our consolidated
financial position or results of operations. The securities included in the
trading portfolio denominated in foreign currency totaled less than $1.0 million
and, accordingly, there was no significant foreign currency risk.

The sensitivity analysis of financial instruments held for trading purposes
assumes an instantaneous 10% decrease in the equity markets in which we are
invested from their levels at December 30, 2001 and December 29, 2002, with all
other variables held constant. For purposes of this analysis, our debt
securities, which were entirely convertible bonds, were assumed to primarily
trade based upon the conversion feature of the securities and be perfectly
correlated with the assumed equity index.

40

OTHER THAN TRADING PURPOSES:

The sensitivity analysis of financial instruments held at December 30, 2001
and December 29, 2002 for purposes other than trading assumes an instantaneous
change in market interest rates of one percentage point and an instantaneous 10%
decrease in the equity markets in which we are invested, both with all other
variables held constant. For purposes of this analysis, our debt investments
were assumed to have average maturities as set forth below. Our cash equivalents
consisted of $487.0 million and $420.7 million as of December 30, 2001 and
December 29, 2002, respectively, of money market funds and interest-bearing
brokerage and bank accounts which are designed to maintain a stable value and,
as a result, were assumed to have no interest rate risk, and $3.0 million and
$28.3 million as of December 30, 2001 and December 29, 2002, respectively, of
commercial paper with maturities of three months or less when acquired which
were assumed to have an average maturity of 45 days. Our restricted cash
equivalents were invested in money market funds and are assumed to have no
interest rate risk since those funds are designed to maintain a stable value.
Our United States government agency debt securities at December 30, 2001
consisted of a single security with a maturity of two years when acquired and
was assumed to have a maturity of two years. Our United States government and
government agency debt securities at December 29, 2002 consisted of several
securities with maturities ranging from ten months to two years when acquired
and had an average remaining maturity of seven months. Our corporate debt
securities consisted almost entirely of short-term commercial paper and had an
average maturity of 180 days and 120 days at December 30, 2001 and December 29,
2002, respectively. Our asset-backed securities had expected maturities ranging
from less than two years to thirty years when acquired and had an average
remaining maturity of eight and three-quarters years and seven years at December
30, 2001 and December 29, 2002, respectively. Our debt mutual fund had
underlying investments with an average duration of approximately two years and
one and one-half years at December 30, 2001 and December 29, 2002, respectively,
and accordingly, was assumed to have an average maturity of two years and one
and one-

41

half years at December 30, 2001 and December 29, 2002, respectively. Our other
investments, principally investment limited partnerships and similar investment
entities, included debt securities for which we assumed an average maturity of
ten years. The interest rate risk reflects, for each of these debt investments,
the impact on our results of operations. At the time these securities mature
and, assuming we reinvest in similar securities, the effect of the interest rate
risk of one percentage point above their levels at December 30, 2001 and
December 29, 2002 would continue beyond the maturities assumed.

The interest rate risk presented with respect to our long-term debt,
excluding capitalized lease obligations relates only to our fixed-rate debt and
represents the potential impact the indicated change has on the fair value of
this debt and not on our financial position or our results of operations. The
fair value of our variable-rate debt approximates the carrying value since the
floating rate resets monthly. However, as discussed above under 'Interest Rate
Risk,' we have an interest rate swap agreement but with an embedded written call
option on our variable-rate debt. As interest rates decrease, the fair market
values of the interest rate swap agreement and the written call option both
decrease, but not necessarily by the same amount. The interest rate risk
presented with respect to the interest rate swap agreement represents the
potential impact the indicated change has on the net fair value of the swap
agreement and embedded written call option and on our financial position and
results of operations.

For investments in investment limited partnerships and similar investment
entities accounted for at cost and other non-current investments which trade in
public markets included in 'Other investments' in the tables above, the decrease
in the equity markets and the change in foreign currency were assumed for this
analysis to be other than temporary. To the extent such entities invest in
convertible bonds which trade primarily on the conversion feature of the
securities rather than on the stated interest rate, this analysis assumed equity
price risk and no interest rate risk. Further, this analysis assumed no market
risk for other investments, other than investment limited partnerships and
similar investment entities and other non-current investments which trade in
public equity markets. This analysis also assumes an instantaneous 10% change in
the foreign currency exchange rates versus the United States dollar from their
respective levels at December 30, 2001 and December 29, 2002, with all other
variables held constant. The foreign currency risk presented excludes those
investments where the investment manager has fully hedged the risk.

We also had a written call option on our class A common stock which
effectively arose upon the assumption of our zero coupon convertible debentures
by the purchaser of our former beverage businesses, which remained convertible
into our class A common stock until February 8, 2003, when it ceased to exist
without any of our class A common stock being called under the option. The
equity risk presented with respect to this written call option as of December
30, 2001 represented the potential impact of an instantaneous 10% increase in
the price of our class A common stock on the fair value of the written call
option and on our financial position and results of operations. The fair value
of this written call option was less than $1,000 as of December 29, 2002 and, as
a result, the associated equity risk was not significant.

42

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

43

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
TRIARC COMPANIES, INC.:
New York, New York

We have audited the accompanying consolidated balance sheets of Triarc
Companies, Inc. and subsidiaries (the 'Company') as of December 29, 2002 and
December 30, 2001, and the related consolidated income statements, statements of
stockholders' equity (deficit) and statements of cash flows for each of the
three years in the period ended December 29, 2002. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of December 29,
2002 and December 30, 2001 and the results of their operations and their cash
flows for each of the three years in the period ended December 29, 2002 in
conformity with accounting principles generally accepted in the United States of
America.

As discussed in Notes 1 and 9 to the consolidated financial statements,
effective December 31, 2001 the Company changed its method of accounting for
goodwill in accordance with Statement of Financial Accounting Standards
No. 142.

DELOITTE & TOUCHE LLP

New York, New York
March 27, 2003

44

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)

See accompanying notes to consolidated financial statements.

45

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

See accompanying notes to consolidated financial statements.

46

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)

47

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) -- CONTINUED
(IN THOUSANDS)

48

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) -- CONTINUED
(IN THOUSANDS)

See accompanying notes to consolidated financial statements.

49

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

50

TRIARC COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS -- CONTINUED
(IN THOUSANDS)

Due to their noncash nature, the following transactions are not reflected in
the respective consolidated statements of cash flows (amounts in whole shares
and dollars):

On January 19, 2000, in addition to a cash payment of $9,210,000 included in
'Capital expenditures,' the Company assumed an $18,000,000 secured promissory
note in connection with the acquisition of 280 Holdings, LLC, which owns an
airplane previously leased by the Company. Such $18,000,000 was reported as an
addition to 'Properties' with an offsetting increase in long-term debt,
including current portion. See Note 23 for further disclosure of this
transaction.

In connection with the October 25, 2000 sale of the Company's beverage
businesses and the related assumption by the purchaser of the Company's
convertible debt, the Company effectively established a written call option on
the Company's common stock relating to the conversion feature of such debt. The
fair value of the written call option of $1,476,000 as of October 25, 2000 was
recorded as a reduction of the gain on the sale of the beverage businesses
included in discontinued operations with an equal offsetting credit to 'Other
liabilities, deferred income and minority interests in a consolidated
subsidiary.' The reduction in the fair value of the written call option during
the period October 26, 2000 to December 31, 2000 and for the years ended
December 30, 2001 and December 29, 2002 was reported as a component of 'Other
income, net.' See Note 14 for further disclosure of this transaction.

In October 2001, the Company eliminated and effectively canceled the
previously authorized 25,000,000 shares of its former class B common stock, all
outstanding shares of which had been repurchased by the Company. As a result of
the effective cancellation of the 5,997,622 shares of the former class B common
stock repurchased, the Company recorded an entry within stockholders' equity
which reduced 'Common stock' by $600,000, 'Additional paid-in capital' by
$83,211,000, 'Retained earnings' by $43,325,000 and 'Common stock held in
treasury' by $127,136,000. See Note 14 for further disclosure of this
transaction.

51

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS -- CONTINUED

On December 27, 2002, the Company purchased all of the voting equity
interests of Sybra, Inc. for $9,750,000, including estimated fees and expenses
of $1,470,000. The purchase price, less cash of Sybra, Inc. of $9,425,000,
resulted in a net use of the Company's cash of $325,000. In conjunction with the
acquisition, liabilities were assumed as follows (in thousands):

Fair value of assets acquired, excluding cash acquired...... $153,342
Net cash paid for the voting equity interests............... (325)
--------
Liabilities assumed................................. $153,017
--------
--------

See Note 3 for further disclosure of this transaction.

See accompanying notes to consolidated financial statements.

52

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 29, 2002

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Triarc
Companies, Inc. ('Triarc' and, collectively with its subsidiaries, the
'Company') and its subsidiaries. The principal operating subsidiaries of the
Company, each indirectly wholly-owned as of December 29, 2002, are (1) Arby's,
Inc. ('Arby's'), which, in turn, indirectly owns 100% of Arby's Franchise Trust
('Arby's Trust'), and (2) Sybra, Inc. ('Sybra') which was acquired on December
27, 2002. The Company's other wholly-owned subsidiaries at December 29, 2002
that are referred to herein also include Triarc Acquisition, LLC ('Triarc
Acquisition'), which owns 100% of Triarc Restaurant Holdings, LLC ('TRH'), the
direct parent of Arby's and Sybra; National Propane Corporation ('National
Propane'); SEPSCO, LLC ('SEPSCO'); Citrus Acquisition Corporation which owns
100% of Adams Packing Association, Inc. ('Adams'); and Triarc Consumer Products
Group, LLC ('TCPG'). TCPG owns 100% of RCAC, LLC, into which RC/Arby's
Corporation ('RC/Arby's') was merged and also owned (1) 100% (99.9% prior to
October 25, 2000) of Snapple Beverage Group, Inc. ('Snapple Beverage Group')
which owned 100% of Snapple Beverage Corp. ('Snapple'), Mistic Brands, Inc.
('Mistic') and Stewart's Beverages, Inc. ('Stewart's') and (2) 100% of Royal
Crown Company, Inc. ('Royal Crown'), prior to the October 25, 2000 sale of such
companies. These beverage businesses have been accounted for as discontinued
operations in 2000 through the date of sale. All significant intercompany
balances and transactions have been eliminated in consolidation. See Notes 3 and
18 for further disclosure of the acquisition and disposition referred to above.

FISCAL YEAR

The Company reports on a fiscal year consisting of 52 or 53 weeks ending on
the Sunday closest to December 31 and each of its 2000, 2001 and 2002 fiscal
years contained 52 weeks. Such periods are referred to herein as (1) 'the year
ended December 31, 2000' or '2000,' which commenced on January 3, 2000 and ended
on December 31, 2000, (2) 'the year ended December 30, 2001' or '2001,' which
commenced on January 1, 2001 and ended on December 30, 2001 and (3) 'the year
ended December 29, 2002' or '2002,' which commenced on December 31, 2001 and
ended on December 29, 2002. December 30, 2001 and December 29, 2002 are referred
to herein as 'Year-End 2001' and 'Year-End 2002,' respectively.

CASH EQUIVALENTS

All highly liquid investments with a maturity of three months or less when
acquired are considered cash equivalents. The Company typically invests its
excess cash in money market mutual funds, interest-bearing brokerage and bank
accounts with a stable value, commercial paper of high credit-quality entities
and United States government agency debt securities.

INVESTMENTS

Short-Term Investments

Short-term investments include marketable debt and equity securities with
readily determinable fair values and other short-term investments, including
investments in limited partnerships and similar investment entities, which are
not readily marketable. The Company's marketable securities are classified and
accounted for either as 'available-for-sale' or 'trading' and are reported at
fair market value with the resulting net unrealized holding gains or losses, net
of income taxes, reported as a separate component of comprehensive income (loss)
bypassing net income (loss) or included as a component of net income (loss),
respectively. The cost or the amount reclassified out of accumulated other
comprehensive income (deficit) into earnings or loss of securities sold for all
marketable securities is determined using the specific identification method.
Other short-term investments that are not readily marketable consist of
investments in which the Company has significant

53

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

influence over the operating and financial policies of the investees ('Equity
Investments') and investments in which the Company does not have significant
influence over the investees ('Cost Investments'). Equity Investments are
accounted for in accordance with the equity method (the 'Equity Method') under
which each such investment is reported at cost plus the Company's proportionate
share of the income or loss or other changes in stockholders' equity of each
such investee since its acquisition. The consolidated results of operations
include such proportionate share of income or loss. The carrying value of the
Company's investment in each of its short-term Equity Investments is equal to
the underlying equity in net assets of each investee. Cost Investments are
accounted for using the cost method (the 'Cost Method').

Non-Current Investments

The Company's non-current investments consist of Equity Investments which
are accounted for in accordance with the Equity Method and Cost Investments
which are accounted for under the Cost Method. Prior to December 31, 2001, the
excess, if any, of the carrying value of the Company's non-current Equity
Investments over the underlying equity in net assets (the 'Excess Carrying
Value') of each investee at the time of their acquisition was amortized to
equity in earnings or losses of investees included in 'Other income, net' (see
Note 17) on a straight-line basis over 15 years until the carrying value of
those Equity Investments had been reduced to less than the underlying equity
(see Note 8).

Effective December 31, 2001, the Company adopted Statement of Financial
Accounting Standards ('SFAS') No. 142 ('SFAS 142'), 'Goodwill and Other
Intangible Assets.' In accordance therewith, the Excess Carrying Value, if any,
is no longer amortized.

See Note 8 for a further disclosure of the Company's non-current
investments.

Securities Sold With an Obligation to Purchase

Securities sold with an obligation to purchase are reported at fair market
value with the resulting net unrealized gains or losses included as a component
of net income (loss).

All Investments

The Company reviews all of its investments in which the Company has
unrealized losses and recognizes an investment loss for any such unrealized
losses deemed to be other than temporary ('Other Than Temporary Losses') with a
corresponding permanent reduction in the cost basis component of the
investments. With respect to available-for-sale securities, the effect of the
permanent reduction in the cost basis is an increase in the unrealized gain or a
decrease in the unrealized loss on the available-for-sale investments component
of 'Comprehensive income (loss).' With respect to Equity Investments, the effect
of the permanent reduction in the cost basis is a reduction of the cost
component of the carrying value of the investment.

Gain on Issuance of Investee Stock

The Company recognizes a gain or loss upon sale of any previously unissued
stock by an Equity Investment to third parties to the extent of the decrease in
the Company's ownership of the investee. However, a gain is recognized only when
realization of the gain by the Company is reasonably assured.

INVENTORIES

The Company's inventories are stated at the lower of cost or market with
cost determined in accordance with the first-in, first-out method.

54

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

PROPERTIES AND DEPRECIATION AND AMORTIZATION

Properties are stated at cost less accumulated depreciation and
amortization. Depreciation and amortization of properties is computed
principally on the straight-line basis using the estimated useful lives of the
related major classes of properties: 3 to 15 years for office, restaurant and
transportation equipment and 40 years for buildings. Leased assets capitalized
and leasehold improvements are amortized over the shorter of their estimated
useful lives or the terms of the respective leases.

AMORTIZATION OF INTANGIBLES

Goodwill, representing the costs in excess of net assets of acquired
companies, was amortized on the straight-line basis over 15 to 40 years until
December 30, 2001, after which such amortization ceased upon the adoption of
SFAS 142. Other intangible assets are amortized on the straight-line basis using
the estimated useful lives of the related classes of intangibles: 15 years for
trademarks and distribution rights and 3 years for computer software costs. A
non-compete agreement, which became fully amortized during 2001, was amortized
over 5 years. Deferred financing costs and original issue debt discount are
being amortized as interest expense over the lives of the respective debt using
the interest rate method.

See Note 9 for further information with respect to the Company's goodwill
and other intangible assets.

IMPAIRMENTS

Goodwill

Through the year ended December 30, 2001, the amount of impairment, if any,
in unamortized goodwill was measured based on projected future operating
performance. As the future operating performance of the enterprise (Arby's) to
which the goodwill related through the period such goodwill was being amortized
was sufficient to absorb the related amortization, the Company deemed there to
be no impairment of goodwill.

Effective with the adoption of SFAS 142 as of December 31, 2001, the amount
of impairment, if any, in unamortized goodwill is measured by the excess, if
any, of the carrying amount of the unamortized goodwill over its implied fair
value. SFAS 142 requires that goodwill be tested for impairment at least
annually. The Company has determined that there was no impairment of goodwill
upon adoption of SFAS 142 and as of the first annual testing date.

Long-Lived Assets

The Company reviews its long-lived assets other than goodwill for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. If such review indicates an asset may not be
recoverable, an impairment loss is recognized for the excess of the carrying
amount over the fair value of an asset to be held and used or over the fair
value less cost to sell of an asset to be disposed. The Company has determined
that for the year ended December 29, 2002 all of its long-lived assets that
required testing for impairment were recoverable and did not require the
recognition of any associated impairment loss.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company's derivatives consist of (1) the conversion component of
short-term investments in corporate convertible debt securities which are
accounted for as trading securities, (2) put and call options on equity and
corporate debt securities which are accounted for as trading securities, (3) an
interest rate swap agreement in connection with a secured bank term loan and (4)
a written call option on Triarc's common stock with physical settlement. In
addition, prior to August 10, 2001 the Company's derivatives included a forward
purchase obligation for Triarc's common stock with cash settlement (see Note
14). The conversion component of corporate convertible debt securities, put and
call options on equity and corporate debt securities, the interest

55

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

rate swap agreement and the call option on Triarc's common stock with physical
settlement are recorded at fair value with changes in fair value recorded in the
Company's results of operations. The forward purchase obligation for Triarc's
common stock with cash settlement was recorded at the cash redemption amount. As
of February 8, 2003, the written call option on Triarc's common stock ceased to
exist without any Triarc common stock being called under the option (see Note
14). See Note 11 for further disclosure of the Company's derivative financial
instruments.

STOCK-BASED COMPENSATION

The Company measures compensation costs for its employee stock-based
compensation under the intrinsic value method. Accordingly, compensation cost
for the Company's stock options is measured as the excess, if any, of the market
price of the Company's common stock at the date of grant, or at any subsequent
measurement date as a result of certain types of modifications to the terms of
its stock options, over the amount an employee must pay to acquire the stock.
Such amounts are being amortized as compensation expense over the vesting period
of the related stock options. Any compensation cost is recognized as expense
only to the extent it exceeds compensation expense previously recognized for
such stock options. Compensation cost for stock appreciation rights, if any, is
recognized currently based on the change in the market price of the Company's
common stock during each period.

A summary of the effect on net income (loss) and net income (loss) per share
in each year presented as if the fair value method had been applied to all
outstanding and unvested stock options that were granted commencing January 1,
1995 is as follows (in thousands except per share data):

See Note 14 for disclosure of the adjustments, methods and significant
assumptions used to estimate the fair values of stock options reflected in the
table above.

TREASURY STOCK

Common stock held in treasury is stated at cost. The cost of issuances of
shares from treasury stock is determined at average cost.

COSTS OF BUSINESS ACQUISITIONS

The Company defers any costs incurred relating to the pursuit of business
acquisitions while the potential acquisition process is ongoing. Whenever the
acquisition is successful, such costs are included as a component of the
purchase price of the acquired entity. Whenever the Company decides it will no
longer pursue a potential acquisition, any related deferred costs are written
off at that time.

56

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

FOREIGN CURRENCY TRANSLATION

Financial statements of foreign subsidiaries are prepared in their
respective local currencies and translated into United States dollars at the
current exchange rates for assets and liabilities and at an average rate for the
year for revenues, costs and expenses. Net gains or losses resulting from the
translation of foreign financial statements, including those of discontinued
operations through their date of disposition, are charged or credited directly
to the 'Currency translation adjustment' component of 'Accumulated other
comprehensive income (deficit)' in the accompanying consolidated statements of
stockholders' equity (deficit).

INCOME TAXES

The Company files a consolidated Federal income tax return with all of its
subsidiaries. Deferred income taxes are provided to recognize the tax effect of
temporary differences between the bases of assets and liabilities for tax and
financial statement purposes.

REVENUE RECOGNITION

Franchise fees are recognized as revenue when a franchised restaurant is
opened since all material services and conditions related to the franchise fee
have been substantially performed by the Company upon the restaurant opening.
Franchise fees for multiple area development agreements represent the aggregate
of the franchise fees for the number of restaurants in the area being developed
and are recognized as revenue when each restaurant is opened in the same manner
as franchise fees for individual restaurants. Franchise commitment fee deposits
are forfeited and recognized as revenue upon the termination of the related
commitments to open new franchised restaurants. Royalties are based on a
percentage of restaurant sales of the franchised store and are recognized as
earned.

RECLASSIFICATIONS

Certain amounts included in the accompanying prior years' consolidated
financial statements and footnotes thereto have been reclassified to conform
with the current year's presentation.

(2) SIGNIFICANT RISKS AND UNCERTAINTIES

NATURE OF OPERATIONS

The Company franchises and, effective with the acquisition of Sybra on
December 27, 2002 (see Note 3), operates Arby's'r' quick service restaurants
specializing in slow-roasted roast beef sandwiches. Arby's restaurants also
offer an extensive menu of chicken, turkey, ham and submarine sandwiches, side
dishes and salads including Arby's Market Fresh'TM' sandwiches. Some of the
Arby's system-wide restaurants are multi-branded with the Company's T.J.
Cinnamons'r' product line and/or, to a lesser extent, Pasta Connection'r'
product line. The franchised restaurants are principally throughout the United
States and, to a much lesser extent, Canada. The Company's owned restaurants are
located in nine states, primarily Michigan, Texas, Pennsylvania and Florida.
Information concerning the number of Arby's franchised and Company-owned
restaurants is as follows:

- ---------

(a) The Company operates these 239 restaurants effective December 28, 2002 as a
result of the acquisition of Sybra.

57

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

SIGNIFICANT ESTIMATES

The Company's significant estimates which are susceptible to change in the
near term relate to (1) the amount of the post-closing adjustment currently in
arbitration in connection with the Snapple Beverage Sale (see Note 3), (2)
provisions for the resolution of income tax contingencies subject to future
examinations of the Company's Federal and state income tax returns by the
Internal Revenue Service ('IRS') or state taxing authorities, including
remaining provisions included in 'Net current liabilities relating to
discontinued operations,' (see Note 13), (3) provisions for the resolution of
legal and environmental matters (see Note 24), (4) the valuation of investments
which are not publicly traded (see Note 12) and (5) provisions for unrealized
losses on investments deemed to be other than temporary (see Note 16). The
Company's estimates of each of these items historically have been adequate.
However, due to uncertainties inherent in the estimation process, it is
reasonably possible that the actual resolution of any of these items could vary
significantly from the estimate and, accordingly, there can be no assurance that
the estimates may not materially change in the near term.

CERTAIN RISK CONCENTRATIONS

The Company believes its vulnerability to risk concentrations in its cash
equivalents and investments is mitigated by (1) the Company's policies
restricting the eligibility, credit quality and concentration limits for its
placements in cash equivalents, (2) the diversification of its investments and
(3) to the extent the cash equivalents and investments are held in brokerage
accounts, insurance from the Securities Investor Protection Corporation of up to
$500,000 per account as well as supplemental private insurance coverage
maintained by the brokerage firms covering substantially all of the Company's
accounts. The Company has one significant franchisee which accounted for 27% of
consolidated revenues from royalties and franchise and related fees in each of
2000, 2001 and 2002, the loss of which would have a material adverse impact on
the Company's business. The Company's restaurant operations could also be
adversely affected by changing consumer preferences resulting from health or
safety concerns with respect to the consumption of beef, french fries or certain
other foods. The Company believes that its vulnerability to risk concentrations
related to significant vendors and sources of its raw materials for itself and
its franchisees is not significant. The Company also believes that its
vulnerability to risk concentrations related to geographical concentration is
minimized since the Company and its franchisees generally operate throughout the
United States with minimal foreign exposure.

(3) BUSINESS ACQUISITIONS AND DISPOSITIONS

Acquisition of Sybra

On December 27, 2002, the Company completed the acquisition of all of the
voting equity interests of Sybra (the 'Sybra Acquisition') from I.C.H.
Corporation ('ICH') under a plan of reorganization confirmed by a United States
Bankruptcy Court. In February 2002, ICH and Sybra had filed for protection under
Chapter 11 of the United States Bankruptcy Code in order to restructure their
financial obligations. Sybra owns and operates 239 Arby's restaurants in nine
states and, prior to the Sybra Acquisition, was the second largest franchisee of
Arby's restaurants. The Company acquired Sybra with the expectation of
strengthening and increasing the value of its Arby's brand. The aggregate
purchase price paid for Sybra by the Company was

58

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

$9,750,000, consisting of $8,280,000 of payments to ICH's creditors and
$1,470,000 of estimated fees and expenses.

The allocation of the purchase price of Sybra to the assets acquired and
liabilities assumed at the date of acquisition, on a preliminary basis and
subject to finalization due to the recent date of the acquisition, and a
reconciliation to 'Cost of business acquisition less cash acquired' in the
accompanying consolidated statement of cash flows are summarized in the
following table (in thousands):

Current assets.............................................. $ 19,104
Properties.................................................. 60,077
Goodwill.................................................... 71,960
Other intangible assets..................................... 3,379
Deferred income tax benefit................................. 7,848
Deferred costs and other assets............................. 399
--------
Total assets acquired................................... 162,767
--------
Current liabilities......................................... 31,805
Long-term debt, including current portion................... 103,242
Other liabilities and deferred income....................... 17,970
--------
Total liabilities assumed............................... 153,017
--------
Net assets acquired......................................... 9,750
Less cash acquired.......................................... 9,425
--------
Cost of business acquisition less cash acquired............. $ 325
--------
--------

The Sybra acquisition has resulted in $71,960,000 of goodwill (see Note 9),
of which $17,723,000 is estimated to be deductible for income tax purposes.
Arby's restaurants typically have relatively low levels of receivables and
inventories, as is the case with the Arby's restaurants operated by Sybra, and
Sybra has financed substantially all of its land and buildings, including those
buildings reported in leasehold improvements. As such, Sybra had net liabilities
on its historical financial statements before the allocation of the purchase
price to the assets acquired and liabilities assumed despite the substantial
value of the restaurants. This excess of the purchase price over the net
tangible assets acquired relates in part to the fair value of the franchise
agreements; however, since Arby's is the franchisor of the acquired restaurants
that value is included in goodwill in the Company's consolidated balance sheet
as of December 29, 2002. The only other significant identifiable intangible
asset in accordance with an independent appraisal is $3,274,000 of favorable
leases which are amortizable over the lives of the leases with a weighted
average remaining useful life of 14 years.

Sybra's results of operations subsequent to the December 27, 2002 date of
the Sybra Acquisition through December 29, 2002 have been included in the
accompanying consolidated income statement for the year ended December 29, 2002.
The results of operations before income taxes have been reported in 'Other
income, net' (see Note 17) for convenience since Sybra's pretax income for that
two-day period is not material to the Company's consolidated income before
income taxes. The pretax income of Sybra consists of the following components
(in thousands):

Net sales and other income.................................. $933
Costs and expenses.......................................... 918
----
Income before income taxes.............................. $ 15
----
----

The following unaudited supplemental pro forma condensed consolidated
summary operating data (the 'As Adjusted Data') of the Company for 2001 and 2002
has been prepared by adjusting the historical data as set forth in the
accompanying consolidated income statements to give effect to the Sybra
Acquisition as if it

59

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

had been consummated on January 1, 2001 and December 31, 2001, respectively (in
thousands except per share amounts):

Such As Adjusted Data is presented for comparative purposes only and does
not purport to be indicative of the Company's actual results of operations had
such acquisition actually been consummated on such dates or of the Company's
future results of operations. The 2001 historical results of Sybra were impacted
by a $2,129,000 pretax charge representing the write-off of costs for
construction in progress for certain Arby's restaurants that were not completed.
In February 2002, Sybra, as discussed above, filed for protection under Chapter
11 of the United States Bankruptcy Code. In 2002, Sybra's historical results
were impacted by a $6,403,000 pretax charge representing expenses incurred by
Sybra directly relating to the bankruptcy, principally for legal fees and, to a
much lesser extent, for other professional fees.

Sale of Beverage Businesses

On October 25, 2000, the Company sold (the 'Snapple Beverage Sale') Snapple
Beverage Group and Royal Crown to affiliates of Cadbury Schweppes plc
('Cadbury'). Snapple Beverage Group represented the operations of the Company's
former premium beverage business and Royal Crown represented the operations of
the Company's former soft drink concentrate business. Snapple Beverage Group and
Royal Crown are collectively referred to herein as the 'Former Beverage
Businesses.' The consideration paid to the Company consisted of (1) cash, which
may be subject to further post-closing adjustments as described below, and (2)
the assumption by Cadbury of debt and related accrued interest. The assumed debt
and accrued interest consisted of (1) $300,000,000 of 10 1/4% senior
subordinated notes due 2009 (the 'Senior Notes') co-issued by TCPG and Snapple
Beverage Group, (2) $119,130,000, net of unamortized original issue discount of
$240,870,000, of Triarc's zero coupon convertible subordinated debentures due
2018 (the 'Debentures') and (3) $5,982,000 of accrued interest. The Snapple
Beverage Sale resulted in an after-tax gain in 2000 recorded in the 'Gain on
disposal' component of 'Total income from discontinued operations' in the
accompanying consolidated income statement (see Note 18) of $480,946,000,
subject to any additional post-closing purchase price adjustment as described
below, and net of $19,134,000 of related fees and expenses and $226,765,000 of
income tax provision. In 2001 and 2002, the Company recorded additional gains
from the Snapple Beverage Sale of $43,450,000 and $11,100,000, respectively. The
additional gain in 2001 principally resulted from the realization of
$200,000,000 of proceeds from Cadbury for the Company electing (the 'Tax
Election') during 2001 to treat certain portions of the Snapple Beverage Sale as
an asset sale in lieu of a stock sale under the provisions of Section 338(h)(10)
of the United States Internal Revenue Code, net of estimated income taxes,
partially offset by additional accruals relating to the Snapple Beverage Sale.
The additional gain in 2002 resulted from the release of reserves for income
taxes in connection with the receipt of related income tax refunds.

60

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

In addition, the Snapple Beverage Sale purchase and sale agreement provides
for a post-closing adjustment, the amount of which is in dispute. Cadbury has
stated that it currently believes that it is entitled to receive from the
Company a post-closing adjustment of $23,189,000 plus interest at 7.19% from
October 25, 2000 while the Company, on the other hand, has stated that it
currently believes that no post-closing adjustment is required. The Company is
in arbitration with Cadbury to determine the amount of the post-closing
adjustment, if any. The Company currently expects the arbitration process to be
completed in 2003.

In connection with the closing of the Snapple Beverage Sale, in 2000 the
Company repaid the (1) outstanding principal of $436,433,000, (2) related
accrued interest of $1,119,000, (3) related prepayment penalties of $5,509,000
and (4) fees of $57,000 under a senior bank credit facility (the 'Beverage
Credit Facility') maintained by Snapple, Mistic, Stewart's, Royal Crown and
RC/Arby's, the then parent company of Royal Crown.

(4) INCOME (LOSS) PER SHARE

Basic income (loss) per share for 2000, 2001 and 2002 has been computed by
dividing the income or loss by the weighted average number of common shares
outstanding of 23,232,000, 21,532,000 and 20,446,000, respectively. Diluted
income (loss) per share for 2000 and 2002 is the same as the basic income (loss)
per share since the Company reported a loss from continuing operations and,
therefore, the effect of all potentially dilutive securities on the loss per
share from continuing operations would have been antidilutive. Diluted income
per share for 2001 has been computed by dividing the income by an aggregate
22,692,000 shares which reflect the effect of dilutive stock options of
1,160,000 shares computed using the treasury stock method. The shares used to
calculate diluted income per share for 2001 exclude any effect of (1) a written
call option on Triarc's common stock, which commenced following the assumption
of the Debentures by Cadbury and (2) a forward purchase obligation for Triarc's
common stock through its final settlement on August 10, 2001 since the effect of
each of these on income per share from continuing operations for 2001 would have
been antidilutive (see Note 14). The only Company securities outstanding as of
December 29, 2002 that could dilute basic income per share in years subsequent
to 2002 are the 9,261,421 outstanding stock options (see Note 14).

(5) SHORT-TERM INVESTMENTS AND SECURITIES SOLD WITH AN OBLIGATION TO PURCHASE

SHORT-TERM INVESTMENTS

The Company's short-term investments are carried at fair market value,
except for Cost Investments and Equity Investments set forth in the table below
(see Note 1). The cost of available-for-sale debt securities represents
amortized cost. The cost of available-for-sale securities and other short-term
investments have also been reduced by any unrealized losses deemed to be other
than temporary (see Note 16). The cost, gross unrealized holding gains and
losses included in accumulated other comprehensive income (deficit), fair value
and carrying amount, as appropriate, of the Company's short-term investments at
December 30, 2001 and December 29, 2002 were as follows (in thousands):

61

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

The maturities of United States government and government agency debt
securities, corporate debt securities and asset-backed securities at December
29, 2002 which are classified as available-for-sale at fair value, which is
equal to their carrying value, are as follows (in thousands):

Within one year............................................. $ 92,162
After one year through five years........................... 8,696
After five years through ten years.......................... 2,982
After ten years............................................. 3,472
Mortgage-backed securities (classified within asset-backed
securities above) not due at a single maturity date....... 2,380
--------
$109,692
--------
--------

Proceeds from sales and maturities of available-for-sale marketable
securities were $82,392,000, $288,584,000 and $69,444,000 in 2000, 2001 and
2002, respectively. Gross realized gains and gross realized losses on those
sales are included in 'Investment income, net' in the accompanying consolidated
income statements (see Note 16) and are as follows (in thousands):

The net change in the unrealized holding gains on available-for-sale
securities and the equity in an unrealized gain on a retained interest of Encore
Capital Group, Inc., an Equity Investment included in

62

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

non-current investments (see Note 8), included in other comprehensive income
(loss) consisted of the following (in thousands):

The change in the net unrealized gain or loss on trading securities resulted
in losses of $4,848,000, $2,033,000 and $883,000 in 2000, 2001 and 2002,
respectively, which are included in 'Investment income, net' in the accompanying
consolidated income statements (see Note 16).

Other short-term investments represent investments in limited partnerships,
limited liability companies and similar investment entities which invest in
securities that primarily consist of debt securities, common and preferred
equity securities, convertible preferred equity and debt securities, stock
warrants and rights and stock options. These investments are focused on both
domestic and foreign securities. Certain of these investments are, or if sold
during 2002 were, accounted for in accordance with the Equity Method.

SECURITIES SOLD WITH AN OBLIGATION TO PURCHASE

The Company also enters into short sales of debt and equity securities as
part of its portfolio management strategy. Short sales are commitments to sell
debt and equity securities not owned at the time of sale that require purchase
of the debt and equity securities at a future date. These short sales resulted
in proceeds of $42,922,000, $30,449,000 and $36,418,000 in 2000, 2001 and 2002,
respectively. The change in the net unrealized gains (losses) on securities sold
with an obligation to purchase resulted in income of $4,527,000 and $2,180,000
in 2000 and 2001, respectively, and a loss of $1,020,000 in 2002, which are
included in 'Investment income, net' (see Note 16). The fair value and the
carrying value of the liability for securities sold with an obligation to
purchase were $17,384,000 and $9,168,000 at December 30, 2001 and December 29,
2002, respectively, and are included in 'Accrued expenses' (see Note 6).

(6) BALANCE SHEET DETAIL

CASH

Cash includes cash equivalents of $15,700,000 and $15,018,000 as of December
30, 2001 and December 29, 2002, respectively, held in a custodial account at a
financial institution which is subject to set off should the Company or certain
other parties not perform under certain debt guarantees (see Note 23). Cash also
includes cash and cash equivalents aggregating $9,201,000 as of December 29,
2002 pledged as collateral for the Company's insured securitization notes (see
Note 10).

63

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

RECEIVABLES

The following is a summary of the components of receivables (in thousands):

- ---------

(a) Represents the current portion of a note receivable from the Chairman and
Chief Executive Officer and the President and Chief Operating Officer of
the Company (the 'Executives') pursuant to a litigation settlement (see
Note 23).

The following is an analysis of the allowance for doubtful accounts (in
thousands):

- ---------

(a) Represents the reversal upon realization in 2002 of collections related to
two fully-reserved notes receivable from franchisees.

Certain trade receivables with an aggregate net book value of $6,297,000 as
of December 29, 2002 are pledged as collateral for the Company's insured
securitization notes (see Note 10).

64

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

INVENTORIES

Inventories consist principally of food, beverage and paper inventories and
are classified entirely as raw materials. Certain inventories aggregating
$2,114,000 as of December 29, 2002 are pledged as collateral for certain debt
(see Note 10).

PROPERTIES

The following is a summary of the components of properties (in thousands):

Properties with a net book value of $103,527,000 as of December 29, 2002 are
pledged as collateral for certain debt (see Note 10).

DEFERRED COSTS AND OTHER ASSETS

The following is a summary of the components of deferred costs and other
assets (in thousands):

- ---------

(a) The allowance for non-current doubtful accounts was provided in 2002 (see
Note 23) and there has been no other activity in the reserve for
non-current doubtful accounts.

65

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

ACCRUED EXPENSES

The following is a summary of the components of accrued expenses (in
thousands):

OTHER LIABILITIES, DEFERRED INCOME AND MINORITY INTERESTS IN A CONSOLIDATED
SUBSIDIARY

Other liabilities, deferred income and minority interests in a consolidated
subsidiary includes minority interests of $4,266,000 and $718,000 as of December
30, 2001 and December 29, 2002, respectively, in 280 BT Holdings LLC ('280 BT')
a consolidated subsidiary with a respective 44.1% and 42.6% minority interest
comprised principally of certain of the Company's management (see Note 23).

(7) RESTRICTED CASH EQUIVALENTS

The following is a summary of the components of non-current restricted cash
equivalents (in thousands):

66

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(8) INVESTMENTS

The following is a summary of the carrying value of investments classified
as non-current (in thousands):

The carrying value of the Company's investment in the common stock of Encore
Capital Group, Inc. ('Encore'), formerly MCM Capital Group, Inc., at
December 29, 2002 is less than its underlying equity interest in Encore
principally due to the Company's recognition of unrealized losses deemed to be
other than temporary during 2000 (see below).

The Company's consolidated equity in the earnings (losses) of investees
accounted for under the Equity Method and classified as non-current and included
as a component of 'Other income, net' (see Note 17) in the accompanying
consolidated income statements consisted of the following components (in
thousands):

The equity in the earnings (losses) of investees included in 'Other income,
net' in the table above excludes the equity in the earnings or losses of EBT
Holding Company, LLC ('EBT'), an investment limited liability company, which is
included in 'Investment income, net' (see Note 16) in the accompanying
consolidated income statements.

The Company and certain of its officers have invested in Encore, with the
Company owning 7.2% and the present officers, including entities controlled by
them, collectively owning 17.2% of Encore's issued and outstanding common stock
(see Note 23) as of December 29, 2002. During 2002 the Company, certain of its
officers, including entities controlled by them, and other significant
stockholders of Encore invested in newly issued convertible preferred stock of
Encore (the 'Encore Preferred Stock') in which the Company invested $873,000, or
17.5% of the aggregate $5,000,000 of Encore Preferred Stock, and the officers
invested $1,427,000. The $5,000,000 of Encore Preferred Stock is convertible
into 10,000,000 shares of Encore common stock. If all of the Encore Preferred
Stock were converted, the ownership of the Company and the present officers in
Encore common stock would increase to 13.1% and 23.7%, respectively. Encore is a
financial

67

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

services company specializing in the collection, restructuring, resale and
securitization of receivable portfolios acquired at deep discounts.

During 2000 the Company's investment in Encore common stock exceeded its
interest in the underlying equity in the net assets of Encore. The Company
recorded amortization of such excess of $107,000 in 2000 which is included in
the equity in losses of Encore. As of December 31, 2000, the Company reduced its
investment in Encore by $2,047,000 to the then fair market value of the Encore
common stock of $.33 per share, or $2.89 per share less than the Company's then
carrying value. The Encore common stock had traded at depressed levels
throughout the second half of 2000 ranging from $.13 to $.88 per share and
Encore had encountered cash flow and liquidity difficulties. As a result, the
Company had deemed the loss on its investment in Encore to be other than
temporary. During 2001, the investment in Encore was reduced to zero due to
losses of Encore which resulted in the Company recording its equity in the
losses of Encore as a reduction of the unrealized gain on a retained interest of
Encore which had been included in accumulated other comprehensive income (see
Note 5).

During 2002, as disclosed above, the Company invested $873,000 in the Encore
Preferred Stock. In 2002 the Company recognized its cumulative unrecorded equity
in losses of Encore of $744,000 through December 30, 2001 in connection with its
$873,000 investment in Encore Preferred Stock and resumed applying the Equity
Method as a result of the additional investment, recognizing $1,004,000 of
equity in the 2002 earnings of Encore. Accordingly, the net equity in earnings
of Encore amounted to $260,000 during 2002. Also during 2002 the outstanding
principal amount of senior notes of Encore was reduced from $10,000,000 to
$7,250,000 as the lender forgave $2,750,000 of principal and $2,573,000 of
related accrued interest upon the investment in the Encore Preferred Stock. In
connection with this forgiveness, Encore recorded an increase in its additional
paid-in capital of $4,665,000 representing the aggregate $5,323,000 of debt
forgiven less $658,000 of related unamortized debt discount and deferred loan
costs. Accordingly, the Company recorded its equity of $393,000 in such amount
as an increase in 'Additional paid-in capital' during 2002. The effect of the
debt forgiveness was recorded by Encore as a capital contribution since it was
facilitated by the Company and other significant equity holders of Encore
Preferred Stock and through the Company's relationship with the lender resulting
from prior investment banking and financial advisory services rendered to the
Company by the lender and its affiliates.

The Company and certain of its officers and employees have co-invested in
EBT with the Company owning 18.6% and the officers and employees owning 56.4%
(see Note 23) as of December 29, 2002. EBT had as its only operating asset an
investment in the non-cumulative preferred stock of EBondTrade.com, Inc.
('Ebondtrade'), an online municipal bond trading business. The Company accounted
for its investment in EBT in accordance with the Equity Method; however, EBT's
investment in Ebondtrade was accounted for in accordance with the Cost Method.
Accordingly, the Company had equity in the earnings of EBT of $9,000 and $8,000
in 2000 and 2001, respectively. Ebondtrade encountered operating, cash flow and
liquidity difficulties and in late 2002 its stock became worthless. As a result,
the Company recognized an unrealized loss deemed to be other than temporary for
its then remaining investment in EBT of $279,000 included in 'Investment income,
net' (see Note 16) in the accompanying consolidated statement of income for the
year ended December 29, 2002.

The Company has an investment in Scientia Health Group Limited ('Scientia')
through its 57.4% (see Note 23) ownership of 280 BT as of December 29, 2002. The
Company consolidates its investment in 280 BT resulting in the investment in
Scientia being included in 'Non-marketable equity securities, at cost' in the
table above, with the related minority interests included in 'Other liabilities,
deferred income and minority interests in a consolidated subsidiary.' 280 BT
invested $5,000,000 in preferred shares of Scientia (the 'Scientia Preferred
Shares') in November 2001, of which $2,500,000 was originally invested by the
Company and $2,475,000 was invested by the Company's management under a
co-investment policy (see Note 23). As of December 29, 2002, the carrying value
of the investment in Scientia was a gross amount of $1,685,000, effectively
reduced by minority interests of $718,000. The gross carrying value represents
the original cost less

68

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

$3,315,000 of unrealized losses in Scientia that were deemed to be other than
temporary included in 'Other than temporary unrealized losses' in 'Investment
income, net' (see Note 16), effectively reduced by minority interests of
$1,420,000.

SUMMARY UNAUDITED FINANCIAL INFORMATION OF EQUITY INVESTMENTS

The following is a summary of the carrying value of the Company's aggregate
Equity Investments (in thousands):

Presented below is summary unaudited operating information for the Company's
Equity Investments, including those that were included in other short-term
investments, for the year ended December 31, 2000, the year-end of such
investments. Summary unaudited information is not presented as of and for the
years ended December 30, 2001 and December 29, 2002 because the Company's Equity
Investments are no longer significant to the Company's consolidated total assets
or consolidated income (loss) from continuing operations before income taxes and
minority interests in 2001 and 2002. The Company's Equity Investments include
Encore, a financial services company as described above, entities that developed
and operated golf courses and several investment limited partnerships and
limited liability companies, including EBT and 280 KPE Holdings, LLC, which
generally invest in diversified portfolios of securities. As such, the summary
operating information presented below combines revenues and expenses which vary
greatly in nature. Revenues relate to the operations of golf courses as well as
operating revenues of the financial services company. Investment income, net
relates to the investment entities. The summary unaudited operating information
for the year ended December 31, 2000 is as follows (in thousands):

Revenues.................................................... $ 49,098
Investment loss, net........................................ (13,121)
Loss before income taxes.................................... (53,491)
Net loss.................................................... (46,234)

(9) GOODWILL AND OTHER INTANGIBLE ASSETS

The following is a summary of the components of goodwill (in thousands):

69

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

Upon the adoption of SFAS 142 effective December 31, 2001, the Company no
longer amortizes goodwill, which relates entirely to the Company's restaurant
operations. In accordance with the requirements of SFAS 142, the following
summarizes the changes in the carrying amount of goodwill for 2002 (in
thousands):

A reconciliation of reported income before extraordinary charges, net income
and net income per share adjusted on a pro forma basis for the reversal of
goodwill amortization, net of related income taxes, as though SFAS 142 had been
in effect as of January 3, 2000 is as follows (in thousands except per share
amounts):

- ---------

(a) This adjustment does not reflect goodwill amortization of $7,973,000, net of
income taxes, relating to the discontinued beverage operations included in
the 'Loss from operations' component of 'Total income from discontinued
operations,' which if adjusted would be fully offset by an equal adjustment
in the 'Gain on disposal' component of 'Total income from discontinued
operations' in 2000.

The following is a summary of the components of other intangible assets, all
of which are subject to amortization (in thousands):

Aggregate amortization expense:
Actual:
2001.................................................. $655
2002.................................................. 689
Estimate for fiscal year:
2003.................................................. $909
2004.................................................. 791
2005.................................................. 791
2006.................................................. 791
2007.................................................. 775

70

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(10) LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

Aggregate annual maturities of long-term debt were as follows as of
December 29, 2002 (in thousands):

- ---------

(a) The Company, through Arby's Trust, issued insured non-recourse
securitization notes (the 'Securitization Notes') in the principal amount
of $290,000,000, with a discounted amount of $289,963,000, on November 21,
2000. In connection with the issuance of the Securitization Notes, the
Company incurred $12,982,000 ($12,445,000 estimated as of December 31,
2000) of fees and expenses which are included, net of amortization, in
'Deferred costs and other assets' in the accompanying consolidated balance
sheets (see Note 6).

(footnotes continued on next page)

71

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(footnotes continued from previous page)

The remaining principal amount of the Securitization Notes of $254,804,000
as of December 29, 2002 is due no later than December 2020. However, based
on current projections and assuming the adequacy of available funds, as
defined under the indenture (the 'Indenture') pursuant to which the
Securitization Notes were issued, the Company currently estimates it will
repay $20,665,000 in 2003 with increasing annual payments to $37,377,000 in
2011 in accordance with a targeted principal payment schedule. The table of
annual maturities of long-term debt above reflects these targeted payments.
The Securitization Notes are redeemable by Arby's Trust at an amount equal
to the total of remaining principal, accrued interest and the excess, if
any, of the discounted value of the remaining principal and interest
payments over the outstanding principal amount of the Securitization Notes.

Obligations under the Securitization Notes are insured by a financial
guarantee company and are collateralized by assets with an aggregate net
book value of $46,035,000 as of December 29, 2002 consisting of cash and
cash equivalents of $9,201,000, a cash equivalent reserve account of
$30,537,000 and royalty receivables of $6,297,000.

(b) The leasehold notes (the 'Leasehold Notes') with a remaining principal of
$82,016,000 were assumed in the Sybra Acquisition and are due in equal
monthly installments including interest through 2021 of which $5,937,000 is
due in 2003. The Leasehold Notes bear interest at rates ranging from 6.23%
to 10.89% and are secured by restaurant leasehold improvements, equipment
and inventories with respective net book values of $32,049,000, $12,783,000
and $2,114,000.

(c) The Company maintains a secured bank term loan (the 'Bank Term Loan') with
a remaining principal amount of $18,287,000 as of December 29, 2002 with
payments due of $3,227,000 in each year through 2007 and $2,152,000 in
2008. The Bank Term Loan bears interest at variable rates (3.23% as of
December 29, 2002), determined at the Company's option, at the prime rate
or the one-month London Interbank Offered Rate ('LIBOR') plus 1.85%, reset
monthly. The Company also entered into an interest rate swap agreement (the
'Swap Agreement') on the Bank Term Loan which commenced August 1, 2001
whereby it effectively pays a fixed rate of 6.8% as long as the one-month
LIBOR is less than 6.5%, but with an embedded written call option whereby
the Swap Agreement will no longer be in effect if, and for as long as, the
one-month LIBOR is at or above 6.5% (see Note 11). Obligations under the
Bank Term Loan are secured by an airplane with a net book value of
$21,810,000 as of December 29, 2002.

(d) The Company assumed an $18,000,000 secured promissory note (the 'Promissory
Note') in connection with its acquisition of 280 Holdings, LLC (see
Note 23) on January 19, 2000. The remaining principal amount of the
Promissory Note of $13,320,000 as of December 29, 2002 is due $1,860,000 in
2003 with increasing annual payments to $7,204,000 in 2006. The Promissory
Note is secured by an airplane with a net book value of $27,631,000 as of
December 29, 2002.

(e) The equipment notes (the 'Equipment Notes') with a remaining principal of
$6,272,000 were assumed in the Sybra Acquisition and are due in equal
monthly installments including interest through 2009 of which $1,281,000 is
due in 2003. The Equipment Notes bear interest at rates ranging from 8.52%
to 11.64% and are secured by restaurant equipment with a net book value of
$7,070,000.

(f) The mortgage notes (the 'Mortgage Notes') with a remaining principal of
$3,346,000 were assumed in the Sybra Acquisition and are due in equal
monthly installments including interest through 2018 of which $79,000 is
due in 2003. The Mortgage Notes bear interest at rates ranging from 8.77%
to 10.11% and are secured by land and buildings of restaurants with net
book values of $1,110,000 and $1,074,000, respectively.

(g) The Company remains liable for $3,024,000 of mortgage and equipment notes
payable as of December 29, 2002, of which it is a co-obligor for notes
aggregating $446,000 as of December 29, 2002.

72

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

The loan agreements for most of the Leasehold Notes, Mortgage Notes and
Equipment Notes contain various prepayment provisions that provide for
prepayment penalties of up to 5% of the principal amount prepaid or are based
upon specified 'yield maintenance' formulas.

The Indenture and the agreements for the Leasehold Notes and Mortgage Notes
contain various covenants, the most restrictive of which (1) require periodic
financial reporting, (2) require meeting certain debt service coverage ratio
tests and (3) restrict, among other matters, (a) the incurrence of indebtedness,
(b) certain asset dispositions and (c) the payment of distributions by Arby's
Trust and Sybra. The Company was in compliance with all of such covenants as of
December 29, 2002.

As of December 29, 2002, Arby's Trust had no amounts available for the
payment of distributions. However, on January 21, 2003, $1,650,000 relating to
cash flows for the calendar month of December 2002 became available for the
payment of such distributions by Arby's Trust, through its parent to Arby's
which, in turn, would be available to Arby's to pay management service fees or
Federal income tax-sharing payables to Triarc or, to the extent of any excess,
make distributions to Triarc. In connection with Sybra's reorganization, Sybra
is unable to pay any distributions prior to December 27, 2004.

Sybra is required to maintain a fixed charge coverage charge ratio (the
'FCCR') under the agreements for the Leasehold Notes and Equipment Notes. In the
event that Sybra fails to maintain the minimum FCCR, such failure may be cured
by a capital contribution in cash to Sybra in the quarter immediately following
such period of an amount such that the minimum FCCR would have been met.

(11) DERIVATIVE INSTRUMENTS

The Company's derivative instruments, excluding those that may be settled in
its own stock and, accordingly, not affected by SFAS No. 133, 'Accounting for
Derivative Instruments and Hedging Activities,' during 2001 and 2002 are
(1) the conversion component of short-term investments in convertible debt
securities which are accounted for as trading securities and had aggregate
carrying values of $2,665,000 and $601,000 as of December 30, 2001 and
December 29, 2002, respectively, (2) put and call options on equity and
corporate debt securities which are accounted for as trading securities and
(3) the Swap Agreement entered into during 2001 (see Note 10 and below). The
Company enters into convertible debt and put and call derivatives as part of its
overall investment portfolio strategy. This strategy includes balancing the
relative proportion of its investments in cash equivalents with their relative
stability and risk-minimized returns with opportunities to avail the Company of
higher, but more risk-inherent, returns associated with other investments,
including convertible debt securities and put and call options. The Swap
Agreement effectively establishes a fixed interest rate on the variable-rate
Bank Term Loan, but with an embedded written call option whereby the Swap
Agreement will no longer be in effect if, and for as long as, the one-month
LIBOR is at or above a specified rate. On the initial date of the Swap
Agreement, the fair market value of the Swap Agreement and the embedded written
call option netted to zero but, as interest rates either increase or decrease,
the fair market values of the Swap Agreement and written call option have moved
and will continue to move in the same direction but not necessarily by the same
amount. As of December 30, 2001 and December 29, 2002, the net fair market value
of the Swap Agreement and embedded written call option had changed to payable
positions of $651,000 and $1,229,000, respectively, included in 'Other
liabilities, deferred income and minority interests in a consolidated
subsidiary' in the accompanying consolidated balance sheets, resulting in
charges of $651,000 and $578,000 included in 'Interest expense' in the
accompanying consolidated income statements for 2001 and 2002, respectively.

73

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(12) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of the Company's financial
instruments for which the disclosure of fair values is required were as follows
(in thousands):

(footnotes on next page)

74

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(footnotes from previous page)

(a) The carrying amounts approximated fair value due to the short-term
maturities of the cash equivalents.

(b) The fair values were based on quoted market prices or statements of account
received from investment managers or investees which are principally based
on quoted market or brokered/dealer prices.

(c) These consist of investments held in deferred compensation trusts and
certain other non-current Cost Investments. The fair values of these
investments were based almost entirely on statements of account received
from investment managers or investees which are principally based on quoted
market or brokered/dealer prices. To the extent that some of these
investments, including the underlying investments in investment limited
partnerships, do not have available quoted market or brokered/dealer
prices, we rely on third-party appraisals or valuations performed by the
investment managers or investees in valuing those securities.

(d) It was not practicable to estimate the fair value of these Cost Investments
because the investments are non-marketable and are in start-up enterprises.

(e) The fair values were determined by discounting the future scheduled
payments using an interest rate assuming the same original issuance spread
over a current Treasury bond yield for securities with similar durations.

(f) The fair values were based on an independent appraisal as part of the Sybra
Acquisition purchase accounting as of December 27, 2002.

(g) The fair value approximated the carrying value due to the frequent reset,
on a monthly basis, of the floating interest rate.

(h) The fair value was equal to the carrying amount of the underlying
investments held by the Company in the related trusts which may be used to
satisfy such payable in full.

(i) The fair value was based on a quote provided by the bank counterparty.

(j) The fair value was determined by independent third-party consultants using
the Black-Scholes option pricing model, although, in the opinion of the
Company, the model has limitations on its effectiveness and does not
necessarily provide a reliable single measure of the fair value of the
written call option.

(k) The fair values were assumed to reasonably approximate their carrying
amounts since the carrying amounts represent the fair value as of the
inception of the guarantee less subsequent amortization.

(l) The fair value was determined through an independent third-party appraisal
based on the net present value of the probability adjusted payments which
may be required to be made by the Company.

(m) The fair value was determined through an independent third-party appraisal
based on the net present value of the estimated interest payment
differential between the Encore revolving credit borrowings with and
without the related guarantee.

The carrying amounts of accounts receivable, accounts payable and accrued
expenses approximated fair value due to the related allowance for doubtful
accounts receivable and the short-term maturities of accounts payable and
accrued expenses and, accordingly, they are not required to be presented in the
table above.

(13) INCOME TAXES

Income (loss) from continuing operations before income taxes and minority
interests consisted of the following components (in thousands):

75

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

The provision for (benefit from) income taxes from continuing operations
consisted of the following components (in thousands):

The net current deferred income tax benefit and the net non-current deferred
income tax (liability) resulted from the following components (in thousands):

The decrease in the net deferred income tax liability from $58,111,000 at
December 30, 2001 to $45,033,000 at December 29, 2002, or a decrease of
$13,078,000, exceeds the 2002 benefit for deferred

76

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

income taxes of $1,398,000. The difference of $11,680,000 is principally due to
the recognition of net deferred tax assets in connection with the Sybra
Acquisition.

A reconciliation of the difference between the reported provision for
(benefit from) income taxes and the provision (benefit) that would result from
applying the 35% Federal statutory rate to the income or loss from continuing
operations before income taxes and minority interests is as follows (in
thousands):

The Company's Federal income tax returns for years subsequent to 1993 have
not been examined by the IRS. However, should any income taxes or interest be
assessed as the result of any Federal or state examinations for periods through
the October 25, 2000 date of the Snapple Beverage Sale, Cadbury has agreed to
pay up to $4,984,000 of any resulting income taxes or associated interest
relating to the operations of Snapple Beverage Group and Royal Crown.

(14) STOCKHOLDERS' EQUITY

Class A Common Stock

The Company's class A common stock (the 'Class A Common Stock') has one vote
per share. There were no changes in the 100,000,000 shares authorized and the
29,550,663 shares issued of Class A Common Stock throughout 2000, 2001 and 2002.

Class B Common Stock

In October 2001, the Company authorized 100,000,000 shares of a new class B
common stock (the 'Class B Common Stock'), none of which have been issued
through December 29, 2002, and eliminated and effectively canceled the
previously authorized 25,000,000 shares of its former non-voting class B common
stock (the 'Former Class B Common Stock'). The voting rights of the Class B
Common Stock will not be determined until an issuance thereof. All outstanding
shares of the Former Class B Common Stock, which were held by affiliates of
Victor Posner (the 'Posner Entities'), had been repurchased by the Company, as
disclosed in more detail below under 'Treasury Stock.' Victor Posner was a
former Chairman and Chief Executive Officer of Triarc prior to May 1993. As a
result of the effective cancellation of the 5,997,622 shares of the Former Class
B Common Stock, the Company recorded an entry in 2001 within stockholders'
equity which reduced 'Common stock' by $600,000, 'Additional paid-in capital' by
$83,211,000, 'Retained earnings' by $43,325,000 and 'Common stock held in
treasury' by $127,136,000.

Preferred Stock

The Company increased the number of authorized preferred shares to
100,000,000 in October 2001 from 25,000,000, none of which were issued
throughout 2000, 2001 and 2002. The authorized preferred stock

77

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

previously included 5,982,866 shares designated as redeemable preferred stock
until such shares were retired on August 20, 2001. As a result, all of the
authorized 100,000,000 shares of preferred stock are undesignated.

Treasury Stock

A summary of the changes in the number of shares of Class A Common Stock and
Former Class B Common Stock held in treasury is as follows (in thousands):

- ---------

(a) In August 1999 Triarc entered into a contract to repurchase in three
separate transactions the 5,997,622 shares of the Former Class B Common
Stock then held by the Posner Entities for an aggregate of $127,050,000.
Triarc completed the purchases of 1,999,207 shares of Former Class B Common
Stock (the 'Class B Repurchases') each on August 19, 1999, August 10, 2000
and August 10, 2001. The August 10, 2000 and August 10, 2001 Class B
Repurchases were for an aggregate of $42,343,000 and $43,843,000,
respectively, at negotiated prices of $21.18 and $21.93 per share,
respectively, plus expenses of $30,000 for the August 10, 2000 repurchase.
The negotiated prices were based on the fair market value of the Class A
Common Stock of $20.44 per share at the time the transaction was
negotiated. The August 10, 2001 payment resulted in the reduction to zero
of the 'Common stock to be acquired' component of 'Stockholders' equity.'

(b) During December 2000 the Company repurchased 1,045,834 shares of its Class
A Common Stock from certain of its officers and a director for an aggregate
cost of $25,942,000 (see disclosure below).

(c) On October 25, 2001, all of the previously authorized 25,000,000 shares of
the Former Class B Common Stock were eliminated and effectively canceled
(see disclosure above), which effectively retired all 5,997,622 shares of
the Former Class B Common Stock then held in treasury.

Written Call Option

Prior to February 8, 2003, Cadbury had the right to cause the Company to
issue Class A Common Shares upon conversion of the Debentures assumed by
Cadbury, which effectively established a written call option on such stock (the
'Written Call Option'). Cadbury called the Debentures for redemption in full
with a redemption date of February 9, 2003 and the Written Call Option
terminated without any Class A Common Stock being called under the option. The
original fair value of the Written Call Option of $1,476,000 as of October 25,
2000 was recorded as a reduction of the 'Gain on disposal' component of
'Total income from

78

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

discontinued operations' in the accompanying consolidated income statement for
the year ended December 31, 2000 (see Note 18). The fair value of the Written
Call Option, of $30,000 as of December 30, 2001 and less than $1,000 as of
December 29, 2002, was reported as a liability included in 'Other liabilities,
deferred income and minority interests in a consolidated subsidiary' in the
accompanying consolidated balance sheets. The reduction in the fair value of
the Written Call Option of $653,000 from October 25, 2000 to December 31, 2000,
$793,000 during 2001 and $30,000 during 2002 was reported as a component of
'Other income, net' (see Note 17). The fair value of the Written Call Option
was determined by independent third-party consultants using the Black-Scholes
option pricing model.

Stock-Based Compensation

The Company maintains or maintained several equity plans (the 'Equity
Plans') which collectively provide or provided for the grant of stock options to
certain officers, key employees, consultants and non-employee directors and
shares of Class A Common Stock pursuant to automatic grants in lieu of annual
retainer or meeting attendance fees to non-employee directors. The Equity Plans
include the 2002 Equity Participation Plan which was approved by the Company's
stockholders in June 2002 and which authorized an additional 5,000,000 shares
for grants of stock options, tandem stock appreciation rights and restricted
shares of the Company's common stock. As of December 29, 2002, there are
5,398,442 shares available for future grants under the Equity Plans.

A summary of changes in outstanding stock options under the Equity Plans is
as follows:

- ---------

(a) The weighted average grant date fair values of stock options granted under
the Equity Plans during 2000, 2001 and 2002, all of which were granted at
exercise prices equal to the market price of the stock on the grant date,
were $11.37, $8.12 and $8.22, respectively.

(b) Includes 856,169 stock options held by the employees of Snapple Beverage
Group and Royal Crown who chose to surrender these options prior to the
Snapple Beverage Sale (see discussion below).

79

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

A summary of exercisable stock options under the Equity Plans is as follows:

The following table sets forth information relating to stock options
outstanding and stock options exercisable at December 29, 2002 under the Equity
Plans:

Stock options under the Equity Plans generally have maximum terms of ten
years and vest ratably over periods of generally three years but not exceeding
five years from date of grant. However, an aggregate 2,725,000 stock options
outstanding at December 29, 2002 granted on April 21, 1994 to the Executives at
an exercise price of $20.125 per option vest on October 21, 2003.

Stock options under the Equity Plans are generally granted at the fair
market value of the Class A Common Stock at the date of grant. However, options
granted in March 1997 included 1,331,000 options issued at a weighted average
option price of $12.70 which was below the $14.82 weighted average fair market
value of the Class A Common Stock on the respective dates of grant (based on the
closing price on such dates), resulting in aggregate unearned compensation,
representing the initial intrinsic value, of $2,823,000 originally reported in
the 'Unearned compensation' component of stockholders' equity. Such unearned
compensation was amortized as compensation expense over the applicable vesting
period of one to three years through March 2000. During 2000, $61,000 of
remaining unearned compensation was credited to 'Unearned compensation,' of
which $49,000 relating to employees of Triarc and Arby's was charged to 'General
and administrative' and $12,000 relating to employees of Snapple Beverage Group
and Royal Crown was reported in the 'Loss from operations' component of 'Total
income from discontinued operations.'

During December 2000, certain of the Company's officers and a director
exercised stock options under the Equity Plans and the Company repurchased the
1,045,834 shares of its Class A Common Stock received by these individuals upon
such exercises on the respective exercise dates. Since such shares of Class A
Common Stock were repurchased within six months after exercise of the related
stock options, the Company recognized aggregate compensation cost of $10,422,000
representing the excess of the market prices on the dates of purchase by the
Company over the exercise prices of the underlying stock options, net of any
amortization related to such stock options issued below market. Such amount was
charged to 'General and administrative' with an offsetting credit to 'Additional
paid-in capital.'

As disclosed in Note (b) above, during October 2000 certain employees of
Snapple Beverage Group and Royal Crown who held stock options for Triarc's Class
A Common Stock surrendered 856,169 stock options prior to the Snapple Beverage
Sale. Such option holders received an amount initially equal to the excess of
$23.75 per option over the respective exercise prices of the underlying stock
option, or an aggregate

80

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

$6,159,000 of cash, in this settlement. Such cash payment, net of $274,000
previously amortized for stock options issued below market, or $5,885,000, was
recorded in the 'Gain on disposal' component of 'Total income from discontinued
operations' in the accompanying consolidated income statement for the year ended
December 31, 2000. Further, Triarc agreed to pay cash compensation to certain of
these individuals for each option surrendered equal to the excess of the average
of the five highest daily closing prices of Triarc's Class A Common Stock during
the 90-day period following the October 25, 2000 date of the Snapple Beverage
Sale over the $23.75 price used in the settlement, which aggregated $599,000 and
was paid in January 2001. Since each of the five highest daily closing prices
occurred during 2000, the Company recorded the liability for the full $599,000
in 2000 with an equal offsetting charge to 'General and administrative'
expenses.

During 2000, 2001 and 2002, there were certain other modifications to the
vesting or exercise periods of stock options relating to certain terminated
employees of the Company. Such modifications resulted in aggregate compensation
of $491,000, $462,000 and $275,000 during 2000, 2001 and 2002, respectively,
which was credited to 'Additional paid-in-capital' and was charged to 'General
and administrative', except for $26,000 during 2000 relating to employees of
Snapple Beverage Group and Royal Crown which was reported in the 'Loss from
operations' component of 'Total income from discontinued operations.'

Snapple Beverage Group maintained a stock option plan (the 'Snapple Beverage
Plan') which provided for the grant of options to purchase shares of Snapple
Beverage Group's common stock (the 'Snapple Beverage Common Stock') to key
employees, officers, directors and consultants of Snapple Beverage Group and the
Company. Effective with the Snapple Beverage Sale on October 25, 2000, the
Company was no longer responsible for the 149,284 then outstanding stock options
under the Snapple Beverage Plan which remained the responsibility of Snapple
Beverage Group under Cadbury's ownership and which at the time of the Snapple
Beverage Sale had an aggregate intrinsic value of $123,638,000. A summary of
changes in outstanding stock options under the Snapple Beverage Plan is as
follows:

- ---------

(a) Exercisable stock options as of January 2, 2000 were 47,723 stock options
at prices of $107.05 and $138.83 with a weighted average option price of
$123.07.

Stock options under the Snapple Beverage Plan were generally granted at the
fair value of Snapple Beverage Common Stock at the date of grant as determined
by independent appraisals. However, all 2,501 options granted in 2000 were
issued at option prices below the fair market value of Snapple Beverage Common
Stock on the date of grant resulting in aggregate compensation expense of
$1,157,000, of which $412,000 relating to an employee of Triarc was included in
'General and administrative' and $745,000 relating to employees of Snapple
Beverage Group was reported in the 'Loss from operations' component of 'Total
income from discontinued operations.' The weighted average grant date fair value
of the options granted during 2000 was $462.53. Stock options under the Snapple
Beverage Plan had maximum terms of ten years and generally vested or would have
vested ratably over periods approximating three years. However, 144,675 stock
options reissued in 1999 vested or would have vested ratably on July 1 of 2000,
2001 and 2002.

81

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

The Snapple Beverage Plan provided for an equitable adjustment of options in
the event of a recapitalization or similar event. Effective as of May 17, 1999
the exercise prices of the Snapple Beverage Group options then outstanding that
were granted prior to January 4, 1999 were equitably adjusted for the effects of
net distributions of $91,342,000, principally consisting of transfers of cash
and deferred tax assets from Snapple Beverage Group to Triarc, partially offset
by the effect of the contribution of Stewart's to Snapple Beverage Group
effective May 17, 1999. The exercise prices of options granted at $147.30 per
share were equitably adjusted to $107.05 per share and options granted at
$191.00 per share were equitably adjusted to $138.83 per share and a cash
payment (the 'Cash Payment') of $51.34 and $39.40 per share, respectively, was
due from the Company to the option holder following the exercise of the stock
options and the occurrence of certain other events. The Company accounted for
the equitable adjustment of the Snapple Beverage Group stock options in
accordance with the intrinsic value method. In accordance therewith, the
equitable adjustment, exclusive of the Cash Payment, was considered a
modification to the terms of existing stock options. Compensation expense for
the Cash Payment was recognized ratably over the vesting period of the stock
options through the date such options were no longer the responsibility of the
Company but remained the responsibility of Snapple Beverage Group under
Cadbury's ownership in connection with the Snapple Beverage Sale. Such
compensation expense with respect to option holders who were employees of Triarc
of $306,000 during 2000 is included in 'General and administrative' in the
accompanying consolidated income statement. Such compensation expense with
respect to option holders who were employees of Snapple Beverage Group of
$312,000, net of income taxes of $199,000, during 2000 was charged to the 'Loss
from operations' component of 'Total income from discontinued operations.' Upon
the release of the Company's obligation for such Cash Payment to option holders
who were employees of Triarc, the related accruals of $1,550,000, net of income
taxes of $883,000, were released and reported in the 'Gain on disposal'
component of 'Total income from discontinued operations' (see Note 18). No
compensation expense was recognized for the changes in the exercise prices of
the outstanding options because such modifications to the options did not create
a new measurement date under accounting principles generally accepted in the
United States of America.

As disclosed in Note 1, the Company accounts for stock options in accordance
with the intrinsic value method and, accordingly, has not recognized any
compensation expense for those stock options granted at option prices equal to
the fair market value of the Class A Common Stock or the Snapple Beverage Common
Stock, as applicable, at the respective dates of grant. The pro forma net income
(loss) and basic and diluted net income (loss) per share set forth in Note 1
adjusts such data as set forth in the accompanying consolidated income
statements to reflect for the Equity Plans and, through October 25, 2000, for
the Snapple Beverage Plan (1) the reversal of stock-based employee compensation
expense determined under the intrinsic value method included in reported net
income, (2) the recognition of total stock-based employee compensation expense
for all 1995 through 2002 stock option grants determined under the fair value
method and (3) the income tax effects of each. In 2000 the reduction in
compensation expense recorded in accordance with the intrinsic value method
exceeded the compensation expense based on the fair value method due to the
expense recognized in accordance with the intrinsic value method of (a)
$10,422,000 for the Company's repurchase of Class A Common Stock from certain
officers and a director representing the excess of the market prices on the
dates of purchase by the Company over the exercise prices of the underlying
stock options and (b) $5,885,000 related to certain employees of Snapple
Beverage Group and Royal Crown who surrendered 856,169 stock options for
Triarc's Class A Common Stock prior to the Snapple Beverage Sale for cash, at
prices in excess of the exercise prices of the underlying stock options, both as
disclosed in more detail above.

The fair value of stock options granted under the Equity Plans on the date
of grant was estimated using the Black-Scholes option pricing model with the
weighted average assumptions set forth below. The fair value of stock options
granted in 2000 under the Snapple Beverage Plan was assumed to be their
intrinsic value since such options were issued shortly before the October 25,
2000 date of the Snapple Beverage Sale.

82

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

The Black-Scholes option pricing model has limitations on its effectiveness
including that it was developed for use in estimating the fair value of traded
options which have no vesting restrictions and are fully transferable and that
the model requires the use of highly subjective assumptions including expected
stock price volatility. Because the Company's stock-based awards to employees
have characteristics significantly different from those of traded options and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in the opinion of the Company, the existing models do not
necessarily provide a reliable single measure of the fair value of its
stock-based awards to employees.

(15) CAPITAL MARKET TRANSACTION RELATED COMPENSATION

The capital market transaction related compensation results from incentive
compensation directly related to the consummation of the Snapple Beverage Sale
in October 2000 and the issuance of the Securitization Notes in November 2000
consisting of (1) an aggregate of $22,500,000 to the Executives which was
invested in two deferred compensation trusts (the 'Deferred Compensation
Trusts') for their benefit in January 2001 (see Note 23) and (2) $3,510,000 paid
to other officers and employees in January 2001. The incentive compensation
payable to the Executives, together with investment income on the Deferred
Compensation Trusts, is included in 'Deferred compensation payable to related
parties' in the accompanying consolidated balance sheets.

(16) INVESTMENT INCOME, NET

Investment income, net consisted of the following components (in thousands):

- ---------

(a) The Company recognized unrealized losses deemed to be other than temporary
on certain marketable securities classified as available-for-sale, certain
investments in limited partnerships, including 280 BT, EBT and 280 KPE
Holdings, LLC, Encore and certain non-marketable common and preferred
stocks and
(footnotes continued on next page)

83

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(footnotes continued from previous page)

reduced the cost basis of those investments. Such losses were deemed to be
other than temporary due to declines in the underlying economics of the
specific security or volatility in capital and lending markets. These
unrealized losses were before minority interests in 280 BT of $264,000 and
$3,448,000 in 2001 and 2002, respectively.

(17) OTHER INCOME, NET

Other income, net consisted of the following income (expense) components (in
thousands):

- ---------

(a) The Company received $8,284,000 of interest income on the $200,000,000
payment by Cadbury for the Tax Election (see Note 3) in accordance with a
Snapple Beverage Sale tax agreement. Such interest income was recognized in
2001 when the Tax Election was made and was for the period from
December 9, 2000 (45 days after the October 25, 2000 Snapple Beverage Sale
date) through the date of payment of the $200,000,000 on June 14, 2001.

(b) The Company received $1,461,000 of compensation in 2001 resulting from the
demutualization of the insurance company from which a group annuity
contract was purchased in July 1987 to provide for pension payments to
participants in connection with the settlement of certain pension
obligations associated with the termination of a pension plan effective
June 1985. Of such compensation, $506,000 related to continuing operations
and is included above in 'Other income, net' and $955,000 related to the
discontinued operations associated with the Snapple Beverage Sale and is
included, net of income taxes, in the 'Gain on disposal' component of
'Total income from discontinued operations' in 2001.

(18) DISCONTINUED OPERATIONS

On October 25, 2000, the Company consummated the Snapple Beverage Sale (see
Note 3) and, as set forth in Note 1, these beverage businesses have been
accounted for as discontinued operations (the 'Beverage Discontinued
Operations') in 2000 through the date of sale. Further, prior to 2000 the
Company sold the stock or the principal assets of the companies comprising
SEPSCO's utility and municipal services and refrigeration business segments (the
'SEPSCO Discontinued Operations') which have been accounted for as discontinued

84

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

operations and of which there remain certain obligations not transferred to the
buyers of the discontinued businesses to be liquidated and incidental properties
of the refrigeration business to be sold.

The income (loss) from discontinued operations consisted of the following
(in thousands):

The loss from discontinued operations relating to the Former Beverage
Businesses from January 3, 2000 through their date of sale of October 25, 2000
consisted of the following (in thousands):

Revenues and other income................................... $681,063
Loss before income taxes.................................... (7,953)
Provision for income taxes.................................. (915)
Net loss.................................................... (8,868)

The Company's discontinued operations had a provision for income taxes
despite a loss before income taxes in 2000 principally due to (1) the
amortization of non-deductible unamortized costs in excess of net assets of
acquired companies and (2) the differing impact of the mix of pretax loss or
income among the combined entities since the Company files state income tax
returns on an individual company basis.

Net current liabilities relating to discontinued operations as of December
30, 2001 and December 29, 2002 consisted of the following (in thousands):

Accrued expenses, including accrued income taxes, of the Beverage
Discontinued Operations as of December 29, 2002 represent remaining liabilities
payable with respect to the Beverage Discontinued Operations. The net
liabilities of SEPSCO Discontinued Operations principally represent liabilities
that have not been liquidated as of December 29, 2002. The Company expects that
the liquidation of the remaining liabilities associated with both the Beverage
Discontinued Operations and the SEPSCO Discontinued Operations as of December
29, 2002 will not have any material adverse impact on its financial position or
results of operations.

(19) EXTRAORDINARY CHARGES

The 2000 extraordinary charges resulted from the early assumption or
extinguishment, as applicable, of (1) the Senior Notes co-issued by TCPG and
Snapple Beverage Group, (2) the Beverage Credit Facility maintained by Snapple,
Mistic, Stewart's, Royal Crown and RC/Arby's and (3) the Triarc Debentures.
These extraordinary charges consisted of (1) the write-off of previously
unamortized deferred financing costs of $27,491,000, (2) the payment of
prepayment penalties of $5,509,000 and (3) fees of $17,000, all less income tax
benefit of $12,337,000.

85

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(20) RETIREMENT BENEFIT PLANS

The Company maintains two 401(k) defined contribution plans (the '401(k)
Plans') covering all of its employees who meet certain minimum requirements and
elect to participate, including employees of Sybra subsequent to December 27,
2002. Under the provisions of the 401(k) Plans, employees may contribute various
percentages of their compensation ranging up to a maximum of 20% (15% prior to
January 1, 2002) for one of the 401(k) Plans and 15% for the other plan, subject
to certain limitations. One of the 401(k) Plans provides for Company matching
contributions at 50% of employee contributions up to the first 6% thereof,
whereas the other plan does not currently provide for matching contributions. In
addition, the 401(k) Plans permit discretionary annual Company profit-sharing
contributions to be determined by the employer regardless of whether the
employee otherwise elects to participate in the 401(k) Plans. In connection with
both of these employer contributions, the Company provided $924,000, $1,004,000
and $1,174,000 as compensation expense in 2000, 2001 and 2002, respectively.

The Company maintains two defined benefit plans for eligible employees
through December 31, 1988 of certain subsidiaries, benefits under which were
frozen in 1992. After recognizing a curtailment gain upon freezing the benefits,
the Company has no unrecognized prior service cost related to these plans.

A reconciliation of the beginning and ending balances of the accumulated
benefit obligations and the fair value of the plans' assets and a reconciliation
of the resulting funded status of the plans to the net amount recognized are (in
thousands):

86

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

The net amount recognized in the consolidated balance sheets consisted of
the following (in thousands):

As of December 30, 2001, one of the plans had an accumulated benefit
obligation of $1,756,000 which was in excess of the fair value of the plan
assets of $1,445,000. As of December 29, 2002, both plans have accumulated
benefit obligations in excess of the fair value of each of the plans' assets.

The components of the net periodic pension cost (credit) are as follows (in
thousands):

The unrecognized pension loss in 2000 and 2002, and the recovery in 2001,
less related deferred income taxes, has been reported as 'Unrecognized pension
loss' and 'Recovery of unrecognized pension loss,' respectively, as components
of comprehensive income (loss) reported in the accompanying consolidated
statements of stockholders' equity (deficit) consisting of the following (in
thousands):

The actuarial assumptions used in measuring the net periodic pension cost
(credit) and accumulated benefit obligations are as follows:

The effect of the decrease in the discount rate used in measuring the net
periodic pension cost from 2001 to 2002 resulted in a decrease in the net
periodic pension cost of $6,000. The decrease in the discount rate used in
measuring the accumulated benefit obligations from 2001 to 2002 resulted in an
increase in the accumulated benefit obligations of $535,000. In addition, a
change in the mortality table used in determining the accumulated benefit
obligations from 2001 to 2002 resulted in an additional increase of $427,000.
Both of these increases in the accumulated benefit obligations are reflected in
the 'Actuarial loss' component of the change in accumulated benefit obligations
during 2002 above.

87

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(21) LEASE COMMITMENTS

The Company leases real property and transportation, restaurant and office
equipment, principally related to Sybra. Some leases related to restaurant
operations provide for contingent rentals based on sales volume.

Rental expense under operating leases consisted of the following components
(in thousands):

The Company has recorded $3,274,000 of 'Favorable leases' included in 'Other
intangible assets' (see Note 9) and $15,506,000 of unfavorable leases included
in 'Other liabilities, deferred income and minority interests in a consolidated
subsidiary.' The Company's future minimum rental payments, reduced by the
$12,232,000 of net unfavorable leases the Company has provided as previously set
forth and excluding (1) the lease obligations assumed by RTM Restaurant Group,
Inc. in connection with the May 1997 sale of restaurants (see Note 22) and
(2) sublease rental receipts for noncancelable leases having an initial lease
term in excess of one year as of December 29, 2002 are as follows (in
thousands):

The present value of minimum capitalized lease payments is included either
with 'Long-term debt' or 'Current portion of long-term debt,' as applicable, in
the accompanying consolidated balance sheet as of December 29, 2002 (see
Note 10).

(22) GUARANTEES

National Propane retains a less than 1% special limited partner interest in
its former propane business, now known as AmeriGas Eagle Propane, L.P.
('AmeriGas Eagle'). National Propane agreed that while it remains a special
limited partner of AmeriGas Eagle, National Propane would indemnify (the
'Indemnification') the owner of AmeriGas Eagle for any payments the owner makes
related to the owner's obligations under certain of the debt of AmeriGas Eagle,
aggregating approximately $138,000,000 as of December 29, 2002, if AmeriGas
Eagle is unable to repay or refinance such debt, but only after recourse by the
owner to the assets of AmeriGas Eagle. National Propane's principal asset is an
intercompany note receivable from Triarc in the amount of $30,000,000 as of
December 29, 2002, which amount was increased to $50,000,000 as of January 1,
2003. The Company believes it is unlikely that it will be called upon to make
any payments under the

88

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

Indemnification. In August 2001, AmeriGas Propane L.P. ('AmeriGas Propane')
purchased all of the interests in AmeriGas Eagle other than National Propane's
special limited partner interest. Either National Propane or AmeriGas Propane
may require AmeriGas Eagle to repurchase the special limited partner interest.
However, the Company believes it is unlikely that either party would require
repurchase prior to 2009 as either AmeriGas Propane would owe the Company tax
indemnification payments if AmeriGas Propane required the repurchase or the
Company would accelerate payment of deferred taxes associated with the July 1999
sale of the propane business if National Propane required the repurchase.

Triarc has guaranteed obligations under mortgage and equipment notes payable
through 2015 (the 'Mortgage and Equipment Notes Guarantee') which were assumed
by subsidiaries of RTM Restaurant Group, Inc. ('RTM'), the largest franchisee in
the Arby's system, in connection with the May 1997 sale of all 355 of the then
Company-owned restaurants to RTM (the 'Restaurant Sale'), of which approximately
$44,000,000 and $42,000,000 were outstanding as of December 30, 2001 and
December 29, 2002, respectively.

In connection with the Restaurant Sale, substantially all lease obligations
associated with the sold restaurants were also assumed by RTM, although the
Company remains contingently liable if the future lease payments, which extend
through 2031 including all then existing extension or renewal option periods,
are not made by RTM (the 'Lease Guarantee'). Such lease obligations could
aggregate a maximum of approximately $73,000,000 and $66,000,000 as of
December 30, 2001 and December 29, 2002, respectively, assuming RTM has made all
scheduled payments thereof through those dates.

The Company also guarantees certain debt of Encore, as disclosed in
Note 23.

The carrying amounts of the Mortgage and Equipment Notes Guarantee, the
Lease Guarantee and the guarantee of Encore senior notes (see Note 23)
aggregated $992,000 and $669,000 as of December 30, 2001 and December 29, 2002,
respectively. Such carrying amounts are included in 'Other liabilities, deferred
income and minority interests in a consolidated subsidiary' in the accompanying
consolidated balance sheets (see Note 12).

(23) TRANSACTIONS WITH RELATED PARTIES

Deferred compensation expense of $1,856,000 and $1,350,000 was recognized in
2001 and 2002, respectively, for increases in the fair value of the investments
in the Deferred Compensation Trusts. Under accounting principles generally
accepted in the United States of America, the Company recognized investment
income of $171,000 on the investments in the Deferred Compensation Trusts during
2001 but was not able to recognize any investment income on the increase in the
value of those investments during 2002. This disparity between compensation
expense and investment income recognized will reverse in future periods as
either (1) the investments in the Deferred Compensation Trusts are sold and
previously unrealized gains are recognized without any offsetting increase in
compensation expense or (2) the fair values of the investments in the Deferred
Compensation Trusts decrease resulting in the recognition of a reduction of
deferred compensation expense without any offsetting losses recognized in
investment income. Investment income on the Deferred Compensations Trusts is
included in 'Investment income, net' and Deferred compensation expense is
included in 'General and administrative' in the accompanying consolidated income
statements. The obligation to the Executives is reported as 'Deferred
compensation payable to related parties' and the investments in the Deferred
Compensation Trusts are included in 'Investments' in the accompanying
consolidated balance sheets.

The Company leased a helicopter until April 4, 2002 from a subsidiary of
Triangle Aircraft Services Corporation ('TASCO'), a company owned by the
Executives, under a dry lease which was scheduled to expire in September 2002.
Annual rent for the helicopter was $369,000 from January 19, 2000 through
September 30, 2000, and increased to $382,000 and $392,000 as of October 1, 2000
and October 1, 2001, respectively, as a result of annual cost of living
adjustments. The Company terminated its lease effective April 1, 2002 and paid
$150,000 to TASCO to be released from all of its remaining obligations under the
lease, including a then remaining rental obligation of $196,000. In addition,
the Company leased an airplane

89

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

until January 19, 2000 from 280 Holdings, LLC, a then subsidiary of TASCO,
pursuant to a dry lease for base annual rent which as of January 2, 2000 was
$3,078,000. On January 19, 2000 the Company acquired the airplane through its
acquisition of 280 Holdings, LLC for $27,210,000 consisting of cash of
$9,210,000 and the assumption of the $18,000,000 Promissory Note. The purchase
price was based on independent appraisals and was approved by the Company's
audit committee and board of directors. Under the terms of the dry lease for
both aircraft, the Company paid the operating expenses, including repairs and
maintenance, of the aircraft directly to third parties. The aggregate expense
attributable to lease related payments to TASCO, including the amortization of a
lease option entered into in 1997 aggregated $574,000, $385,000 and $248,000 for
2000, 2001 and 2002, respectively. On January 19, 2000 the Company was
reimbursed $1,200,000 by TASCO representing the return of substantially all of
the remaining unamortized amount paid for the lease option.

A class action lawsuit relating to certain awards of compensation to the
Executives in 1994 through 1997 was settled effective March 1, 2001 whereby,
among other things, (1) the Company received an interest-bearing note (the
'Executives' Note') from the Executives, in the aggregate amount of $5,000,000,
receivable in three equal installments due March 31, 2001, 2002 and 2003 and
(2) as set forth in Note 14, the Executives surrendered an aggregate of 775,000
stock options awarded to them in 1994. The Company recorded the $5,000,000
during 2001 as a reduction of compensation expense included in 'General and
administrative' in the accompanying consolidated income statement for the year
ended December 30, 2001, since the settlement effectively represents an
adjustment of prior period compensation expense. The Executives' Note bore
interest initially at 6% per annum and, in accordance with its terms, was
adjusted on April 2, 2001 to 4.92% per annum and was again adjusted on April 1,
2002 to 1.75%. The Company recorded interest income on the Executives' Note of
$148,000 and $62,000 during 2001 and 2002, respectively. During 2001 and 2002
the Company collected the first and second installments aggregating $3,333,000
on the Executives' Note plus related interest. The remaining balance of the
Executives' Note of $1,667,000 as of December 29, 2002 is included in
'Receivables' in the accompanying consolidated balance sheet.

The Company's president and chief operating officer has an equity interest
in a franchisee that owns an Arby's restaurant. That franchisee is a party to a
standard Arby's franchise license agreement and pays to Arby's fees and royalty
payments that unaffiliated third-party franchisees pay. Under an arrangement
that pre-dated the Sybra Acquisition, Sybra manages the restaurant for the
franchisee and has not received any compensation for its services during 2002.

As part of its overall retention efforts, the Company has provided certain
of its management officers and employees, including its executive officers, the
opportunity to co-invest with the Company in certain investments and made
related loans to management through December 30, 2001. The Company did not enter
into any new co-investments or make any co-investment loans to management
officers or employees during 2002 and management notified the Company's board of
directors that the Company does not intend to make any further co-investment
loans. Moreover, under the Sarbanes-Oxley Act of 2002, the Company is not
permitted to make any new loans to its executive officers. The co-investment and
corporate opportunity policy, as amended in May 2001 and approved by the
Company's audit committee, provided that the Company could make loans to
management, not to exceed an aggregate of $5,750,000 principal amount
outstanding, where the Company's portion of the aggregate co-investment was at
least 20%. Each loan could not exceed two-thirds of the total amount to be
invested by any member of management in a co-investment and was to be evidenced
by promissory notes, of which at least one-half were to be recourse notes,
secured by such member's co-investment shares. The promissory notes were to
mature no later than the lesser of (1) five years, (2) the sale of the
investment by the officer or employee or (3) the termination of employment of
the officer or employee; and bear interest at the prime rate payable annually in
arrears. The Company and certain of its management had entered into four
co-investments in accordance with this policy: (1) EBT (see Note 8), (2) 280 KPE
Holdings, LLC ('280 KPE'), (3) K12 Inc. ('K12'), a Cost Investment and
(4) 280 BT (see Note 6). EBT, 280 KPE and 280 BT are limited liability holding
companies principally owned by the Company and present and former company
management that, among other parties, invested in operating companies. The
investment in K12,

90

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

however, is directly in the operating company. The underlying investments held
by EBT and 280 KPE became worthless. Information pertaining to each of these
co-investments is as follows (dollars in thousands):

- ---------

(a) Reflects the collection of $90,000 in 2002 and an allowance for
uncollectible notes established in 2002 for outstanding non-recourse notes
due to the worthlessness of the investments by EBT during 2002. The related
provision for uncollectible notes of $176,000 is included in 'General and
administrative' in the accompanying consolidated income statement for 2002.
In addition, $5,000 of accrued interest associated with the non-recourse
notes was also written off as a reduction of the 'Other interest income'
component of 'Other income, net' (see Note 17) in 2002.

(b) Reflects the collection of $3,000 in 2000, the reduction of $762,000 in
2001 for the release for future investment obligations which were never
drawn upon and the write-off of $219,000 in 2001 of non-recourse notes
which were forgiven in 2002 due to the worthlessness of the underlying
investments held by 280 KPE and included in 'General and administrative' in
the accompanying consolidated income statement for 2001. In addition,
$14,000 of accrued interest associated with the non-recourse notes forgiven
was also written off as a reduction of the 'Other interest income'
component of 'Other income, net' (see Note 17) in 2001. The remaining
$216,000 of recourse notes and related accrued interest was collected
during 2002. Prior to the surrender of all their interests in 280 KPE to
the Company upon the forgiveness of the non-recourse notes, present and
former company management owned 74.7% and the Company owned the remaining
25.3% of 280 KPE.

(c) Reflects the collection of $50,000 in 2002 and the surrender in 2002 by a
former Company officer of 1.5% of his 2.5% co-investment interest in 280 BT
to the Company in settlement of a $50,000 non-recourse loan, which resulted
in an increase in the Company's ownership percentage to 57.4% from 55.9%.
Such settlement resulted in a pretax gain to the Company of $48,000
consisting of a reduction of the minority interests in 280 BT of $100,000
as a result of the Company now owning the 1.5% surrendered interest less
the $52,000 charge for the extinguishment of the $50,000 non-recourse note
and related accrued interest. The reduction of the minority interests was
included as a credit to 'Minority interests in loss of a consolidated
subsidiary' and the charge for the extinguishment of the note was included
in 'General and
(footnotes continued on next page)

91

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(footnotes continued from previous page)

administrative' in the accompanying consolidated income statement for the
year ended December 29, 2002.

(d) Reflects an allowance for uncollectible notes established in 2002 for the
portion of the non-recourse notes which the Company estimates will not be
collected due to declines in value of the underlying investments of 280 BT.
The related provision of $393,000 was included in 'General and
administrative' in 2002.

As indicated above, both the Company and certain of its management officers
made a co-investment in 280 BT in November 2001, which was in addition to a
cash-only co-investment previously made in May 1998. 280 BT invested all of such
November 2001 proceeds in Scientia Preferred Shares. The Company and an officer
who is not one of the Executives and who co-invested in 280 BT had previously
invested in ordinary shares (the 'Scientia Ordinary Shares') of Scientia. The
Scientia Ordinary Shares were acquired for a significantly lower cost per share,
while the Scientia Preferred Shares provide for dividend and liquidation
preferences. The officer owns a higher percentage of Scientia Ordinary Shares
than the Company owns while the officer owns a lower percentage of Scientia
Preferred Shares than the Company owns. The officer could have indirectly
benefited from the lower average cost of his investments compared with that of
the Company's investments. However, because of a substantial decline in value of
the Scientia Ordinary Shares during 2002, it is unlikely the officer will
realize this benefit.

In addition to the co-investments set forth in the preceding table, the
Company and certain of its officers, including entities controlled by them, have
invested in Encore, resulting in the Company owning 7.2% and present officers
collectively owning 17.2% of Encore's issued and outstanding common stock as of
December 29, 2002. The Company and certain of its then officers and employees
had co-invested in Encore prior to an initial public offering by Encore of its
common stock in July 1999 (the 'Encore IPO'), resulting in the Company acquiring
an 8.4% share and certain of the present and former officers acquiring a 15.7%
collective share, as adjusted for the effect of the Encore IPO. In October 2002
the Company made a restricted stock award of 90,000 shares of Encore common
stock owned by it to an officer of the Company who is not one of the Executives
and who began serving on Encore's board of directors. Such award reduced the
Company's ownership of Encore's common stock by 1.2% to 7.2%. In connection with
this award, the Company recorded the $72,000 fair market value of the Encore
shares as of the date of grant as accrued compensation which is being amortized
to expense ratably over the three-year vesting period of the restricted stock
award. An equal offsetting deferred gain will be amortized to income equally
upon each of the three annual vesting dates.

In addition, as disclosed in Note 8, during 2002 the Company, certain of its
officers, including entities controlled by them, and other significant
stockholders of Encore invested in the Encore Preferred Stock. If all of the
Encore Preferred Stock were converted, the ownership of the Company and the
present officers in Encore common stock would increase to 13.1% and 23.7%,
respectively.

On January 12, 2000 the Company entered into a guarantee (the 'Note
Guarantee') of $10,000,000 principal amount of senior notes that mature in
January 2007 (the 'Encore Notes') issued by Encore to a major financial
institution. In consideration for the guarantee, the Company received a fee of
$200,000 and warrants to purchase 100,000 shares of Encore common stock at $.01
per share with an estimated fair value on the date of grant of $305,000. As
disclosed in Note 8, during 2002 the outstanding principal amount of the Encore
Notes was reduced from $10,000,000 to $7,250,000. The $10,000,000 guaranteed
amount has been reduced to $6,698,000 as of December 29, 2002 and the guaranteed
amount will be further reduced by (1) any repayments of the Encore Notes,
(2) any purchases of the Encore Notes by the Company and (3) the amount of
certain investment banking or financial advisory services fees, if any, paid to
the financial institution or its affiliates or, under certain circumstances,
other financial institutions by the Company, Encore or another significant
stockholder of Encore or any of their affiliates. The present and former
officers of the Company, including entities controlled by them, who collectively
owned 15.7% of Encore as of the Encore IPO, are not parties to the Note
Guarantee and could indirectly benefit from it.

92

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

In addition to the Note Guarantee, the Company and certain other
stockholders of Encore, including the present and former officers of the Company
who had invested prior to the Encore IPO, on a joint and several basis, have
entered into guarantees (the 'Bank Guarantees') and certain related agreements
to guarantee up to $15,000,000 of revolving credit borrowings of a subsidiary of
Encore. The Company would be responsible for approximately $1,800,000 assuming
the full $15,000,000 was borrowed and all of the parties, other than the
Company, to the Bank Guarantees and the related agreements fully perform
thereunder. As of Encore's year end of December 31, 2002 Encore had $3,933,000
of outstanding revolving credit borrowings. In connection therewith, at December
29, 2002 the Company had $15,018,000 in an interest-bearing bank custodial
account at the financial institution providing the revolving credit line which
under the Bank Guarantees is subject to set off under certain circumstances if
the parties to the Bank Guarantees and related agreements fail to perform their
obligations thereunder. The interest-bearing bank account is included in 'Cash
(including cash equivalents)' in the accompanying consolidated balance sheet as
of December 29, 2002.

Encore had encountered cash flow and liquidity difficulties in the past.
However, Encore's liquidity and capital were positively impacted by the debt
forgiveness and preferred stock investment referred to above. Encore also has
returned to profitability, and it reported net income available to common
stockholders for its year ended December 31, 2002. The Company currently
believes that it is unlikely the Company will be required to make payments under
the Note Guarantee and/or the Bank Guarantees.

The Company, the Company's officers who had invested in Encore prior to the
Encore IPO and certain other stockholders of Encore, through a then newly-formed
limited liability company, CTW Funding, LLC ('CTW'), entered into an agreement
on October 31, 2000 to make available to Encore a $2,000,000 revolving credit
facility (the 'Encore Revolver') for working capital purposes which was extended
through December 31, 2001, at which date it expired unused. The Company owned an
8.7% interest in CTW and, had any borrowings under the Encore Revolver occurred,
all members of CTW would have been required to fund such borrowings in
accordance with their percentage interests. In return for its commitment, CTW
received warrants to purchase a total of 250,000 shares of Encore common stock
at $.01 per share with an aggregate estimated fair value on the dates of grant
of $108,000. The Company accounted for its investment in CTW in accordance with
the Equity Method and had equity in the earnings of CTW of $2,000 and $7,000 in
2000 and 2001, respectively, that were fully offset in 2001 by recognizing
equity in losses of Encore. During 2002 CTW exercised the warrants and was then
liquidated, resulting in the Company receiving 21,822 shares of Encore common
stock. Such shares had a less than 0.1% effect on the Company's ownership
percentage of Encore because of the common shares issued to other members of CTW
upon CTW's exercise of the warrants and liquidation.

The Company also has related party transactions disclosed in Note 14
consisting of the Class B Repurchases from the Posner Entities and stock-based
compensation.

(24) LEGAL AND ENVIRONMENTAL MATTERS

In 2001, a vacant property owned by Adams, a non-operating subsidiary, was
listed by the United States Environmental Protection Agency on the Comprehensive
Environmental Response, Compensation and Liability Information System
('CERCLIS') list of known or suspected contaminated sites. The CERCLIS listing
appears to have been based on an allegation that a former tenant of Adams
conducted drum recycling operations at the site from some time prior to 1971
until the late 1970s. The business operations of Adams were sold in December
1992. Adams engaged an environmental consultant that, under the supervision of
the Florida Department of Environmental Protection (the 'FDEP'), conducted an
investigation of the site that was intended to develop additional information on
the extent and nature of the soil and groundwater contamination and the
appropriate remediation for that contamination. Adams' environmental consultant
has submitted to the FDEP a summary of the results of this investigation and
Adams and the FDEP have negotiated a work plan for further investigation of the
site and limited remediation of the identified contamination. The work plan is
embodied in a consent order between Adams and the FDEP. The consent order has
been executed by Adams

93

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

and by the FDEP subsequent to December 29, 2002 and is effective, subject to a
petition for administrative hearing being filed during the statutory public
comment period. Based on a preliminary cost estimate of approximately $1,000,000
for completion of the work plan developed by Adams' environmental consultant
and, after taking into consideration various legal defenses available to the
Company, including Adams, Adams has provided for its estimate of its liability
for this matter, including related legal and consulting fees. Such provision was
made primarily during the year ended December 29, 2002 principally as a
reduction of 'Gain (loss) on sale of businesses' in the accompanying
consolidated income statement for the year ended December 29, 2002 since the
provision represents an adjustment to the previously recorded gain on the sale
of Adams.

On March 23, 1999 a stockholder filed a complaint on behalf of persons who
held Triarc Class A Common Stock as of March 10, 1999 which, as amended in April
2000, alleged that the Company's tender offer statement filed with the
Securities and Exchange Commission in 1999, pursuant to which the Company
repurchased 3,805,015 shares of its Class A Common Stock for $18.25 per share,
was materially false and misleading. The amended complaint sought damages in an
unspecified amount, together with prejudgment interest, the costs of suit,
including attorneys' fees, an order permitting all stockholders who tendered
their shares in the tender offer to rescind the transaction and unspecified
other relief. The amended complaint names the Company and the Executives as
defendants. On October 17, 2002 the court presiding over the matter granted the
Company's motion to dismiss this action and subsequently entered a judgment
dismissing the case. On November 21, 2002 the plaintiff filed a notice of
appeal. Subsequent to December 29, 2002, the plaintiff withdrew the appeal.

In October 1998, various class action lawsuits were filed on behalf of the
Company's stockholders. Each of these actions names the Company, the Executives
and members of the Company's Board of Directors as defendants. On March 26,
1999, certain plaintiffs in these actions filed an amended complaint making
allegations substantially similar to those asserted in the March 23, 1999 action
described in the preceding paragraph. In October 2000, the plaintiffs agreed to
stay this action pending determination of the March 23, 1999 action disclosed in
the preceding paragraph.

In addition to the environmental matter and stockholder lawsuits described
above, the Company is involved in other litigation and claims incidental to its
business. Triarc and its subsidiaries have reserves for all of their legal and
environmental matters aggregating $2,700,000 as of December 29, 2002. Although
the outcome of such matters cannot be predicted with certainty and some of these
matters may be disposed of unfavorably to the Company, based on currently
available information, including legal defenses available to Triarc and/or its
subsidiaries, and given the aforementioned reserves, the Company does not
believe that the outcome of its legal and environmental matters will have a
material adverse effect on its consolidated financial position or results of
operations.

94

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(25) QUARTERLY INFORMATION (UNAUDITED)

- ---------

(a) Revenues, investment income and other income for the quarters ended
July 1, 2001, September 30, 2001 and December 30, 2001 and income from
continuing operations before income taxes and minority interests for the
quarter ended December 30, 2001 have been reclassified to conform with the
accompanying 2001 full year consolidated income statement.

(footnotes continued on next page)

95

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 29, 2002

(footnotes continued from previous page)

(b) The income from continuing operations for the quarter ended April 1, 2001
was materially affected by a credit of $5,000,000, or $3,200,000 net of
income tax provision of $1,800,000, upon the receipt of the Executives'
Note in connection with the settlement of a class action lawsuit involving
certain awards of compensation to the Executives (see Note 23).

(c) Basic and diluted income (loss) per share have been computed consistently
with the annual calculations explained in Note 4. Basic and diluted income
(loss) per share are the same for the quarter ended September 30, 2001 and
for each of the first three quarters of 2002 since all potentially dilutive
securities would have had an antidilutive effect based on the loss from
continuing operations in each of those quarters.

(d) Revenues, investment income and other income for the quarter ended
June 30, 2002 reflect certain reclassifications from the Company's
quarterly report on Form 10-Q to conform with the accompanying 2002 full
year consolidated statement of operations.

(e) Revenues are not significantly impacted by seasonality although they are
somewhat lower in the first quarter. However, investment income for each
quarter is significantly impacted by, among other things, fluctuations in
interest rates earned on the Company's investments, timing of sales of
investments with unrecognized gains or losses and the timing of the
recognition of Other Than Temporary Losses.

96

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.

PART III

ITEMS 10, 11, 12 AND 13.

The information required by items 10, 11, 12 and 13 will be furnished on or
prior to April 29, 2003 (and is hereby incorporated by reference) by an
amendment hereto or pursuant to a definitive proxy statement involving the
election of directors pursuant to Regulation 14A which will contain such
information. Notwithstanding the foregoing, information appearing in the
sections 'Executive Compensation Report of the Compensation Committee and
Performance Compensation Subcommittee' and 'Stock Price Performance Graph' shall
not be deemed to be incorporated by reference in this Form 10-K.

ITEM 14. CONTROLS AND PROCEDURES

Our management, including our Chairman and Chief Executive Officer and our
Chief Financial Officer, evaluated the effectiveness of our disclosure controls
and procedures within 90 days prior to the filing date of this annual report.
There are inherent limitations to the effectiveness of any system of disclosure
controls and procedures however well designed, including the possibility of
human error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable assurance of achieving their control objectives. Notwithstanding
these limitations, based upon and as of the date of the evaluation, our Chairman
and Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective to ensure that information
required to be included in the reports we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported as and when
required. No significant changes were made to our internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) 1. Financial Statements:

See Index to Financial Statements (Item 8).

2. Financial Statement Schedules:

All schedules have been omitted since they are either not applicable or the
information is contained elsewhere in 'Item 8. Financial Statements and
Supplementary Data.'

3. Exhibits:

Copies of the following exhibits are available at a charge of $.25 per page
upon written request to the Secretary of Triarc at 280 Park Avenue, New York,
New York 10017.

- -------------------
* Filed herewith

Instruments defining the rights of holders of certain issues of long-term
debt of Triarc and its consolidated subsidiaries have not been filed as
exhibits to this Form 10-K because the authorized principal amount of any
one of such issues does not exceed 10% of the total assets of Triarc and
its subsidiaries on a consolidated basis. Triarc agrees to furnish a copy
of each of such instruments to the Commission upon request.

(b) Reports on Form 8-K:

On November 12, 2002, Triarc filed a Current Report on Form 8-K, which
included information under Item 7 of such form.

On November 27, 2002, Triarc filed a Current Report on Form 8-K, which
included information under Items 5 and 7 of such form.

On December 27, 2002, Triarc filed a Current Report on Form 8-K, which
included information under Items 5 and 7 of such form.

(d) Separate financial statements of subsidiaries not consolidated and fifty
percent or less owned persons:

The consolidated financial statements of Encore Capital Group Inc.
(formerly known as MCM Capital Group, Inc.), an investment of the Company
accounted for in accordance with the equity method, are hereby incorporated
by reference from Item 8. 'Consolidated Financial Statements' from the
Annual Report on Form 10-K for the year ended December 31, 2002 of Encore
Capital Group, Inc. (SEC file no. 000-26489). A copy of the consolidated
financial statements incorporated by reference in this Item 14(d) is
included as Exhibit 99.1 to this Form 10-K.

100

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.

TRIARC COMPANIES, INC.
(Registrant)

NELSON PELTZ
....................................
NELSON PELTZ
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Dated: March 28, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 28, 2003 by the following persons on
behalf of the registrant in the capacities indicated.

101

CERTIFICATIONS

I, Nelson Peltz, the Chairman and Chief Executive Officer of Triarc
Companies, Inc., certify that:

1. I have reviewed this annual report on Form 10-K of Triarc Companies,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the 'Evaluation Date'); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 28, 2003

NELSON PELTZ
........................................
NELSON PELTZ
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

102

CERTIFICATIONS

I, Francis T. McCarron, the Senior Vice President and Chief Financial
Officer of Triarc Companies, Inc., certify that:

1. I have reviewed this annual report on Form 10-K of Triarc Companies,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the 'Evaluation Date'); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 28, 2003

FRANCIS T. MCCARRON
........................................
FRANCIS T. MCCARRON
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER

103

STATEMENT OF DIFFERENCES
------------------------

The trademark symbol shall be expressed as ........................... 'TM'
The registered trademark symbol shall be expressed as ................ 'r'