TRIARC COMPANIES INC - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended September 28, 2003

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, New York, New York 10017
----------------------------------- -----
(Address of principal executive offices) (Zip Code)

(212) 451-3000
--------------
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year,
if changed since last report)

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.

(X) Yes ( ) No

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

(X) Yes ( ) No

There were 19,748,609 shares of the registrant's Class A Common Stock and
39,497,218 shares of the registrant's Class B Common Stock outstanding as of
October 31, 2003.

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

December 29, September 28,
2002 (A) 2003
-------- ----
(In Thousands)
(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents.........................................................$ 456,388 $ 543,946
Short-term investments............................................................ 175,161 199,441
Receivables....................................................................... 12,967 12,179
Inventories....................................................................... 2,274 2,378
Deferred income tax benefit....................................................... 15,037 15,550
Prepaid expenses, restricted cash and other current assets........................ 7,555 10,273
---------- -----------
Total current assets........................................................... 669,382 783,767
Restricted cash equivalents............................................................ 32,476 32,463
Investments............................................................................ 34,717 33,643
Properties............................................................................. 115,224 108,360
Goodwill .............................................................................. 90,689 94,197
Other intangible assets................................................................ 8,291 7,796
Deferred costs and other assets........................................................ 16,604 21,087
---------- -----------
$ 967,383 $ 1,081,313
========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt.................................................$ 34,422 $ 35,102
Accounts payable ................................................................. 18,998 15,658
Accrued expenses and other current liabilities.................................... 73,338 85,154
Net current liabilities relating to discontinued operations....................... 33,083 36,652
---------- -----------
Total current liabilities...................................................... 159,841 172,566
Long-term debt......................................................................... 352,700 492,305
Deferred compensation payable to related parties....................................... 25,706 28,446
Deferred income taxes.................................................................. 60,070 60,498
Other liabilities, deferred income and minority interests in a consolidated subsidiary. 36,324 33,461
Stockholders' equity:
Common stock...................................................................... 2,955 8,865
Additional paid-in capital........................................................ 131,708 128,048
Retained earnings................................................................. 360,995 353,854
Common stock held in treasury..................................................... (162,084) (204,961)
Deferred compensation payable in common stock..................................... -- 10,160
Accumulated other comprehensive deficit........................................... (832) (1,929)
---------- -----------
Total stockholders' equity..................................................... 332,742 294,037
---------- -----------
$ 967,383 $ 1,081,313
========== ===========

(A) Derived and reclassified from the audited consolidated financial statements
as of December 29, 2002.

See accompanying notes to condensed consolidated financial statements.

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Nine Months Ended
--------------------------- ----------------------------
September 29, September 28, September 29, September 28,
2002 2003 2002 2003
---- ---- ---- ----
(In Thousands Except Per Share Amounts)
(Unaudited)

Revenues:
Net sales...............................................$ -- $ 51,093 $ -- $ 150,988
Royalties and franchise and related fees (A)............ 25,671 23,542 72,889 68,181
--------- --------- -------- ---------
25,671 74,635 72,889 219,169
--------- --------- -------- ---------

Costs and expenses:
Cost of sales, excluding depreciation and amortization.. -- 38,295 -- 112,139
Advertising and selling................................. 1,070 4,412 2,185 11,555
General and administrative.............................. 19,080 23,402 56,802 70,681
Depreciation and amortization, excluding amortization
of deferred financing costs........................... 1,605 3,379 4,860 10,176
--------- --------- -------- ---------
21,755 69,488 63,847 204,551
--------- --------- -------- ---------
Operating profit................................. 3,916 5,147 9,042 14,618
Interest expense............................................ (6,839) (10,032) (20,002) (27,857)
Insurance expense related to long-term debt................. (1,109) (1,025) (3,414) (3,163)
Investment income (loss), net............................... (441) 4,014 706 10,884
Gain (costs) related to proposed business acquisitions not
consummated.............................................. (2,100) 2,994 (2,232) 2,064
Loss on sale of businesses.................................. -- -- (1,218) --
Other income, net........................................... 427 449 199 1,424
--------- --------- -------- ---------
Income (loss) before income taxes and minority
interests..................................... (6,146) 1,547 (16,919) (2,030)
(Provision for) benefit from income taxes................... 2,582 (1,052) 3,552 (985)
Minority interests in loss of a consolidated subsidiary..... 1,009 -- 2,255 112
--------- --------- -------- ---------
Net income (loss)................................$ (2,555) $ 495 $(11,112) $ (2,903)
========= ========= ======== =========

Basic and diluted income (loss) per share:
Class A common stock...................................$ (.04) $ .01 $ (.18) $ (.05)
========= ========= ======== =========
Class B common stock...................................$ (.04) $ .01 $ (.18) $ (.05)
========= ========= ======== =========

(A) Includes royalties from Sybra, Inc. of $1,869,000 and $5,470,000 for the
three-month and nine-month periods ended September 29, 2002, respectively,
whereas the royalties from Sybra, Inc. of $1,776,000 and $5,226,000 for the
three-month and nine-month periods ended September 28, 2003, respectively,
were eliminated in consolidation.

See accompanying notes to condensed consolidated financial statements.

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

Nine Months Ended
----------------------------------
September 29, September 28,
2002 2003
---- ----
(In Thousands)
(Unaudited)

Cash flows from continuing operating activities:
Net loss...............................................................................$ (11,112) $ (2,903)
Adjustments to reconcile net loss to net cash used in continuing operating activities:
Depreciation and amortization of properties.......................................... 4,203 9,203
Amortization of other intangible assets and certain other items...................... 657 973
Amortization of deferred financing costs and original issue discount................. 1,432 1,666
Deferred compensation provision ..................................................... 481 2,740
Collection of litigation settlement receivable....................................... 1,667 1,667
Operating investment adjustments, net (see below).................................... 7,954 (17,647)
Deferred vendor incentive recognized................................................. -- (1,420)
Unfavorable lease liability recognized............................................... -- (1,131)
Equity in (earnings) losses of investees, net........................................ 487 (1,025)
Deferred income tax benefit.......................................................... (2,977) (658)
Minority interests in loss of a consolidated subsidiary ............................. (2,255) (112)
Other, net........................................................................... 1,064 606
Changes in operating assets and liabilities:
(Increase) decrease in receivables................................................ 1,138 (485)
Increase in inventories........................................................... -- (104)
Decrease in prepaid expenses, restricted cash and other current assets............ 1,515 1,100
Decrease in accounts payable and accrued expenses and other current liabilities... (4,266) (5,046)
----------- -----------
Net cash used in continuing operating activities............................... (12) (12,576)
----------- -----------
Cash flows from continuing investing activities:
Investment activities, net (see below)................................................. (37,771) 1,635
Capital expenditures................................................................... (30) (3,465)
Adjustment to cost of business acquisition............................................. -- (200)
Purchase of fractional interest in corporate aircraft.................................. (1,200) --
Other.................................................................................. (44) (62)
----------- -----------
Net cash used in continuing investing activities............................... (39,045) (2,092)
----------- -----------
Cash flows from continuing financing activities:
Issuance of long-term debt............................................................. -- 175,000
Repayments of long-term debt........................................................... (18,090) (34,717)
Exercises of stock options............................................................. 5,439 10,422
Transfers from restricted cash equivalents collateralizing long-term debt.............. 295 127
Repurchases of common stock for treasury............................................... (3,147) (41,700)
Deferred financing costs............................................................... -- (6,525)
Dividends paid......................................................................... -- (4,238)
Class B common stock distribution costs................................................ -- (910)
----------- -----------
Net cash provided by (used in) continuing financing activities................. (15,503) 97,459
----------- -----------
Net cash provided by (used in) continuing operations....................................... (54,560) 82,791
Net cash provided by discontinued operations............................................... 357 4,767
----------- -----------
Net increase (decrease) in cash and cash equivalents....................................... (54,203) 87,558
Cash and cash equivalents at beginning of period........................................... 496,028 456,388
----------- -----------
Cash and cash equivalents at end of period.................................................$ 441,825 $ 543,946
=========== ===========

Details of cash flows related to investments:
Operating investment adjustments, net:
Proceeds from sales of trading securities...........................................$ 37,122 $ 206,465
Cost of trading securities purchased................................................ (38,853) (220,724)
Net recognized (gains) losses from trading securities and short positions in
securities........................................................................ 612 (372)
Other net recognized (gains) losses, including other than temporary losses, and
equity in an investment limited partnership....................................... 8,619 (3,042)
Net amortization of premium on debt securities...................................... 454 26
----------- -----------
$ 7,954 $ (17,647)
=========== ===========

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Nine Months Ended
----------------------------------
September 29, September 28,
2002 2003
---- ----
(In Thousands)
(Unaudited)

Investing investment activities, net:
Proceeds from sales and maturities of available-for-sale securities and other
investments.......................................................................$ 47,836 $ 128,006
Cost of available-for-sale securities and other investments purchased............... (98,035) (129,610)
Proceeds of securities sold short................................................... 31,254 28,777
Payments to cover short positions in securities..................................... (26,846) (21,720)
(Increase) decrease in restricted cash collateralizing obligations for
short positions in securities..................................................... 8,020 (3,818)
----------- -----------
$ (37,771) $ 1,635
=========== ===========

See accompanying notes to condensed consolidated financial statements.

TRIARC COMPANIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
September 28, 2003
(Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of
Triarc Companies, Inc. ("Triarc" and, together with its subsidiaries, the
"Company") have been prepared in accordance with Rule 10-01 of Regulation S-X
promulgated by the Securities and Exchange Commission (the "SEC") and,
therefore, do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with accounting principles generally accepted in the United States of
America. In the opinion of the Company, however, the accompanying condensed
consolidated financial statements contain all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the Company's
financial position as of December 29, 2002 and September 28, 2003, its results
of operations for the three and nine-month periods ended September 29, 2002 and
September 28, 2003 and its cash flows for the nine-month periods ended September
29, 2002 and September 28, 2003 (see below). This information should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 2002 (the "Form 10-K").

The Company reports on a fiscal year basis consisting of 52 or 53 weeks
ending on the Sunday closest to December 31. The Company's first nine-month
period of fiscal 2002 commenced on December 31, 2001 and ended on September 29,
2002, with its third quarter of 2002 commencing on July 1, 2002. The Company's
first nine-month period of 2003 commenced on December 30, 2002 and ended on
September 28, 2003, with its third quarter of 2003 commencing on June 30, 2003.
The periods from July 1, 2002 to September 29, 2002 and December 31, 2001 to
September 29, 2002 are referred to herein as the three-month and nine-month
periods ended September 29, 2002, respectively. The periods from June 30, 2003
to September 28, 2003 and December 30, 2002 to September 28, 2003 are referred
to herein as the three-month and nine-month periods ended September 28, 2003,
respectively. Each quarter contained 13 weeks and each nine-month period
contained 39 weeks.

Certain amounts included in the accompanying prior periods' condensed
consolidated financial statements have been reclassified to conform with the
current periods' presentation.

(2) 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, other key employees, non-employee directors and consultants
and shares of the Company's common stock pursuant to automatic grants in lieu of
annual retainer or meeting attendance fees to non-employee directors.

The Company measures compensation costs for its employee stock-based
compensation under the intrinsic value method rather than the fair 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 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.

A summary of the effect on net income (loss) and net income (loss) per
share in each period 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):

Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 29, September 28, September 29, September 28,
2002 2003 2002 2003
---- ---- ---- ----

Net income (loss), as reported...........................$ (2,555) $ 495 $ (11,112) $ (2,903)
Reversal of stock-based employee compensation expense
determined under the intrinsic value method included
in reported net income or loss, net of related income
taxes.................................................. -- 110 173 159
Recognition of total stock-based employee compensation
expense determined under the fair value method, net
of related income taxes................................ (1,219) (1,297) (3,897) (3,980)
---------- --------- ---------- ----------
Net loss, as adjusted....................................$ (3,774) $ (692) $ (14,836) $ (6,724)
========== ========= ========== ==========

Basic and diluted income (loss) per share:
As reported:
Class A Common Stock and Class B Common Stock.........$ (.04) $ .01 $ (.18) $ (.05)
As adjusted:
Class A Common Stock and Class B Common Stock......... (.06) (.01) (.24) (.11)

The fair value of these stock options granted under the Equity Plans on the
date of grant was estimated using the Black-Scholes option pricing model (the
"Black-Scholes Model") with the assumptions set forth below for options granted
during the nine-month periods ended September 29, 2002 and September 28, 2003:

Nine Months Ended
--------------------------------
September 29, September 28,
2002 2003
---- ----

Risk-free interest rate...................................................... 4.80% 2.90%
Expected option life in years................................................ 7 7
Expected volatility.......................................................... 15.8% 17.5%
Dividend yield .............................................................. None None

During the nine-month periods ended September 29, 2002 and September 28,
2003, the Company granted 28,000 and 24,000 stock options, respectively, under
the Equity Plans at exercise prices equal to the market price of the stock on
the grant dates. The weighted average grant date fair values of these stock
options, using the Black-Scholes Model with the assumptions set forth above,
were $8.78 and $7.56, respectively. There were no stock options granted during
the three-month periods ended September 29, 2002 and September 28, 2003 and, as
such, all of the aforementioned option grants preceded the date of a stock
distribution (the "Stock Distribution") of two shares of a newly designated
series of the Company's previously authorized class B common stock (the "Class B
Common Stock") for each share of its class A common stock (the "Class A Common
Stock") issued as of August 21, 2003 as disclosed in more detail in Note 5.

The Black-Scholes 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. The Company's stock-based awards to employees have characteristics
significantly different from those of traded options and changes in the
subjective input assumptions can materially affect the fair value estimate.
Therefore, 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.

(3) Acquisition of Sybra

On December 27, 2002, the Company completed the acquisition (the "Sybra
Acquisition") of all of the voting equity interests of Sybra, Inc. ("Sybra")
from I.C.H. Corporation ("ICH") as disclosed in more detail in Note 3 ("Note 3
in the 10-K") to the Company's consolidated financial statements contained in
the Form 10-K. Sybra owned and operated 239 Arby's restaurants in nine states as
of the date of the Sybra Acquisition and, prior to the acquisition, was the
second largest franchisee of Arby's restaurants. The aggregate purchase price
paid for Sybra by the Company was $9,950,000 (originally estimated at $9,750,000
as of December 29, 2002) consisting of $8,219,000 of payments to ICH's creditors
and $1,731,000 of estimated fees and expenses.

The allocation of the purchase price of Sybra to the assets acquired and
the liabilities assumed at the date of the Sybra Acquisition, on a preliminary
basis and subject to finalization, is summarized in the following table. This
table reflects adjustments that were made to the initial allocation of the
purchase price of Sybra as set forth in Note 3 in the 10-K and is as follows (in
thousands):

Current assets..........................................................................$ 19,104
Properties.............................................................................. 59,049
Goodwill................................................................................ 75,468
Other intangible assets................................................................. 3,370
Deferred income tax benefit............................................................. 6,630
Deferred costs and other assets......................................................... 399
------------
Total assets acquired............................................................. 164,020
------------
Current liabilities..................................................................... 32,890
Long-term debt, including current portion............................................... 103,242
Other liabilities and deferred income................................................... 17,938
------------
Total liabilities assumed......................................................... 154,070
------------
Net assets acquired.........................................................$ 9,950
============

A reconciliation of the change in goodwill from the initial allocation of
the purchase price of Sybra set forth in Note 3 in the 10-K to the current
allocation set forth in the preceding table is summarized as follows (in
thousands):

Goodwill reported in initial allocation of purchase price...............................$ 71,960
Decrease in properties for revision of preliminary estimated appraisal.................. 1,028
Decrease in deferred income tax benefit (a)............................................. 1,218
Increase in current liabilities for adjustment to accrued income taxes (a).............. 1,085
Other net adjustments, principally reflecting a $200 increase in the original
estimated purchase price............................................................. 177
------------
Goodwill reported in allocation of purchase price in table above...............$ 75,468
============

(a) Adjustments to deferred and accrued income taxes relate principally to the
Company's election during the nine months ended September 28, 2003 to treat
the Sybra Acquisition as an asset purchase in lieu of a stock purchase
under the provisions of Section 338(h)(10) of the United States Internal
Revenue Code.

Sybra's results of operations and cash flows have been included in the
accompanying condensed consolidated statements of operations and cash flows for
the nine-month period ended September 28, 2003 but have not been included for
the nine-month period ended September 29, 2002. However, royalties and franchise
and related fee revenues from Sybra, which are no longer included in the
accompanying condensed consolidated statements of operations and cash flows for
the nine-month period ended September 28, 2003, were included for the nine-month
period ended September 29, 2002.

The following pro forma condensed consolidated summary operating
information (the "As Adjusted for the Acquisition" information) of the Company
for the nine-month period ended September 29, 2002 has been prepared by
adjusting the historical data as set forth in the accompanying condensed
consolidated statement of operations to give effect to the Sybra Acquisition as
if it had been consummated on December 31, 2001 (in thousands except per share
amounts):

Nine Months Ended September 29, 2002
------------------------------------
As Adjusted
As Reported for the Acquisition
----------- -------------------

Revenues.......................................................................$ 72,889 $ 225,140
Operating profit............................................................... 9,042 10,029
Net loss....................................................................... (11,112) (15,734)
Basic and diluted loss per Class A Common Share and Class B Common Share....... (.18) (.26)

This pro forma information is presented for comparative purposes only and
does not purport to be indicative of the Company's actual results of operations
had the Sybra Acquisition actually been consummated on December 31, 2001 or of
the Company's future results of operations.

(4) Long-Term Debt

On May 19, 2003 the Company issued (the "Offering") $175,000,000 aggregate
principal amount of 5% convertible notes due 2023 (the "Convertible Notes") in a
private placement. The Company used a portion of the $175,000,000 proceeds from
the Offering to purchase 1,500,000 shares of its Class A Common Stock for
treasury for $41,700,000 (the "Treasury Stock Purchase") and to pay estimated
fees and expenses associated with the Offering of $6,525,000. The balance of the
net proceeds from the Offering are being used by the Company for general
corporate purposes, which may include working capital, repayment of
indebtedness, acquisitions, additional share repurchases and investments.

The Convertible Notes are convertible under specified circumstances into an
aggregate 4,375,000 shares and 8,750,000 shares of the Company's Class A Common
Stock and Class B Common Stock, respectively, at a combined conversion rate of
25 shares of Class A Common Stock and 50 shares of Class B Common Stock per
$1,000 principal amount of Convertible Notes, subject to adjustment in certain
circumstances and after giving effect for the Stock Distribution, as referred to
in Note 2. This rate represents a conversion price of $40.00 for every one share
of Class A Common Stock and two shares of Class B Common Stock. The Convertible
Notes are redeemable at the Company's option commencing May 20, 2010 and at the
option of the holders on May 15, 2010, 2015 and 2020 or upon the occurrence of a
fundamental change, as defined, of the Company, in each case at a price of 100%
of the principal amount of the Convertible Notes plus accrued interest. The
indenture pursuant to which the Convertible Notes were issued does not contain
any significant financial covenants.

In July 2003, a registration statement (the "Registration Statement")
covering the resale of the Convertible Notes and the Class A Common Stock
issuable upon any conversion of the Convertible Notes was declared effective by
the SEC. However, the Company suspended the use of the prospectus (the
"Prospectus") contained in the Registration Statement effective August 12, 2003,
the day following the declaration date of the Stock Distribution. Effective
October 11, 2003 and continuing until the use of the Prospectus is no longer
suspended, the effective interest rate on the Convertible Notes increased to
5.25% and would further increase to 5.5% commencing January 9, 2004.

The following pro forma operating information (the "As Adjusted for the
Offering" information) of the Company for the nine-month period ended September
28, 2003 has been prepared by adjusting the historical information set forth in
the accompanying condensed consolidated statement of operations to give effect
to the Offering and the Treasury Stock Purchase (which affects only the weighted
average number of common shares and the loss per share) prior to the May 19,
2003 Offering date as if such transactions had been consummated on December 30,
2002 and does not reflect incremental interest income or any other benefit of
the excess proceeds of the Offering (in thousands except per share amounts):

Nine Months Ended September 28, 2002
------------------------------------
As Adjusted
As Reported for the Offering
----------- ----------------

Interest expense...............................................................$ 27,857 $ 31,581
Net loss....................................................................... (2,903) (5,286)
Basic and diluted loss per share:
Class A Common Stock...................................................... (.05) (.09)
Class B Common Stock...................................................... (.05) (.09)
Weighted average number of common shares used for calculation of basic and
diluted loss per share:
Class A Common Stock...................................................... 20,072 19,303
Class B Common Stock...................................................... 40,144 38,606

This pro forma information is presented for information purposes only and
does not purport to be indicative of the Company's actual results of operations
had the Offering actually occurred on December 30, 2002 or of the Company's
future results of operations.

(5) Stockholders' Equity

On September 4, 2003, the Company made the Stock Distribution, as referred
to in Note 2. The newly designated series of Class B Common Stock is entitled to
one-tenth of a vote per share, has a $.01 per share liquidation preference and
is entitled to receive regular quarterly cash dividends per share of at least
110% of any regular quarterly cash dividends per share when, as and if, declared
on the Class A Common Stock and paid on or before September 4, 2006. Thereafter,
the Class B Common Stock will participate equally on a per share basis with the
Class A Common Stock in any cash dividends. Following the Stock Distribution,
each stock option outstanding under the Equity Plans granted prior to the Stock
Distribution is exercisable for a package of one share of Class A Common Stock
and two shares of Class B Common Stock.

On September 25, 2003, the Company paid an initial regular quarterly cash
dividend of $0.065 and $0.075 per share on its Class A Common Stock and Class B
Common Stock, respectively, aggregating $4,238,000 to holders of record on
September 15, 2003. The Company currently intends to continue to declare and pay
quarterly cash dividends, however, there can be no assurance that any dividends
will be declared or paid in the future or of the amount or timing of such
dividends, if any.

On May 19, 2003 the Company made the Treasury Stock Purchase, as disclosed
in Note 4.

(6) Income Taxes

The Internal Revenue Service has commenced an examination of the Company's
Federal income tax returns for the years ended December 31, 2000 and December
30, 2001. Management of the Company believes that adequate aggregate provisions
have been made in prior periods for any tax liabilities, including interest,
that may result from the completion of this examination.

(7) Comprehensive Income (Loss)

The following is a summary of the components of comprehensive income
(loss), net of income taxes (in thousands):

Three Months Ended Nine Months Ended
---------------------------- ---------------------------
September 29, September 28, September 29, September 28,
2002 2003 2002 2003
---- ---- ---- ----

Net income (loss)........................................$ (2,555) $ 495 $ (11,112) $ (2,903)
Net change in unrealized holding gains or losses on
available-for-sale securities (see below).............. 47 (202) (1,062) (1,105)
Net change in currency translation adjustment............ (9) (4) (35) 8
--------- ---------- --------- ----------
Comprehensive income (loss)..............................$ (2,517) $ 289 $ (12,209) $ (4,000)
========= ========== ========= ==========

The following is a summary of the components of the net change in the
unrealized holding gains or losses on available-for-sale securities included in
other comprehensive income (loss) (in thousands):

Three Months Ended Nine Months Ended
---------------------------- ---------------------------
September 29, September 28, September 29, September 28,
2002 2003 2002 2003
---- ---- ---- ----

Net change in unrealized appreciation or depreciation
of available-for-sale securities during the period.....$ (336) $ (311) $ (336) $ (1,835)
(Less) plus reclassification of prior period net
(appreciation) depreciation included in net income or
loss................................................... 422 (7) (1,334) 105
--------- ---------- --------- ----------
86 (318) (1,670) (1,730)
Equity in change in unrealized gain on a retained
interest............................................... (15) (4) 40 (20)
Equity in change in unrealized gain on available-for-
sale securities........................................ 4 3 6 --
Income tax (provision) benefit........................... (28) 117 562 645
--------- ---------- --------- ----------
$ 47 $ (202) $ (1,062) $ (1,105)
========= ========== ========= ==========

(8) Discontinued Operations

In October 2000 the Company sold (the "Snapple Beverage Sale") the stock of
the companies comprising the Company's former premium beverage and soft drink
concentrate business segments (the "Beverage Discontinued Operations") to
affiliates of Cadbury Schweppes plc ("Cadbury"). Prior thereto, the Company sold
the stock or the principal assets of the companies comprising the former utility
and municipal services and refrigeration business segments (the "SEPSCO
Discontinued Operations") of SEPSCO, LLC, a subsidiary of the Company. The
Beverage Discontinued Operations and the SEPSCO Discontinued Operations have
been accounted for as discontinued operations since their respective dates of
sale.

The consideration paid to the Company in the Snapple Beverage Sale
consisted of (1) cash, which is subject to further post-closing adjustment as
described below and (2) the assumption by Cadbury of debt and related accrued
interest. 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 $22,514,000 plus interest at 7.19% from the October
25, 2000 sale date 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 by December 28, 2003.

Net current liabilities relating to discontinued operations consisted of
the following (in thousands):

December 29, September 28,
2002 2003
---- ----

Accrued expenses, including accrued income taxes, of the Beverage
Discontinued Operations.....................................................$ 30,316 $ 33,968 (a)
Net liabilities of the SEPSCO Discontinued Operations (net of assets held
for sale of $234).......................................................... 2,767 2,684
---------- -----------
$ 33,083 $ 36,652
========== ===========

(a) Increase is principally due to the collection during 2003 of income tax
receivables. To the extent any estimated amounts included in accrued
expenses are determined to be in excess of the requirement to liquidate the
associated liability, any such excess will be reversed, at that time, as a
component of income or loss from discontinued operations in the Company's
consolidated statement of operations.

(9) Income (Loss) Per Share

Income (loss) per share amounts in the accompanying condensed consolidated
financial statements and notes thereto have been retroactively adjusted for the
effect of the Stock Distribution.

Basic income (loss) per share has been computed by dividing the net income
(loss) attributable to the Class A Common Shares and Class B Common Shares by
the weighted average number of shares of each class assuming the Stock
Distribution had occurred at the beginning of each period presented. Net income
for a period is allocated between the Class A and Class B Common Shares based on
the actual dividend payment ratio to the extent of any dividends paid during the
period, with any excess allocated giving effect to the minimum stated dividend
participation rate of 110% for the Class B Common Shares compared with the Class
A Common Shares (see Note 5). Accordingly, the net income for the three months
ended September 28, 2003 was allocated $150,000 to the Class A Common Shares and
$345,000 to the Class B Common Shares based on the actual dividend paid. The net
loss in each of the other periods presented was allocated equally among each
share of Class A and Class B Common Stock, resulting in the same loss per share
for each class. The weighted average number of Class A Common Shares for the
three-month periods ended September 29, 2002 and September 28, 2003 are
20,507,000 and 19,628,000, respectively, and for the nine-month periods ended
September 29, 2002 and September 28, 2003 are 20,471,000 and 20,072,000,
respectively. The weighted average number of Class B Common Shares for the
three-month periods ended September 29, 2002 and September 28, 2003 are
41,014,000 and 39,256,000, respectively, and for the nine-month periods ended
September 29, 2002 and September 28, 2003 are 40,942,000 and 40,144,000,
respectively. The weighted average common shares for each of the two classes of
common stock for the three and nine-month periods ended September 28, 2003
include the weighted-average effect commencing April 23, 2003 of the shares held
in the additional deferred compensation trusts (see Note 10).

Diluted loss per share for the three and nine-month periods ended September
29, 2002 and the nine-month period ended September 28, 2003 is the same as basic
loss per share for each of the Class A and Class B Common Shares since the
Company reported a net loss for each of these periods and, therefore, the effect
of both potentially dilutive securities on the net loss per share would have
been antidilutive. Diluted income per share for the three-month period ended
September 28, 2003 attributable to the Class A and Class B Common Shares has
been computed by dividing the allocated net income for each respective class of
common stock by an aggregate 21,213,000 shares and 42,426,000 shares,
respectively, which include the 1,585,000 and 3,170,000, respectively, potential
common share effect of dilutive stock options computed using the treasury stock
method. The shares used to calculate diluted income per share for the
three-month period ended September 28, 2003 exclude any effect of the
Convertible Notes which would have been antidilutive. The reported diluted and
basic income per share are the same since the difference is less than one cent.

The only remaining Company securities as of September 28, 2003 that could
dilute basic income per share for periods subsequent to September 28, 2003 are
(1) 7,772,155 outstanding stock options which are exercisable into 7,772,155
shares and 15,544,310 shares of the Company's Class A Common Stock and Class B
Common Stock, respectively, and (2) $175,000,000 of 5% convertible notes which
are convertible into 4,375,000 shares and 8,750,000 shares of the Company's
Class A Common Stock and Class B Common Stock, respectively (see Note 4).

(10) Transactions with Related Parties

Prior to 2002 the Company provided incentive compensation of $22,500,000 to
the Chairman and Chief Executive Officer and President and Chief Operating
Officer of the Company (the "Executives") which was invested in two deferred
compensation trusts (the "Deferred Compensation Trusts") for their benefit.
Deferred compensation expense of $481,000 and $2,740,000 was recognized in the
nine-month periods ended September 29, 2002 and September 28, 2003,
respectively, for the increase 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 recognizes investment income for any
interest or dividend income on investments in the Deferred Compensation Trusts
and realized gains on sales of investments in the Deferred Compensation Trusts,
but is unable to recognize any investment income for unrealized increases in the
fair value of the investments in the Deferred Compensation Trusts because these
investments are accounted for under the cost method. During the nine-month
period ended September 29, 2002 the Company was unable to recognize any
investment income on the investments in the Deferred Compensation Trusts as the
Company did not receive any dividends or interest or realize any gains from sale
of the cost-method investments held in the Deferred Compensation Trusts.
However, during the nine-month period ended September 28, 2003, the Company
recognized investment income of $749,000 consisting of $5,000 of interest income
and realized gains of $744,000 from the sale of certain cost-method investments
in the Deferred Compensation Trusts, which includes increases in value of
$513,000 prior to the nine-month period ended September 28, 2003. The cumulative
disparity between deferred compensation expense and net recognized investment
income will reverse in future periods as either (1) additional 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 reversal of compensation expense without any
offsetting losses recognized in investment income. Recognized gains and interest
income are included in "Investment income (loss), net" and deferred compensation
expense is included in "General and administrative" in the accompanying
condensed consolidated statements of operations. The obligation to the
Executives is reported as "Deferred compensation payable to related parties" in
the accompanying condensed consolidated balance sheets. The assets in the
Deferred Compensation Trusts which are reflected in the accompanying condensed
consolidated balance sheet as of September 28, 2003 consisted of $21,113,000
included in "Investments," which does not reflect the unrealized increase in the
fair value of the investments, $1,698,000 included in "Cash and cash
equivalents" and $495,000 included in "Receivables."

In April 2003 the Executives exercised an aggregate 1,000,000 stock options
under the Company's Equity Plans and paid the exercise price utilizing shares of
the Company's Class A Common Stock the Executives already owned for more than
six months. These exercises resulted in aggregate deferred gains to the
Executives of $10,160,000, represented by an additional 360,795 shares of the
Company's Class A Common Stock based on the market price at the date of
exercise. Such shares, along with 721,590 shares of Class B Common Stock issued
as part of the Stock Distribution, are being held in two additional deferred
compensation trusts. The Executives had previously elected to defer the receipt
of the shares held in the additional deferred compensation trusts until no
earlier than January 2, 2005. The resulting obligation of $10,160,000 is
reported as the "Deferred compensation payable in common stock" component of
"Stockholders' equity" in the accompanying condensed consolidated balance sheet
as of September 28, 2003.

The Company received a $5,000,000 interest-bearing note (the "Executives'
Note") from the Executives prior to 2002 as part of a settlement of a class
action lawsuit that was due in three equal installments. The Executives' Note
bore interest at 4.92% during the twelve-month period ended March 31, 2002 and
at 1.75% thereafter through maturity. The Company recorded interest income on
the Executives' Note of $56,000 and $7,000 for the nine-month periods ended
September 29, 2002 and September 28, 2003, respectively. In March of 2002 and
2003 the Company collected the second and third installments aggregating
$3,334,000 on the Executives' Notes and also collected related interest of
$163,000 and $29,000, respectively.

As disclosed in more detail in Note 23 ("Note 23 in the 10-K") to the
consolidated financial statements contained in the Form 10-K regarding related
party transactions, 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
prior to 2002. The Company did not enter into any new co-investments subsequent
to 2001 and the co-investment policy no longer permits any new loans. During the
quarter ended December 29, 2002, the Company provided an allowance of $176,000
for the uncollectible non-recourse portion of the notes owed by management in
connection with their co-investments in EBT Holding Company, LLC ("EBT") due to
the worthlessness of the investment owned by EBT. Such non-recourse notes were
subsequently forgiven in March 2003. During the nine-month period ended
September 28, 2003, the Company collected the remaining $176,000 of the recourse
portion of the notes with respect to EBT and $2,000 of related accrued interest.
Under the Company's co-investment policy, as of September 28, 2003 the Company
had in total $1,994,000 of remaining co-investment notes receivable from
management, of which $997,000 was non-recourse, less a $452,000 remaining
allowance for the uncollectible non-recourse portion of the notes, of which
$393,000 was provided during the quarter ended December 29, 2002 and $59,000 was
provided during the quarter ended June 29, 2003. These notes, net of the related
allowance, are included in "Deferred costs and other assets" in the accompanying
condensed consolidated balance sheets.

The Company continues to have additional related party transactions of the
same nature and general magnitude as those described in Note 23 in the 10-K.

(11) Legal and Environmental Matters

In 2001, a vacant property owned by Adams Packing Association, Inc.
("Adams"), an inactive subsidiary of the Company, 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 1970's. The
business operations of Adams were sold in December 1992. In February 2003, Adams
and the Florida Department of Environmental Protection (the "FDEP"), agreed to a
consent order that provides for development of a work plan for further
investigation of the site and limited remediation of the identified
contamination. In May 2003, the FDEP approved the work plan submitted by Adams'
environmental consultant and, as of September 28, 2003, the majority of the work
at the site has been completed. Based on a 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 three-month period ended June 30, 2002
principally as "Loss on sale of businesses" in the accompanying condensed
consolidated statement of operations for the nine-month period ended September
29, 2002 since the provision represented an adjustment to the previously
recorded gain on the sale of Adams.

In October 1998, various class action lawsuits were filed on behalf of the
Company's stockholders. Each of these actions named 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 which
alleged that the Company's tender offer statement filed with the SEC 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 seeks, among other items, damages in an unspecified amount. In October
2000, the plaintiffs agreed to stay this action pending determination of a
similar stockholder action which was subsequently dismissed in October 2002 and
is no longer being appealed. Through September 28, 2003, no further action has
occurred with respect to the remaining class action lawsuit.

In addition to the environmental matter and stockholder lawsuit 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 $2,300,000 as of September 28, 2003. 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.

(12) Subsequent Event

As disclosed in more detail in Note 23 in the 10-K, the Company and certain
of its officers, including entities controlled by them, have invested in Encore
Capital Group, Inc. ("Encore"). The Company accounts for its investment in
Encore under the equity method, though it directly owns less than 20% of the
voting stock of Encore, because of the Company's ability to exercise significant
influence over operating and financial policies of Encore through the Company's
greater than 20% representation on Encore's board of directors. In their
capacity as directors, the Company's representatives consult with the management
of Encore with respect to various operational and financial matters of Encore
and approve the selection of Encore's senior officers.

In October 2003 Encore completed an offering (the "Encore Offering") of
5,750,000 shares of its common stock ("Encore Common Stock") for $11.00 per
share, before underwriting fees and other estimated related expenses of $.96 per
share, which included 3,000,000 newly issued shares offered by Encore and
2,750,000 shares offered by certain existing stockholders, including the Company
and certain of the Company's officers. In conjunction with the Encore Offering,
526,667 Encore employee stock options and 335,087 Encore stock warrants were
exercised (the "Exercises") each into one share of Encore Common Stock and all
of the convertible preferred stock of Encore (the "Encore Preferred Stock") was
converted (the "Conversion") into 10,000,000 shares of Encore Common Stock. In
connection with the Encore Offering, the Company (1) converted its Encore
Preferred Stock into 1,745,660 shares of Encore Common Stock, (2) exercised its
Encore warrants for 101,275 shares of Encore Common Stock and (3) sold 379,679
shares (the "Company's Sale") of Encore Common Stock. Immediately prior to the
Exercises, the Conversions, the Company's Sale and the Encore Offering, the
Company owned 535,609 shares, or 7.2%, of the outstanding Encore Common Stock.
After giving effect to the Exercises, the Conversions and the Company's Sale,
the Company owns 2,002,865 shares of Encore Common Stock, which represented
10.9% of the outstanding Encore Common Stock before giving effect to the Encore
Offering and represents 9.4% of the outstanding Encore Common Stock after giving
effect to the Encore Offering.

The Company will record a gain relating to the Company's Sale and the
effect of the Encore Offering during its fourth quarter ending December 28,
2003. The Company preliminarily estimates that this pretax gain, which will be
reported as "Gain (loss) on sale of businesses" in the Company's consolidated
statement of operations, will aggregate approximately $6,000,000, principally
consisting of (1) approximately $3,500,000 related to the Company's Sale and (2)
approximately $2,500,000 related to a non-cash gain for the decrease in the
Company's ownership percentage resulting from the Encore Offering. The Company
will recognize the non-cash gain in accordance with its current accounting
policy under which it recognizes a gain or loss upon sale by an equity method
investee of any previously unissued stock to third parties to the extent of the
decrease in the Company's ownership of the investee.

Also, as disclosed in more detail in Note 23 in the 10-K, the Company had
guaranteed senior note debt of Encore and the Company, certain of its officers
and others had guaranteed revolving credit borrowings of Encore (collectively,
the "Encore Guarantees"). As of Encore's third quarter ended September 30, 2003,
the Company understands that Encore had $7,250,000 of outstanding senior note
debt, of which the Company guaranteed $6,698,000, and the Company understands
that Encore had no outstanding revolving credit borrowings. In connection with
the Encore Offering, the senior notes were repaid and the revolving credit line
was terminated, thereby relieving the Company of the Encore Guarantees. The
Company will record a pretax gain of approximately $156,000 representing the
release of the remaining unamortized carrying amount of the senior note
guarantee during its fourth quarter ending December 28, 2003 as "Other income,
net" in its consolidated statement of operations.

TRIARC COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Introduction

We currently operate solely in the restaurant business through our
franchised and company-owned Arby's restaurants.

On December 27, 2002, we completed the acquisition of Sybra, Inc. in a
transaction we refer to as the Sybra Acquisition. Sybra owns and operates 237
Arby's restaurants in nine states as of September 28, 2003 and, prior to the
Sybra Acquisition, was the second largest franchisee of Arby's restaurants. As a
result of the Sybra Acquisition, our consolidated results of operations and cash
flows for the first nine months of 2003 include Sybra's results and cash flows
but do not include royalties and franchise and related fees from Sybra which are
eliminated in consolidation. Our consolidated results of operations and cash
flows for the first nine months of 2002, however, include royalties and
franchise and related fees from Sybra but do not include Sybra's results and
cash flows.

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 the accompanying
condensed consolidated financial statements and "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations" in our Annual
Report on Form 10-K for the fiscal year ended December 29, 2002. Item 7 of our
2002 Form 10-K describes the recent trends affecting our restaurant business,
contractual obligations and the application of our critical accounting policies.
We discuss any significant changes pertaining to these topics within this Item
2. Certain statements we make under this Item 2 constitute "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995. See
"Special Note Regarding Forward-Looking Statements and Projections" in "Part II
- - Other Information" preceding "Item 5."

We report on a fiscal year basis consisting of 52 or 53 weeks ending on the
Sunday closest to December 31. Our first nine-month period of fiscal 2002
commenced on December 31, 2001 and ended on September 29, 2002, with our third
quarter of 2002 commencing on July 1, 2002. Our first nine-month period of
fiscal 2003 commenced on December 30, 2002 and ended on September 28, 2003, with
our third quarter of 2003 commencing on June 30, 2003. When we refer to the
"three months ended September 29, 2002," or the "2002 third quarter," and the
"nine months ended September 29, 2002," or the "first nine months of 2002," we
mean the periods from July 1, 2002 to September 29, 2002 and December 31, 2001
to September 29, 2002, respectively. When we refer to the "three months ended
September 28 2003," or the "2003 third quarter," and the "nine months ended
September 28, 2003," or the "first nine months of 2003," we mean the periods
from June 30, 2003 to September 28, 2003 and December 30, 2002 to September 28,
2003, respectively. Each quarter contained 13 weeks and each nine-month period
contained 39 weeks.

Certain amounts presented in this "Management's Discussion and Analysis of
Financial Condition and Results of Operations" for the three and nine months
ended September 29, 2002 have been reclassified to conform with the current
periods' presentation.

Results of Operations

Presented below is a table that summarizes our results of operations and
compares the amount and percent of the change between (1) the 2002 third quarter
and the 2003 third quarter and (2) the first nine months of 2002 and the first
nine months of 2003. We consider certain percentage changes between these
periods 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 percent.

Three Months Ended Nine Months Ended
--------------------------- Change --------------------------- Change
September 29, September 28, --------------- September 29, September 28, ---------------
2002 2003 Amount Percent 2002 2003 Amount Percent
---- ---- ------ ------- ---- ---- ------ -------
(In Millions Except Percents)

Revenues:
Net sales.....................................$ -- $ 51.1 $ 51.1 n/m $ -- $ 151.0 $ 151.0 n/m
Royalties and franchise and related fees (a).. 25.7 23.5 (2.2) (8)% 72.9 68.2 (4.7) (6)%
------- -------- -------- --------- --------- --------
25.7 74.6 48.9 n/m 72.9 219.2 146.3 n/m
------- -------- -------- --------- --------- --------
Costs and expenses:
Cost of sales, excluding depreciation
and amortization ........................... -- 38.3 38.3 n/m -- 112.1 112.1 n/m
Advertising and selling....................... 1.1 4.4 3.3 n/m 2.2 11.6 9.4 n/m
General and administrative ................... 19.1 23.4 4.3 23 % 56.8 70.7 13.9 24 %
Depreciation and amortization, excluding
amortization of deferred financing costs ... 1.6 3.4 1.8 111 % 4.9 10.2 5.3 109 %
------- -------- -------- --------- --------- --------
21.8 69.5 47.7 n/m 63.9 204.6 140.7 n/m
------- -------- -------- --------- --------- --------
Operating profit ......................... 3.9 5.1 1.2 31 % 9.0 14.6 5.6 62 %
Interest expense ................................ (6.8) (10.0) (3.2) (46)% (20.0) (27.8) (7.8) (39)%
Insurance expense related to long-term debt...... (1.1) (1.0) 0.1 8 % (3.4) (3.2) 0.2 7 %
Investment income (loss), net.................... (0.4) 4.0 4.4 n/m 0.7 10.9 10.2 n/m
Gain (costs) related to proposed business
acquisitions not consummated.................... (2.1) 3.0 5.1 n/m (2.2) 2.1 4.3 n/m
Loss on sale of businesses....................... -- -- -- -- (1.2) -- 1.2 100 %
Other income, net................................ 0.4 0.4 -- -- 0.2 1.4 1.2 n/m
------- -------- -------- --------- --------- --------
Income (loss) before income taxes and
minority interests...................... (6.1) 1.5 7.6 n/m (16.9) (2.0) 14.9 88 %
(Provision for) benefit from income taxes........ 2.5 (1.0) (3.5) n/m 3.5 (1.0) (4.5) n/m
Minority interests in loss of a consolidated
subsidiary..................................... 1.0 -- (1.0) (100)% 2.3 0.1 (2.2) (95)%
------- -------- -------- --------- --------- --------
Net income (loss).........................$ (2.6) $ 0.5 $ 3.1 119 % $ (11.1) $ (2.9) $ 8.2 74 %
======= ======== ======== ========= ========= ========

(a) Includes royalties from Sybra of $1.9 million and $5.5 million for the 2002
third quarter and first nine months of 2002, respectively, whereas the
royalties from Sybra of $1.8 million and $5.2 million for the 2003 third
quarter and first nine months of 2003, respectively, were eliminated in
consolidation.

Three Months Ended September 28, 2003 Compared with Three Months Ended
September 29, 2002

Net Sales

Our net sales of $51.1 million for the three months ended September 28,
2003 resulted entirely from company-owned Arby's restaurants acquired in the
Sybra Acquisition.

Royalties and Franchise and Related Fees

Our royalties and franchise and related fees, which were generated entirely
from franchised restaurants, were reduced by $2.2 million, or 8%, to $23.5
million for the three months ended September 28, 2003 from $25.7 million for the
three months ended September 29, 2002. This reduction reflects that we no longer
include royalties from the restaurants we acquired in the Sybra Acquisition
whereas we included $1.9 million of royalties from Sybra in the 2002 third
quarter. Aside from the effect of the Sybra Acquisition, royalties and franchise
and related fees decreased $0.3 million in the 2003 third quarter compared with
the 2002 third quarter reflecting a $0.2 million, or 31%, decrease in franchise
and related fees and a $0.1 million, or 0.2%, decrease in royalties. Franchise
and related fees decreased due to a $0.1 million decrease in franchise fees from
the opening of 5 fewer franchised restaurants in the 2003 third quarter compared
with the 2002 third quarter and a $0.1 million decrease in franchised restaurant
license renewal fees principally due to the renewals in the 2003 third quarter
no longer including any older licenses which provided for higher renewal fees.
The decrease in royalties consisted of a $1.1 million reduction due to a 4%
decline in same-store sales of franchised restaurants in the 2003 third quarter
compared with the 2002 third quarter substantially offset by a $1.0 million
improvement resulting from the royalties from the 119 restaurants opened since
September 29, 2002, with generally higher than average sales volumes, replacing
the royalties from the 67 generally underperforming restaurants closed since
September 29, 2002.

The 4% decline in same-store sales of franchised restaurants in the 2003
third quarter followed declines of 2% to 3% in each of the preceding three
quarters. We believe these declines were affected by price discounting in the
quick service restaurant industry, an increasingly competitive environment, the
continuing effect of a sluggish economy, strong same-store sales comparisons of
the prior years' comparable quarters, particularly strong in the 2002 third
quarter and, in the 2002 fourth quarter and 2003 first quarter, the adverse
effects of worse weather conditions. The same-store sales comparison during the
2003 fourth quarter should be more favorable due to, among other things, the
weak same-store sales in the 2002 fourth quarter.

Cost of Sales, Excluding Depreciation and Amortization

Our cost of sales, excluding depreciation and amortization, of $38.3
million for the three months ended September 28, 2003 resulted entirely from the
company-owned Arby's restaurants acquired in the Sybra Acquisition. The
company-owned restaurants have experienced increases in costs of roast beef
during the 2003 third quarter which we anticipate will further increase in the
2003 fourth quarter, adversely affecting our cost of sales and related gross
profit margins by an amount we currently estimate to be between $0.4 million and
$0.5 million.

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

Advertising and Selling

Our advertising and selling expenses increased $3.3 million principally
reflecting $3.4 million of advertising expenses of Sybra.

General and Administrative

Our general and administrative expenses increased $4.3 million reflecting
$4.4 million of general and administrative expenses related to Sybra. Aside from
the effect of the Sybra Acquisition, general and administrative expenses
decreased $0.1 million reflecting a $1.0 million reduction in charitable
contributions partially offset by a $0.9 million increase in deferred
compensation expense. Deferred compensation expense, which increased to an
expense of $0.8 million for the three months ended September 28, 2003 from a
reversal of expense of $0.1 million for the three months ended September 29,
2002, represents the increase and decrease, respectively, in the fair value of
investments in two deferred compensation trusts, which we refer to as the
Deferred Compensation 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 under "Income (Loss) Before Income
Taxes and Minority Interests."

Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs

Our depreciation and amortization, excluding amortization of deferred
financing costs, increased $1.8 million entirely due to depreciation and
amortization related to Sybra.

Interest Expense

Interest expense increased $3.2 million partially reflecting $2.0 million
of interest expense of Sybra. Aside from the effect of the Sybra Acquisition,
interest expense increased $1.2 million, or 17%, principally due to interest
expense, including related amortization of deferred financing costs, in the 2003
third quarter of $2.4 million on the $175.0 million principal amount of our 5%
convertible notes, which we refer to as the Convertible Notes, issued on May 19,
2003. This increase was partially offset by decreases in interest expense of (1)
$0.8 million related to the change in fair value of an interest rate swap
agreement on one of our term loans and (2) $0.4 million due to lower outstanding
balances of our 7.44% insured non-recourse securitization notes, which we refer
to as the Securitization Notes.

Investment Income (Loss), Net

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

Three Months Ended
-----------------------------
September 29, September 28,
2002 2003 Change
---- ---- ------
(In Millions)

Other than temporary unrealized losses....................$ (2.9) $ -- $ 2.9
Recognized net gains (losses)............................. (0.5) 1.4 1.9
Interest income........................................... 2.8 2.2 (0.6)
Distributions, including dividends........................ 0.5 0.6 0.1
Other..................................................... (0.3) (0.2) 0.1
-------- ------ --------
$ (0.4) $ 4.0 $ 4.4
======== ====== ========

Our 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 may not recur in
future periods. The significant other than temporary losses of $2.9 million in
the 2002 third quarter related to the recognition of (1) $2.1 million of
impairment charges, before minority interests of $0.9 million, related to an
investment in Scientia Health Group Limited, a non-public company which we refer
to as Scientia, held by our 54.7%-owned consolidated subsidiary, 280 BT
Holdings, LLC and (2) a $0.8 million impairment charge based on the significant
decline in market value of one of our common stock investments in a large public
company. We determined our investment in Scientia to be significantly impaired
because certain of its underlying investments were determined to be no longer
viable or significantly impaired due to either liquidity problems or the entity
ceasing business operations. Our recognized net gains (losses) include realized
gains and losses on sales of our available-for-sale securities and cost-basis
investments and unrealized gains and losses on changes in the fair values of our
trading securities and our securities sold short with an obligation to
repurchase. These gains and losses may vary significantly in future periods
depending upon the timing of the sales of our investments or the changes in the
value of our investments, as applicable. The decrease in interest income is due
to a decline in average rates of our interest-bearing investments partially
offset by higher average amounts of these investments. Average rates on our
interest-bearing investments declined from 1.8% in the 2002 third quarter to
1.3% in the 2003 third quarter principally due to the general decline in the
money market and short-term interest rate environment. The average amount of our
interest-bearing investments increased principally due to the investment of a
portion of the net proceeds from the May 2003 issuance of the Convertible Notes.
In response to the continued low interest rate environment, we began in the
latter part of the 2003 third quarter to invest in some higher yielding, but
more risk inherent, debt securities with the objective of improving the overall
return on our interest-bearing investments.

As of September 28, 2003, we had pretax unrealized holding gains and
(losses) on available-for-sale marketable securities of $1.9 million and $(3.4)
million, respectively, included in accumulated other comprehensive deficit. We
presently believe that the unrealized losses are not other than temporary.
Should either (1) we decide to sell any of these investments with unrealized
losses or (2) any of the unrealized losses continue such that we believe they
have become other than temporary, we would recognize the losses on the related
investments at that time. In addition, through 280 BT Holdings we continue to
hold a $1.4 million cost-basis investment in Scientia representing original cost
less adjustments for unrealized losses in investments made by Scientia that were
deemed to be other than temporary. The amount of this investment is before
related minority interests of $0.6 million. In addition, as of September 28,
2003 we have notes receivable from management officers and employees relating to
a portion of their investments in 280 BT Holdings of which $0.8 million is
non-recourse, less an allowance of $0.5 million for uncollectible amounts. If
the value of Scientia declines further and, accordingly, we recognize additional
other than temporary losses, we would also provide additional allowances of up
to a maximum of $0.3 million relating to the non-recourse notes receivable in
"General and administrative" expenses.

Gain (Costs) Related to Proposed Business Acquisitions Not Consummated

The gain related to proposed business acquisitions not consummated of $3.0
million in the three months ended September 28, 2003 represents a payment
received by us for the use of due diligence materials related to a proposed
business acquisition we had previously decided not to continue to pursue and did
not consummate. The costs incurred in connection with this proposed acquisition
were previously expensed since recovery of the costs was not certain. The $2.1
million of costs related to proposed business acquisitions not consummated in
the 2002 third quarter were for a business acquisition proposal we submitted but
was not accepted.

Income (Loss) Before Income Taxes and Minority Interests

Our income (loss) before income taxes and minority interests increased $7.6
million to income of $1.5 million for the three months ended September 28, 2003
from a loss of $6.1 million for the three months ended September 29, 2002 due to
the effect of the variances explained in the captions above.

As discussed above, we recognized deferred compensation expense of $0.8
million in the 2003 third quarter and a reversal of compensation expense of $0.1
million in the 2002 third quarter within general and administrative expenses for
the increase and decrease, respectively, in the fair value of investments in the
Deferred Compensation Trusts, in which we invested prior to 2002 for the benefit
of the Executives. Under accounting principles generally accepted in the United
States of America, we recognize investment income for any interest or dividend
income on investments in the Deferred Compensation Trusts and realized gains on
sales of investments in the Deferred Compensation Trusts, but are unable to
recognize any investment income for unrealized increases in the fair value of
the investments in the Deferred Compensation Trusts because these investments
are accounted for under the cost method. During the 2002 third quarter, we were
unable to recognize any investment income on the investments in the Deferred
Compensation Trusts as we did not receive any dividends or interest or realize
any gains from the sale of the cost-method investments held in the Deferred
Compensation Trusts. However, during the 2003 third quarter, we recognized
investment income of $0.3 million consisting of a realized gain from the sale of
a cost-method investment in the Deferred Compensation Trusts, all of which
represents increases in value prior to the 2003 third quarter. The cumulative
disparity between deferred compensation expense and net recognized investment
income will reverse in future periods as either (1) additional 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, as
they did in the 2002 third quarter, resulting in the recognition of a reversal
of compensation expense without any offsetting losses recognized in investment
income.

(Provision For) Benefit From Income Taxes

Our provision for income taxes for the three months ended September 28,
2003 represents an effective rate of 68% which is substantially higher than the
United States Federal statutory rate of 35% due to (1) the effect of
non-deductible compensation costs and (2) state income taxes, net of Federal
income tax benefit, due to the differing mix of pretax income or loss among the
consolidated entities which file state tax returns on an individual company
basis. The benefit from income taxes for the three months ended September 29,
2002 represented an effective rate of 42%. This 42% effective rate reflected the
catch-up effect of a year-to-date increase in the then estimated full-year 2002
effective tax benefit rate from 9% to 21% since as of September 29, 2002 we
estimated a higher full-year pretax loss than as of June 30, 2002. This increase
in the projected pretax loss reduced the effect of nondeductible compensation
costs on our then estimated effective tax rate.

Minority Interests in Loss of a Consolidated Subsidiary

The minority interests in loss of a consolidated subsidiary of $1.0 million
for the three months ended September 29, 2002 principally reflect the provision
for unrealized losses by 280 BT Holdings on its cost-basis investment in
Scientia deemed to be other than temporary.

Nine Months Ended September 28, 2003 Compared with Nine Months Ended
September 29, 2002

Net Sales

Our net sales of $151.0 million for the nine months ended September 28,
2003 resulted entirely from company-owned Arby's restaurants acquired in the
Sybra Acquisition.

Royalties and Franchise and Related Fees

Our royalties and franchise and related fees, which were generated entirely
from franchised restaurants, were reduced by $4.7 million, or 6%, to $68.2
million for the nine months ended September 28, 2003 from $72.9 million for the
nine months ended September 29, 2002. This reduction reflects that we no longer
include royalties from the restaurants we acquired in the Sybra Acquisition
whereas we included $5.5 million of royalties from Sybra in the first nine
months of 2002. Aside from the effect of the Sybra Acquisition, royalties and
franchise and related fees increased $0.8 million in the first nine months of
2003 compared with the first nine months of 2002 reflecting a $0.8 million, or
1%, increase in royalties. The increase in royalties consisted of a $2.7 million
improvement resulting from the royalties from the 119 restaurants opened since
September 29, 2002, with generally higher than average sales volumes, replacing
the royalties from the 67 generally underperforming restaurants closed since
September 29, 2002, partially offset by a $1.9 million reduction due to a 3%
decline in same-store sales of franchised restaurants during the first nine
months of 2003 compared with the first nine months of 2002. Franchise and
related fees remained unchanged as the $0.1 million increase in franchise fees
from the opening of 3 additional franchised restaurants in the 2003 period
compared with the 2002 period was offset by a $0.1 million decrease in
franchised restaurant license renewal fees as discussed in the comparison of the
three-month periods.

The 3% decline in same-store sales of franchised restaurants in the first
nine months of 2003 followed a 3% decline in the 2002 fourth quarter. We believe
these declines were affected by the same factors discussed in the comparison of
the three-month periods. The same-store sales comparison during the 2003 fourth
quarter should be more favorable due to, among other things, the weak same-store
sales in the 2002 fourth quarter.

Cost of Sales, Excluding Depreciation and Amortization

Our cost of sales, excluding depreciation and amortization, of $112.1
million for the nine months ended September 28, 2003 resulted entirely from the
company-owned Arby's restaurants acquired in the Sybra Acquisition. As discussed
in the comparison of the three-month periods, the company-owned restaurants have
experienced increases in costs of roast beef which we anticipate will further
increase in the 2003 fourth quarter, adversely affecting our cost of sales.

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

Advertising and Selling

Our advertising and selling expenses increased $9.4 million reflecting $9.9
million of advertising expenses of Sybra partially offset by a $0.4 million
recovery of doubtful accounts.

General and Administrative

Our general and administrative expenses increased $13.9 million reflecting
$12.8 million of general and administrative expenses related to Sybra. Aside
from the effect of the Sybra Acquisition, general and administrative expenses
increased $1.1 million principally due to a $2.3 million increase in deferred
compensation expense partially offset by a $1.0 million reduction in charitable
contributions. Deferred compensation expense, which increased to $2.8 million
for the nine months ended September 28, 2003 from $0.5 million for the nine
months ended September 29, 2002, represents the increase in the fair value of
investments in the Deferred Compensation Trusts as explained in more detail
below under "Loss Before Income Taxes and Minority Interests."

Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs

Our depreciation and amortization, excluding amortization of deferred
financing costs, increased $5.3 million entirely due to depreciation and
amortization related to Sybra.

Interest Expense

Interest expense increased $7.8 million reflecting $6.6 million of interest
expense of Sybra. Aside from the effect of the Sybra Acquisition, interest
expense increased $1.2 million, or 6%, principally due to $3.5 million of
interest expense, including related amortization of deferred financing costs, on
the Convertible Notes issued on May 19, 2003, partially offset by decreases in
interest expense of (1) $1.2 million due to lower outstanding balances of our
Securitization Notes and (2) $0.9 million related to the change in fair value of
an interest rate swap agreement on one of our term loans.

Investment Income (Loss), Net

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

Nine Months Ended
-----------------------------
September 29, September 28,
2002 2003 Change
---- ---- ------
(In Millions)

Other than temporary unrealized losses....................$ (11.0) $ (0.4) $ 10.6
Interest income........................................... 8.5 6.2 (2.3)
Recognized net gains...................................... 1.9 3.9 2.0
Distributions, including dividends........................ 1.7 1.6 (0.1)
Other..................................................... (0.4) (0.4) --
-------- ------ --------
$ 0.7 $ 10.9 $ 10.2
======== ====== ========

Our 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 may not recur in
future periods. The significant other than temporary losses of $11.0 million in
the nine months ended September 29, 2002 related primarily to the recognition of
(1) $5.0 million of impairment charges, before minority interests of $2.2
million, related to two underlying non-public investments of 280 BT Holdings,
including $2.6 million related to Scientia, and (2) $5.3 million of impairment
charges based on the significant declines in market values of three of our
common stock investments in large public companies. The two underlying
investments of 280 BT Holdings for which we recognized impairment charges, or
certain of their underlying investments, were determined to be no longer viable
or significantly impaired due to either liquidity problems or the entity ceasing
business operations. The decrease in interest income is due to a decline in
average rates of our interest-bearing investments partially offset by higher
average amounts of these investments. Average rates on our interest-bearing
investments declined from 1.9% in the first nine months of 2002 to 1.3% in the
first nine months of 2003 principally due to the general decline in the money
market and short-term interest rate environment. The average amount of our
interest-bearing investments increased principally due to the investment of a
portion of the net proceeds from the May 2003 issuance of the Convertible Notes.
Our recognized net gains include realized gains and losses on sales of our
available-for-sale securities and cost-basis investments and unrealized gains
and losses on changes in the fair values of our trading securities and our
securities sold short with an obligation to repurchase. These gains and losses
may vary significantly in future periods depending upon the timing of the sales
of our investments or the changes in the value of our investments, as
applicable. In response to the continued low interest rate environment, we began
in the latter part of the 2003 third quarter to invest in some higher yielding,
but more risk inherent, debt securities with the objective of improving the
overall return on our interest-bearing investments.

As of September 28, 2003, we had pretax unrealized holding gains and
(losses) on available-for-sale marketable securities of $1.9 million and $(3.4)
million, respectively, included in accumulated other comprehensive deficit. We
presently believe that the unrealized losses are not other than temporary.
Should either (1) we decide to sell any of these investments with unrealized
losses or (2) any of the unrealized losses continue such that we believe they
have become other than temporary, we would recognize the losses on the related
investments at that time. In addition, as explained in more detail in the
comparison of the three-month periods, we hold a $1.4 million investment in
Scientia, before related minority interests of $0.6 million, for which an
additional other than temporary loss could possibly occur in future periods and
which could result in additional losses relating to the non-recourse portion of
notes from management officers and employees of up to a maximum of $0.3 million.

Gain (Costs) Related to Proposed Business Acquisitions Not Consummated

The gain related to proposed business acquisitions not consummated of $2.1
million in the nine months ended September 28, 2003 represents a payment
received by us for the use of due diligence materials related to a proposed
business acquisition we had previously decided not to continue to pursue and did
not consummate, net of our costs incurred in connection with this proposed
acquisition. The $2.2 million of costs related to proposed business acquisitions
not consummated in the nine months ended September 29, 2002 were primarily for a
business acquisition proposal we submitted but was not accepted.

Loss on Sale of Business

The loss on sale of businesses of $1.2 million in the nine months ended
September 29, 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.

In connection with an offering of common stock of Encore Capital Group,
Inc., an equity investee of ours which we refer to as Encore, completed in
October 2003 for both newly issued shares and shares held by certain existing
stockholders, including us and certain of our officers, we will record a pretax
gain on sale of business in our 2003 fourth quarter which we preliminarily
estimate will be approximately $6.0 million. This gain principally consists of
(1) approximately $3.5 million related to the sale of certain of our Encore
common shares and (2) approximately $2.5 million related to a non-cash gain for
the decrease in our ownership percentage resulting from the Encore offering. We
will recognize the non-cash gain in accordance with our current accounting
policy under which we recognize a gain or loss upon sale by an equity method
investee of any previously unissued stock to third parties to the extent of the
decrease in our ownership of the investee.

Other Income, Net

Other income, net improved by $1.2 million principally reflecting a $1.5
million improvement in our equity in the earnings (losses) of Encore. During the
first nine months of 2002, we recognized $0.5 million of equity in losses of
Encore principally reflecting $0.7 million in previously unrecorded equity in
losses of Encore upon our investment in the 2002 first quarter of $0.9 million
in then newly-issued convertible preferred stock of Encore. The equity in these
losses had not been recorded as we had previously reduced our investment in
Encore to zero. During the first nine months of 2003 we recognized $1.0 million
of equity in earnings of Encore, including $0.3 million relating to a litigation
settlement. During the 2003 fourth quarter we will record a pretax gain of
approximately $0.2 million representing the release of the remaining unamortized
carrying amount of our guarantee of certain debt of Encore which was repaid in
connection with its common stock offering.

Loss Before Income Taxes and Minority Interests

Our loss before income taxes and minority interests decreased $14.9 million
to $2.0 million for the nine months ended September 28, 2003 from $16.9 million
for the nine months ended September 29, 2002 due to the effect of the variances
explained in the captions above.

As discussed above, we recognized deferred compensation expense of $2.8
million and $0.5 million in the first nine months of 2003 and 2002,
respectively, within general and administrative expenses for the increase in the
fair value of investments in the Deferred Compensation Trusts. Under accounting
principles generally accepted in the United States of America, we are permitted
to recognize investment income for any interest or dividend income on
investments in the Deferred Compensation Trusts and realized gains on sales of
investments in the Deferred Compensation Trusts, but are unable to recognize any
investment income for unrealized increases in the fair value of the investments
in the Deferred Compensation Trusts because these investments are accounted for
under the cost method. During the first nine months of 2002, we were unable to
recognize any investment income on the investments in the Deferred Compensation
Trusts as we did not receive any dividends or interest or realize any gains from
the sale of cost-method investments held in the Deferred Compensation Trusts.
However, during the first nine months of 2003, we recognized investment income
of $0.7 million consisting primarily of realized gains from the sale of certain
cost-method investments in the Deferred Compensation Trusts, which includes
increases in value of $0.5 million prior to the first nine months of 2003. The
cumulative disparity between deferred compensation expense and net recognized
investment income will reverse in future periods as either (1) additional
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 reversal of compensation
expense without any offsetting losses recognized in investment income.

(Provision For) Benefit From Income Taxes

We had a provision for income taxes for the nine months ended September 28,
2003 despite a pretax loss principally due to (1) the effect of non-deductible
compensation costs and (2) state income taxes, net of Federal income tax
benefit, due to the differing mix of pretax income or loss among the
consolidated entities which file state tax returns on an individual company
basis. Our benefit from income taxes for the nine months ended September 29,
2002 represented an effective rate of 21% which was lower than the United States
Federal statutory rate of 35% principally due to the impact of the same items
affecting the 2003 provision on a higher pretax loss.

Minority Interests in Loss of a Consolidated Subsidiary

The minority interests in loss of a consolidated subsidiary of $0.1 million
and $2.3 million for the nine-month periods ended September 28, 2003 and
September 29, 2002, respectively, principally reflect provisions for unrealized
losses by 280 BT Holdings on two of its cost-method investments deemed to be
other than temporary.

Liquidity And Capital Resources

Cash Flows from Continuing Operating Activities

Our consolidated operating activities from continuing operations used cash
and cash equivalents, which we refer to in this discussion as cash, of $12.6
million during the nine months ended September 28, 2003 reflecting (1) net
operating investment adjustments of $17.6 million, (2) cash used by changes in
operating assets and liabilities of $4.5 million and (3) a net loss of $2.9
million, all partially offset by (1) net non-cash charges of $10.7 million and
(2) the collection of a litigation settlement receivable of $1.7 million.

The net operating investment adjustments of $17.6 million principally
reflected $14.3 million of net purchases of trading securities in excess of
sales. The cash used by changes in operating assets and liabilities of $4.5
million principally reflected (1) a $6.6 million reduction in Sybra's accounts
payable and accrued expenses, other than accrued compensation and related
benefits and accrued interest, principally to satisfy a portion of Sybra's net
negative working capital assumed as contemplated as part of the Sybra
Acquisition and (2) a $2.9 million reduction in accrued compensation and related
benefits principally due to the annual payment of previously accrued incentive
compensation, less the effect of the current year accrual, both partially offset
by a $4.0 million increase in accrued interest, of which $3.2 million relates to
the Convertible Notes issued on May 19, 2003 for which the first semi-annual
interest payment is due November 15, 2003. The net non-cash charges of $10.7
million principally relate to $11.8 million of depreciation and amortization.

Excluding the effect of net purchases of trading securities noted above
which represent the discretionary investment of excess cash, cash flows from
continuing operating activities during the first nine months of 2003 would have
been positive by $1.7 million. We expect positive cash flows from continuing
operating activities during the 2003 fourth quarter, excluding the effect, if
any, of similar net purchases of trading securities.

Working Capital and Capitalization

Working capital, which equals current assets less current liabilities, was
$611.2 million at September 28, 2003, reflecting a current ratio, which equals
current assets divided by current liabilities, of 4.5:1. Working capital
increased $101.7 million from $509.5 million at December 29, 2002 principally
due to the net proceeds of $126.8 million, after a related repurchase of $41.7
million of our common stock, from our issuance on May 19, 2003 of $175.0 million
principal amount of the Convertible Notes, discussed below under "Convertible
Notes" and "Treasury Stock Purchases," less the reclassification of $35.4
million of long-term debt to current.

Our total capitalization at September 28, 2003 was $821.4 million
consisting of stockholders' equity of $294.0 million and long-term debt of
$527.4 million, including current portion. Our total capitalization increased
$101.6 million from $719.8 million at December 29, 2002 principally due to (1)
the issuance of the Convertible Notes of $175.0 million and (2) proceeds from
stock option exercises of $10.4 million, both partially offset by (1) the
repurchase of our common stock of $41.7 million, (2) repayments of long-term
debt of $34.7 million, (3) dividends paid of $4.2 million and (4) the net loss
of $2.9 million.

Contractual Obligations

Our tabular disclosure of contractual obligations is set forth in our 2002
Form 10-K and is updated for the following material change. During the first
nine months of 2003 we committed to fund $3.0 million per year in 2004 and 2005
as part of an Arby's national cable television advertising campaign.

Stock Distribution

On September 4, 2003, we made a stock distribution of two shares of a newly
designated series of our previously authorized class B common stock for each
share of our class A common stock issued as of August 21, 2003. The newly
designated series of class B common stock is entitled to one-tenth of a vote per
share, has a $.01 per share liquidation preference and is entitled to receive
regular quarterly cash dividends per share of at least 110% of any regular
quarterly cash dividends per share when, as and if, declared on the class A
common stock and paid on or before September 4, 2006. Thereafter, the class B
common stock will participate equally on a per share basis with the class A
common stock in any cash dividends.

Securitization Notes

We have outstanding, through our ownership of Arby's Franchise Trust,
Securitization Notes with a remaining principal balance of $239.5 million as of
September 28, 2003 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 Note
Indenture, we currently estimate that we will repay $5.3 million during the 2003
fourth quarter with increasing annual payments to $37.4 million in 2011 in
accordance with a targeted principal payment schedule.

Sybra Notes

We have outstanding, through our ownership of Sybra, leasehold notes,
equipment notes and mortgage notes with a total remaining principal balance of
$79.8 million as of September 28, 2003. The leasehold notes have a remaining
principal of $71.2 million and are due in equal monthly installments including
interest through 2021, of which $1.3 million is due during the 2003 fourth
quarter. The equipment notes have a remaining principal of $5.4 million and are
due in equal monthly installments including interest through 2009, of which $0.3
million is due during the 2003 fourth quarter. The mortgage notes have a
remaining principal of $3.2 million and are due in equal monthly installments
including interest through 2018, of which less than $0.1 million is due during
the 2003 fourth quarter.

Convertible Notes

On May 19, 2003 we issued $175.0 million principal amount of 5% Convertible
Notes due 2023 in a private placement, which we refer to as the Offering. The
Convertible Notes are redeemable at our option commencing May 20, 2010 and at
the option of the holders on May 15, 2010, 2015 and 2020 or upon the occurrence
of a fundamental change, as defined, relating to us, in each case at a price of
100% of the principal amount of the Convertible Notes plus accrued interest. We
used a portion of the $175.0 million proceeds from the Offering to purchase
1,500,000 shares of our class A common stock for treasury for $41.7 million and
to pay estimated fees and expenses associated with the Offering of $6.5 million.
The balance of the net proceeds from the Offering are being used by us for
general corporate purposes, which may include working capital, repayment of
indebtedness, acquisitions, additional share repurchases and investments.

Other Long-Term Debt

We have a secured bank term loan payable through 2008 with an outstanding
principal amount of $15.9 million as of September 28, 2003, of which $0.8
million is due during the 2003 fourth quarter. We also have an 8.95% secured
promissory note payable through 2006 with an outstanding principal amount of
$11.9 million as of September 28, 2003, of which $0.5 million is due during the
2003 fourth quarter.

Revolving Credit Facilities

We did not have any revolving credit facilities as of September 28, 2003.

Debt Repayments and Covenants

Our total scheduled long-term debt repayments during the 2003 fourth
quarter are $8.5 million consisting principally of the $5.3 million expected to
be paid under the Securitization Notes, $1.6 million under Sybra's leasehold,
equipment and mortgage notes, $0.8 million under the secured bank term loan and
$0.5 million under the 8.95% secured promissory note.

The various note agreements and indentures 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. The
Company was in compliance with all of these covenants as of September 28, 2003.

In accordance with the Note Indenture, as of September 28, 2003 Arby's
Franchise Trust had no amounts available for the payment of distributions.
However, on October 20, 2003, $2.8 million relating to cash flows for the
calendar month of September 2003 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. Under the plan of reorganization of Sybra confirmed by
a United States Bankruptcy Court under which we acquired Sybra, we agreed that
Sybra would not pay any distributions prior to December 27, 2004.

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, 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 September 28,
2003, 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
$50.0 million as of September 28, 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 $40.4 million as of September 28, 2003, 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 $1.0 million during the 2003
fourth quarter 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 $41.0 million as of September 28, 2003 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 $60.0 million as of
September 28, 2003, assuming the purchaser has made all scheduled payments
through that date under those lease obligations.

We had guaranteed senior note debt of Encore and we, certain of our
officers and others had guaranteed revolving credit borrowings of Encore. As of
Encore's third quarter ended September 30, 2003, we understand that Encore had
$7.2 million of outstanding senior note debt, of which we guaranteed $6.7
million, and we understand that Encore had no outstanding revolving credit
borrowings. In connection with an offering of Encore's common stock in October
2003, the senior notes were repaid and the revolving credit line was terminated,
thereby relieving us of those guarantees.

Capital Expenditures

Cash capital expenditures amounted to $3.5 million during the first nine
months of 2003. We expect that cash capital expenditures will be approximately
$2.2 million for the 2003 fourth quarter, principally for remodel and
maintenance capital expenditures for company-owned restaurants, for which there
were $0.2 million of outstanding commitments as of September 28, 2003.

Acquisitions and Investments

As of September 28, 2003, we have $757.6 million of cash, cash equivalents
and investments, including $33.6 million of investments classified as
non-current and net of $19.5 million of securities sold with an obligation for
us to purchase included in "Accrued expenses and other current liabilities" in
our accompanying condensed consolidated balance sheet. We also had $37.4 million
of restricted cash and cash equivalents including $30.5 million held in a
reserve account related to the Securitization Notes. The cash equivalents and
non-current investments include $22.8 million of investments, at cost, in the
Deferred Compensation Trusts designated to satisfy deferred compensation. We
continue to evaluate strategic opportunities for the use of our significant cash
and investment position, including business acquisitions, repurchases of Triarc
common shares (see "Treasury Stock Purchases" below) and investments.

Income Taxes

The Internal Revenue Service has commenced an examination of our Federal
income tax returns for the years ended December 31, 2000 and December 30, 2001.
Should any income taxes or associated interest be assessed as the result of this
or any other Federal or state examinations for periods through the October 25,
2000 date of sale of our former beverage businesses, the purchaser has agreed to
pay up to $5.0 million of any resulting income taxes or interest relating to the
operations of the former beverage businesses. Since this examination has only
recently commenced, we do not anticipate having any results of this examination
during 2003.

Dividends

On September 25, 2003, we paid an initial regular quarterly cash dividend
of $0.065 and $0.075 per share on our class A and class B common stock,
respectively, aggregating $4.2 million to holders of record on September 15,
2003. We currently intend to continue to declare and pay quarterly cash
dividends, however, there can be no assurance that any dividends will be
declared or paid in the future or of the amount or timing of such dividends, if
any. If we were to pay cash dividends in the 2003 fourth quarter at the same
rate as paid in our 2003 third quarter, based on the number of common shares
outstanding on October 31, 2003, our cash requirement for dividends would be
$4.2 million.

Treasury Stock Purchases

Our management is currently authorized, when and if market conditions
warrant and to the extent legally permissible, to repurchase up to a total of
$50.0 million of our class A and class B common stock under a program that, as
extended, ends on January 18, 2005. Under this program, we repurchased 1,500,000
shares of class A common stock for a total cost of $41.7 million during the
first nine months of 2003 in connection with the issuance of the Convertible
Notes discussed above. Following this purchase, the amount permissible for
repurchase of shares under this program was replenished to $50.0 million. We
cannot assure you that we will repurchase any additional shares under this
program.

Discontinued Operations

The agreement relating to the October 25, 2000 sale of our former beverage
businesses provides for a post-closing adjustment, the amount of which is in
dispute. The purchaser has stated that it currently believes that it is entitled
to receive from us a post-closing adjustment of $22.5 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 the purchaser to determine the amount of the post-closing
adjustment, if any. We currently expect the arbitration process to be completed
by December 28, 2003.

Cash Requirements

As of September 28, 2003, our consolidated cash requirements for continuing
operations for the 2003 fourth quarter, exclusive of operating cash flow
requirements, consist principally of (1) a maximum of $50.0 million of payments
for repurchases of our class A and class B common stock for treasury under our
current stock repurchase program, (2) scheduled debt principal repayments
aggregating $8.5 million, (3) regular quarterly cash dividends of approximately
$4.2 million, if declared, (4) capital expenditures of approximately $2.2
million and (5) the cost of business acquisitions, if any. Our consolidated cash
requirements relating to discontinued operations for the 2003 fourth quarter
consist principally of the post-closing adjustment, if any, of up to $22.5
million related to the sale of our former beverage businesses, excluding related
accrued interest which will be included in operating cash flows. We anticipate
meeting all of these requirements through (1) the use of our aggregate $723.9
million of existing cash and cash equivalents and short-term investments, net of
$19.5 million of short-term investments sold with an obligation for us to
purchase and (2) cash flows from continuing operating activities.

Legal and Environmental Matters

In 2001, a vacant property owned by Adams Packing Association, Inc., an
inactive 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 1970's. The
business operations of Adams Packing were sold in December 1992. In February
2003, Adams Packing and the Florida Department of Environmental Protection,
which we refer to as the Florida DEP, agreed to a consent order that provides
for development of a work plan for further investigation of the site and limited
remediation of the identified contamination. In May 2003, the Florida DEP
approved the work plan submitted by Adams Packing's environmental consultant
and, as of September 28, 2003, the majority of the work at the site has been
completed. Based on a 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.

In October 1998, various class action lawsuits were filed on behalf of our
stockholders. Each of these actions named 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 which 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 seeks, among other
items, damages in an unspecified amount. In October 2000, the plaintiffs agreed
to stay this action pending determination of a similar stockholder action which
was subsequently dismissed in October 2002 and is no longer being appealed.
Through September 28, 2003, no further action has occurred with respect to the
remaining class action lawsuit.

In addition to the environmental matter and stockholder lawsuit 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 $2.3 million as of September 28, 2003.
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.

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 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, many of 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
already applies for all variable interests in entities created or obtained after
January 31, 2003. Financial Accounting Standards Board Staff Position No. 46-6,
"Effective Date of FASB Interpretation No. 46," deferred the effective date for
applying the provision of Interpretation No. 46 for public entities for variable
interests in entities acquired before February 1, 2003 and will now be effective
for us with the quarter ending December 28, 2003. This deferral will permit the
Financial Accounting Standards Board to provide additional guidance with regard
to Interpretation No. 46. We believe it is unlikely we presently have any equity
interests in any variable interest entities. However, Interpretation No. 46 has
been construed to require the consolidation of a franchisee in certain
circumstances where a franchisor has made loans to or guaranteed obligations of
a franchisee even though the franchisor may have no equity investment in the
franchisee. Although we currently have no loans receivable from our franchisees,
we guarantee approximately $41.0 million of mortgage and equipment notes and
remain continently liable for approximately $60.0 million of lease obligations
as of September 28, 2003 in connection our 1997 sale of 355 restaurants to our
largest franchisee, as discussed above under "Guarantees." We are currently
awaiting the additional guidance from the Financial Accounting Standards Board
to enable us to evaluate whether we may be required to include the financial
statements of that franchisee in our consolidated financial statements upon the
effectiveness of Interpretation No. 46.

In May 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." Statement 150
establishes standards for classifying and measuring certain specific
freestanding financial instruments with characteristics of both liabilities and
equity. It requires a financial instrument that is within its scope which
companies have historically presented in their financial statements as either
equity or between the liabilities section and the equity section (sometimes
referred to as mezzanine reporting) to be classified as a liability (or an asset
in some circumstances). Financial instruments within the scope of Statement 150
include (1) mandatorily redeemable financial instruments, (2) obligations to
repurchase the issuer's equity shares by transferring assets and (3) certain
obligations to issue a variable number of shares. Unless otherwise specified by
Statement 150 or other generally accepted accounting principles, these financial
instruments must be initially valued at fair value and subsequently valued
either at (1) fair value, (2) the present value of the amount to be paid at
settlement or (3) the cash that would be paid if settlement occurred at the
reporting date, depending on the type of financial instrument. Subsequent
changes in the values of these financial instruments generally are to be
recognized in earnings, with changes in the present value of mandatorily
redeemable financial instruments and certain other instruments specifically
recognized in interest cost along with any amounts paid or to be paid to holders
of those contracts in excess of the initial measurement amount. Statement 150 is
already effective for all financial instruments covered by the statement, except
for mandatorily redeemable non-controlling interests in subsidiaries that would
not be liabilities under Statement 150 for the subsidiary itself, such as
minority interests in a consolidated subsidiary or partnership with a limited
life. Financial Accounting Standards Board Staff Position No. 150-3, "Effective
Date, Disclosures and Transition for Mandatorily Redeemable Financial
Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable
Noncontrolling Interests Under FASB Statement No. 150," deferred indefinitely
the effective date for applying the provisions of Statement 150 for these
mandatorily redeemable noncontrolling interests in subsidiaries described above.
We are currently evaluating whether the application of Statement 150, if it
becomes effective with respect to the mandatorily redeemable noncontrolling
interests in subsidiaries, will have an effect on our consolidated financial
position or results of operations. We presently do not have any other financial
instruments with characteristics of both liabilities and equity and,
accordingly, the adoption of Statement 150 did not have any impact on our
consolidated financial position or results of operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

This "Quantitative and Qualitative Disclosures about Market Risk" should be
read in conjunction with "Item 7A. Quantitative and Qualitative Disclosures
about Market Risk" in our annual report on Form 10-K for the fiscal year ended
December 29, 2002. Item 7A of our Form 10-K describes in more detail our
objectives in managing our "Interest Rate Risk" with respect to long-term debt
and our "Foreign Currency Risk," both as referred to below.

Certain statements we make under this Item 3 constitute "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995. See
"Special Note Regarding Forward-Looking Statements and Projections" in "Part II
- - Other Information" preceding "Item 5."

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. 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. We did not enter into
any new interest rate caps or swaps during the first nine months of 2003. As of
September 28, 2003, our long-term debt, including current portion, aggregated
$527.4 million and consisted of $511.5 million of fixed-rate debt, including
$2.0 million of capitalized leases, and $15.9 million of a variable-rate bank
loan. The fair market value of our fixed-rate debt will increase if interest
rates decrease. 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 ninety days 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 our
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 but has delegated the discretionary authority to our Chairman and
Chief Executive Officer and President and Chief Operating Officer to make
certain investments. Our board of directors has established certain investment
policies to be followed with respect to the investment of funds.

Foreign Currency Risk

We had no significant changes in our management of, or our exposure to,
foreign currency fluctuations during the first nine months of 2003.

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 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 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.
In response to the continued low interest rate environment, we began in the
latter part of the 2003 third quarter to invest in some higher yielding, but
more risk inherent, debt securities with the objective of improving the overall
return on our interest-bearing investments.

We maintain investment portfolio holdings of various issuers, types and
maturities. As of September 28, 2003 these investments consisted of the
following (in thousands):

Cash equivalents included in "Cash and cash equivalents" on
the accompanying condensed consolidated balance sheet..........$ 537,589
Short-term investments........................................... 199,441
----------
Total cash equivalents and short-term investments............. 737,030
Restricted cash equivalents...................................... 32,463
Non-current investments.......................................... 33,643
----------
$ 803,136
==========

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, United States government debt securities,
interest-bearing brokerage and bank accounts with a stable value and commercial
paper of high credit-quality entities. Our short-term investments included $46.0
million of United States government and government agency debt securities with
maturities ranging from four months to two years when acquired. The $46.0
million together with our cash equivalents were highly liquid investments that
combined constituted 79% of our total cash equivalents and short-term
investments shown above.

At September 28, 2003 our investments are classified in the following
general types or categories (in thousands):

Carrying Value
At Fair -------------------
Type At Cost Value (c) Amount Percent
---- ------- -------- ------ -------

Cash equivalents (a)............................$ 537,589 $ 537,589 $ 537,589 66%
Restricted cash equivalents..................... 32,463 32,463 32,463 4%
Securities accounted for as:
Trading securities......................... 30,739 30,171 30,171 4%
Available-for-sale securities (b).......... 153,820 152,313 152,313 19%
Non-current investments held in deferred
compensation trusts accounted for at cost..... 21,113 26,276 21,113 3%
Other current and non-current investments in
investment limited partnerships and similar
investment entities accounted for at cost..... 23,172 38,130 23,172 3%
Other non-current investments accounted for at:
Cost....................................... 4,629 24,182 4,629 1%
Equity..................................... 895 5,650 1,686 --
----------- ----------- ---------- ----
Total cash equivalents and long investment
positions.....................................$ 804,420 $ 846,774 $ 803,136 100%
=========== =========== ========== ====
Securities sold with an obligation for us to
purchase......................................$ (18,392) $ (19,453) $ (19,453) N/A
=========== =========== ==========

(a) Includes $1,698,000 of cash equivalents held in deferred compensation
trusts.
(b) Includes $1,452,000 of investments for which the purchase had not settled
as of September 28, 2003.
(c) There can be no assurance that we would be able to sell certain of these
investments at these amounts.

Our marketable securities are reported at fair market value and are
classified and accounted for either as "available-for-sale" or "trading" with
the resulting net unrealized holding gains or losses, net of income taxes,
reported either as a separate component of comprehensive income or loss
bypassing net income or net loss or included as a component of net income or net
loss, respectively. Investment limited partnerships and similar investment
entities and 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. A
non-current common stock investment in which we have significant influence over
the investee is accounted for in accordance with the equity method of accounting
under which our results of operations include our share of the earnings of the
investee. We review all of our investments in which we have unrealized losses
and recognize investment losses currently for any unrealized losses we deem to
be other than temporary. The cost-basis component of investments reflected in
the table above represents original cost less a permanent reduction for any
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 estimate of market
risk exposure is presented for each class of financial instruments held by us at
September 28, 2003 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 market risk exposure as of
September 28, 2003 based upon assumed immediate adverse effects as noted below
(in thousands):

Trading Purposes:

Carrying Interest Equity
Value Rate Risk Price Risk
----- --------- ----------

Debt securities.................................................$ 6,926 $ (17) $ --
Equity securities............................................... 23,245 -- (2,325)

The sensitivity analysis of financial instruments held at September 28,
2003 for trading purposes assumes (1) an instantaneous increase in market
interest rates of one percentage point and (2) an instantaneous 10% decrease in
the equity markets in which we are invested, each from their levels at September
28, 2003 and with all other variables held constant. The securities included in
the trading portfolio do not include any investments denominated in foreign
currency and, accordingly, there is no foreign currency risk.

The debt securities in our trading portfolio as of September 28, 2003
consisted entirely of United States government debt securities with an average
remaining maturity of three months. The interest rate risk with respect to those
debt securities reflects the effect of the assumed interest rate increase on the
fair value of those securities.

Other Than Trading Purposes:

Carrying Interest Equity Foreign
Value Rate Risk Price Risk Currency Risk
----- --------- ---------- -------------

Cash equivalents....................................$ 537,589 $ (128) $ -- $ --
Restricted cash equivalents......................... 32,463 -- -- --
Available-for-sale United States government
and government agency debt securities............ 39,074 (65) -- --
Available-for-sale corporate debt securities........ 29,597 (1,184) -- --
Available-for-sale asset-backed securities.......... 24,042 (3,005) -- --
Available-for-sale equity securities................ 51,085 -- (5,109) --
Available-for-sale debt mutual fund................. 8,515 (192) -- --
Other investments................................... 50,600 (1,238) (3,452) (74)
Securities sold with an obligation to purchase...... (19,453) -- 1,945 --
Long-term debt, excluding capitalized lease
obligations...................................... (525,387) (24,893) -- --
Interest rate swap agreement in a payable position.. (979) (318) -- --

The sensitivity analysis of financial instruments held at September 28,
2003 for purposes other than trading assumes (1) an instantaneous change in
market interest rates of one percentage point, (2) an instantaneous 10% decrease
in the equity markets in which we are invested and (3) an instantaneous 10%
decrease in the foreign currency exchange rates versus the United States dollar,
each from their levels at September 28, 2003 and with all other variables held
constant. The equity price risk reflects the impact of a 10% decrease in the
carrying value of our equity securities, including those in "Other investments"
in the table above. The sensitivity analysis also assumes that the decreases in
the equity markets and foreign exchange rates are other than temporary. For
purposes of this analysis, our debt investments with interest rate risk had a
range of maturities and were assumed to have weighted average remaining
maturities as follows:

Remaining Maturities
---------------------------------
Range Weighted Average
----- ----------------

Cash equivalents (other than money market funds and interest-
bearing brokerage and bank accounts)............................... 2 days - 73 days 45 days
United States government and government agency debt securities....... 2 days - 1 year 2 months
Corporate debt securities (domestic corporate debt securities and
commercial paper).................................................. 51 days - 7 years 4 years
Asset-backed securities..............................................144 days - 30 years 12-1/2 years
Debt mutual fund..................................................... (a) 2-1/4 years
Debt securities included in other investments (principally held by
investment limited partnerships and similar investment entities)... (b) 10 years

(a) This fund has underlying investments with an average maturity of two and
one-quarter years.
(b) Information is not available for the underlying debt investments of these
entities.

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 September 28, 2003 would continue
beyond the maturities assumed. Our cash equivalents included $433.4 million 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. 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.

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 a decrease in interest rates of one percentage
point 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 interest rate resets monthly. However, 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 held since December 29, 2002 in investment limited
partnerships and similar investment entities accounted for at cost included in
"Other investments" in the table above, the sensitivity analysis assumes the
investment mix for each such investment between equity versus debt securities
and securities denominated in United States dollars versus foreign currencies
generally was unchanged since that date since more current information was not
readily available. To the extent those 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 but no
interest rate risk. The foreign currency risk presented excludes those
investments where the investment manager has fully hedged the risk.

Item 4. 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 (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the
end of the period covered by this quarterly report. Based upon that evaluation,
our Chairman and Chief Executive Officer and Chief Financial Officer concluded
that, as of the end of such period, our disclosure controls and procedures are
effective to ensure that information required to be included in the reports we
file or submit under the Exchange Act is recorded, processed, summarized and
reported as and when required. No change in our internal control over financial
reporting was made during our most recent fiscal quarter that materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

Part II. OTHER INFORMATION

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND PROJECTIONS

This Quarterly Report on Form 10-Q contains or incorporates by reference
certain statements that are not historical facts, including, most importantly,
information concerning possible or assumed future results of operations of
Triarc Companies, Inc. and its subsidiaries (collectively "Triarc" or the
"Company") and those statements preceded by, followed by, or that include the
words "may," "believes," "expects," "anticipates," or the negation thereof, or
similar expressions, that constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"). 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-Q 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:

o 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;

o Success of operating initiatives;

o Development and operating costs;

o Advertising and promotional efforts;

o Brand awareness;

o The existence or absence of positive or adverse publicity;

o Market acceptance of new product offerings;

o New product and concept development by competitors;

o 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;

o The business and financial viability of key franchisees;

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

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

o Delays in opening new restaurants or completing remodels;

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

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

o Changes in business strategy or development plans;

o Quality of the Company's and franchisees' management;

o Availability, terms (including changes in interest rates) and
deployment of capital;

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

o Availability of qualified personnel to the Company and to
franchisees;

o Labor and employee benefit costs;

o Availability and cost of energy, raw materials, ingredients,
commodities (including beef) and supplies;

o 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
the Company receives from franchisees;

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

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

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

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

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

o Adverse weather conditions;

o Our ability to identify appropriate acquisition targets in the
future and to successfully integrate any future acquisitions into
our existing operations; and

o Other risks and uncertainties referred to in Triarc's Annual
Report on Form 10-K for the fiscal year ended December 29, 2002
(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 5. Other Events

Payment of Dividends
--------------------

On August 11, 2003, our Board of Directors approved the payment of an
initial regular quarterly cash dividend of $0.065 per share on our Class A
Common Stock. Our Board of Directors also approved a special stock dividend of
two shares of a newly designated Class B Common Stock, Series 1 (the "Class B
Common Stock") for each share of Class A Common Stock as well as the payment of
an initial regular quarterly cash dividend of $0.075 per share on the Class B
Common Stock. The shares of Class B Common Stock were distributed on September
4, 2003. The cash dividends were each paid on September 25, 2003.

Although Triarc currently intends to declare and pay regular quarterly cash
dividends, the actual declaration and payment of subsequent quarterly cash
dividends and the timing and amount thereof are in the sole discretion of the
Board of Directors and there can be no assurance that quarterly cash dividends
will be declared or paid in any subsequent quarters, or of the amount or timing
of such dividends, if any.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

32.1 Certification of the Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished as an
exhibit to this report on Form 10-Q.

(b) Reports on Form 8-K

The Registrant furnished a report on Form 8-K on September 24, 2003, which
included information under Item 9 of such form.

The Registrant filed a report on Form 8-K on September 4, 2003, which
included information under Items 7 and 9 of such form.

The Registrant furnished a report on Form 8-K on September 4, 2003, which
included information under Item 12 of such form.

The Registrant furnished a report on Form 8-K on August 13, 2003, which
included information under Item 12 of such form.

The Registrant filed a report on Form 8-K on August 11, 2003, which
included information under Items 5 and 7 of such form.

SIGNATURES

Pursuant to the requirements 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)

Date: November 12, 2003 By:/S/ FRANCIS T. MCCARRON
---------------------------------
Francis T. McCarron
Senior Vice President and
Chief Financial Officer
(On behalf of the Company)

Date: November 12, 2003 By: /S/ FRED H. SCHAEFER
---------------------------------
Fred H. Schaefer
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)

Exhibit Index

Exhibit
No. Description Page No.
--- ----------- ---------

31.1 Certification of the Chief Executive
Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

31.2 Certification of the Chief Financial
Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

32.1 Certification of the Chief Executive
Officer and Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of
2002, furnished as an exhibit to this report
on Form 10-Q.

EXHIBIT 31.1
CERTIFICATIONS

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

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

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;

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

a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

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

a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.

Date: November 12, 2003
/S/ NELSON PELTZ
------------------------------------
Nelson Peltz
Chairman and Chief Executive Officer

EXHIBIT 31.2
CERTIFICATIONS

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

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

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;

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

a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

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

a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.

Date: November 12, 2003
/S/ FRANCIS T. MCCARRON
----------------------------
Francis T. McCarron
Senior Vice President
and Chief Financial Officer

EXHIBIT 32.1

Certification Pursuant to
18 U.S.C. Section 1350
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a)
and (b) of section 1350, chapter 63 of title 18, United States Code), each of
the undersigned officers of Triarc Companies, Inc., a Delaware corporation (the
"Company"), does hereby certify, to the best of such officer's knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 28, 2003
(the "Form 10-Q") of the Company fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained
in the Form 10-Q fairly presents, in all material respects, the financial
condition and results of operations of the Company.

Date: November 12, 2003
/S/ NELSON PELTZ
------------------------------------
Nelson Peltz
Chairman and Chief Executive Officer

Date: November 12, 2003
/S/ FRANCIS T. MCCARRON
----------------------------
Francis T. McCarron
Senior Vice President
and Chief Financial Officer

A signed original of this written statement required by Section 906, or
other document authenticating, acknowledging or otherwise adopting the signature
that appears in typed form within the electronic version of this written
statement required by Section 906, has been provided to Triarc Companies, Inc.
and will be retained by Triarc Companies, Inc. and furnished to the Securities
and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to section
906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350,
chapter 63 of title 18, United States Code) and is not being filed as part of
the Form 10-Q or as a separate disclosure document.