TRIARC COMPANIES INC - 10-K Annual Report

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TRIARC COMPANIES, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED

DECEMBER 30, 2001

________________________________________________________________________________

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

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FORM 10-K

(MARK ONE)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 30, 2001.

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

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TRIARC COMPANIES, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

-------------------

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

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

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 451-3000

-------------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

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

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

The aggregate market value of the outstanding shares of the registrant's
Class A Common Stock (the only outstanding class of the registrant's common
equity) held by non-affiliates of the registrant was approximately $389,880,855
as of March 15, 2002. There were 20,455,403 shares of the registrant's Class A
Common Stock outstanding as of March 15, 2002.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this 10-K incorporates information by reference from an
amendment hereto or to the registrant's definitive proxy statement, in either
case which will be filed no later than 120 days after December 30, 2001.

________________________________________________________________________________

PART I
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND PROJECTIONS

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

Competition, including product and pricing pressures;

Success of operating initiatives;

Development and operating costs;

Advertising and promotional efforts;

Brand awareness;

The existence or absence of positive or adverse publicity;

Market acceptance of new product offerings;

New product and concept development by competitors;

Changing trends in consumer tastes and preferences (including changes
resulting from health or safety concerns with respect to the consumption of
beef) and in spending and demographic patterns;

The business and financial viability of key franchisees;

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

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

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

The performance by material suppliers of their obligations under their
supply agreements with franchisees;

Changes in business strategy or development plans;

Quality of the Company's and franchisees' management;

Availability, terms and deployment of capital;

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

Availability of qualified personnel to the Company and to franchisees;

Labor and employee benefit costs;

Availability and cost of raw materials, ingredients and supplies and the
potential impact on royalty revenues and franchisees' restaurant level
sales that could arise from interruptions in the distribution of supplies
of food and other products to franchisees;
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General economic, business and political conditions in the countries and
territories in which franchisees operate;

Changes in, or failure to comply with, government regulations, including
franchising laws, accounting standards, environmental laws and taxation
requirements;

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

The impact of general economic conditions on consumer spending, including a
slower consumer economy, the effects of the events of September 11, 2001
and the effects of war or other terrorist activities;

Adverse weather conditions; and

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

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

ITEM 1. BUSINESS.

INTRODUCTION

We are a holding company and, through our subsidiaries, the franchisor of
the Arby's'r' restaurant system. Our corporate predecessor was incorporated in
Ohio in 1929. We reincorporated in Delaware in June 1994. Our principal
executive offices are located at 280 Park Avenue, New York, New York 10017 and
our telephone number is (212) 451-3000. Our website address is: www.triarc.com.
Information contained on our website is not part of this Annual Report on
Form 10-K.

BUSINESS STRATEGY

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

The Company's cash, cash equivalents and investments (including restricted
cash, but excluding investments related to deferred compensation arrangements)
at December 30, 2001 totaled approximately $694 million. At such date, the
Company's consolidated indebtedness was approximately $314 million, including
approximately $274 million of non-recourse debt issued by a subsidiary of
Arby's, Inc. The Company's cash, cash equivalents and investments (other than
approximately $30.6 million of restricted cash) do not secure such debt. The
Company is evaluating its options for the use of this significant cash and
investment position, including acquisitions, share repurchases and investments.

SALE OF BEVERAGE BUSINESS

On October 25, 2000, we completed the sale of our beverage business by
selling all the outstanding capital stock of Snapple Beverage Group, Inc. and
Royal Crown Company, Inc. to affiliates of Cadbury

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Schweppes plc. The purchase and sale agreement for the transaction provides for
a post-closing adjustment, the amount of which is in dispute. Cadbury has stated
that it believes that it is entitled to receive from us a post-closing
adjustment of approximately $27.6 million and we, on the other hand, have stated
that we believe that we are entitled to receive from Cadbury a post-closing
adjustment of approximately $5.6 million, in each case plus interest from the
closing date. In accordance with the terms of the purchase and sale agreement,
Triarc and Cadbury have selected an arbitrator for the purpose of determining
the amount of the post-closing adjustment. We currently expect such post-closing
adjustment process to be completed in the second half of 2002.

REPURCHASE OF CLASS B COMMON STOCK

On August 19, 1999, we announced that our Board of Directors had unanimously
approved a stock purchase agreement between the Company and two entities
controlled by the late Victor Posner, Victor Posner Trust No. 6 and Security
Management Corp., pursuant to which we would acquire from the Posner entities
all of the 5,997,622 issued and outstanding shares of our non-voting Class B
Common Stock in three separate transactions. Pursuant to the agreement we
acquired one-third of the shares (1,999,208 shares) on August 19, 1999, at a
price of $20.44 per share (which was the trading price of our Class A Common
Stock at the time the transaction was negotiated), for an aggregate cost of
approximately $40.9 million, one-third of the shares (1,999,207 shares) on
August 10, 2000, at a price of $21.18 per share, for an aggregate cost of
approximately $42.3 million and the remaining one-third of the shares (1,999,207
shares) on August 10, 2001, at a price of $21.93 per share, for an aggregate
cost of approximately $43.8 million.

FISCAL YEAR

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

BUSINESS SEGMENT

RESTAURANT FRANCHISING SYSTEM (ARBY'S)

THE ARBY'S RESTAURANT SYSTEM

Through subsidiaries of Arby's, Inc. (which does business as the Triarc
Restaurant Group), which are the franchisors of the Arby's restaurant system, we
participate in the approximately $110 billion quick service restaurant segment
of the domestic restaurant industry. There are over 3,300 Arby's restaurants in
the United States and Canada and Arby's is the largest restaurant franchising
system specializing in the roast beef sandwich segment of the quick service
restaurant industry. Arby's celebrated its 37th anniversary in 2001 and
according to Nation's Restaurant News, is the 9th largest quick service
restaurant chain in the United States. In addition to various slow-roasted roast
beef sandwiches, Arby's also offers an extensive menu of chicken, turkey, ham
and submarine sandwiches, side-dishes and salads. In 2001, Arby's introduced its
Market Fresh'TM' line of turkey, ham, chicken and roast beef premium sandwiches
on a nationwide basis. Arby's also owns the T.J. Cinnamons'r' concept, which
consists of gourmet cinnamon rolls, gourmet coffees and other related products,
and the Pasta Connection'r' concept, which includes pasta dishes with a variety
of different sauces. Some Arby's franchisees multi-brand with T.J. Cinnamons or
Pasta Connection within their Arby's restaurants. Currently, all of the Arby's
restaurants are owned and operated by franchisees. As of December 30, 2001, 469
franchisees operated 3,351 separate restaurants, of which 3,198 operate within
the United States and 153 operate outside the United States. Of the domestic
restaurants, 336 are multi-branded locations that sell T.J. Cinnamons products
and 54 are multi-branded locations that sell Pasta Connection products.
Subsequent to such year-end, two franchisees notified Arby's of their intention
to close 76 of the T.J. Cinnamons bakeries within their Arby's restaurants later
this year, although T.J. Cinnamons gourmet coffees will continue to be sold at
those restaurants. Management does not expect such closures to have a material
adverse effect on the Company's consolidated financial position or results of
operations. At December 30, 2001, T.J. Cinnamons gourmet coffees were also sold
in an additional approximately 1,620 Arby's restaurants. Arby's is not currently
offering to sell any additional Pasta Connection franchises.
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From 1997 to 2001, Arby's system-wide sales grew at a compound annual growth
rate of 5.2% to $2.6 billion. Through December 30, 2001, the Arby's system has
experienced five consecutive years of domestic same store sales growth compared
to the prior year. During 2001, our franchisees opened 131 new Arby's
restaurants and closed 99 Arby's restaurants. In addition, Arby's franchisees
opened 17 T.J. Cinnamons units in Arby's units in 2001. As of December 30, 2001,
franchisees have committed to open 616 Arby's restaurants over the next nine
years. You should read the information contained in 'Risk Factors -- Arby's is
Dependent on Restaurant Revenues and Openings'; and ' -- Number of Arby's
Restaurants.'

GENERAL

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

Because Arby's owns no restaurants, it avoids the significant capital costs
and real estate and operating risks associated with restaurant operations.
Arby's and its subsidiaries derive their revenues from two principal sources:
(i) franchise royalties received from all Arby's restaurants; and (ii) up-front
franchise fees from its restaurant operators for each new unit opened. Arby's
current domestic franchise royalty rate is 4.0%. Because of lower royalty rates
still in effect under earlier agreements, the average royalty rate paid by
franchisees was approximately 3.3% during both 2000 and 2001.

On November 21, 2000, our subsidiary Arby's Franchise Trust completed an
offering of $290 million of 7.44% non-recourse fixed rate insured notes due 2020
pursuant to Rule 144A of the Securities Act. As a result of the financing and
related restructuring, Arby's continues to service the franchise agreements
relating to U.S. franchises and a subsidiary services the franchise agreements
relating to Canadian franchises with the assistance of Arby's. In connection
with the financing, Arby's engaged in a corporate restructuring pursuant to
which it formed a wholly-owned Delaware statutory business trust, Arby's
Franchise Trust, which became the franchisor of the Arby's restaurant system in
the United States and Canada. Arby's contributed its U.S. and Canadian franchise
agreements, development agreements, license option agreements and the rights to
the revenues from those agreements to Arby's Franchise Trust. Arby's also formed
a new wholly-owned Delaware statutory business trust, Arby's IP Holder Trust,
and contributed to it all of the intellectual property, including the Arby's
trademark, necessary to operate the Arby's franchise system in the United States
and Canada. Arby's IP Holder Trust has granted Arby's Franchise Trust a 99-year
exclusive license to use such intellectual property. Arby's continues to service
the franchise agreements relating to U.S. franchises, and Arby's of Canada,
Inc., a wholly-owned subsidiary of Arby's, services the franchise agreements
relating to Canadian franchises with the assistance of Arby's. The servicing
functions are performed pursuant to separate servicing agreements with Arby's
Franchise Trust pursuant to which the servicers receive servicing fees from
Arby's Franchise Trust equal to their expenses, subject to a specified cap for
any 12-month period. Any residual cash flow received by Arby's Franchise Trust,
after taking into account all required monthly payments under the notes,
including interest and targeted principal repayments, may be distributed by
Arby's Franchise Trust to Arby's. See Note 9 to our Consolidated Financial
Statements.

ARBY'S RESTAURANTS

Arby's opened its first restaurant in Youngstown, Ohio in 1964. As of
December 30, 2001, franchisees operated Arby's restaurants in 49 states and 6
foreign countries. As of December 30, 2001, the six leading states by number of
operating units were: Ohio, with 262 restaurants; Michigan, with 173
restaurants; Indiana, with 173 restaurants; Texas, with 163 restaurants;
Georgia, with 159 restaurants; and California, with 155 restaurants. The country
outside the United States with the most operating units is Canada with 125
restaurants.

Arby's restaurants in the United States and Canada typically range in size
from 2,500 square feet to 3,000 square feet. Restaurants in other countries
typically are larger than U.S. and Canadian restaurants. Restaurants typically
have a manager, assistant manager and as many as 30 full and part-time
employees. Staffing levels, which vary during the day, tend to be heaviest
during the lunch hours.

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The following table sets forth the number of Arby's restaurants at the
beginning and end of each year from 1999 to 2001:

During the period from January 1, 1999 through December 30, 2001, 446 new
Arby's restaurants were opened and 230 Arby's restaurants were closed. We
believe that closing underperforming Arby's restaurants has contributed to an
increase in the average annual unit sales volume of the Arby's system, as well
as to an improvement of the overall brand image of Arby's.

FRANCHISE NETWORK

Arby's seeks to identify potential franchisees that have experience in
owning and operating multiple quick-service restaurant units, have a willingness
to develop and operate multiple Arby's restaurants and have a significant net
worth. Arby's identifies applicants through targeted mailings, maintaining a
presence at industry trade shows and conventions, existing customer and supplier
contacts and regularly placed advertisements in trade and other publications.
Prospective franchisees are contacted by an Arby's sales agent and complete an
application for a franchise. As part of the application process, Arby's requires
and reviews substantial documentation, including financial statements and
documents relating to the corporate or other business organization of the
applicant. Franchisees that already operate one or more Arby's restaurants must
satisfy certain criteria in order to be eligible to enter into additional
franchise agreements, including capital resources commensurate with the proposed
development plan submitted by the franchisee, a commitment by the franchisee to
employ trained restaurant management and to maintain proper staffing levels,
compliance by the franchisee with all of its existing franchise agreements, a
record of operation in compliance with Arby's operating standards, a
satisfactory credit rating and the absence of any existing or threatened legal
disputes with Arby's. The initial term of the typical 'traditional' franchise
agreement is 20 years. Arby's does not offer any financing arrangements to its
franchisees.

During 2001, Arby's franchisees opened nine new restaurants in three foreign
countries and closed 22 restaurants in five foreign countries. Arby's also has
territorial agreements with international franchisees in two countries as of
December 30, 2001. Under the terms of these territorial agreements, these
international franchisees have the exclusive right to open Arby's restaurants in
specific regions or countries.

Arby's offers franchises for the development of both single and multiple
'traditional' restaurant locations. Both new and existing franchisees may enter
into either a master development agreement, which requires the franchisee to
develop two or more Arby's restaurants in a particular geographic area within a
specified time period, or a license option agreement that grants the franchisee
the option, exercisable for a one year period, to build an Arby's restaurant on
a specified site. All franchisees are required to execute standard franchise
agreements. Arby's standard U.S. franchise agreement currently requires an
initial $37,500 franchise fee for the first franchised unit and $25,000 for each
subsequent unit and a monthly royalty payment equal to 4.0% of restaurant sales
for the term of the franchise agreement. Franchisees typically pay a $10,000
commitment fee, credited against the franchise fee during the development
process for a new restaurant. Because of lower royalty rates still in effect
under earlier agreements, the average royalty rate paid by franchisees was
approximately 3.3% in both 2000 and 2001.

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

As of December 30, 2001, franchisees have committed to open 616 Arby's
restaurants over the next nine years. As previously reported, that number
reflects a reduction of 283 future store commitments as a result of: (i) the
announcement by Sybra, Inc., the second largest domestic franchisee of Arby's
restaurants, that it would be unable to comply with its development agreement,
which calls for it to open an additional 163 Arby's
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restaurants through 2006; (ii) the insolvency of Arby's United Kingdom
franchisee, resulting in the loss of 99 future commitments; and (iii) the
termination of the existing franchises and all future development rights of
Arby's Indonesian franchisee, resulting in the loss of 21 future commitments.
Arby's terminated Sybra's development agreement effective December 30, 2001.

Arby's does not expect to find other franchisees in the United Kingdom or
Indonesia to replace the above commitments. Arby's expects that Sybra will
develop new Arby's restaurants in the future, but at a slower pace than that
required by its former development agreement. Arby's also expects to recruit new
franchisees to develop restaurants in Sybra's former territories. The Company
believes that the outcome of the matters described above will not have a
material adverse effect on the consolidated financial condition of the Company
or its results of operations. On February 5, 2002 Sybra and its parent company
filed for bankruptcy protection. See 'Item 1. Business -- Risk Factors -- Arby's
Franchise Revenues Depend, to a Large Extent, on a Small Number of Large
Franchisees and a Decline in Their Revenues May Indirectly Adversely Affect Us.'

ADVERTISING AND MARKETING

The Arby's system, through its franchisees, advertises primarily through
regional television, radio and newspapers. Payment for advertising time and
space is made by local advertising cooperatives in which owners of local
franchised restaurants participate. Franchisees contribute 0.7% of net sales to
the AFA Service Corporation, which produces advertising and promotional
materials for the system. Each franchisee is also required to spend a reasonable
amount, but not less than 3% of its monthly net sales, for local advertising.
This amount is divided between the franchisee's individual local market
advertising expense and the expenses of a cooperative area advertising program
with other franchisees who are operating Arby's restaurants in that area.
Contributions by franchisees to the cooperative area advertising program are
determined by the participants in the program and are generally in the range of
3% to 5% of monthly net sales. Arby's and AFA Service Corporation have entered
into an agreement pursuant to which the Arby's system had two flights of
national advertising in 2001 and will have an additional six flights of national
advertising over the 2002-2003 period. Under the agreement, Arby's is
contributing $8.2 million over the three-year period ($2.1 million of which was
expensed in 2001) for the eight flights. Franchisees are required to contribute
incremental dues to AFA Service Corporation equal to 0.5% of net sales (bringing
their total contribution to advertising and marketing to 1.2% of net sales) to
help fund the program, and AFA Service Corporation will contribute an additional
$2.8 million to the program.

PROVISIONS AND SUPPLIES

Five independent meat processors provide all of Arby's roast beef in the
United States. Franchise operators are required to obtain roast beef from one of
these five approved suppliers. ARCOP, Inc., a non-profit purchasing cooperative,
negotiates contracts with approved suppliers on behalf of Arby's franchisees.
Arby's believes that satisfactory arrangements could be made to replace any of
the current roast beef suppliers, if necessary, on a timely basis.

Franchisees may obtain other products, including food, beverage,
ingredients, paper goods, equipment and signs, from any source that meets Arby's
specifications and approval. Through ARCOP, Arby's franchisees purchase food,
proprietary paper and operating supplies through national contracts employing
volume purchasing. You should read the information contained in 'Item.
1. -- Risk Factors -- Arby's is Dependent on Restaurant Revenues and Openings.'

QUALITY ASSURANCE

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

6

representatives also provide a variety of on-site consulting services to
franchisees. Arby's has the right to terminate franchise agreements if
franchisees fail to comply with quality standards.

GENERAL

TRADEMARKS

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

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

COMPETITION

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

Many of the leading restaurant chains have focused on new unit development
as one strategy to increase market share through increased consumer awareness
and convenience. This has led operators to employ other strategies, including
frequent use of price promotions and heavy advertising expenditures.

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

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

GOVERNMENTAL REGULATIONS

Various state laws and the Federal Trade Commission regulate Arby's
franchising activities. The Federal Trade Commission requires that franchisors
make extensive disclosure to prospective franchisees before the execution of a
franchise agreement. Several states require registration and disclosure in
connection with franchise offers and sales and have 'franchise relationship
laws' that limit the ability of franchisors to terminate franchise agreements or
to withhold consent to the renewal or transfer of these agreements. Furthermore,
the United States Congress has also considered, and there is currently pending,
legislation governing various aspects of the franchise relationship. In
addition, Arby's franchisees must comply with the Fair Labor Standards Act and
the Americans with Disabilities Act, which requires that all public
accommodations and commercial facilities meet federal requirements related to
access and use by disabled persons, and various state laws governing matters
that include, for example, minimum wages, overtime and other working conditions.
We cannot predict the effect on our operations, particularly on our relationship
with franchisees, of any pending or future legislation. We believe that the
operations of our subsidiaries comply substantially with all applicable
governmental rules and regulations.

ENVIRONMENTAL MATTERS

Our past and present operations are governed by federal, state and local
environmental laws and regulations concerning the discharge, storage, handling
and disposal of hazardous or toxic substances. These laws and regulations
provide for significant fines, penalties and liabilities, sometimes without
regard to whether the owner or operator of the property knew of, or was
responsible for, the release or presence of the hazardous or
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toxic substances. In addition, third parties may make claims against owners or
operators of properties for personal injuries and property damage associated
with releases of hazardous or toxic substances. We cannot predict what
environmental legislation or regulations will be enacted in the future or how
existing or future laws or regulations will be administered or interpreted. We
similarly cannot predict the amount of future expenditures which may be required
to comply with any environmental laws or regulations or to satisfy any claims
relating to environmental laws or regulations. We currently own no restaurants
and lease our material facilities (see 'Item 2. Properties' below). We believe
that our operations comply substantially with all applicable environmental laws
and regulations. Accordingly, the environmental matters in which we are involved
generally relate either to properties that our subsidiaries own, but on which
they no longer have any operations, or properties that we or our subsidiaries
have sold to third parties, but for which we or our subsidiaries remain liable
or contingently liable for any related environmental costs. Based on currently
available information, including defenses available to us and/or our
subsidiaries, and our current reserve levels, we do not believe that the
ultimate outcome of the environmental matter discussed below or in which we are
otherwise involved will have a material adverse effect on our consolidated
financial position or results of operations. See 'Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations' below.

In 2001, a vacant property owned by our indirect subsidiary, Adams Packing
Association, Inc., was listed by the U.S. Environmental Protection Agency on the
Comprehensive Environmental Response, Compensation and Liability Information
System ('CERCLIS') list of known or suspected contaminated sites. The CERCLIS
listing appears to have been based on an allegation that a former tenant of
Adams Packing conducted drum recycling operations at the site from some time
prior to 1971 until approximately 1979. In October 2001, an environmental
consultant engaged by the Florida Department of Environmental Protection
conducted a preliminary investigation of the site, including soil and
groundwater sampling. Adams Packing has been orally informed that a purpose of
the preliminary investigation was to determine whether the property should be
included on the National Priorities List ('NPL') created under the Comprehensive
Environmental Response Compensation and Liability Act ('CERCLA'). The NPL is a
listing of sites where known and threatened releases of hazardous substances
have been identified and these sites, on the basis of an evaluation of relative
risk or danger to the public health or the environment, have been assigned a
numerical rating which exceeds a threshold established for inclusion on the NPL.
Based upon the preliminary nature of the testing, the extent of the
contamination of the Adams Packing property and the remediation, if any, that
might be required is not yet known. Consequently, it is currently not possible
to estimate the potential costs of this matter, which could possibly be
significant. Based on currently available information, including various legal
defenses available to us and/or Adams Packing, we do not believe that the
ultimate outcome of this matter will have a material adverse effect on our
consolidated financial position or results of operations. See 'Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources.'

SEASONALITY

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

EMPLOYEES

As of December 30, 2001, we had 231 employees, including 202 salaried
employees and 29 hourly employees. We believe that employee relations are
satisfactory. As of December 30, 2001, none of our employees were covered by a
collective bargaining agreement.

RISK FACTORS

We wish to caution readers that in addition to the important factors
described elsewhere in this Form 10-K, the following important factors, among
others, sometimes have affected, or in the future could affect, our actual
results and could cause our actual consolidated results during 2002, and beyond,
to differ materially from those expressed in any forward-looking statements made
by us or on our behalf.

8

HOLDING COMPANY STRUCTURE.

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

Under the terms of the indenture relating to the notes issued in the Arby's
securitization, there are restrictions on the ability of certain of our
subsidiaries to pay dividends and/or make loans or advances to us. The ability
of any of our subsidiaries to pay cash dividends and/or make loans or advances
to us is also dependent upon the respective abilities of such entities to
achieve sufficient cash flows after satisfying their respective cash
requirements, including debt service, to enable the payment of such dividends or
the making of such loans or advances.

In addition, our equity interests in our subsidiaries rank junior to all of
the respective indebtedness, whenever incurred, of such entities in the event of
their respective liquidation or dissolution. As of December 30, 2001, our
subsidiaries had aggregate indebtedness of approximately $314 million excluding
intercompany indebtedness.

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

We have not designated any specific use for our significant cash and
investment position. We are evaluating options for the use of these funds,
including acquisitions, share repurchases and investments. We have significant
flexibility in selecting the opportunities that we will pursue. See 'Item 1.
Business -- Business Strategy.'

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

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

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

The Investment Company Act of 1940, as amended (the '1940 Act'), requires
the registration of, and imposes various restrictions on, companies that do not
meet certain financial tests regarding the composition of their assets and
source of income. A company may be deemed to be an investment company if it owns
'investment securities' with a value exceeding 40% of its total assets
(excluding government securities and cash items) or if more than 45% of its
total assets consists of, or more than 45% of its income/loss is derived from,
securities of companies it does not control. Our acquisition strategy may
require us to take actions that we would not otherwise take so as not to be
deemed an 'investment company' under the 1940 Act. Investment companies are
subject to registration under, and compliance with, the 1940 Act unless a
particular exclusion or safe harbor provision applies. If we were to be deemed
an investment company, we would become subject to the requirements of the 1940
Act. We intend to make acquisitions and other investments in a manner so as not
to be deemed an investment company. As a result, we may forego investments that
we might otherwise make or retain or dispose of investments or assets that we
might otherwise sell or hold.
9

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

If at any time during the last half of our taxable year, five or fewer
individuals own or are deemed to own more than 50% of the total value of our
shares and if during such taxable year we receive 60% or more of our gross
income from specified passive sources, we would be classified as a 'personal
holding company' for the U.S. federal income tax purposes. If this were the
case, we would be subject to additional taxes at the rate of 39.6% on a portion
of our income, to the extent this income is not distributed to shareholders. We
do not currently expect to have any liability for tax under the personal holding
company rules in 2002. However, we cannot assure you that we will not become
liable for such tax in the future. Because we do not wish to be classified as a
personal holding company or to incur any personal holding company tax, we may be
required in the future to take actions that we would not otherwise take. These
actions may influence our strategic and business decisions, including causing us
to conduct our business and acquire or dispose of investments differently than
we otherwise would.

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

Under our subsidiaries' debt agreements, substantially all of our
subsidiaries' assets, other than cash, cash equivalents and short term
investments, are pledged as collateral security. The indenture relating to the
notes issued in the Arby's securitization contains financial covenants that,
among other things, require Arby's Franchise Trust to maintain certain financial
ratios and restrict its ability to incur debt, enter into certain fundamental
transactions (including sales of all or substantially all of its assets and
certain mergers and consolidations) and create or permit liens. If Arby's
Franchise Trust is unable to generate sufficient cash flow or otherwise obtain
the funds necessary to make required payments of interest or principal under, or
is unable to comply with covenants of, the indenture, it would be in default
under the terms thereof which would, under certain circumstances, permit the
insurer of the notes to accelerate the maturity of the balance thereof. You
should read the information in Note 9 to the Consolidated Financial Statements.

ARBY'S IS DEPENDENT ON RESTAURANT REVENUES AND OPENINGS.

The principal source of revenues for Arby's and its subsidiaries is royalty
fees received from franchisees. Accordingly, Arby's and its subsidiaries' future
revenues will be highly dependent on the gross revenues of Arby's franchisees
and the number of Arby's restaurants that its franchisees operate. In January
2000, the major distributor of food and other products to Arby's franchisees
filed for bankruptcy. That bankruptcy and the subsequent change of distributors
by franchisees did not have a significant adverse effect on us. However, it is
possible that interruptions in the distribution of supplies to Arby's
franchisees could adversely affect sales by such franchisees and cause a decline
in the royalty fees that we receive from them.

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

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

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

Numerous factors beyond our control affect restaurant openings. These
factors include the ability of potential restaurant owners to obtain financing,
locate appropriate sites for restaurants and obtain all necessary state and
local construction, occupancy and other permits and approvals. Although as of
December 30, 2001 franchisees had signed commitments to open 616 Arby's
restaurants and have made or are required to make non-refundable deposits of
$10,000 per restaurant, we cannot assure you that these commitments will result
in open restaurants. See 'Item 1. Business -- Restaurant Franchising System
(Arby's) -- Franchise Network.' In addition, we cannot assure you that our
franchisees will successfully develop and operate their restaurants in a manner
consistent with our standards.

10

ARBY'S FRANCHISE REVENUES DEPEND, TO A LARGE EXTENT, ON A SMALL NUMBER OF
LARGE FRANCHISEES AND A DECLINE IN THEIR REVENUE MAY INDIRECTLY ADVERSELY
AFFECT US.

During 2001, Arby's received approximately 28% of its royalties from RTM,
Inc. and its affiliates (which as of December 30, 2001, operated 774 Arby's
restaurants), and received approximately 8% and 6%, respectively, of its
royalties from two other franchisees. Arby's franchise royalties could decline
from their present levels if any of these franchisees suffered significant
declines in their businesses. In that connection, Sybra, Inc., Arby's second
largest franchisee, and its parent company filed for bankruptcy protection on
February 5, 2002. Based on statements by Sybra and its parent, it is our
understanding that the filings were made principally in order to separate
Sybra's ongoing Arby's business from various unrelated holding company
liabilities of the parent and, in the case of the Sybra filing, because the
parent's filing constituted a technical event of default under Sybra's loan
agreements. However, we do not believe Sybra has suffered a significant decline
in its business and we expect that Sybra will continue to pay Arby's royalties
during the pendency of its bankruptcy proceedings.

COMPETITION FROM RESTAURANT COMPANIES COULD ADVERSELY AFFECT US.

The sole source of Arby's revenues is royalties and fees paid to it by
franchisees. The business sectors in which Arby's franchisees compete are highly
competitive (e.g., with respect to price, food quality and presentation,
service, location, and the nature and condition of the financed business
unit/location), and are affected by changes in tastes and eating habits, local,
regional and national economic conditions and population and traffic patterns.
Arby's franchisees compete with a variety of locally-owned restaurants, as well
as competitive regional and national chains and franchises. Moreover, new
companies may enter the franchisees' respective market area and target sales
audience. Such competition may have, among other things, lower operating costs,
lower debt service requirements, better locations, better facilities, better
management, more effective marketing and more efficient operations. All such
competition may adversely affect Arby's franchisees' revenues and profits and
the ability of franchisees to make required payments to Arby's. Furthermore,
Arby's franchisees face competition for competent employees and high levels of
employee turnover, which can have an adverse effect on the operations and
revenues of the franchisees and on their abilities to make required payments to
Arby's. Many of Arby's competitors have substantially greater financial,
marketing, personnel and other resources than Arby's.

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

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

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

Our intellectual property is material to the conduct of our business. We
rely on a combination of trademarks, copyrights, service marks, trade secrets
and similar intellectual property rights to protect our brands and other
intellectual property. The success of our business strategy depends, in part, on
our continued ability to use our existing trademarks and service marks in order
to increase brand awareness and further
11

develop our branded products in both domestic and international markets. If our
efforts to protect our intellectual property are not adequate, or if any third
party misappropriates or infringes on our intellectual property, either in print
or on the Internet, the value of our brands may be harmed, which could have a
material adverse effect on our business, including the failure of our brands to
achieve and maintain market acceptance.

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

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

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

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

As previously reported, in 1997 we sold all of our company-owned Arby's
restaurants to affiliates of RTM, Arby's largest franchisee. In connection with
the sale, an aggregate of approximately $54.7 million of mortgage and equipment
notes were assumed by affiliates of RTM, of which we believe approximately $44.0
million was outstanding at December 30, 2001. RTM has guaranteed the payment of
such notes by its affiliates. Notwithstanding the assumption of such debt and
guaranty, the Company remains contingently liable as a guarantor of the notes.
In addition, such affiliates of RTM also assumed certain operating and capital
lease obligations relating to the purchased restaurants (aggregating
approximately $73.0 million at December 30, 2001) and RTM has indemnified us for
any losses we might incur with respect to such leases. Notwithstanding such
assumption, we remain contingently liable if RTM's affiliates fail to make the
required payments under those leases.

In addition, in July 1999, the Company sold 41.7% of its remaining 42.7%
interest in National Propane Partners, L.P. and a sub-partnership, National
Propane, L.P. to Columbia Energy Group, and retained a 1% special limited
partner interest in AmeriGas Eagle Propane, L.P. (formerly known as National
Propane, L.P. and Columbia Propane, L.P.). As part of the transaction, our
subsidiary, National Propane Corporation, agreed that while it remains a special
limited partner of AmeriGas, it would indemnify the owner of AmeriGas for any
payments the owner makes under certain debt of AmeriGas (aggregating
approximately $138.0 million as of December 30, 2001), if AmeriGas is unable to
repay or refinance such debt, but only after recourse to the assets of AmeriGas.
Either National Propane Corporation or AmeriGas Propane, L.P. may require
AmeriGas to repurchase the special limited partner interest. However, we believe
it is unlikely that either party would require repurchase prior to 2009 as
either AmeriGas Propane, L.P. would owe us tax indemnification payments or we
would accelerate payment of deferred taxes associated with our sale of the
propane business.

Although the Company believes that it is unlikely that it will be called
upon to make any payments under the guaranty, leases or indemnification
described above, if the Company were required to make such payments it could
have a material adverse effect on the financial position or results of
operations of the Company. You should read the information in 'Item. 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources' and in Notes 3, 9 and 23 to the
Consolidated Financial Statements.

ENVIRONMENTAL LIABILITIES.

Certain of our current and past operations are or have been subject to
federal, state and local environmental laws and regulations concerning the
discharge, storage, handling and disposal of hazardous or toxic substances. Such
laws and regulations provide for significant fines, penalties and liabilities,
in certain cases without regard to whether the owner or operator of the property
knew of, or was responsible for, the release or presence of such hazardous or
toxic substances. In addition, third parties may make claims against owners or
operators of properties for personal injuries and property damage associated
with releases of hazardous or toxic

12

substances. Although we believe that our operations comply in all material
respects with all applicable environmental laws and regulations, we cannot
predict what environmental legislation or regulations will be enacted in the
future or how existing or future laws or regulations will be administered or
interpreted. We cannot predict the amount of future expenditures which may be
required in order to comply with any environmental laws or regulations or to
satisfy any such claims. See 'Item 1. Business -- General -- Environmental
Matters.'

ITEM 2. PROPERTIES.

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

The following table contains information about our material facilities as of
December 30, 2001:

- ---------

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

** Approximately 1,150 square feet of this space is subleased from Arby's by a
third party.

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

ITEM 3. LEGAL PROCEEDINGS.

On March 23, 1999, Norman Salsitz, a stockholder of Triarc, filed a
complaint in the United States District Court for the Southern District of New
York against Triarc, Nelson Peltz and Peter May. In an amended complaint, filed
in April 2000, Mr. Salsitz purports to assert a claim for alleged violation of
Section 14(e) of the Securities Exchange Act of 1934, as amended, on behalf of
all persons who held our stock as of March 10, 1999. The amended complaint
alleges that our tender offer statement in connection with the 1999 'Dutch
Auction' self-tender offer was materially false and misleading in that, among
other things, it failed to disclose alleged recent valuations of Triarc. The
amended complaint seeks damages in an amount to be determined, together with
prejudgment interest, the costs of suit, including attorneys' fees, an order
permitting all shareholders who tendered their shares in the Dutch Auction
Tender Offer to rescind the transaction, and unspecified other relief. On
November 16, 2001, the defendants moved for summary judgment dismissing the
action in its entirety. On the same day, the plaintiff moved to certify a class
consisting of all persons or entities who held stock in Triarc as of March 10,
1999 and who allegedly suffered damages thereby. The defendants have opposed
that motion. These motions are pending.

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

On September 14, 1999, William Pallot, one of our shareholders, filed a
purported derivative action against our directors and other defendants, and
naming us as a nominal defendant, in the Supreme Court of the State of New York,
New York County. In a second amended complaint, filed on February 17, 2000, the
plaintiff alleges that the defendants breached their fiduciary duties and aided
and abetted breaches of fiduciary duties by causing us to enter into an
agreement to purchase shares of the Company's Class B common stock owned by
affiliates of the late Victor Posner. The plaintiff further alleges that the
defendants violated their fiduciary duties and wasted corporate assets by
approving the Company's lease and purchase of aircraft from Triangle Aircraft
Services Corporation and causing Triarc to award Messrs. Peltz and May
unauthorized compensation between 1994 and 1997. On October 31, 2000 the court
granted the defendants' motion to

13

dismiss the action. On December 13, 2001, the Appellate Division, First
Department, affirmed the lower court's dismissal of plaintiff's complaint for
failure to state a cause of action. The plaintiff's time to appeal or to seek
leave to appeal from the Appellate Division decision has expired.

We believe that the outcome of any of the matters described above or any of
the other matters that have arisen in the ordinary course of our business will
not have a material adverse effect on our consolidated financial condition or
results of operations.

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

We held a Special Meeting of Stockholders on October 25, 2001. The matters
acted upon by the stockholders at that meeting were reported in our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2001.

14

PART II

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

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

We did not pay any dividends on our common stock in 2000, 2001 or in the
current year to date and do not presently anticipate the declaration of cash
dividends on our Class A Common Stock in the near future. We have no class of
equity securities currently issued and outstanding except for the Class A Common
Stock. However, we are currently authorized to issue up to 100 million shares of
Class B Common Stock and up to 100 million shares of preferred stock.

Because we are a holding company, our ability to meet our cash requirements,
including required interest and principal payments on our indebtedness, is
primarily dependent upon, in addition to our cash, cash equivalents and
short-term investments on hand, cash flows from our subsidiaries. Under the
terms of the indenture relating to the notes issued in the Arby's securitization
(see 'Item 1. Business -- Restaurant Franchising System (Arby's) -- General'),
the ability of Arby's to pay any dividends or make any loans or advances to us
is limited by the debt service requirements of its subsidiaries. You should read
the information in 'Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources' and Note
9 to our Consolidated Financial Statements.

In August 1999, we entered into a stock purchase agreement pursuant to which
we were obligated to acquire all of the outstanding shares of Class B Common
Stock on or prior to August 19, 2001, subject to extension in certain limited
circumstances. Pursuant to the agreement, in August 1999 we repurchased
1,999,208 shares of our Class B Common Stock for an aggregate purchase price of
approximately $40.9 million, in August 2000 we repurchased 1,999,207 shares of
our Class B Common Stock for an aggregate purchase price of approximately $42.3
million and on August 10, 2001 we repurchased the remaining 1,999,207 shares of
our Class B Common Stock. You should read the information in 'Item 1.
Business -- Repurchase of Class B Common Stock'.

On January 18, 2001, our management was authorized, when and if market
conditions warrant, to purchase from time to time up to an aggregate of $50
million worth of our Class A Common Stock pursuant to a $50 million stock
repurchase program that ends on January 18, 2003. During the period from January
18, 2001 through March 15, 2002, we repurchased 149,000 shares, at an average
cost of approximately $23.40 per share (including commissions), for an aggregate
cost of approximately $3.5 million, pursuant to the stock repurchase program. We
cannot assure you that we will repurchase any additional shares pursuant to this
stock repurchase program.

As of March 15, 2002, there were approximately 3,671 holders of record of
our Class A Common Stock.

15

ITEM 6. SELECTED FINANCIAL DATA(1)

- ---------

(1) Selected Financial Data for the years ended on or prior to the fiscal year
ended December 31, 2000 reflect the discontinuance of the Company's
beverage businesses sold in October 2000, for the years ended on or prior
to the fiscal year ended January 2, 2000 reflect the discontinuance of the
Company's propane business sold in July 1999 and for the fiscal year ended
December 28, 1997 reflect the discontinuance of the Company's dyes and
specialty chemicals business sold in December 1997.

(2) The Company reports on a fiscal year basis consisting of 52 or 53 weeks
ending on the Sunday closest to December 31. In accordance with this
method, the Company's 1997, 1999, 2000 and 2001 fiscal years contained 52
weeks and its fiscal year 1998 contained 53 weeks.

(3) Basic and diluted income (loss) per share are the same for the years ended
December 28, 1997 and December 31, 2000 since all potentially dilutive
securities would have had an antidilutive effect for each of those years.
The shares used in the calculation of diluted income (loss) per share for
the years ended January 3, 1999 (31,527,000), January 2, 2000 (26,943,000)
and December 30, 2001 (22,692,000) consist of the weighted average common
shares outstanding and potential common shares reflecting the effect of
dilutive stock options of 1,221,000, 818,000 and 1,160,000, respectively,
and for the year ended January 2, 2000 the effect of a dilutive forward
purchase obligation for common stock of 110,000 shares.

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

(5) Reflects certain significant charges and credits recorded during 1997 as
follows: $9,698,000 charged to loss from continuing operations before
income taxes representing (1) a $5,609,000 charge for facilities
(footnotes continued on next page)

16

(footnotes continued from previous page)

relocation and corporate restructuring costs and (2) $4,089,000 of loss on
sale of business; $5,865,000 charged to loss from continuing operations
representing the aforementioned $9,698,000 less $3,833,000 of related
income tax benefit; and $4,716,000 charged to net loss representing
(1) the aforementioned $5,865,000 charged to loss from continuing
operations, (2) $19,999,000 included in the loss from operations of the
discontinued businesses consisting of (a) $31,815,000 of charges for
post-acquisition related transition, integration and changes to business
strategies and (b) $1,466,000 of facilities relocation and corporate
restructuring charges, less (a) $576,000 of gain on sale of business and
(b) $12,706,000 of related income tax benefit and (3) a $3,781,000
extraordinary charge from the early extinguishment of debt, all less
$24,929,000 of gain on disposal of discontinued operations.

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

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

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

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

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

17

(footnotes continued from previous page)

(11) Reflects significant credits recorded during 2001 as follows: $5,000,000
credited to income from continuing operations before income taxes
representing the receipt of a $5,000,000 note receivable from the Chairman
and Chief Executive Officer and the President and Chief Operating Officer
(the 'Executives') of the Company received in connection with the
settlement of a class action lawsuit involving certain awards of
compensation to the Executives; $3,200,000 credited to income from
continuing operations representing the aforementioned $5,000,000 less
$1,800,000 of related income tax expense; and $46,650,000 credited to net
income representing the aforementioned $3,200,000 credited to income from
continuing operations and $43,450,000 of additional gain on disposal of
discontinued operations.

18

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

INTRODUCTION

We currently operate in one business, the franchising of Arby's restaurants,
from which we derive our revenues principally in the form of franchise royalties
and franchise fees. While over half of our existing royalty agreements and all
of our new domestic royalty agreements provide for royalties of 4% of franchise
revenues, our average rate was 3.3% in 2001. We also derive investment income
from our investments. As discussed below under 'Liquidity and Capital
Resources,' we are presently evaluating our options for the use of our
significant cash, cash equivalent and investment position, including business
acquisitions, repurchases of our common shares and investments.

We incur general and administrative expenses, depreciation and amortization
and interest expense, but no cost of goods sold, in our restaurant franchising
business. In addition, we incur general corporate expenses, including investment
activity related expenses, in those same expense categories. Our restaurant
franchising business does not require significant capital expenditures since we
do not own any restaurants.

We previously operated in the premium beverage and soft drink concentrate
businesses. On October 25, 2000 we completed the sale, which we refer to as the
Snapple Beverage Sale, of Snapple Beverage Group, Inc., the parent company of
Snapple Beverage Corp., Mistic Brands, Inc. and Stewart's Beverages, Inc., and
Royal Crown Company, Inc. to affiliates of Cadbury Schweppes plc, which we refer
to as Cadbury. Our former premium beverage business consisted of Snapple
Beverage Group and our former soft drink concentrate business consisted of Royal
Crown Company. The premium beverage and soft drink concentrate businesses,
formerly reported as business segments, have been accounted for as discontinued
operations in 1999 and 2000 through the date of sale.

On July 19, 1999 we completed the sale of 41.7% of our remaining 42.7%
interest in National Propane Partners L.P. and a subpartnership, which operated
a propane business, retaining a then 1% limited partner interest. Accordingly,
the propane business, formerly reported as a business segment, was accounted for
as a discontinued operation in 1999 through the date of sale.

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

Consistent growth of the restaurant industry as a percentage of total
food-related spending;

Increased competitive pressures from the emphasis by competitors on new
unit development to increase market share leading to frequent use of
price promotions and heavy advertising expenditures within the
industry;

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

Additional competitive pressures for prepared food purchases from
operators outside the restaurant industry such as deli sections and
in-store cafes of several major grocery store chains; and

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

We experience the effects of these trends to the extent they affect sales by
our franchisees and the resulting impact on the royalties and franchise fees we
receive from them.

PRESENTATION OF FINANCIAL INFORMATION

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

We report on a fiscal year consisting of 52 or 53 weeks ending on the Sunday
closest to December 31. Each of our 1999, 2000 and 2001 fiscal years contained
52 weeks. Our 1999 fiscal year commenced on January 4, 1999 and ended on
January 2, 2000, our 2000 fiscal year commenced on January 3, 2000 and ended
19

on December 31, 2000, and our 2001 fiscal year commenced on January 1, 2001 and
ended on December 30, 2001. When we refer to '1999' we mean the period from
January 4, 1999 to January 2, 2000; when we refer to '2000' we mean the period
from January 3, 2000 to December 31, 2000; and when we refer to '2001' we mean
the period from January 1, 2001 to December 30, 2001.

RESULTS OF OPERATIONS

Set forth below is a table that summarizes and compares our results of
operations for 1999, 2000 and 2001 and provides the amount and percent increase
or decrease between (1) 1999 and 2000 and (2) 2000 and 2001. Where there is no
amount in one of the years of the comparison or the change exceeds 100%, the
percent change is not meaningful, which we refer to as 'n/m.' The nature of the
income from discontinued operations and the extraordinary charges are not
comparable between periods and, as a result, we have not provided the percent
change.

2001 COMPARED WITH 2000

Royalties and Franchise Fees

Our royalties and franchise fees, which are generated entirely from our
restaurant franchising business, increased $5.1 million, or 6%, to $92.3 million
in 2001 from $87.2 million in 2000 reflecting a $5.3 million,

20

or 6%, increase in royalty revenue partially offset by a $0.2 million, or 6%,
decrease in franchise fee revenue. The increase in royalty revenue resulted from
an average net increase of 66, or 2%, franchised restaurants and a 1.9% increase
in same-store sales of franchised restaurants. The slight decrease in franchise
fee revenue was principally due to the opening of 25 fewer franchised
restaurants in 2001 compared with 2000 substantially offset by an increase in
revenues recognized from forfeited deposits upon the termination of commitments
to open new franchised restaurants. While we anticipate a continued combined
increase in royalties and franchise fees for the year ended December 29, 2002
compared with 2001, we expect this increase will be at a lower rate than the 6%
increase in combined royalties and franchise fees experienced during 2001.
Although we project an increase in the number of franchised restaurants during
2002, we currently expect the average net increase of franchised restaurants for
2002 will be less than the average net increase of 66 referred to above in 2001.
We also expect a decrease in revenues recognized from forfeited deposits upon
the termination of commitments to open new franchised restaurants. However, we
expect same-store sales of franchised restaurants to continue to increase in
2002. As a result, we expect (1) royalties will be higher in 2002 than in 2001
and (2) franchise fees will be lower in 2002 compared with 2001.

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

Investment Income, Net

The following table summarizes and compares the major components of
investment income, net in 2000 and 2001:

Investment income, net, increased $2.9 million, or 9%, to $33.6 million in
2001 from $30.7 million in 2000. This increase principally reflects (1) a $15.3
million increase in interest income on cash equivalents and short-term
investments and (2) a $0.2 million decrease in the provision for unrealized
losses recognized on investments deemed to be other than temporary. These
increases were partially offset by (1) a $12.2 million decrease in recognized
net gains, realized or unrealized as applicable, on our investments, of which
$10.3 million was attributable to our gain on the sale of one particular common
stock investment in 2000 which did not recur in 2001 and (2) a $0.4 million
decrease in distributions, including dividends, from certain of our investments.
The increased interest income is due to higher average amounts of cash
equivalents and short-term investments in 2001 compared with 2000 as a result of
the full year effect in 2001 of the cash provided from the Snapple Beverage Sale
and $277.0 million of proceeds, net of $13.0 million of expenses, from the
issuance of our 7.44% insured non-recourse securitization notes, which we refer
to as the Securitization Notes, on November 21, 2000. We currently are invested
principally in cash equivalents and we anticipate interest income will be
significantly lower in 2002 compared with 2001 assuming interest rates as of
December 30, 2001 do not increase significantly. In December 2001, moreover,
$175.0 million of United States government agency debt securities matured, which
yielded 6.2% and which had maturities of twelve months when acquired, the
proceeds of which were reinvested principally in money market funds which had an
average yield of 2.0% as of December 30, 2001. The recognized net gains on our
securities and the provision for other than temporary losses on our securities
may not recur in future periods.

Gain on Sale of Businesses

The gain on sale of businesses of $0.5 million in 2001 reflects the release
of sales tax accruals no longer necessary due to the expiration of statutory
audit periods. These accruals were originally provided as a component of the
loss on sale of all of the 355 then company-owned restaurants in 1997. There was
no gain on sale of businesses in 2000 included in continuing operations.
21

Other Income, Net

The following table summarizes and compares the major components of other
income, net in 2000 and 2001:

Other income, net, increased $8.9 million to $10.4 million in 2001 from $1.5
million in 2000. This increase was due to (1) $8.3 million of interest income
related to our election to treat certain portions of the Snapple Beverage Sale
as an asset sale for income tax purposes, as explained in more detail below
under 'Discontinued Operations,' representing interest for the period beginning
45 days after the October 25, 2000 date of the sale through the June 14, 2001
date of payment by Cadbury of $200.0 million to us for our making this election
and (2) a $2.1 million decrease in our equity in the losses of investees other
than investment limited partnerships and similar investment entities accounted
for under the equity method, principally due to $1.8 million of an equity loss
from the write-down of certain assets by an investee in 2000 which did not recur
in 2001. These increases were partially offset by (1) the non-recurring
collection in 2000 of $0.9 million of a receivable from a former affiliate which
was written off in years prior to 1999 due to the former affiliate filing for
bankruptcy protection and (2) other net decreases of $0.6 million.

General and Administrative

Our general and administrative expenses decreased $2.8 million, or 4%, to
$77.4 million in 2001 from $80.2 million in 2000. This decrease principally
reflects (1) an $11.4 million decrease in stock option compensation costs due to
costs incurred in 2000 which did not recur in 2001 consisting of (a) $10.4
million resulting from our repurchase of class A common stock from certain
officers and a director within six months after the exercise of related stock
options by such officers and director and (b) $1.0 million resulting from other
stock option activity relating to the Snapple Beverage Sale, (2) a $5.0 million
reduction in compensation expense related to a note receivable from our Chairman
and Chief Executive Officer and President and Chief Operating Officer, whom we
refer to as the Executives, that we received in 2001 in connection with the
settlement effective March 1, 2001 of a class action shareholder lawsuit which
asserted claims relating to certain compensation awards to the Executives,
(3) provisions of $1.2 million in 2000 which did not recur in 2001 for costs to
support a change in distributors of food and other products for a majority of
franchisees in our restaurant franchising business and (4) a $1.2 million
decrease in charitable contributions in 2001. These decreases were partially
offset by (1) higher incentive compensation costs of $5.0 million to $11.9
million in 2001 from $6.9 million in 2000 under our executive bonus plan
principally due to the effect on the bonus calculation of the positive impact of
the Snapple Beverage Sale on our capitalization, (2) a $2.5 million increase in
insurance expense due to (a) a $1.5 million reduction of insurance expense
recognized in 2000 which did not recur in 2001 relating to the favorable
settlement of insurance claims by the purchaser of a former insurance subsidiary
that we sold in 1998 resulting in the collection of a $1.5 million note
receivable that we received as a portion of the sales proceeds which was fully
reserved at the time of sale and (b) a $1.0 million increase in insurance
premiums in 2001, (3) $2.1 million of contributions to AFA Service Corporation,
an independent organization which produces advertising and promotional materials
for the Arby's franchise system, expensed in connection with an Arby's national
cable television advertising campaign introduced in 2001, (4) $1.9 million of
compensation expense recognized in 2001 representing the increase in the fair
value of investments in two deferred compensation trusts, which we refer to as
the Trusts, invested in January 2001 for the benefit of the Executives, as
explained in more detail below under 'Income from Continuing Operations Before
Income Taxes' and (5) other inflationary increases.

22

The $1.5 million gain in 2000 from realization of the note receivable
discussed above was included as a reduction of general and administrative
expenses since the gain effectively represented an adjustment of prior period
insurance reserves. The $5.0 million gain from the settlement of the class
action shareholder lawsuit discussed above was included as a reduction of
general and administrative expenses since the gain effectively represents an
adjustment of prior period compensation expense. The contributions to AFA
Service Corporation for the national cable television advertising campaign
will continue under an agreement which we expect will result in an additional
$6.1 million of expenses, in total, to be incurred over our fiscal years 2002
and 2003.

Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs

Our depreciation and amortization, excluding amortization of deferred
financing costs, increased $1.2 million, or 22%, to $6.5 million in 2001 from
$5.3 million in 2000. This increase principally reflects (1) a $0.5 million
increase in depreciation related to the purchase of an airplane in the third
quarter of 2001 which replaced fractional interests in two airplanes under
timeshare agreements which were terminated and (2) a $0.5 million increase in
amortization related to leasehold improvements completed in 2001.

Effective with our first quarter of fiscal 2002 we will adopt Statement of
Financial Accounting Statements No. 142 'Goodwill and Other Intangible Assets'
issued by the Financial Accounting Standards Board. Under SFAS 142 we will no
longer amortize our costs in excess of net assets of acquired companies, which
we refer to as Goodwill, commencing with our first quarter of fiscal 2002.
During 2001 Goodwill amortization amounted to $0.8 million. Further, we have
determined that all of our other intangible assets have finite useful lives and
will continue to be amortized. Therefore, depreciation and amortization,
excluding amortization of deferred financing costs, will decrease $0.8 million
in 2002 compared with 2001 as a result of the adoption of SFAS 142. See
'Recently Issued Accounting Pronouncements' under 'Liquidity and Capital
Resources' for a more complete discussion of SFAS 142.

Capital Market Transaction Related Compensation

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

Capital Structure Reorganization Related Charge

The capital structure reorganization related charge of $0.3 million in 2000
results from equitable adjustments that were made in 1999 to the terms of then
outstanding options under the stock option plan of Snapple Beverage Group to the
extent the option holders were employees of Triarc Companies, Inc. There was no
similar charge in 2001.

The Snapple Beverage Group stock option plan provided for an equitable
adjustment of options in the event of a recapitalization or similar event. As of
May 17, 1999 the exercise prices of Snapple Beverage Group options then
outstanding that were granted prior to January 4, 1999 were equitably adjusted
for the effects of net distributions of $91.3 million, principally consisting of
transfers of cash and deferred tax assets from Snapple Beverage Group to Triarc,
partially offset by the effect of the contribution of Stewart's to Snapple
Beverage Group effective May 17, 1999. We accounted for the equitable adjustment
of the Snapple Beverage Group stock options in accordance with the intrinsic
value method. We reduced the exercise prices of the Snapple Beverage Group stock
options, which did not result in the recognition of any expense because those
modifications to the options did not create a new measurement date under the
intrinsic value method. In addition, a then maximum of $2.6 million of cash
payments relating to option holders who were employees of Triarc was due from us
following the exercise of the stock options and the occurrence of certain other
events. The $0.3 million charge recognized in 2000 represents the additional
vested portion of our then obligation for these cash payments during 2000
through October 25, 2000, the date of the Snapple Beverage Sale, net of credits
for forfeitures of non-vested stock options of terminated employees. As a result
of the Snapple Beverage Sale, all outstanding Snapple Beverage Group stock
options remained the responsibility of Snapple Beverage Group under Cadbury's
ownership and were no longer our responsibility. The then remaining accrual for
these
23

cash payments recognized by Triarc of $2.4 million was released and reported as
a component of the gain on sale of the beverage businesses included in income
from discontinued operations in 2000.

Interest Expense

Interest expense increased $25.6 million to $30.4 million in 2001 from $4.8
million in 2000. This increase is primarily attributable to (1) $18.5 million of
additional interest in 2001 on our Securitization Notes issued on November 21,
2000 and $1.9 million of additional amortization of related deferred financing
costs, due to the full year effect on interest expense in 2001 of the
Securitization Notes which were issued on November 21, 2000, (2) interest of
$3.1 million for the period from March 15, 2001 through June 14, 2001 on the
estimated income tax liability paid with the filing of our election on June 14,
2001 to treat certain portions of the Snapple Beverage Sale as an asset sale for
income tax purposes as discussed more fully below under 'Discontinued
Operations' and (3) interest of $1.3 million in connection with a term loan with
an outstanding principal balance of $21.5 million as of December 30, 2001 and
related interest rate swap agreement used to finance the purchase of an airplane
during the third quarter of 2001.

Insurance Expense Related to Long-Term Debt

Insurance expense related to long-term debt increased $4.2 million to $4.8
million in 2001 from $0.6 million in 2000. These charges, which relate to
insuring the payment of principal and interest on the Securitization Notes,
increased due to the full year effect on insurance expense in 2001 of the
Securitization Notes which were issued on November 21, 2000.

Income from Continuing Operations Before Income Taxes

Our income from continuing operations before income taxes increased $15.5
million to $17.7 million in 2001 from $2.2 million in 2000 due to the effect of
the variances explained in the captions above.

As disclosed above, we recognized $1.9 million of compensation expense in
2001 for the increase in the fair values of the investments in the Trusts.
However, under accounting principles generally accepted in the United States of
America we were able to recognize investment income of only $0.2 million on the
investments in the Trusts resulting in a $1.7 million difference in the
recognition of deferred compensation expense and the related investment income.
This difference will reverse in future periods as either (1) the investments in
the Trusts are sold and previously unrealized gains are recognized without any
offsetting increase in compensation expense or (2) the fair values of the
investments in the Trusts decrease resulting in the recognition of a reduction
of deferred compensation expense without any offsetting losses recognized in
investment income.

Income Taxes

The provision for income taxes represented effective rates of 49% in 2001
and 559% in 2000. The effective rate is unusually high in 2000 principally due
to the relatively low amount of pretax income and the effect thereon of
non-deductible compensation costs. The effective rate is lower in 2001, but
still exceeds the United States Federal statutory rate of 35%, principally due
to (1) the effect of non-deductible compensation costs, which were significantly
lower in 2001 compared with 2000, and (2) the effect of state income taxes,
which were lower in 2001 compared with 2000 due to the differing impact of the
mix of pretax income or loss among the consolidated entities since we file state
tax returns on an individual company basis.

Discontinued Operations

Income from discontinued operations was $43.4 million in 2001 compared with
$472.1 million in 2000. The 2001 income from discontinued operations resulted
entirely from adjustments to the previously recognized estimated gain on
disposal of our beverage businesses. These net adjustments result principally
from the realization of $200.0 million of proceeds from Cadbury for our electing
to treat certain portions of the Snapple Beverage Sale as an asset sale in lieu
of a stock sale under the provisions of Section 338(h)(10) of the United States
Internal Revenue Code, net of estimated income taxes, partially offset by
additional accruals relating to the Snapple Beverage Sale. The 2000 income from
discontinued operations consists of the then estimated gain

24

on disposal of the discontinued beverage businesses of $481.0 million less the
loss from operations of the discontinued businesses of $8.9 million through the
October 25, 2000 Snapple Beverage Sale.

Revenues and other income of the beverage businesses were $681.0 million in
2000 through the October 25, 2000 Snapple Beverage Sale. Revenues and other
income of the premium beverage business reflected (1) strong demand for newer
product introductions such as Snapple Elements'TM', a product platform of
herbally enhanced drinks, introduced in April 1999, and Mistic Zotics'TM'
introduced in April 2000 and (2) the positive effect of an increased focus by
two premium beverage distributors on sales of our products as a result of our
ownership of these distributors from February 25, 1999 and January 2, 2000,
respectively, through the date of the Snapple Beverage Sale on October 25, 2000.

The beverage businesses generated a pretax loss of $8.0 million in 2000
through the October 25, 2000 Snapple Beverage Sale principally reflecting the
negative impact of operating costs and expenses associated with the acquisition
of the two premium beverage distributors referred to above and interest expense
related to additional borrowings and the effect of an increasing interest rate
environment on the variable-rate debt of our beverage businesses. The beverage
businesses had a provision for income taxes of $0.9 million in 2000 despite a
loss before income taxes principally due to the amortization of non-deductible
Goodwill, and the differing impact of the mix of pretax loss or income among the
consolidated entities since we file state income tax returns on an individual
company basis.

Extraordinary Charges

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

2000 COMPARED WITH 1999

Royalties and Franchise Fees

Our royalties and franchise fees, which are generated entirely from our
restaurant franchising business, increased $6.0 million, or 7%, to $87.2 million
in 2000 from $81.2 million in 1999 reflecting higher royalty revenue and
slightly higher franchise fee revenue. The increase in royalty revenue resulted
from an average net increase of 91, or 3%, franchised restaurants and a 0.9%
increase in same-store sales of franchised restaurants.

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

25

Investment Income, Net

The following table summarizes and compares the major components of
investment income, net in 1999 and 2000:

Investment income, net increased $13.8 million, or 82%, to $30.7 million in
2000 from $16.9 million in 1999. This increase principally reflects (1) $10.4
million of higher recognized net gains, realized or unrealized as applicable, on
our investments, of which $10.3 million was attributable to our gain on the sale
of one particular common stock investment in 2000, (2) a $4.2 million increase
in interest income on cash equivalents and short-term investments, (3) a $0.9
million decrease in the provision recognized for unrealized losses on
investments deemed to be other than temporary and (4) a $0.8 million increase in
distributions, including dividends, from certain of our investments. These
increases were partially offset by a $2.3 million decrease in our net equity in
the earnings or losses of investment limited partnerships and similar investment
entities accounted for under the equity method. The increased interest income is
due to higher average amounts of cash equivalents and short-term investments in
2000 compared with 1999 as a result of the cash provided from the Snapple
Beverage Sale in October 2000 and the issuance of the Securitization Notes in
November 2000.

Gain on Sale of Businesses

The gain on sale of businesses of $1.2 million in 1999 was recognized as a
result of the decrease in our percentage ownership of MCM Capital Group, Inc.,
an investment accounted for under the equity method which we refer to as MCM,
due to the sale of common stock issued by MCM. There was no gain on sale of
businesses in 2000 included in continuing operations.

Other Income, Net

The following table summarizes and compares the major components of other
income, net in 1999 and 2000:

Other income, net decreased $1.4 million, or 48%, to $1.5 million in 2000
from $2.9 million in 1999. This decrease was principally due to (1) a loss of
$2.3 million in 2000 in our net equity in the income or losses of investees
other than investment limited partnerships and similar investment entities
accounted for under the equity method compared with an essentially break-even
position in 1999, principally due to $1.8 million of an equity loss from the
write-down of certain assets by MCM in 2000 which did not occur in 1999, and
(2) a $0.9 million reduction in interest income due to the receipt of $1.3
million of interest income in 1999 relating to

26

both income tax refunds and casualty insurance collateral which did not recur in
2000. These decreases were partially offset by (1) the collection in 2000 of
$0.9 million of a receivable from a former affiliate which was written off in
years prior to 1999 due to the former affiliate filing for bankruptcy protection
and (2) a $0.7 million reduction in the fair value of a written call option on
our class A common stock effectively established in connection with the
assumption by Cadbury of the Debentures. Although the Debentures were assumed by
Cadbury, they remain convertible into our class A common stock and as such we
have recorded the liability for such conversion at fair value and the reduction
in the fair value of the liability from the October 25, 2000 date of sale to
December 31, 2000 was recognized in other income.

General and Administrative

Our general and administrative expenses increased $11.7 million, or 17%, to
$80.2 million in 2000 from $68.5 million in 1999. This increase principally
reflects (1) stock option compensation costs of $11.4 million in 2000 consisting
of (a) $10.4 million resulting from our repurchase of class A common stock from
certain officers and a director within six months after the exercise of related
stock options by such officers and director and (b) $1.0 million resulting from
other stock option activity relating to the Snapple Beverage Sale, (2) higher
expenses of $1.4 million to $8.1 million in 2000 from $6.7 million in 1999
related to the full year effect in 2000 compared with the period from May 3,
1999 to January 2, 2000 in 1999 of executive salary arrangements and an
executive bonus plan which became effective May 3, 1999, (3) higher charitable
contributions of $1.4 million, (4) provisions of $1.2 million in 2000 for costs
to support a change in distributors of food and other products for a majority of
franchisees in our restaurant franchising business and (5) other inflationary
increases. These increases were partially offset by (1) non-recurring 1999
expenses of $2.9 million related to our lease of an airplane from Triangle
Aircraft Services Corporation, a company owned by the Executives, through
January 19, 2000 at which time we acquired 280 Holdings, LLC, the entity that at
the time of the acquisition owned the airplane and (2) a $1.5 million reduction
of insurance expense recognized in 2000 which did not occur in 1999, as
explained in more detail in the comparison of 2001 and 2000.

Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs

Our depreciation and amortization, excluding amortization of deferred
financing costs, decreased $0.1 million, or 2%, to $5.3 million in 2000 from
$5.4 million in 1999. This decrease in depreciation and amortization principally
reflects (1) a decrease in amortization of $1.5 million reflecting (a) an
increase in the estimated useful lives effective January 19, 2000 on $8.9
million of airplane leasehold improvements as a result of our acquisition of 280
Holdings on January 19, 2000 and (b) the termination of amortization effective
January 2000 on a $2.5 million payment made in 1997 principally for the option
to continue to lease the airplane for five years since the remaining unamortized
portion was repaid to us in connection with our acquisition of 280 Holdings and
(2) a decrease in the amortization of below market stock options of $0.3 million
in 2000 as those stock options became fully vested in March 2000. These
decreases were almost entirely offset by the 2000 depreciation of $1.7 million
on the airplane commencing with our acquisition of 280 Holdings.

Capital Market Transaction Related Compensation

The capital market transaction related compensation charge of $26.0 million
in 2000 resulted from incentive compensation costs directly related to the
completion of the Snapple Beverage Sale and the issuance of the Securitization
Notes, as previously discussed in more detail in the comparison of 2001 and
2000. There was no similar charge in 1999.

Capital Structure Reorganization Related Charge

The capital structure reorganization related charge decreased $1.8 million,
or 86%, to $0.3 million in 2000 from $2.1 million in 1999. Such charge reflects
equitable adjustments that were made in 1999 to the terms of then outstanding
options under the stock option plan of Snapple Beverage Group to the extent the
option holders were employees of Triarc, as previously discussed in more detail
in the comparison of the years 2001 and 2000. The initial charge of $2.1 million
in 1999 represents the portion of the aggregate cash payment ultimately due to
these option holders to the extent of the vesting of the stock options through
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January 2, 2000. The $0.3 million charge recognized in 2000 represents the
additional vested portion of our then obligation for these cash payments during
2000 through the date of the Snapple Beverage Sale, net of credits for
forfeitures of non-vested stock options of terminated employees, as explained in
more detail in the comparison of 2001 and 2000.

Interest Expense

Interest expense increased $3.5 million to $4.8 million in 2000 from $1.3
million in 1999. This increase in interest expense is primarily attributable to
(1) the reversal in 1999 of $3.1 million of interest accruals relating to income
tax matters due to the finalization of our income tax liabilities resulting from
the settlement of Internal Revenue Service examinations of our income tax
returns for the fiscal years from 1989 to 1992 and the then tentative completion
of the examinations of our income tax returns for fiscal 1993 and the
eight-month transition period ended December 31, 1993 during 1999, (2) interest
of $2.4 million in 2000 on the Securitization Notes issued on November 21, 2000
and (3) interest of $1.5 million in 2000 on a secured promissory note with an
outstanding principal balance of $16.6 million at December 31, 2000 assumed in
connection with the acquisition of 280 Holdings on January 19, 2000. These
increases were partially offset by (1) $1.4 million of 1999 interest on the
Senior Subordinated Notes, reported in continuing operations representing the
portion which was allocated to our restaurant franchising business in 1999 but
which was no longer allocated in 2000 and (2) non-recurring 1999 interest of
$1.4 million on $275.0 million of 9 3/4% senior secured notes due 2000 of
RC/Arby's reported in continuing operations consisting of the portion related to
Arby's and RC/Arby's. The 9 3/4% notes were repaid in the first quarter of 1999
in connection with a debt refinancing which consisted of (1) the issuance of
$300.0 million of Senior Subordinated Notes and (2) $475.0 million borrowed by
the beverage businesses under a senior bank credit facility and the repayment of
(1) $284.3 million under a prior credit facility of Snapple Beverage Group and
(2) the $275.0 million of 9 3/4% notes. Outstanding borrowings under the credit
facility of Snapple Beverage Group and the 10 1/4% notes were repaid by us or
assumed by Cadbury, as applicable, in connection with the Snapple Beverage Sale.

Insurance Expense Related to Long-Term Debt

The insurance expense related to long-term debt of $0.6 million in 2000
related to insuring the payment of principal and interest on the Securitization
Notes which were issued on November 21, 2000.

Income from Continuing Operations Before Income Taxes

Our income from continuing operations before income taxes decreased $22.7
million to $2.2 million in 2000 from $24.9 million in 1999 due to the effect of
the variances explained in the captions above.

Income Taxes

The provision for income taxes represented effective rates of 559% in 2000
and 29% in 1999. The effective rate is unusually high in 2000 principally due to
the relatively low amount of pretax income and the effect thereon of
non-deductible compensation costs, which were significantly higher in 2000
compared with 1999. The effective rate is lower than the United States Federal
statutory rate of 35% in 1999 principally due to the 1999 release of excess
income tax reserves of $5.1 million as a result of the settlement of Internal
Revenue Service examinations of our tax returns for fiscal 1989 to 1992 and the
then tentative completion of Internal Revenue Service examinations of our tax
returns for fiscal 1993 and the eight-month transition period ended
December 31, 1993 during 1999, partially offset by the effect of non-deductible
compensation costs and state income taxes.

Discontinued Operations

Income from discontinued operations was $472.1 million in 2000 compared with
$4.5 million in 1999. This income from discontinued operations includes the loss
from operations of the discontinued businesses and the gain on disposal of the
discontinued businesses. The loss from operations component improved $1.7
million to a loss of $8.9 million in 2000 from a loss of $10.6 million in 1999.
The gain on disposal component increased $465.9 million to $481.0 million in
2000 from $15.1 million in 1999.

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The gain on disposal of discontinued businesses of $481.0 million in 2000
resulted entirely from the Snapple Beverage Sale. The gain on disposal of
discontinued businesses of $15.1 million in 1999 resulted from (1) a $12.4
million gain relating to the sale of our propane business consisting of (a) an
$11.2 million gain from the July 1999 sale of 41.7% of our then remaining 42.7%
interest in National Propane Partners and (b) the recognition in 1999 of $1.2
million of previously deferred gains from the 1996 sale of 57.3% of our interest
in National Propane Partners and (2) a $2.7 million reduction of previously
recognized estimated disposal losses related to certain discontinued operations
of SEPSCO, LLC, a subsidiary of ours. The $2.7 million adjustment relating to
SEPSCO in 1999 was principally due to the receipt by SEPSCO of an income tax
refund and the release of income tax reserves no longer required based on the
results of Internal Revenue Service examinations of our tax returns for the
fiscal years from 1989 through 1993.

The improvement in the loss from operations of the discontinued businesses
of $1.7 million was due to the non-recurring $1.6 million after-tax equity in
the loss from discontinued operations of the former propane business in 1999 and
a $0.1 million decrease in the net loss of our discontinued beverage businesses
in 2000. A discussion of the operating results of the discontinued beverage
businesses follows.

Revenues and other income of the beverage businesses decreased $94.0
million, or 12%, to $681.0 million in 2000 from $775.0 million in 1999
reflecting a decrease of $75.5 million, or 12%, for the premium beverage
business and an $18.5 million, or 15%, decrease for the soft drink concentrate
business. The decrease in revenues and other income for both the premium
beverage business and the soft drink concentrate business was due to the Snapple
Beverage Sale on October 25, 2000 whereby our 2000 results reflect the
operations of the beverage businesses only through the date of sale compared
with a full year in 1999. Revenues and other income for the period October 26,
1999 to January 2, 2000 amounted to $93.0 million for the premium beverage
business and $19.8 million for the soft drink concentrate business. Adjusting
our 1999 results to exclude the revenues and other income of the beverage
businesses for the period from October 26, 1999 to January 2, 2000, revenues and
other income of the beverage businesses increased $18.8 million, or 3%, for the
comparable periods through October 25 of each year reflecting an increase of
$17.5 million, or 3%, for the premium beverage business and an increase of $1.3
million, or 1%, for the soft drink concentrate business. The $17.5 million
increase for the premium beverage business was principally due to increased
sales volume resulting from newer product introductions such as Snapple
Elements'TM' introduced in April 1999 and Mistic Zotics'TM' introduced in
April 2000 and increased cases sold to retailers through two premium beverage
distributors principally reflecting the effect of an increased focus on sales of
our products as a result of our ownership of these distributors from
February 25, 1999 and January 2, 2000, respectively, through the date of the
Snapple Beverage Sale on October 25, 2000. These increases were partially offset
by decreased sales volume of Whipper Snapple'r' and Mistic tropical fruit
juices.

The pretax loss of the beverage businesses increased $4.8 million, or 151%,
to $8.0 million in 2000 from $3.2 million in 1999. The pretax loss for the
period from October 26, 1999 to January 2, 2000 amounted to $4.6 million.
Adjusting our 1999 results to exclude the pretax loss of the beverage businesses
for the period from October 26, 1999 to January 2, 2000, the pretax income
(loss) of the beverage businesses declined $9.4 million to a loss of $8.0
million in 2000 from income of $1.4 million in 1999 for the comparable periods
through October 25 of each year principally due to a $28.2 million increase in
costs and expenses of the beverage businesses partially offset by an $18.8
million increase in their revenues and other income, as described in the
preceding paragraph. The $28.2 million increase in costs and expenses of the
beverage businesses was due to (1) an $8.0 million increase in interest expense
principally as a result of higher average interest rates in the 2000 period and,
to a lesser extent, higher average levels of debt during the 2000 period due to
the full period effect of increases from a February 25, 1999 debt refinancing
discussed above under 'Interest Expense' and (2) a $22.9 million increase in
operating costs and expenses, including amortization of Goodwill, trademarks and
other intangibles, primarily as a result of the acquisition of two premium
beverage distributors on February 25, 1999 and January 2, 2000, respectively, as
well as other increases approximately proportionate to the increase in revenues
and other earnings. These increases were partially offset by a $2.7 million
decrease in the capital structure reorganization charge recognized by Snapple
Beverage Group, comparable to the related charge recognized by Triarc, as
explained in more detail under 'Capital Structure Reorganization Related Charge'
above.

The beverage businesses had provisions for income taxes of $0.9 million in
2000 and $5.8 million in 1999 despite losses before income taxes principally due
to (1) the amortization of non-deductible Goodwill and
29

(2) the differing impact of the mix of pretax loss or income among the combined
entities since we file state income tax returns on an individual company basis.

Extraordinary Charges

The extraordinary charges of $20.7 million in 2000 resulted from the early
assumption by Cadbury or extinguishment by us, as applicable, of certain
borrowings, as explained in more detail in the comparison of 2001 and 2000. The
extraordinary charges of $12.1 million in 1999 resulted from the early
extinguishment of borrowings under a prior credit facility of Snapple Beverage
Group and RC/Arby's 9 3/4% notes and consisted of (1) the write-off of
previously unamortized (a) deferred financing costs of $11.3 million and
(b) interest rate cap agreement costs of $0.1 million and (2) the payment of a
$7.7 million redemption premium on RC/Arby's 9 3/4% notes, both less income tax
benefit of $7.0 million.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows from Continuing Operations

Our consolidated operating activities from continuing operations used cash
and cash equivalents, which we refer to in this discussion as cash, of $5.6
million during 2001 reflecting (1) operating investment adjustments of $17.4
million, (2) a note receivable from litigation settlement included in pretax
income, net of payment received, of $3.3 million and (3) cash used by changes in
operating assets and liabilities of $3.7 million. These uses were partially
offset by (1) net non-cash charges of $9.8 million, principally depreciation and
amortization and (2) income from continuing operations of $9.0 million.

Operating investment adjustments of $17.4 million consisted of (1) $7.8
million of net cash used for purchases in excess of sales of trading securities,
increasing our position in trading securities which are included in short-term
investments in our consolidated balance sheets, (2) a $7.9 million adjustment to
income for the non-cash accretion of discount on debt securities and (3) $1.7
million of net recognized gains from investments which were reclassified
principally to investing activities.

The cash used by changes in operating assets and liabilities of $3.7 million
reflects an increase in prepaid expenses of $2.8 million and a decrease in
accounts payable and accrued expenses of $2.0 million, both partially offset by
a decrease in receivables of $1.1 million. The increase in prepaid expenses is
primarily due to $2.0 million of prepaid advertising costs related to an Arby's
national cable television advertising campaign introduced in 2001. The decrease
in accounts payable and accrued expenses is primarily due to (1) a $7.4 million
payable as of December 31, 2000 for common shares repurchased from two of our
officers, other than the Executives, on December 29, 2000 which had been issued
upon exercise of stock options and was not settled until January 2 and 3, 2001
and (2) $2.9 million of related withholding taxes, all partially offset by
(1) a $7.2 million increase in accrued income taxes principally due to our
provision for income taxes currently payable, which excludes our benefit from
deferred income taxes, net of related tax payments, and (2) a $1.1 million
increase in accrued incentive compensation. There was no similar payable to our
officers for repurchases of common shares at December 30, 2001. The decrease in
receivables was principally due to a $2.5 million decrease in accrued interest
receivable principally on our cash equivalents partially offset by a $1.7
million increase in trade receivables, excluding the allowance for doubtful
accounts.

Excluding net purchases of trading securities noted above which represent
the discretionary investment of excess cash, cash flows from continuing
operating activities in 2001 were positive. We expect positive cash flows from
operations during 2002, 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
$556.6 million at December 30, 2001, reflecting a current ratio, which equals
current assets divided by current liabilities, of 5.2:1. Working capital
decreased $39.7 million from $596.3 million at December 31, 2000 principally due
to repurchases of $51.0 million of our common stock discussed below under
'Treasury Stock Purchases.'

Our total capitalization at December 30, 2001 was $646.1 million consisting
of stockholders' equity of $332.4 million and $313.7 million of long-term debt,
including current portion. Our total capitalization increased $11.3 million from
$634.8 million at December 31, 2000 principally due to (1) net income of $52.4

30

million, (2) proceeds of $5.7 million from stock option exercises and (3) net
borrowings of long-term debt of $5.0 million, partially offset by
(1) repurchases of $51.0 million of our common stock discussed below under
'Treasury Stock Purchases' and (2) adjustments of $2.0 million in deriving
comprehensive income from net income.

Securitization Notes

We have outstanding, through our ownership of Arby's Franchise Trust,
Securitization Notes with a remaining principal balance of $274.0 million as of
December 30, 2001 which are due no later than December 2020. However, based on
current projections and assuming the adequacy of available funds, as defined
under the indenture for the Securitization Notes, which we refer to as the
Indenture, we currently estimate that we will repay $19.2 million in 2002 with
increasing annual payments to $37.4 million in 2011 in accordance with a
targeted principal payment schedule. Available funds to Arby's Franchise Trust
to pay principal on the Securitization Notes are franchise fees, royalties and
other payments received by Arby's Franchise Trust under substantially all of our
franchising agreements after payment of (1) operating expenses of Arby's
Franchise Trust, (2) servicing fees payable to Arby's and one of its
subsidiaries to cover the costs of administering the franchising agreements,
(3) insurance premiums related to insuring the payment of principal and interest
on the Securitization Notes and (4) interest on the Securitization Notes. Any
remaining cash is available for distribution by Arby's Franchise Trust to its
parent as long as Arby's Franchise Trust meets the minimum debt service coverage
ratio, as defined under the Indenture. That requirement is currently 1.3:1,
subject to increases to a maximum of 1.7:1, based upon 75% of our highest
previously-reported ratio. The actual debt service coverage ratio is based on
the preceding four calendar months of activity and was 1:6:1 as of December 30,
2001. The Securitization Notes are subject to mandatory redemption to the extent
of any remaining cash before distributions by Arby's Franchise Trust if the debt
service coverage ratio is less than 1.2:1 but greater than 1.1:1, until such
time as the ratio exceeds 1.2:1 for six consecutive months. If the debt service
coverage ratio falls below or equal to 1.1:1, then all funds in the cash
equivalent reserve account ($30.6 million as of December 30, 2001) and all
remaining cash that otherwise would have been available for distributions must
be used for mandatory redemption of the Securitization Notes until they have
been repaid in full. The Securitization Notes are redeemable by Arby's Franchise
Trust at an amount equal to the total of remaining principal, accrued interest
and the excess, if any, of the discounted value of the remaining principal and
interest payments over the outstanding principal amount of the Securitization
Notes.

Obligations under the Securitization Notes are insured by a financial
guarantee company and are collateralized by assets of Arby's Franchise Trust
with a total net book value of $47.8 million as of December 30, 2001 consisting
of cash and cash equivalents of $9.4 million, the cash equivalent reserve
account of $30.6 million referred to above and royalty receivables of $7.8
million.

The Indenture contains various covenants with respect to Arby's Franchise
Trust which (1) require periodic financial reporting, (2) require meeting the
debt service coverage ratio test and (3) restrict, among other matters, (a) the
incurrence of indebtedness, (b) asset dispositions and (c) the payment of
distributions. Arby's Franchise Trust was in compliance with all of these
covenants as of December 30, 2001. As of December 30, 2001, Arby's Franchise
Trust had no amounts available for the payment of distributions 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 through the parent of Arby's.
However, $838,000 became available for the payment of distributions by Arby's
Franchise Trust as of December 31, 2001.

Other Long-Term Debt

In July 2001, we entered into a $22.6 million secured bank term loan payable
through 2008. The remaining principal balance of the secured bank term loan is
$21.5 million as of December 30, 2001, of which $3.2 million is due during 2002.
The bank term loan bears interest at variable rates (3.99% as of December 30,
2001), determined at our option, at the prime rate or the one-month London
Interbank Offered Rate, which we refer to as LIBOR, plus 1.85%, reset monthly.
We also entered into an interest rate swap agreement on the bank term loan which
commenced August 1, 2001 whereby we effectively pay a fixed rate of 6.8% as long
as the one-month LIBOR is less than 6.5%, but with an embedded written call
option whereby the swap agreement will no longer be in effect if, and for as
long as, the one-month LIBOR is at or above 6.5%.
31

Obligations under the secured bank term loan are secured by an airplane with a
net book value of $23.4 million as of December 30, 2001.

We have an 8.95% secured promissory note payable through 2006 with an
outstanding principal amount of $15.0 million as of December 30, 2001, of which
$1.7 million is due during 2002.

Our total scheduled long-term debt repayments during 2002 are $24.8 million
consisting principally of the $19.2 million expected to be paid under the
Securitization Notes, $3.2 million due on the secured bank term loan and $1.7
million due on the 8.95% secured promissory note.

Guaranties and Commitments

In July 1999 we sold through our wholly-owned subsidiary, National Propane
Corporation, 41.7% of our remaining 42.7% interest in our former propane
business to Columbia Energy Group, retaining a 1% special limited partner
interest in AmeriGas Eagle Propane, L.P., which we refer to as AmeriGas Eagle,
and which was formerly National Propane, L.P. and Columbia Propane, L.P.
National Propane Corporation, whose principal asset following the sale of the
propane business is a $30.0 million intercompany note receivable from Triarc,
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 December 30, 2001, if AmeriGas
Eagle is unable to repay or refinance such debt, but only after recourse by the
purchaser to the assets of AmeriGas Eagle. 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 that were held by Columbia Energy Group.
National Propane Corporation still retains its special limited partner interest,
although such interest has been diluted to less than 1% as a result of capital
contributions by AmeriGas Propane. Either National Propane Corporation or
AmeriGas Propane may require AmeriGas Eagle to repurchase the special limited
partner interest of less than 1%. 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 or we would accelerate payment of deferred
taxes associated with our sale of the propane business.

In 1997 Arby's sold all of its 355 then company-owned restaurants. The
purchaser of the restaurants assumed substantially all of the associated
operating and capitalized lease obligations (approximately $73.0 million as of
December 30, 2001, assuming the purchaser has made all scheduled payments
through that date under such lease obligations), although Arby's remains
contingently liable if the purchaser does not make the required future lease
payments. In connection with such sale, Triarc guaranteed obligations under a
total of $54.7 million of mortgage and equipment notes payable to FFCA Mortgage
Corporation that were assumed by the purchaser. Outstanding obligations under
the mortgage and equipment notes approximated $44.0 million as of December 30,
2001, assuming the purchaser has made all scheduled payments through that date.
Triarc is also a guarantor of $0.5 million as of December 30, 2001 of mortgage
and equipment notes included in our long-term debt for which one of our
subsidiaries is co-obligor with the purchaser of the restaurants.

In January 2000 we guaranteed $10.0 million principal amount of senior notes
that mature in January 2007 issued by MCM, an 8.4% equity investee of ours as of
December 30, 2001, to a major financial institution. In consideration for the
guaranty, we received a fee of $0.2 million and warrants to purchase 100,000
shares of MCM common stock at $.01 per share with an estimated fair value on the
date of grant of $0.3 million. The $10.0 million guaranteed amount has been
reduced to $6.7 million as of December 30, 2001 and will be further reduced by
(1) any repayments of the MCM notes, (2) any purchases of the MCM notes by us
and (3) the amount of certain investment banking or financial advisory services
fees paid to the financial institution or its affiliates or, under certain
circumstances, other financial institutions, by us, MCM or another significant
stockholder of MCM or any of their affiliates. Some of our present and former
officers, including entities controlled by them, collectively owned 15.7% of MCM
as of MCM's initial public offering in July 1999, as adjusted for the effect of
the MCM initial public offering. These present and former officers, including
entities controlled by them, who collectively owned 15.7% of MCM as of its
initial public offering, are not parties to this note guaranty and could
indirectly benefit from not having any obligation under this note guaranty.

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In addition to the note guaranty, we and certain other stockholders of MCM,
including our present and former officers referred to above who had invested in
MCM prior to its initial public offering, on a joint and several basis, have
entered into guaranties and agreements to guarantee up to $15.0 million of
revolving credit borrowings of a subsidiary of MCM. We would be responsible for
approximately $1.8 million assuming the full $15.0 million was borrowed and all
of the parties, besides us, to the guaranties of the revolving credit borrowings
and certain related agreements fully perform thereunder. As of December 30,
2001, MCM had $14.7 million of outstanding revolving credit borrowings. At
December 30, 2001 we had $15.7 million of highly liquid United States government
debt securities in a custodial account at the financial institution providing
the revolving credit facility. Such securities under the guaranties of the
revolving credit borrowings are subject to set off under certain circumstances
if the parties to these guaranties of the revolving credit borrowings and
related agreements fail to perform their obligations thereunder.

MCM has encountered cash flow and liquidity difficulties in the past. While
it is not currently possible to determine if MCM may eventually default on any
of the aforementioned obligations, we currently believe that it is possible, but
not probable, that we will be required to make payments under the note guaranty
and/or the bank guaranties. Subsequent to December 30, 2001, MCM's liquidity was
positively impacted by a capital investment and a debt forgiveness. Certain
existing stockholders of MCM made an aggregate $5.0 million investment in
newly-issued convertible preferred stock of MCM, of which we invested $0.9
million and certain of our present and former officers, including entities
controlled by them, invested $1.6 million. We will recognize in the first
quarter of 2002 our cumulative unrecorded equity in losses of MCM of $0.7
million through December 30, 2001 in connection with our $0.9 million additional
investment in MCM. We discontinued applying the equity method of accounting for
our investment in MCM during the first quarter of 2001 when our investment in
MCM was reduced to zero. Concurrently with the $5.0 million investment, the
financial institution which holds the MCM notes forgave obligations aggregating
$5.3 million, consisting of $2.8 million principal amount and $2.5 million of
related accrued interest, reducing the outstanding principal amount of the MCM
notes to $7.2 million, of which we continue to guarantee $6.7 million under the
note guaranty. MCM had $0.6 million of unamortized debt discount and deferred
loan costs associated with the notes forgiven. MCM will record an increase in
its additional paid-in capital of $4.7 million for the forgiveness in its first
quarter of 2002, representing the $5.3 million less the $0.6 million, and we
will record our equity of $0.4 million in that amount as an increase in our
additional paid-in capital during the first quarter of 2002.

We, our present and former officers who had invested in MCM prior to its
initial public offering and certain other stockholders of MCM, through CTW
Funding, LLC, a then newly-formed limited liability company, made available to
MCM a $2.0 million revolving credit facility for working capital purposes which
was extended through December 31, 2001, at which date it expired unused. We own
an 8.7% interest in CTW and, had any borrowings under this revolving credit
facility occurred, all members of CTW would have been required to fund the
borrowings in accordance with their percentage interests. In return for its
commitment, CTW received warrants to purchase a total of 250,000 shares of MCM
common stock at $.01 per share.

We lease facilities and transportation and office equipment under operating
lease agreements. Our minimum rental payments under these leases that have an
initial term in excess of one year, excluding the lease obligations assumed by
RTM, principally extend through 2012 as of December 30, 2001 and total $22.2
million, of which $3.6 million is for 2002. These rental payments are included
in operating cash flows.

Co-Investments With Management

As part of our overall retention efforts, we provide certain of our
management officers and employees, including the Executives, the opportunity to
co-invest with us in certain investments. The current co-investment and
corporate opportunity policy was initially adopted and approved by our audit
committee in December 1999 and was subsequently amended in May 2001. The current
policy provides that we may make loans to management, not to exceed an aggregate
of $5.8 million principal amount outstanding, where our portion of the aggregate
co-investment is at least 20%. Each loan may not exceed two-thirds of the total
amount to be invested by any member of management in a co-investment and is to
be evidenced by promissory notes, of which at least one-half must be recourse
notes, secured by the member's co-investment shares. The promissory notes are to
mature no later than the lesser of (1) five years, (2) the sale of the
investment by the officer or employee or (3) the termination of employment of
the officer or employee; and shall bear interest at the prime rate payable
annually in arrears. We and certain of our management had entered into four
33

co-investments in accordance with this policy from December 1999 through
December 30, 2001. As of December 30, 2001, we had $2.7 million total
outstanding principal amount of co-investment notes receivable from certain of
our management after the write-off of $0.2 million of non-recourse notes which
we will not collect due to the worthlessness of the underlying investments held
by one of the companies in which we co-invested.

One of the co-investments referred to above was in 280 BT Holdings LLC, a
consolidated subsidiary of ours with a 44.1% minority interest, and was in
addition to a cash-only co-investment previously made in May 1998. 280 BT
invested all of the most recent co-investment proceeds in preferred shares of
Scientia Health Group Limited. Both we and an officer who is not one of the
Executives and who co-invested in 280 BT had previously invested in ordinary
shares of Scientia. The ordinary shares of Scientia were acquired for a
significantly lower cost per share, while the preferred shares of Scientia
provide for dividend and liquidation preferences. The officer owns a higher
percentage of Scientia's ordinary shares than we own while the officer owns a
lower percentage of Scientia's preferred shares than we own. The officer could
indirectly benefit from the lower average cost of his investments compared with
that of our investments.

Capital Expenditures

Cash capital expenditures amounted to $25.4 million during 2001. Our cash
capital expenditures during 2001 included the purchase of an aircraft for $24.0
million, including $0.4 million of improvements we then made to it. This
aircraft purchase was substantially financed by a secured bank term loan
described above under 'Other Long-Term Debt.' We later surrendered our existing
fractional interests in two other aircraft during 2001 and received cash
payments equal to the appraised value of those interests of $3.0 million.

We expect that cash capital expenditures will approximate $0.5 million for
2002 for which there were $0.1 million of outstanding commitments as of
December 30, 2001.

Acquisitions and Investments

As of December 30, 2001, we have $684.6 million of cash, cash equivalents
and investments, including $42.1 million of investments classified as
non-current and net of $17.4 million of short-term investments sold with an
obligation for us to purchase included in 'Accrued expenses' in our accompanying
consolidated balance sheet. We also had $32.5 million of restricted cash
equivalents including $30.6 million held in the reserve account discussed above
under 'Securitization Notes.' The non-current investments include $22.7 million
of investments in the Trusts designated to satisfy the deferred compensation
payable to related parties. We are presently evaluating our options 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

During 2001, we made net payments of $368.1 million of income taxes
attributable to the Snapple Beverage Sale and a related tax agreement with
Cadbury. Under this related tax agreement, both we and Cadbury jointly elected
to treat certain portions of the Snapple Beverage Sale as an asset sale in lieu
of a stock sale under the provisions of section 338(h)(10) of the United States
Internal Revenue Code. We received $200.0 million of proceeds from Cadbury
during 2001 for making this election. The $368.1 million of tax payments, net of
the $200.0 million of proceeds from Cadbury, are reflected in net cash used in
discontinued operations in the accompanying consolidated statement of cash flows
for 2001.

See 'Critical Accounting Policies and Estimates' below for a discussion of
income tax contingencies.

Treasury Stock Purchases

Our management is currently authorized, when and if market conditions
warrant, to repurchase up to $50.0 million of our class A common stock under a
stock repurchase program that, as extended, ends on January 18, 2003. Under this
program, we repurchased 149,000 shares for a total cost of $3.5 million through
December 30, 2001. We cannot assure you that we will repurchase any additional
shares under the remaining $46.5 million authorized under this program.
Additionally, our management was authorized to repurchase our class A common
stock under a $30.0 million stock repurchase program that expired on May 25,
2001. Under

34

the $30.0 million stock repurchase program, we repurchased 1,045,834 shares for
a total cost of $25.9 million during 2000 and an additional 150,600 shares for a
total cost of $3.7 million during the first quarter of 2001.

Pursuant to a contract entered into in August 1999, on August 10, 2001 we
repurchased the remaining 1,999,207 shares of our former class B common stock
held by affiliates of Victor Posner, a former Chairman and Chief Executive
Officer, for $43.8 million. This repurchase was at a negotiated fixed price of
$21.93 per share based on the fair market value of our class A common stock at
the time the transaction was negotiated.

Discontinued Operations

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 believes that it is entitled to receive from us a post-closing
adjustment of $27.6 million and we, on the other hand, have stated that we
believe that we are entitled to receive from Cadbury a post-closing adjustment
of $5.6 million, in each case plus interest at 7.19% from October 25, 2000. In
accordance with the terms of the purchase and sale agreement, we and Cadbury
have selected an arbitrator for the purpose of determining the amount of the
post-closing adjustment. However, the arbitration process was just commencing as
of December 30, 2001. We currently expect the post-closing adjustment process to
be completed in the second half of 2002.

Cash Requirements

As of December 30, 2001, our consolidated cash requirements for continuing
operations for 2002, exclusive of operating cash flow requirements, consist
principally of (1) a maximum $46.5 million of payments for repurchases, if any,
of our class A common stock for treasury under our current stock repurchase
program, (2) scheduled debt principal repayments aggregating $24.8 million,
(3) capital expenditures of approximately $0.5 million and (4) the cost of
business acquisitions, if any. Our consolidated cash requirements relating to
discontinued operations for 2002 consist principally of the Snapple Beverage
Sale post-closing adjustment, if any, of up to $27.6 million plus related
accrued interest. We anticipate meeting all of these requirements through
(1) an aggregate $642.5 million of existing cash and cash equivalents and
short-term investments, net of $17.4 million of short-term investments sold with
an obligation for us to purchase and (2) cash flows from operations.

LEGAL AND ENVIRONMENTAL MATTERS

On March 23, 1999, a stockholder filed a complaint on behalf of persons who
held our class A common stock as of March 10, 1999 which, as amended in
April 2000, alleges that our tender offer statement filed with the Securities
and Exchange Commission, pursuant to which we repurchased 3.8 million shares of
our class A common stock for $18.25 per share, was materially false and
misleading. The amended complaint seeks damages in an unspecified amount,
together with prejudgment interest, the costs of suit, including attorneys'
fees, an order permitting all stockholders who tendered their shares in the
tender offer to rescind the transaction, and unspecified other relief. The
complaint names us and the Executives as defendants. On November 16, 2001, the
defendants moved for summary judgment dismissing the action in its entirety. On
the same day, the plaintiff moved to certify a class consisting of all persons
or entities who held our class A common stock as of March 10, 1999 and who
allegedly suffered damages thereby. The defendants have opposed that motion.
These motions are pending.

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

In 2001, a vacant property owned by our non-operating subsidiary, Adams
Packing Association, Inc., was listed by the United States Environmental
Protection Agency on the Comprehensive Environmental Response, Compensation and
Liability Information System ('CERCLIS') 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 approximately 1979. In October 2001, an
environmental consultant engaged by the Florida Department of Environmental
Protection
35

conducted a preliminary investigation of the site, including soil and
groundwater sampling. A final report by the environmental consultant has not yet
been issued although a preliminary copy of the report indicates that the
environmental consultant believes that further unspecified action is warranted
at the site. Based upon the preliminary nature of the testing, the extent of the
contamination of the property and the remediation that might be required is not
yet known. While it is possible that the ultimate outcome of this matter could
be significant, since we are unable to determine the nature of the required
remediation, if any, we are unable to estimate the costs thereof.

In addition to the environmental matter and stockholder lawsuits described
above, we are involved in other litigation and claims incidental to our
business. We have reserves for all of these legal and environmental matters
aggregating $1.8 million as of December 30, 2001. Although the outcome of these
matters cannot be predicted with certainty and some of them may be disposed of
unfavorably to us, based on currently available information, including legal
defenses available to Triarc and/or Adams Packing, and given our aforementioned
reserves, we do not believe that these legal and environmental matters will have
a material adverse effect on our consolidated financial position or results of
operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amount of revenues and expenses during the reporting period. We
evaluate those estimates and assumptions on an ongoing basis based on historical
experience and on various other factors which we believe are reasonable under
the circumstances. Our estimates and assumptions concern, among other things,
contingencies for legal, environmental, tax and other matters and the valuations
of some of our investments. We have also chosen certain accounting policies for
which alternative options are available, most significantly including:

the intrinsic value method of measuring employee stock-based
compensation costs; and

the specific identification method for determining the cost of
marketable securities sold.

These accounting policies are applied consistently for all years presented.
Had we used the fair value method instead of the intrinsic value method of
measuring employee stock-based compensation costs, our pro forma net income
would have been less than reported net income by $8.6 million and $5.8 million
in 1999 and 2001, respectively, and would have been greater than reported net
income by $3.4 million in 2000. The selection of the accounting method for
identifying the cost of securities sold does not impact net income for sales of
marketable securities classified as trading since unrealized holding gains or
losses on those securities are already included in determining net income.
Accordingly, the effect on our net income is limited to sales of marketable
securities classified as available-for-sale. Net income would be affected by the
method used to determine the cost of available-for-sale securities only to the
extent they were purchased at different prices over time and were not sold
entirely during the same year. Had we adopted an alternative accounting method,
such as average cost, for determining the cost of the securities sold, we
believe that the effect on our earnings in 1999, 2000 and 2001 would not have
been significant. However, at December 30, 2001, we held available-for-sale
securities with a carrying value of $22.8 million and with $0.9 million of net
unrealized gains which were purchased at different prices over time for which
the application of the specific identification method, as compared with an
alternative method, may impact our earnings in a future year.

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

The amount of the post-closing adjustment, if any, to be arbitrated in
connection with the Snapple Beverage Sale. Cadbury has stated that it
believes it is entitled to receive from us a post-closing adjustment of
$27.6 million and we, on the other hand, have stated we believe that we
are entitled to receive from Cadbury a post-closing adjustment of $5.6
million as discussed in more detail above under 'Discontinued
Operations.'

Reserves for the resolution of income tax contingencies which are
subject to future examinations of our Federal and state income tax
returns by the Internal Revenue Service, which we refer to as the IRS,
or state taxing authorities, including remaining provisions included in
'Net current liabilities
36

relating to discontinued operations' in our consolidated balance
sheets. During 1999, the IRS completed its examinations of our Federal
income tax returns for the years ended April 30, 1989 through
April 30, 1992 as well as for the year ended April 30, 1993 and
eight-month transition period ended December 31, 1993. During 1999 and
2000 we reached final settlements with the IRS relating to these
examinations. Our Federal income tax returns subsequent to the 1993
examinations are not currently under examination by the IRS. However,
should taxes or interest, if any, be assessed as the result of any
Federal or state examinations through the October 25, 2000 date of the
Snapple Beverage Sale, Cadbury has agreed to pay up to $5.0 million of
the resulting tax or associated interest, if any, relating to the
operations of Snapple Beverage Group and Royal Crown Company.

Reserves for the resolution of all of our legal and environmental
matters as discussed immediately above under 'Legal and Environmental
Matters.'

Valuations of some of our investments. Our investments in short-term
available-for-sale and trading marketable securities are valued based
on quoted market prices or statements of account received from
investment managers which are principally based on quoted market or
brokered/dealer prices. Accordingly, we do not anticipate any
significant changes from the valuations of these investments. However,
our investments in other short-term cost and equity investments and
substantially all of our non-current investments are valued almost
entirely based on statements of account received from the investment
managers or the investees which are principally based on quoted market
or brokered/dealer prices. To the extent that some of these
investments, including the underlying investments in investment limited
partnerships, do not have available quoted market or brokered/dealer
prices, we rely on third-party appraisals or valuations performed by
the investment managers or equity investees in valuing those
securities. These valuations are subjective and thus subject to
estimates which could change significantly from period to period. Those
changes in estimates in cost investments would impact our earnings only
to the extent of losses which are deemed to be other than temporary.
Those changes in estimates related to the underlying income or losses
of our equity investments in investment limited partnerships would
directly impact our earnings for our share of the investment. However
the total carrying value of these investments is only $8.8 million as
of December 30, 2001. We also have $12.1 million of non-marketable cost
investments in securities for which it is not practicable to estimate
fair value because the investments are non-marketable and are in
start-up enterprises for which we currently believe the carrying amount
is recoverable.

Provisions for unrealized losses on investments deemed to be other than
temporary. These investments include certain marketable securities
classified as available-for-sale, certain investments in limited
partnerships, certain non-marketable preferred stocks and our equity
investment in MCM. The losses we have recognized were deemed to be
other than temporary due to declines in the underlying economics of
specific securities or volatility in capital and lending markets. We
review all of our investments that have unrealized losses for any that
we might deem other than temporary. This includes the underlying
investments of any of our investment limited partnerships and similar
investment entities in which we have an overall unrealized loss. This
process is subjective and subject to estimation. We have aggregate
unrealized losses on our investments of $0.7 million as of
December 30, 2001 which, if not recovered, may result in the
recognition of future losses. We have permanently reduced the cost
basis component of the investments for which we have recognized other
than temporary losses. As such, any recoveries in the value of the
investments will not be recognized until the investments are sold.

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

INFLATION AND CHANGING PRICES

We believe that inflation did not have a significant effect on our
consolidated results of operations during 1999, 2000 and 2001, since inflation
rates generally remained at relatively low levels. The impact of any future
37

inflation in our restaurant franchising business should be limited since our
restaurant operations are exclusively franchising.

SEASONALITY

Our continuing operations are not significantly impacted by seasonality,
however our restaurant franchising royalty revenues are somewhat higher in our
fourth quarter and somewhat lower in our first quarter.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, 'Business Combinations.' Statement 141
addresses financial accounting and reporting for business combinations initiated
after June 30, 2001 and supersedes Accounting Principles Board Opinion No. 16,
'Business Combinations.' The most significant accounting differences from
Opinion 16 are that Statement 141 requires that all business combinations be
accounted for under the purchase method, thereby eliminating the
pooling-of-interests method, and establishes new criteria for identifying
acquired intangibles separately from Goodwill with the expectation that more
intangibles will now be identified. Statement 141 also expands the disclosure
requirements of Opinion 16. As the provisions of Statement 141 apply
prospectively to business combinations initiated after June 30, 2001 and since
we have not entered into any business combinations since June 30, 2001, its
adoption has not had any effect on our consolidated financial position or
results of operations. Further, since we historically have not been able to meet
the criteria for pooling-of-interests accounting, the elimination of that method
has had no effect on us.

In June 2001, the Financial Accounting Standards Board also issued Statement
of Financial Accounting Standards No. 142, 'Goodwill and Other Intangible
Assets.' Statement 142 addresses financial accounting and reporting for acquired
Goodwill and other intangible assets and supersedes Accounting Principles Board
Opinion No. 17, 'Intangible Assets.' Statement 142 adopts an aggregate approach
to Goodwill, compared with the transaction-based approach of Opinion 17, by
accounting for Goodwill on combined reporting units that include an acquired
entity. The more significant accounting provisions of Statement 142 are that
(1) Goodwill and other identified intangible assets that have indefinite useful
lives will no longer be amortized, (2) Goodwill and any other intangible asset
with an indefinite useful life will be tested for impairment at least annually
and (3) intangibles with finite useful lives will continue to be amortized.
Statement 142 also expands the required disclosures for Goodwill and other
intangible assets. The provisions of Statement 142 are effective starting with
the first quarter of 2002. The carrying amount of our Goodwill at December 30,
2001 was $17.9 million. Amortization of Goodwill for 2001 was $0.8 million.
Under the provisions of Statement 142, we will no longer amortize Goodwill
commencing with the first quarter of 2002. We will instead review the carrying
amount of Goodwill at least annually for any impairment and recognize an
impairment loss if the carrying amount of Goodwill is not recoverable and its
carrying amount exceeds its implied fair value. We have determined as of
December 31, 2001 that none of our existing Goodwill is impaired or will, upon
adoption of Statement 142 on December 31, 2001, require the recognition of an
impairment loss under the provisions of Statement 142. Our intangible assets
other than Goodwill, principally trademarks, with a carrying amount of $5.5
million as of December 30, 2001, have finite useful lives and will not be
affected by Statement 142. Based on the reasons above, and other than
discontinuing the amortization of Goodwill of $0.8 million, we do not expect
that the adoption of Statement 142 will have any material immediate effect on
our consolidated financial position or results of operations.

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

38

In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, 'Accounting for the Impairment or
Disposal of Long-Lived Assets.' Statement 144 supersedes Statement of Financial
Accounting Standards No. 121, 'Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of' and the accounting and
reporting provisions relating to the disposal of a business segment of
Accounting Principles Board Opinion No. 30, 'Reporting the Results of
Operations -- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions.' For
long-lived assets to be disposed of by sale, Statement 144, among other things,
establishes one accounting model for both continuing and discontinued operations
based on the framework established in Statement 121. Accordingly, discontinued
operations are no longer measured on a net realizable value basis and future
operating losses are no longer recognized before they occur. For long-lived
assets to be disposed of other than by sale, Statement 144 requires that any
such asset be considered held and used until its disposition. For long-lived
assets to be held and used, Statement 144 retains the general requirements of
Statement 121 but (1) removes Goodwill from its scope, thereby eliminating the
requirement of Statement 121 to allocate Goodwill to long-lived assets to be
tested for impairment and (2) provides for a probability-weighted cash flow
estimation approach to address situations in which either (a) alternative
courses of action to recover the carrying amount of a long-lived asset are under
consideration or (b) a range is estimated for the amount of possible future cash
flows. The provisions of Statement 144 are effective on a prospective basis
starting with the first quarter of 2002. Our long-lived assets do not presently
require an impairment provision under Statement 121 and we do not presently
believe that any of our long-lived assets would require an impairment provision
under the provisions of Statement 144. In addition, the provisions of
Statement 144 with respect to discontinued operations are prospective and, since
we have no remaining long-lived assets relating to discontinued operations, it
will not impact the reporting of our current discontinued operations.
Accordingly, we do not expect that the adoption of Statement 144 will have any
immediate effect on our consolidated financial position or results of
operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

Interest Rate Risk

Our objective in managing our exposure to interest rate changes is to limit
the impact of interest rate changes on earnings and cash flows. As of
December 30, 2001, our long-term debt, including current portion, aggregated
$313.7 million and consisted of $292.2 million of fixed-rate debt and $21.5
million of a variable-rate bank loan. The fair market value of our fixed-rate
debt will increase if interest rates decrease. We generally use interest rate
caps or interest rate swap agreements on a portion of our variable-rate debt to
limit our exposure to the effects of increases in short-term interest rates on
earnings and cash flows. Historically, the cap agreements were usually at
significantly higher than market interest rates prevailing at the time the cap
agreements were entered into and were intended to protect against very
significant increases in short-term interest rates. As of December 30, 2001 we
had no interest rate cap agreements outstanding. However, we do have an interest
rate swap agreement in connection with our variable-rate bank term loan as of
December 30, 2001. The swap agreement effectively establishes a fixed interest
rate on this variable-rate debt, but with an embedded written call option
whereby the swap agreement will no longer be in effect if, and for as long as,
the one-month London Interbank Offered Rate, which we refer to as LIBOR, is at
or above a specified rate which was 3% higher than the one-month LIBOR at the
time the swap agreement was entered into. This swap agreement, therefore, does
not fully protect us from exposure to significant increases in interest rates
due to the written call option.
39

In addition to our fixed-rate and variable-rate debt, our investment
portfolio includes debt securities that are subject to interest rate risk with
maturities which range from less than one year to 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 such changes on earnings and
cash flows with our expectations for long-term investment returns. Our primary
exposure to equity price risk relates to our investments in equity securities,
equity derivatives, securities sold with an obligation for us to purchase and
investment limited partnerships and similar investment entities. We have
established policies and procedures governing the type and relative magnitude of
investments. We have a management investment committee whose duty it is to
oversee our continuing compliance with the restrictions embodied in our
policies.

Foreign Currency Risk

Our objective in managing our exposure to foreign currency fluctuations is
to limit the impact of these fluctuations on earnings and cash flows. Our
primary exposure to foreign currency risk relates to our investments in certain
investment limited partnerships and similar investment entities that hold
foreign securities, including those of entities based in emerging market
countries and other countries which experience volatility in their capital and
lending markets. To a more limited extent, we have foreign currency exposure
when our investment managers buy or sell foreign currencies or financial
instruments denominated in foreign currencies for our account or the accounts of
investment limited partnerships and similar investment entities in which we have
invested. We monitor these exposures and periodically determine our need for the
use of strategies intended to lessen or limit our exposure to these
fluctuations. We also have a relatively limited amount of exposure to
(1) investments in foreign subsidiaries and (2) export revenues and related
receivables denominated in foreign currencies which are subject to foreign
currency fluctuations. Currently, our foreign subsidiary exposures primarily
relate to operations in Canada and our export revenue exposures primarily relate
to royalties in Canada and, prior to the Snapple Beverage Sale, related to sales
in Canada, the Caribbean and Europe. As a result of the Snapple Beverage Sale, a
portion of such foreign operations and such export sales are included as a
component of 'Total income from discontinued operations' in the accompanying
consolidated income statements. Foreign operations and foreign export revenues
of continuing operations for each of the years ended December 31, 2000 and
December 30, 2001 together represented only 4% and 3%, respectively, of our
total royalties and franchise fees, and an immediate 10% change in foreign
currency exchange rates versus the United States dollar from their levels at
December 31, 2000 and December 30, 2001 would not have a material effect on our
consolidated financial position or results of operations.

Overall Market Risk

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

40

We maintain investment portfolio holdings of various issuers, types and
maturities. As of December 31, 2000 and December 31, 2001, such investments
consisted of the following (in thousands):

Our cash equivalents are short-term, highly liquid investments with
maturities of three months or less when acquired and consist principally of
money market mutual funds, interest-bearing brokerage accounts, United States
government agency debt securities and commercial paper of high credit quality.
In 2001 our money market funds were primarily invested in United States
government Treasury securities. Our short-term investments included $244.1
million and $30.0 million as of December 31, 2000 and December 30, 2001,
respectively, of United States government agency debt securities with maturities
ranging from six to twelve months when acquired. Our cash equivalents and United
States government agency debt securities with maturities ranging from six to
twelve months when acquired are highly liquid investments and combined
constitute over 92% as of December 31, 2000 and 80% as of December 30, 2001 of
our total cash equivalents and short-term investments shown above.

At December 31, 2000 our investments are classified in the following general
types or categories (in thousands):

41

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

Our marketable securities are classified and accounted for either as
'available-for-sale' or 'trading' and are reported at fair market value with the
resulting net unrealized holding gains or losses, net of income taxes, reported
as a separate component of comprehensive income bypassing net income or included
as a component of net income, 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. Realized
gains and losses on investment limited partnerships and similar investment
entities and other non-current investments recorded at cost are reported as
investment income or loss in the period in which the securities are sold.
Investment limited partnerships and similar investment entities and other
non-current investments in which we have significant influence over the investee
are accounted for in accordance with the equity method of accounting under which
our results of operations include our share of the income or loss of such
investees. We review all of our investments in which we have unrealized losses
for any unrealized losses deemed to be other than temporary. We recognize an
investment loss currently for any such other than temporary loss with a
permanent reduction in the cost basis component of the investment. The cost of
investments reflected in the table above represents original cost less
(1) unrealized losses that were deemed to be other than temporary and
(2) distributions in excess of any equity in the income of the investee.

SENSITIVITY ANALYSIS

For purposes of this disclosure, market risk sensitive instruments are
divided into two categories: instruments entered into for trading purposes and
instruments entered into for purposes other than trading. Our measure of market
risk exposure represents an estimate of the potential change in fair value of
our financial instruments. Market risk exposure is presented for each class of
financial instruments held by us at December 31, 2000 and December 30, 2001 for
which an immediate adverse market movement represents a potential material
impact on our financial position or results of operations. We believe that the
rates of adverse market movements described below represent the hypothetical
loss to future earnings and do not represent the maximum possible loss nor any
expected actual loss, even under adverse conditions, because actual adverse
fluctuations would likely differ. In addition, since our investment portfolio is
subject to change based on our portfolio management strategy as well as market
conditions, these estimates are not necessarily indicative of the actual results
which may occur.

The following tables reflect the estimated effects on the market value of
our financial instruments as of December 31, 2000 and December 30, 2001 based
upon assumed immediate adverse effects as noted below (in thousands).

42

TRADING PURPOSES:

The debt securities included in the trading portfolio are entirely
investments in convertible bonds which primarily trade on the conversion feature
of the securities rather than the stated interest rate and, as such, there is no
material interest rate risk since a change in interest rates of one percentage
point would not have a material impact on our consolidated financial position or
results of operations. 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 sensitivity analysis of financial instruments held for trading purposes
assumes an instantaneous 10% decrease in the equity markets in which we are
invested from their levels at December 31, 2000 and December 30, 2001, with all
other variables held constant. For purposes of this analysis, our debt
securities, which are entirely convertible bonds, were assumed to primarily
trade based upon the conversion feature of the securities and be perfectly
correlated with the assumed equity index.

OTHER THAN TRADING PURPOSES:

The sensitivity analysis of financial instruments held at December 31, 2000
and December 30, 2001 for purposes of other than trading assumes an
instantaneous change in market interest rates of one percentage point and an
instantaneous 10% decrease in the equity markets in which we are invested, both
with all other variables held constant. For purposes of this analysis, our debt
investments are assumed to have average maturities as set forth below. Our cash
equivalents at December 31, 2000 were principally United States government
agency debt securities with maturities of three months or less when acquired and
are assumed to
43

have average maturities of 45 days. Our cash equivalents at December 30, 2001
are principally money market funds which are assumed to have no interest rate
risk since they maintain a stable value. Our restricted cash equivalents at
December 31, 2000 were invested in United States government agency debt
securities with a maturity of 90 days when acquired and are assumed to have an
average maturity of 90 days. Our restricted cash equivalents at December 30,
2001 were invested in a money market fund and are assumed to have no interest
rate risk since they maintain a stable value. Our available-for-sale United
States government agency debt securities at December 31, 2000 consisted of
several securities with maturities ranging from six to twelve months when
acquired and are assumed to have an average maturity of 290 days. Our
available-for-sale United States government agency debt securities at
December 30, 2001 consist of a single security with a maturity of two years when
acquired. Our available-for-sale corporate debt securities at December 31, 2000
principally consisted of long-term corporate bonds and are assumed to have an
average maturity of ten years. Our available-for-sale corporate debt securities
at December 30, 2001 consisted almost entirely of short-term commercial paper
and are assumed to have an average maturity of 180 days. Our available-for-sale
asset-backed securities, which were purchased during 2001, have expected
maturities ranging from one year to thirty years and are assumed to have an
average maturity of six and one-half years. Our available-for-sale debt mutual
fund in which we invested in 2001 has underlying investments with an average
duration of two years and, accordingly, is assumed to have an average maturity
of two years. The interest rate risk reflects, for each of these debt
investments, the impact on our results of operations. At the time these
securities mature and, assuming we reinvested in similar securities, the effect
of the interest rate risk of one percentage point above their levels at
December 31, 2000 and December 31, 2001 would continue beyond the maturities
assumed.

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

For investments in investment limited partnerships and similar investment
entities accounted for at cost included in 'Other investments' in the table
above, the decrease in the equity markets and the change in foreign currency
were assumed for this analysis to be other than temporary. Further, this
analysis assumed no market risk for other investments, other than investment
limited partnerships and similar investment entities and other non-current
investments which trade in public equity markets. The analysis also assumes an
instantaneous 10% change in the foreign currency exchange rates versus the
United States dollar from their levels at December 31, 2000 and December 30,
2001, with all other variables held constant. We also have a written call option
on our class A common stock effectively established in connection with the
assumption of our zero coupon convertible subordinated debentures due 2018 by
affiliates of Cadbury Schweppes plc in connection with the October 2000 sale of
our beverage businesses to Cadbury. Although these debentures were assumed by
Cadbury, they remain convertible into our class A common stock. The equity risk
presented with respect to this written call option represents the potential
impact of an instantaneous 10% increase in the price of our class A common stock
on the fair value of the written call option and on our financial position and
results of operations.

At December 31, 2000 we had an obligation to repurchase an aggregate of
1,999,207 shares of our former class B common stock which we repurchased in
August 2001. At December 31, 2000 that repurchase obligation of $43.8 million
was reflected as a separate line item between the liabilities and stockholders'
equity sections in the accompanying consolidated balance sheet with an equal
offsetting increase to stockholders' equity. Although this purchase was
negotiated in 1999 at a fixed price, any decrease in the equity market in which
our stock is traded would have had a negative impact on the fair value of the
recorded obligation. However, that same decrease would have had a corresponding
positive impact on the fair value of the offsetting amount included in
stockholders' equity. Accordingly, since any change in the equity markets would
have had an offsetting effect upon our financial position, no market risk was
assumed for this financial instrument.

44

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

45

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated balance sheets of Triarc
Companies, Inc. and subsidiaries (the 'Company') as of December 30, 2001 and
December 31, 2000, and the related consolidated income statements, statements of
stockholders' equity (deficit) and statements of cash flows for each of the
three years in the period ended December 30, 2001. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of December 30,
2001 and December 31, 2000 and the results of their operations and their cash
flows for each of the three years in the period ended December 30, 2001 in
conformity with accounting principles generally accepted in the United States of
America.

/s/ DELOITTE & TOUCHE LLP

New York, New York
March 22, 2002

46

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

See accompanying notes to consolidated financial statements.

47

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

See accompanying notes to consolidated financial statements.

48

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

49

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

50

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

See accompanying notes to consolidated financial statements.

51

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

52

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

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

As part of a contract entered into on August 19, 1999, the Company agreed to
repurchase 1,999,207 shares of its former class B common stock on or before
August 19, 2000 and 1,999,207 shares on or before August 19, 2001 for
$42,343,000 and $43,843,000, respectively. These purchases occurred on August
10, 2000 and August 10, 2001. The aggregate obligation for these purchases of
$86,186,000 and $43,843,000 as of January 2, 2000 and December 31, 2000,
respectively, was recorded by the Company as 'Forward purchase obligation for
common stock' with an equal offsetting reduction to the 'Common stock to be
acquired' component of 'Stockholders' Equity.' See Note 13 for further
disclosure of this transaction.

On January 19, 2000, in addition to a cash payment of $9,210,000 included in
'Capital expenditures,' the Company assumed an $18,000,000 secured promissory
note in connection with the acquisition of 280 Holdings, LLC, which owns an
airplane previously leased by the Company. Such $18,000,000 was reported as an
addition to 'Properties' with an offsetting increase in long-term debt,
including current portion. See Note 24 for further disclosure of this
transaction.

In connection with the October 25, 2000 sale of the Company's beverage
businesses and the related assumption by the purchaser of the Company's
convertible debt, the Company effectively established a written call option on
the Company's common stock relating to the conversion feature of such debt. The
fair value of the written call option of $1,476,000 as of October 25, 2000 was
recorded as a reduction of the gain on the sale of the beverage businesses
included in discontinued operations with an equal offsetting credit to 'Deferred
income and other liabilities.' The reduction in the fair value of the written
call option during the period October 26, 2000 to December 31, 2000 and for the
year ended December 30, 2001 was reported as a component of 'Other income, net.'
See Note 13 for further disclosure of this transaction.

53

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

In October 2001, the Company eliminated and effectively canceled the
previously authorized 25,000,000 shares of its former class B common stock, all
outstanding shares of which had been repurchased by the Company. As a result of
the effective cancellation of the 5,997,622 shares of the former class B common
stock repurchased, the Company recorded an entry within stockholders' equity
which reduced 'Common stock' by $600,000, 'Additional paid-in capital' by
$83,211,000, 'Retained earnings' by $43,325,000 and 'Common stock held in
treasury' by $127,136,000. See Note 13 for further disclosure of this
transaction.

See accompanying notes to consolidated financial statements.

54

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 30, 2001

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Triarc
Companies, Inc. ('Triarc' and, collectively with its subsidiaries, the
'Company') and its subsidiaries. The principal subsidiary of the Company,
wholly-owned as of December 30, 2001, is Triarc Acquisition, LLC ('Triarc
Acquisition'), formerly Arby's Acquisition, LLC, which owns 100% of Arby's, Inc.
('Arby's') which, in turn, indirectly owns 100% of Arby's Franchise Trust
('Arby's Trust'). The Company's wholly-owned subsidiaries at December 30, 2001
that are referred to herein also included National Propane Corporation
('National Propane'), SEPSCO, LLC ('SEPSCO'), Citrus Acquisition Corporation
which owns 100% of Adams Packing Association, Inc. ('Adams') and Triarc Consumer
Products Group, LLC ('TCPG') which owns 100% of RCAC, LLC, into which RC/Arby's
Corporation ('RC/Arby's') was merged. TCPG also owned (1) 100% (99.9% prior to
October 25, 2000) of Snapple Beverage Group, Inc. ('Snapple Beverage Group')
which owned 100% of Snapple Beverage Corp. ('Snapple'), Mistic Brands, Inc.
('Mistic') and Stewart's Beverages, Inc. ('Stewart's') and (2) 100% of Royal
Crown Company, Inc. ('Royal Crown'), prior to the October 25, 2000 sale of such
companies. These beverage businesses have been accounted for as discontinued
operations in 1999 and in 2000 through the date of sale. National Propane and
its former subsidiary, National Propane SGP, Inc., which was wholly owned by the
Company, owned a combined 42.7% interest in National Propane Partners, L.P. (the
'Propane Partnership') and a subpartnership prior to the July 19, 1999 sale of
substantially all of such interest. The propane business of the Propane
Partnership was accounted for as a discontinued operation in 1999 through the
date of sale. All significant intercompany balances and transactions have been
eliminated in consolidation. See Notes 3 and 20 for further disclosure of the
dispositions referred to above.

FISCAL YEAR

The Company reports on a fiscal year consisting of 52 or 53 weeks ending on
the Sunday closest to December 31 and each of its 1999, 2000 and 2001 fiscal
years contained 52 weeks. Such periods are referred to herein as (1) 'the year
ended January 2, 2000' or '1999,' which commenced on January 4, 1999 and ended
on January 2, 2000, (2) 'the year ended December 31, 2000' or '2000,' which
commenced on January 3, 2000 and ended on December 31, 2000 and (3) 'the year
ended December 30, 2001' or '2001,' which commenced on January 1, 2001 and ended
on December 30, 2001. December 31, 2000 and December 30, 2001 are referred to
herein as 'Year-End 2000' and 'Year-End 2001,' respectively.

CASH EQUIVALENTS

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

INVESTMENTS

Short-Term Investments

Short-term investments include marketable debt and equity securities with
readily determinable fair values and other short-term investments, including
investments in limited partnerships and similar investment entities, which are
not readily marketable. The Company's marketable securities are classified and
accounted for either as 'available-for-sale' or 'trading' and are reported at
fair market value with the resulting net unrealized holding gains or losses, net
of income taxes, reported as a separate component of comprehensive income
bypassing net income or included as a component of net income, respectively. The
cost or the amount reclassified out of accumulated other comprehensive income
into earnings of securities sold for all marketable
55

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

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

Non-Current Investments

The Company's non-current investments consist of Equity Investments which
are accounted for in accordance with the Equity Method and Cost Investments
which are accounted for at cost. The excess, if any, of the carrying value of
the Company's non-current Equity Investments over the underlying equity in net
assets (the 'Excess Carrying Value') of each investee at the time of their
acquisition was amortized to equity in earnings or losses of investees included
in 'Other income, net' (see Note 19) on a straight-line basis over 15 years,
until those Equity Investments had stockholders' deficits (see Note 8).

Effective with the first quarter of its year ending December 29, 2002 (the
'2002 First Quarter'), the Company will adopt Statement of Financial Accounting
Standards ('SFAS') No. 142 ('SFAS 142'), 'Goodwill and Other Intangible Assets.'
In accordance therewith, the Excess Carrying Value, if any, will no longer be
amortized.

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

Securities Sold With an Obligation to Purchase

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

All Investments

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

Gain on Issuance of Investee Stock

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

PROPERTIES AND DEPRECIATION AND AMORTIZATION

Properties are stated at cost less accumulated depreciation and
amortization. Depreciation of transportation and office equipment is computed on
the straight-line basis using the estimated useful lives of 3 to 15 years.
Leasehold improvements are amortized over the shorter of their estimated useful
lives or the terms of the respective leases.

56

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

AMORTIZATION OF INTANGIBLES

Costs in excess of net assets of acquired companies ('Goodwill') were
amortized on the straight-line basis over 15 to 40 years effective through the
year ended December 30, 2001. Other intangible assets are being amortized on the
straight-line basis with trademarks over 15 years, computer software costs over
3 years and distribution rights over 15 years. A non-compete agreement, which
became fully amortized during 2001, was amortized over 5 years. Deferred
financing costs and original issue debt discount are being amortized as interest
expense over the lives of the respective debt using the interest rate method.

Effective with the 2002 First Quarter, under SFAS 142 Goodwill and other
identified intangible assets that have indefinite useful lives will no longer be
amortized and intangible assets with finite useful lives will continue to be
amortized. Accordingly, the Company will no longer amortize Goodwill commencing
with its 2002 First Quarter. During 2001 such Goodwill amortization amounted to
$842,000. Further, the Company has determined that all of its other intangible
assets have finite useful lives and will continue to be amortized.

IMPAIRMENTS

Goodwill

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

Effective with the 2002 First Quarter, the Company will adopt SFAS 142. In
accordance therewith, the amount of impairment, if any, in unamortized Goodwill
will be measured by the excess, if any, of the carrying amount of the
unamortized Goodwill over its implied fair value.

Long-Lived Assets

The Company reviews its long-lived assets, including identifiable
intangibles, for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. If such review
indicates an asset may not be recoverable, the impairment loss is recognized for
the excess of the carrying value over the fair value of an asset to be held and
used or over the fair value less cost to sell of an asset to be disposed.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company's derivatives consist of (1) the conversion component of
short-term investments in corporate convertible debt securities which are
accounted for as trading securities, (2) put and call options on equity and
corporate debt securities which are accounted for as trading securities, (3) an
interest rate swap agreement in connection with a secured bank term loan and
(4) a written call option on Triarc's common stock with physical settlement. In
addition, prior to August 10, 2001 the Company's derivatives included a forward
purchase obligation for Triarc's common stock with cash settlement (see
Note 13). The conversion component of corporate convertible debt securities, put
and call options on equity and corporate debt securities, the interest rate swap
agreement and the call option on Triarc's common stock with physical settlement
are recorded at fair value with changes in fair value recorded in the Company's
results of operations. The forward purchase obligation for Triarc's common stock
with cash settlement was recorded at the cash redemption amount. See Note 10 for
further disclosure of the Company's derivative financial instruments.
57

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

STOCK-BASED COMPENSATION

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

TREASURY STOCK

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

COSTS OF BUSINESS ACQUISITIONS

The Company defers any costs incurred relating to the pursuit of business
acquisitions while the potential acquisition process is ongoing. Whenever the
Company decides it will no longer pursue a potential acquisition any related
deferred costs are written off at that time.

FOREIGN CURRENCY TRANSLATION

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

INCOME TAXES

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

REVENUE RECOGNITION

Franchise fees are recognized as revenue when a franchised restaurant is
opened since all material services and conditions related to the franchise fee
have been substantially performed by the Company upon the restaurant opening.
Franchise fees for multiple area development agreements represent the aggregate
of the franchise fees for the number of restaurants in the area being developed
and are recognized as revenue when each restaurant is opened in the same manner
as franchise fees for individual restaurants. Franchise commitment fee deposits
are forfeited and recognized as revenue upon the termination of the related
commitments to open new franchised restaurants. Royalties are based on a
percentage of restaurant sales of the franchised store and are recognized as
earned.
58

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

RECLASSIFICATIONS

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

(2) SIGNIFICANT RISKS AND UNCERTAINTIES

NATURE OF OPERATIONS

The Company franchises Arby's'r' quick service restaurants representing the
largest restaurant franchising system specializing in slow-roasted roast beef
sandwiches. Arby's also offers an extensive menu of chicken, turkey, ham and
submarine sandwiches, side dishes and salads including its Market Fresh'TM'
sandwiches. Some Arby's restaurants are multi-branded with the Company's T.J.
Cinnamons'r' and/or Pasta Connection product lines. The Company's franchised
restaurants are principally throughout the United States and, to a much lesser
extent, Canada. Information concerning the number of Arby's restaurants is as
follows:

USE OF ESTIMATES

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

SIGNIFICANT ESTIMATES

The Company's significant estimates which are susceptible to change in the
near term relate to (1) the amount of the post-closing adjustment to be
arbitrated in connection with the Snapple Beverage Sale (see Note 3),
(2) provisions for the resolution of income tax contingencies subject to future
examinations of the Company's Federal and state income tax returns by the
Internal Revenue Service ('IRS') or state taxing authorities, including
remaining provisions included in 'Net current liabilities relating to
discontinued operations,' (see Note 12), (3) provisions for the resolution of
legal and environmental matters (see Note 25), (4) the valuation of investments
which are not publicly traded (see Note 11) and (5) provisions for unrealized
losses on investments deemed to be other than temporary (see Note 17). The
Company's estimates of each of these items historically have been adequate.
However, due to uncertainties inherent in the estimation process, it is
reasonably possible that the actual resolution of any of these items could vary
significantly from the estimate and, accordingly, there can be no assurance that
the estimates may not materially change in the near term.

CERTAIN RISK CONCENTRATIONS

The Company believes its vulnerability to risk concentrations in its cash
equivalents and investments is mitigated by (1) the Company's policies
restricting the eligibility, credit quality and concentration limits for its
placements in cash equivalents, (2) the diversification of its investments and
(3) to the extent the cash equivalents and investments are held in brokerage
accounts, insurance from the Securities Investor Protection Corporation up to
$500,000 per account as well as supplemental private insurance coverage
maintained by the brokerage firms covering substantially all of the Company's
accounts. The Company has one significant franchisee which accounted for 21%,
20% and 19% of consolidated revenues, investment income and other
59

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

income in 1999, 2000 and 2001, respectively, the loss of which would have a
material adverse impact on the Company's business. In February 2002, another
franchisee which accounted for 6% of consolidated revenues, investment income
and other income in 2001 and its parent company filed for financial
restructuring under Chapter 11 of the United States bankruptcy code principally,
on a collective basis, in order to separate the franchisee's ongoing Arby's
business from various unrelated holding company liabilities of the parent
company. The franchisee expects that all but one of its 240 Arby's restaurants
will continue to operate without interruption during the restructuring and that
it will emerge successfully from the restructuring. The Company, therefore, does
not currently anticipate any material adverse impact on its restaurant
franchising business. The Company's restaurant franchise operations could also
be adversely affected by changing consumer preferences resulting from health or
safety concerns with respect to the consumption of beef. The Company believes
that its vulnerability to risk concentrations related to significant vendors and
sources of its raw materials for its franchisees is not significant. The Company
also believes that its vulnerability to risk concentrations related to
geographical concentration is minimized since the Company's franchisees
generally operate throughout the United States with minimal foreign exposure.

(3) BUSINESS ACQUISITIONS AND DISPOSITIONS

Sale of Beverage Businesses

On October 25, 2000, the Company sold (the 'Snapple Beverage Sale') Snapple
Beverage Group and Royal Crown to affiliates of Cadbury Schweppes plc
('Cadbury'). Snapple Beverage Group represented the operations of the Company's
former premium beverage business and Royal Crown represented the operations of
the Company's former soft drink concentrate business. The consideration paid to
the Company consisted of (1) cash, which is subject to further post-closing
adjustments as described below, and (2) the assumption by Cadbury of debt and
related accrued interest. The assumed debt and accrued interest consisted of
(1) $300,000,000 of 10 1/4% senior subordinated notes due 2009 (the 'Senior
Notes') co-issued by TCPG and Snapple Beverage Group, (2) $119,130,000, net of
unamortized original issue discount of $240,870,000, of Triarc's zero coupon
convertible subordinated debentures due 2018 (the 'Debentures') and
(3) $5,982,000 of accrued interest. The Snapple Beverage Sale resulted in an
after-tax gain in 2000 recorded in the 'Gain on disposal' component of 'Total
income from discontinued operations' in the accompanying consolidated income
statement (see Note 20) of $480,946,000, subject to any additional post-closing
purchase price adjustment as described below, and net of $19,134,000 of related
fees and expenses and $226,765,000 of income tax provision. In 2001, the Company
recorded an additional gain of $43,450,000 resulting from adjustments to the
estimated gain recognized in 2000 from the Snapple Beverage Sale. These net
adjustments in 2001 principally result from the realization of $200,000,000 of
proceeds from Cadbury for our electing (the 'Tax Election') during 2001 to treat
certain portions of the Snapple Beverage Sale as an asset sale in lieu of a
stock sale under the provisions of Section 338(h)(10) of the United States
Internal Revenue Code, net of estimated income taxes, partially offset by
additional accruals relating to the Snapple Beverage Sale.

In addition, the Snapple Beverage Sale purchase and sale agreement provides
for a post-closing adjustment, the amount of which is in dispute. Cadbury has
stated that it believes that it is entitled to receive from the Company a
post-closing adjustment of $27,605,000 and the Company, on the other hand, has
stated that it believes that it is entitled to receive from Cadbury a
post-closing adjustment of $5,586,000, in each case plus interest at 7.19% from
October 25, 2000. In accordance with the terms of the purchase and sale
agreement, the Company and Cadbury have selected an arbitrator for the purpose
of determining the amount of the post-closing adjustment. However, the
arbitration process was just commencing as of December 30, 2001. The Company
currently expects such post-closing adjustment process to be completed in the
second half of 2002.

In connection with the closing of the Snapple Beverage Sale, in 2000 the
Company repaid the (1) outstanding principal of $436,433,000, (2) related
accrued interest of $1,119,000, (3) related prepayment penalties of $5,509,000
and (4) fees of $57,000 under a senior bank credit facility (the 'Beverage
Credit

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

Facility') maintained by Snapple, Mistic, Stewart's, Royal Crown and RC/Arby's,
the then parent company of Royal Crown.

Sale of Propane Business

On July 19, 1999 the Company sold (the 'Propane Partnership Sale') 41.7% of
its remaining 42.7% interest in the Propane Partnership and a subpartnership,
National Propane, L.P. (the 'Operating Partnership'), to Columbia Energy Group
('Columbia'), retaining a 1% limited partner interest in AmeriGas Eagle Propane,
L.P. ('AmeriGas Eagle'), which was formerly National Propane, L.P. and Columbia
Propane, L.P. ('Columbia Propane'). The consideration paid to the Company
consisted of (1) cash of $2,866,000 and (2) the forgiveness of $15,816,000 of a
note payable to the Operating Partnership by Triarc (the 'Partnership Note')
with a remaining principal balance of $30,700,000 immediately prior to the
Propane Partnership Sale. The $2,866,000 of cash consisted of $2,101,000 of
consideration for the Company's sold interests in the Propane Partnership and
the Operating Partnership and $1,033,000 representing the reimbursement of
interest expense incurred and paid by the Company on the Partnership Note, both
partially offset by $268,000 of amounts equivalent to interest on advances made
by Columbia in a tender offer for the then publicly traded common units
representing the 57.3% interest not owned by the Company subsequent to the
Propane Partnership IPO (see below). The Propane Partnership Sale resulted in an
after-tax gain in 1999, recorded in the 'Gain on disposal' component of 'Total
income from discontinued operations' in the accompanying consolidated income
statement (see Note 20), of $11,204,000, net of $3,477,000 of related fees and
expenses and $6,282,000 of income tax provision. In connection with the closing
of the Propane Partnership Sale, the Company repaid the remaining principal
balance of the Partnership Note of $14,884,000 and the Propane Partnership
merged into Columbia Propane.

Prior to the Propane Partnership Sale, the Company owned a 42.7% combined
interest in the Propane Partnership and the Operating Partnership; the remaining
57.3% interest the Company did not own was sold in an initial public offering
(the 'Propane Partnership IPO') consummated by the Propane Partnership in 1996.
The Propane Partnership IPO resulted in a 1996 pretax gain to the Company of
$83,852,000 with an additional $15,539,000 of gain deferred at the date of the
Propane Partnership IPO (see Note 20 for discussion of the subsequent
recognition of this deferred gain).

In connection with the Propane Partnership Sale, National Propane, whose
principal asset following the Propane Partnership Sale is a $30,000,000
intercompany note receivable from Triarc, retained a 1% special limited partner
interest in AmeriGas Eagle and agreed that while it remains a special limited
partner of AmeriGas Eagle, National Propane would indemnify ('the
Indemnification') the owner of AmeriGas Eagle for any payments the owner makes
related to the owner's obligations under certain of the debt of AmeriGas Eagle,
aggregating approximately $138,000,000 as of December 30, 2001, if AmeriGas
Eagle is unable to repay or refinance such debt, but only after recourse by the
purchaser to the assets of AmeriGas Eagle. The Company believes it is unlikely
that it will be called upon to make any payments under the Indemnification. In
August 2001, AmeriGas Propane L.P. ('AmeriGas Propane') purchased all of the
interests in AmeriGas Eagle that were held by Columbia. National Propane still
retains its special limited partner interest, although such interest has been
diluted to less than 1% as a result of capital contributions by AmeriGas
Propane. Either National Propane or AmeriGas Propane may require AmeriGas Eagle
to repurchase the special limited partner interest of less than 1%. However, the
Company believes it is unlikely that either party would require repurchase prior
to 2009 as either AmeriGas Propane would owe the Company tax indemnification
payments or the Company would accelerate payment of deferred taxes associated
with the gain on the Propane Partnership Sale.

(4) INCOME (LOSS) PER SHARE

Basic income (loss) per share for 1999, 2000 and 2001 has been computed by
dividing the income or loss by the weighted average number of common shares
outstanding of 26,015,000, 23,232,000 and 21,532,000, respectively. Diluted
income (loss) per share for 1999 and 2001 has been computed by dividing the
income or
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DECEMBER 30, 2001

loss by an aggregate 26,943,000 and 22,692,000 shares, respectively. Diluted
income (loss) per share for 2000 is the same as the basic income (loss) per
share since the Company reported a loss from continuing operations and,
therefore, the effect of all potentially dilutive securities on the loss per
share from continuing operations would have been antidilutive. The shares used
for diluted income (loss) per share consist of the weighted average number of
common shares outstanding and potential common shares reflecting (1) the effect
of dilutive stock options of 818,000 and 1,160,000 shares for 1999 and 2001,
respectively, computed using the treasury stock method and (2) the effect of a
dilutive forward purchase obligation for common stock (the 'Forward Purchase
Obligation') (see Note 13) of 110,000 shares for 1999. The shares for diluted
income (loss) per share exclude any effect of (1) the assumed conversion of the
Debentures through the date of their assumption by Cadbury and (2) a written
call option on the Company's common stock, which commenced following the
assumption of the Debentures by Cadbury (see Note 13), since the effect of each
of these on income (loss) per share from continuing operations would have been
antidilutive. In addition, the shares for diluted income per share for 2001
exclude any effect of the Forward Purchase Obligation through its final
settlement on August 10, 2001 since the effect on income per share from
continuing operations would have been antidilutive.

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

SHORT-TERM INVESTMENTS

The Company's short-term investments are stated at fair market value, except
for other short-term investments as set forth in the table below that are stated
either at cost, as reduced by any unrealized losses deemed to be other than
temporary, or at equity. Cost, as set forth in the table below, represents
amortized cost as reduced by any unrealized losses deemed to be other than
temporary (see Note 17) for United States government debt securities and
corporate debt securities and cost as reduced by any unrealized losses deemed to
be other than temporary for other short-term investments. The cost, gross
unrealized holding gains and losses included in accumulated other comprehensive
income (the 'Unrealized Holding Gains and Losses'), fair value and carrying
value, as appropriate, of the Company's short-term investments at December 31,
2000 and December 30, 2001 were as follows (in thousands):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

The maturities of United States government agency debt securities, corporate
debt securities and asset-backed securities at December 30, 2001 which are
classified as available-for-sale, at fair value which is equal to their carrying
value, are as follows (in thousands):

Within one year............................................. $12,241
After one year through five years........................... 42,363
After five years through ten years.......................... 2,001
After ten years............................................. 2,954
Mortgage-backed securities (classified within asset-backed
securities above) not due at a single maturity date....... 4,790
-------
$64,349
-------
-------

Proceeds from sales and maturities of available-for-sale marketable
securities were $72,552,000, $82,392,000 and $288,584,000 in 1999, 2000 and
2001, respectively. Gross realized gains and gross realized losses on those
sales are included in 'Investment income, net' in the accompanying consolidated
income statements (see Note 17) and are as follows (in thousands):

The net change in the unrealized holding gains on available-for-sale
securities and the equity in an unrealized gain on a retained interest of MCM
Capital Group, Inc., an Equity Investment included in non-
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

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

The change in the net unrealized gain or loss on trading securities resulted
in income of $2,143,000 in 1999 and losses of $4,848,000 and $2,033,000 in 2000
and 2001, respectively, and are included in 'Investment income, net' in the
accompanying consolidated income statements (see Note 17).

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

SECURITIES SOLD WITH AN OBLIGATION TO PURCHASE

The Company also enters into short sales of debt and equity securities as
part of its portfolio management strategy. The Company's short sales are
commitments to sell such debt and equity securities not owned at the time of
sale that require purchase of such debt and equity securities at a future date.
Such short sales resulted in proceeds of $53,281,000, $42,922,000 and
$30,449,000 in 1999, 2000 and 2001, respectively. The change in the net
unrealized losses on securities sold with an obligation to purchase resulted in
a loss of $1,834,000 in 1999 and income of $4,527,000 and $2,180,000 in 2000 and
2001, respectively, and are included in 'Investment income, net' (see Note 17).
The fair value and the carrying value of the liability for securities sold with
an obligation to purchase was $14,129,000 and $17,384,000 at December 31, 2000
and December 30, 2001, respectively, and is included in 'Accrued expenses' (see
Note 6).

(6) BALANCE SHEET DETAIL

CASH

Cash includes $15,700,000 of highly liquid United States government debt
securities in a custodial account held at a financial institution which is
subject to set off should the Company or certain other parties not perform under
certain debt guaranties (see Note 24). Cash also includes $9,421,000 of cash and
a money market mutual fund pledged as collateral for insured securitization
notes (see Note 9).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

RECEIVABLES

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

- ---------

(a) Includes current portion of a note of $1,667,000 and related accrued
interest of $123,000 receivable from the Chairman and Chief Executive
Officer and the President and Chief Operating Officer of the Company (the
'Executives') as of December 30, 2001 and interest accrued on co-investment
notes receivable (see Note 24).

The following is an analysis of the allowance for doubtful accounts, all of
which relates to trade receivables (in thousands):

Certain trade receivables with an aggregate net book value of $7,765,000 as
of December 30, 2001 are pledged as collateral for insured securitization notes
(see Note 9).

PROPERTIES

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

Certain transportation equipment with an aggregate net book value of
$53,370,000 as of December 30, 2001 is pledged as collateral in connection with
a secured bank term loan and a secured promissory note (see Note 9).

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DECEMBER 30, 2001

UNAMORTIZED COSTS IN EXCESS OF NET ASSETS OF ACQUIRED COMPANIES

The following is a summary of the components of unamortized costs in excess
of net assets of acquired companies (in thousands):

OTHER INTANGIBLE ASSETS

The following is a summary of the components of other intangible assets (in
thousands):

- ---------

(a) The non-compete agreement became fully amortized during 2001.

DEFERRED COSTS AND OTHER ASSETS

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

ACCOUNTS PAYABLE

Accounts payable includes $7,429,000 as of December 29, 2000 payable to two
officers of the Company in connection with the repurchase of shares of the
Company's class A common stock owned by the officers in connection with the
exercise of employee stock options (see Note 13).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

ACCRUED EXPENSES

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

DEFERRED INCOME AND OTHER LIABILITIES

Deferred income and other liabilities includes $823,000 and $30,000 as of
December 31, 2000 and December 30, 2001, respectively, for the fair value of an
effective written call option on the Company's class A common stock (see
Note 13).

(7) RESTRICTED CASH EQUIVALENTS

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

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DECEMBER 30, 2001

(8) INVESTMENTS

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

MCM Capital Group, Inc. ('MCM') and 280 KPE Holdings, LLC ('280 KPE'),
accounted for under the Equity Method, had deficits in equity at December 30,
2001 and, accordingly, there was no underlying equity of these investments at
that date. The aggregate carrying value of the Company's investments in other
limited partnerships and limited liability companies accounted for under the
Equity Method was less than its aggregate interest in the underlying equity of
such investments at December 30, 2001 due to the Company's recognition of
unrealized losses deemed to be other than temporary with respect to one of those
investments of $296,000 during 2001 included in 'Investment income, net' (see
Note 17) in the accompanying consolidated income statement.

The Company's consolidated equity in the earnings (losses) of investees
accounted for under the Equity Method and classified as non-current and included
as a component of 'Other income, net' (see Note 19) in the accompanying
consolidated income statements consisted of the following components (in
thousands):

The equity in the earnings (losses) of investees included in 'Other income,
net' in the table above excludes the equity in the income or loss of 280 KPE and
EBT Holding Company, LLC ('EBT'), investment limited liability companies, which
is included in 'Investment income, net' (see Note 17) in the accompanying
consolidated income statements.

During 1999 and 2000 the Company's investment in MCM exceeded its interest
in the underlying equity in the net assets of MCM. The Company recorded
amortization of such excess of $113,000 and $107,000 in 1999 and 2000,
respectively, which is included in the equity in losses of MCM. After the
write-down of the

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Company's investment in MCM at December 31, 2000 (see below), the Company's
underlying equity in MCM's net assets exceeded its investment in MCM until MCM
had a stockholders' deficit.

The Company and certain of its present and former officers have invested in
MCM with the Company owning 8.4% and the present and former officers, including
entities controlled by them, owning 19.3% (see Note 24) as of December 30, 2001.
MCM is a financial services company specializing in the collection,
restructuring, resale and securitization of receivable portfolios acquired at
deep discounts. On July 14, 1999 MCM consummated an initial public offering (the
'MCM IPO') of 2,250,000 shares of its common stock resulting in a decrease in
the Company's percentage ownership interest to its 8.4% as of December 30, 2001
from 12.2%. The Company recorded a non-cash gain as a result of the MCM IPO of
$1,188,000 reported as 'Gain on sale of businesses' in the accompanying
consolidated income statement in 1999.

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

The Company and certain of its officers and employees have co-invested in
EBT with the Company owning 18.6% and the officers and employees owning 56.4%
(see Note 24) as of December 30, 2001. EBT has as its only operating asset an
investment in the non-cumulative preferred stock of EBondTrade.com, Inc.
('Ebondtrade'), an online municipal bond trading business. The Company accounts
for its investment in EBT in accordance with the Equity Method; however, EBT's
investment in Ebondtrade is accounted for in accordance with the Cost Method.
Accordingly, the Company had no equity in the earnings or losses of EBT in 1999
and had equity in the earnings of EBT of only $9,000 and $8,000 in 2000 and
2001, respectively. EBT also had a note receivable from Ebondtrade dated
January 5, 2000 which was collected in November 2001.

The Company and certain of its officers have co-invested in 280 KPE with the
Company owning 25.3% and the officers owning 74.7% (see Note 24) as of
December 30, 2001. 280 KPE's only asset is a 38.6% interest in Clarion KPE
Investors, LLC ('Clarion') which owns the non-cumulative preferred stock of KPE,
Inc. ('KPE') and has invested in a co-investment fund (the 'Co-Investment Fund')
in other entities with KPE. Prior to March 2000 and since November 1999, the
Company had owned the entire 38.6% interest in Clarion directly. In March 2000
the Company effectively sold to certain of its officers 74.7% of its interest in
Clarion. The Company accounts or accounted for its investment in 280 KPE and
formerly its direct investment in Clarion in accordance with the Equity Method.
280 KPE also accounts for its investment in Clarion in accordance with the
Equity Method. However, the only operating assets of Clarion are its investments
in KPE and the Co-Investment Fund, both of which are accounted for in accordance
with the Cost Method, although Clarion incurs certain minimal administrative
expenses. Accordingly, the Company's equity in losses of Clarion from
November 1999 to March 2000 and of 280 KPE from March 2000 through December 30,
2001 amounted to $21,000, $33,000 and none in 1999, 2000 and in 2001,
respectively. KPE and the underlying investments in the Co-Investment Fund
encountered operating, cash flow and liquidity difficulties and became worthless
in 2001. During 2001, the Company reduced its investment in 280 KPE by $270,000
representing (1) the Company's release from liability for its future investment
obligations to 280 KPE since 280 KPE is terminating its operations and (2) the
returns of funds not invested by the Co-Investment Fund. Accordingly, the
Company recognized an unrealized loss of $435,000 in 2001 deemed to be other
than temporary.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

SUMMARY UNAUDITED FINANCIAL INFORMATION OF EQUITY INVESTMENTS

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

Presented below is summary unaudited information as to assets, liabilities,
equity and results of operations for the Company's Equity Investments, including
those included in other short-term investments (see Note 5), as of December 31,
2000 and for the years ended December 31, 1999 and 2000, the year ends of such
investments. Summary unaudited information is not presented as of and for the
year ended December 30, 2001 because the Company's Equity Investments are no
longer significant to the Company's consolidated total assets or consolidated
income from continuing operations before income taxes in 2001. The Company's
Equity Investments include MCM, a financial services company as described above,
entities that developed and operated golf courses and several investment limited
partnerships and limited liability companies, including EBT and 280 KPE, which
generally invest in diversified portfolios of securities. As such, the summary
balance sheet and statement of operations information presented below combines
assets, liabilities, revenues and expenses which vary greatly in nature and are
taken from certain balance sheets which do not distinguish between current and
long-term assets and liabilities. In addition, certain entities included in 1999
are not included in 2000 since they were either sold or are no longer accounted
for under the equity method. Revenues relate to the operations of golf courses
as well as operating revenues of the financial services company. Investment
income, net relates to the investment entities. The summary unaudited
information is as follows (in thousands):

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(9) LONG-TERM DEBT

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

Aggregate annual maturities of long-term debt were as follows as of
December 30, 2001 (in thousands):

- ---------

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

The remaining principal amount of the Securitization Notes of $273,990,000
as of December 30, 2001 is due no later than December 2020. However, based
on current projections and assuming the adequacy of available funds, as
defined under the indenture (the 'Indenture') pursuant to which the
Securitization Notes were issued, the Company currently estimates it will
repay $19,187,000 in 2002 with increasing annual payments to $37,377,000 in
2011 in accordance with a targeted principal payment schedule. The table of
annual maturities of long-term debt above reflects these targeted payments.
Available funds to Arby's Trust to pay principal on the Securitization
Notes are franchise fees, royalties and other payments received by Arby's
Trust pursuant to substantially all of the Company's franchising agreements
(the 'Franchising Agreements') after payment of (1) operating expenses of
Arby's Trust, (2) servicing fees
(footnotes continued on next page)

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DECEMBER 30, 2001

(footnotes continued from previous page)

payable to Arby's and one of its subsidiaries to cover the costs of
administering the Franchising Agreements, (3) insurance premiums related to
insuring the payment of principal and interest on the Securitization Notes
and (4) interest on the Securitization Notes. Any remaining cash (the
'Remaining Cash') is available for distribution by Arby's Trust to its
parent (see discussion below) as long as Arby's Trust meets the minimum
debt service coverage ratio, as defined under the Indenture. Such
requirement is currently 1.3:1 subject to increases to a maximum of 1.7:1,
based upon 75% of the highest previously-reported ratio. The actual debt
service coverage ratio is based on the preceding four calendar months of
activity and was 1:6:1 as of December 30, 2001. The Securitization Notes
are subject to mandatory redemption to the extent of the Remaining Cash if
the debt service coverage ratio is less than 1.2:1 but greater than 1.1:1,
until such time as the ratio exceeds 1.2:1 for six consecutive months. If
the debt service coverage ratio falls below or equal to 1.1:1, then all
funds in the cash equivalent reserve account ($30,567,000 as of
December 30, 2001 included in 'Restricted cash equivalents' in the
accompanying consolidated balance sheet -- see Note 7) and all Remaining
Cash must be used for mandatory redemption of the Securitization Notes
until they have been repaid in full. The Securitization Notes are
redeemable by Arby's Trust at an amount equal to the total of remaining
principal, accrued interest and the excess, if any, of the discounted value
of the remaining principal and interest payments over the outstanding
principal amount of the Securitization Notes.

Obligations under the Securitization Notes are insured by a financial
guarantee company and are collateralized by assets of Arby's Trust with an
aggregate net book value of $47,753,000 as of December 30, 2001 consisting
of cash and cash equivalents of $9,421,000, the cash equivalent reserve
account of $30,567,000 referred to above and royalty receivables of
$7,765,000.

The Indenture contains various covenants with respect to Arby's Trust which
(1) require periodic financial reporting, (2) require meeting the debt
service coverage ratio test and (3) restrict, among other matters, (a) the
incurrence of indebtedness, (b) asset dispositions and (c) the payment of
distributions. Arby's Trust was in compliance with all of such covenants as
of December 30, 2001. As of December 30, 2001 Arby's Trust had no amounts
available for the payment of distributions 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 payments to Triarc or, to the extent of any
excess, make distributions to Triarc through Triarc Acquisition. However,
$838,000 became available for the payment of such distributions by Arby's
Trust as of December 31, 2001.

(b) In July 2001 the Company entered into a $22,590,000 secured bank term loan
(the 'Bank Term Loan'). The remaining principal amount of the Bank Term
Loan of $21,515,000 as of December 30, 2001 is due $3,227,000 in each year
through 2007 and $2,153,000 in 2008. The Bank Term Loan bears interest at
variable rates (3.99% as of December 30, 2001), determined at the Company's
option, at the prime rate or the one-month London Interbank Offered Rate
('LIBOR') plus 1.85%, reset monthly. The Company also entered into an
interest rate swap agreement (the 'Swap Agreement') on the Bank Term Loan
which commenced August 1, 2001 whereby it effectively pays a fixed rate of
6.8% as long as the one-month LIBOR is less than 6.5%, but with an embedded
written call option whereby the Swap Agreement will no longer be in effect
if, and for as long as, the one-month LIBOR is at or above 6.5% (see
Note 10). Obligations under the Bank Term Loan are secured by an airplane
with a net book value of $23,407,000 as of December 30, 2001.

(c) The Company assumed an $18,000,000 secured promissory note (the 'Promissory
Note') in connection with its acquisition of 280 Holdings, LLC (see
Note 24) on January 19, 2000. The remaining principal amount of the
Promissory Note of $15,021,000 as of December 30, 2001 is due $1,701,000 in
2002 with increasing annual payments to $7,204,000 in 2006. The Promissory
Note is secured by an airplane with a net book value of $29,963,000 as of
December 30, 2001.
(footnotes continued on next page)

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DECEMBER 30, 2001

(footnotes continued from previous page)

(d) The Company remains liable for $3,230,000 of mortgage and equipment notes
payable to FFCA Mortgage Corporation as of December 30, 2001, of which it
is a co-obligor for notes aggregating $487,000 as of December 30, 2001. In
addition, Triarc has guaranteed obligations under an aggregate $54,682,000
of mortgage and equipment notes which were assumed by affiliates of RTM,
Inc. ('RTM'), the largest franchisee in the Arby's system, in connection
with the May 1997 sale of all of the 355 then company-owned restaurants
(the 'Restaurant Sale'), of which approximately $47,000,000 and $44,000,000
were outstanding as of December 31, 2000 and December 30, 2001,
respectively, assuming RTM has made all scheduled payments through such
dates.

(10) DERIVATIVE INSTRUMENTS

The Company's derivative instruments, excluding those that may be settled in
its own stock and, accordingly, not affected by SFAS No. 133, 'Accounting for
Derivative Instruments and Hedging Activities,' during 2001 are (1) the
conversion component of short-term investments in convertible debt securities
which are accounted for as trading securities and had an aggregate carrying
value of $2,665,000 as of December 30, 2001, (2) put and call options on equity
and corporate debt securities which are accounted for as trading securities and
(3) the Swap Agreement entered into during 2001 (see Note 9 and below). The
Company enters into convertible debt and put and call derivatives as part of its
overall investment portfolio strategy. This strategy includes balancing the
relative proportion of its investments in cash equivalents with their relative
stability and risk-minimized returns with opportunities to avail the Company of
higher, but more risk-inherent, returns associated with other investments,
including convertible debt securities and put and call options. The Swap
Agreement effectively establishes a fixed interest rate on the variable-rate
Bank Term Loan, but with an embedded written call option whereby the Swap
Agreement will no longer be in effect if, and for as long as, the one-month
LIBOR is at or above a specified rate. On the initial date of the Swap
Agreement, the fair market value of the Swap Agreement and the embedded written
call option netted to zero but, as interest rates either increase or decrease,
the fair market values of the Swap Agreement and written call option have moved
and will continue to move in the same direction but not necessarily by the same
amount. As of December 30, 2001, the net fair market value of the Swap Agreement
and embedded written call option had changed to a payable position of $651,000,
resulting in a $651,000 charge included in 'Interest expense' in the
accompanying consolidated income statement for 2001 with a corresponding
liability in 'Deferred income and other liabilities' in the accompanying
consolidated balance sheet as of December 30, 2001.

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DECEMBER 30, 2001

(11) FAIR VALUE OF FINANCIAL INSTRUMENTS

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

The carrying amounts of cash and cash equivalents and restricted cash
equivalents approximated fair value due to the short-term maturities of the cash
equivalents. The fair values of short-term investments including securities sold
with an obligation to purchase but excluding Equity Investments are based on
quoted market prices or statements of account received from investment managers
or from the investees which are principally based on quoted market or
brokered/dealer prices and are set forth in Note 5. The fair values of the
Company's non-current investments for which it is practicable to estimate fair
value, consisting of those investments held in deferred compensation trusts and
certain other non-current Cost Investments, are almost entirely based on
statements of account received from the investment managers or the investees
which are principally based on quoted market or brokered/dealer prices. To the
extent that some of these investments, including the underlying investments in
investment limited partnerships, do not have available quoted market or
brokered/dealer prices, we rely on third-party appraisals or valuations
performed by the investment managers or equity investees in valuing those
securities. The Company also has non-marketable Cost Investments in equity
securities for which it is not practicable to estimate fair value because the
investments are non-marketable and are in start-up enterprises. The fair values
of the Securitization Notes, the Promissory Note and the mortgage and equipment
notes are determined by discounting the future scheduled payments using an
interest rate

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DECEMBER 30, 2001

assuming the same original issuance spread over a current Treasury bond yield
for securities with similar durations. The fair value of the Bank Term Loan
approximated the carrying value due to the frequent reset, on a monthly basis,
of the floating interest rate. The carrying amount of the deferred compensation
payable to related parties is equal to the fair value of the underlying
investments held by the Company in the related trusts which may be used to
satisfy such payable in full. The carrying amount of the Swap Agreement is equal
to its fair value which was based on a quote provided by the bank counterparty.
The carrying amount of the written call option on Triarc's common stock is equal
to its fair value which was determined by independent third-party consultants
using the Black-Scholes option pricing model. The Black-Scholes option pricing
model has limitations on its effectiveness including that it was developed for
use in estimating the fair value of traded options which have no vesting
restrictions and are fully transferable and that the model requires the use of
highly subjective assumptions including expected stock price volatility. Because
the written call option on Triarc's common stock has characteristics
significantly different from those of traded options and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
the opinion of the Company, the existing models do not necessarily provide a
reliable single measure of the fair value of the written call option. The
carrying amount of the Company's Forward Purchase Obligation for its common
stock approximated fair value as of December 31, 2000 since it was of a
relatively short duration, having been repaid in August 2001. Since the carrying
amount of accounts receivable and payable and accrued expenses approximated fair
value due to the related allowance for doubtful accounts receivable and the
short-term maturities of accounts payable and accrued expenses, the presentation
of such items is not required in the table above.

(12) INCOME TAXES

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

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

The decrease in the net deferred income tax liability from $60,263,000 at
December 31, 2000 to $58,111,000 at December 30, 2001, or a decrease of
$2,152,000, exceeds the 2001 benefit for deferred income taxes of $1,054,000.
The difference of $1,098,000 is principally due to the recognition of deferred
tax benefit resulting from the net decrease in the unrealized gains on
available-for-sale securities (see Note 5) included as a component of
comprehensive income.

The difference between the reported provision for income taxes and the
provision that would result from applying the 35% Federal statutory rate to the
income from continuing operations before income taxes is reconciled as follows
(in thousands):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

During 1999, the IRS completed its examination of the Company's Federal
income tax returns for the years ended April 30, 1989 through April 30, 1992
(the '1989 through 1992 Examinations') and the Company reached a final
settlement with the IRS relating thereto. During 1999, the IRS also tentatively
completed its examination of the Company's Federal income tax returns for the
year ended April 30, 1993 and eight-month transition period ended December 31,
1993 (the '1993 Examinations') and during 2000 the Company reached a final
settlement with the IRS relating thereto. The liabilities for such settlements,
including interest thereon, had principally been provided for in years prior to
1999. As a result of the then completion of the 1989 through 1992 Examinations
and the tentative completion of the 1993 Examinations in 1999, the Company
determined that it had excess income tax reserves and interest accruals relating
to continuing operations of $5,127,000 and $3,052,000, respectively, and,
accordingly, released such amounts as reductions of the 'Provision for income
taxes' and 'Interest expense,' respectively, in 1999. The Company's Federal
income tax returns subsequent to the 1993 Examinations are not currently under
examination by the IRS. However, should taxes or interest, if any, be assessed
as the result of any Federal or state examinations through the October 25, 2000
date of the Snapple Beverage Sale, Cadbury has agreed to pay up to $4,984,000 of
the resulting income tax or associated interest, if any, relating to the
operations of Snapple Beverage Group and Royal Crown.

(13) STOCKHOLDERS' EQUITY

Class A Common Stock

The Company's class A common stock (the 'Class A Common Stock') has one vote
per share. There were no changes in the 100,000,000 shares authorized and the
29,550,663 shares issued of Class A Common Stock throughout 1999, 2000 and 2001.

Class B Common Stock

In October 2001, the Company authorized 100,000,000 shares of a new class B
common stock (the 'Class B Common Stock'), none of which have been issued
through December 30, 2001, and eliminated and effectively canceled the
previously authorized 25,000,000 shares of its former non-voting class B common
stock (the 'Former Class B Common Stock'). The voting rights of the Class B
Common Stock will not be determined until an issuance thereof. All outstanding
shares of the Former Class B Common Stock, which were held by affiliates of
Victor Posner (the 'Posner Entities'), had been repurchased by the Company, as
disclosed in more detail below under 'Treasury Stock.' Victor Posner was a
former Chairman and Chief Executive Officer of Triarc prior to May 1993. As a
result of the effective cancellation of the 5,997,622 shares of the Former
Class B Common Stock, the Company recorded an entry within stockholders' equity
which reduced 'Common stock' by $600,000, 'Additional paid-in capital' by
$83,211,000, 'Retained earnings' by $43,325,000 and 'Common stock held in
treasury' by $127,136,000.

Preferred Stock

The Company increased the number of authorized preferred shares to
100,000,000 in October 2001 from 25,000,000, none of which were issued
throughout 1999, 2000 and 2001. The authorized preferred stock previously
included 5,982,866 shares designated as redeemable preferred stock until such
shares were retired on August 20, 2001. As a result, all of the authorized
100,000,000 shares of preferred stock are undesignated.

Treasury Stock

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

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- ---------

(a) In August 1999 Triarc entered into a contract to repurchase in three
separate transactions the 5,997,622 shares of the Former Class B Common
Stock then held by the Posner Entities for an aggregate of $127,050,000.
Triarc completed the purchases of 1,999,208, 1,999,207 and 1,999,207 shares
of Former Class B Common Stock (the 'Class B Repurchases') on August 19,
1999, August 10, 2000 and August 10, 2001, respectively. The August 19,
1999 Class B Repurchase was for an aggregate of $40,864,000 at a price of
$20.44 per share, which was the fair market value of the Class A Common
Stock at the time the transaction was negotiated. The August 10, 2000 and
August 10, 2001 Class B Repurchases were for an aggregate of $42,343,000
and $43,843,000, respectively, at negotiated prices of $21.18 and $21.93
per share, respectively, plus expenses of $30,000 for the August 10, 2000
repurchase. The obligation of $43,843,000 outstanding as of December 31,
2000 for the then unpurchased Former Class B Common Stock was recorded by
the Company as 'Forward purchase obligation for common stock' with an equal
offsetting reduction to the 'Common stock to be acquired' component of
'Stockholders' equity.'

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

(c) On April 27, 1999 the Company repurchased 3,805,015 shares of its Class A
Common Stock for $18.25 per share in connection with a tender offer (the
'Tender Offer') for an aggregate cost of $70,051,000, including fees and
expenses of $609,000.

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

Written Call Option

Although Cadbury assumed the Debentures and the Company was released as an
obligor, the Debentures remain convertible into shares of the Company's Class A
Common Stock. The Debentures are convertible at a conversion rate of 9.465
shares per $1,000 principal amount at maturity, which represents a conversion
price of $37.70 per share of Class A Common Stock as of December 30, 2001. The
conversion price increases through

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TRIARC COMPANIES, INC. AND SUBSIDIARIES
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DECEMBER 30, 2001

2018 at an annual rate of 6.5% compounded semiannually. Should a Debenture
holder elect to convert a Debenture into the Company's Class A Common Stock,
Cadbury may, but is not required to, cause the Company to issue such shares,
effectively establishing a written call option on the Company's Class A Common
Stock (the 'Written Call Option'). Should the Company be required to issue Class
A Common Stock upon any conversion, the Company would be compensated for the
accreted value of each of the Debentures converted which, as of December 30,
2001, would have been $37.70 for each share issued upon any conversion.
Accordingly, the Written Call Option would be settled by physical delivery of
the Company's Class A Common Stock. As of December 30, 2001, the conversion of
all of the Debentures, assuming that subsequent to October 25, 2000 none have
been redeemed by Cadbury and no Debenture holder has converted without the
Company issuing the related shares, would result in the issuance of 3,407,000
shares of Class A Common Stock. The Debentures are redeemable by Cadbury
commencing February 9, 2003 and Cadbury has agreed to use their best efforts to
so redeem the Debentures. The fair value of the Written Call Option of
$1,476,000 as of October 25, 2000 was recorded as a reduction of the 'Gain on
disposal' component of 'Total income from discontinued operations' in the
accompanying consolidated income statement (see Note 20) in the year ended
December 31, 2000. The fair value of the Written Call Option of $823,000 and
$30,000 as of December 31, 2000 and December 30, 2001, respectively, was
reported as a liability included in 'Deferred income and other liabilities' in
the accompanying consolidated balance sheets with the reduction in the fair
value of the Written Call Option of $653,000 from October 25, 2000 to
December 31, 2000 and $793,000 during 2001 reported as a component of 'Other
income, net' (see Note 19). The fair value of the Written Call Option was
determined by independent third-party consultants using the Black-Scholes option
pricing model.

Stock-Based Compensation

The Company maintains or maintained several equity plans (the 'Equity
Plans') which collectively provide or provided for the grant of stock options to
certain officers, key employees, consultants and non-employee directors and
shares of Class A Common Stock pursuant to automatic grants in lieu of annual
retainer or meeting attendance fees to non-employee directors. There remain
1,406,457 shares available for future grants under the Equity Plans as of
December 30, 2001.

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

(footnotes on next page)

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TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

(footnotes from previous page)

(a) The weighted average grant date fair values of stock options granted under
the Equity Plans during 1999, 2000 and 2001, all of which were granted at
exercise prices equal to the market price of the stock on the grant date,
were $7.92, $11.37 and $8.12, respectively.

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

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

The following table sets forth information relating to stock options
outstanding and stock options exercisable at December 30, 2001 under the Equity
Plans:

Stock options under the Equity Plans generally have maximum terms of ten
years and vest ratably over periods not exceeding five years from date of grant.
However, an aggregate 2,725,000 stock options outstanding at December 30, 2001
granted on April 21, 1994 to the Executives at an exercise price of $20.125 per
option vest on October 21, 2003.

Stock options under the Equity Plans are generally granted at the fair
market value of the Class A Common Stock at the date of grant. However, options
granted in March 1997 included 1,331,000 options issued at a weighted average
option price of $12.70 which was below the $14.82 weighted average fair market
value of the Class A Common Stock on the respective dates of grant (based on the
closing price on such dates), resulting in aggregate unearned compensation,
representing the initial intrinsic value, of $2,823,000 reported in the
'Unearned compensation' component of 'Stockholders' equity.' Such unearned
compensation was being amortized as compensation expense over the applicable
vesting period of one to three years through March 2000. During 1999 and 2000,
$388,000 and $61,000, respectively, of compensation was credited to 'Unearned
compensation,' of which $298,000 and $49,000 relating to employees of Triarc and
Arby's was charged to 'General and administrative' during 1999 and 2000,
respectively, and $90,000 and $12,000, relating to employees of Snapple Beverage
Group, Royal Crown and, in 1999, the Propane Partnership was reported in the
'Loss from operations' component of 'Total income from discontinued operations'
during 1999 and 2000, respectively.

During December 2000, certain of the Company's officers and a director
exercised stock options under the Equity Plans and the Company repurchased the
1,045,834 shares of its Class A Common Stock received by these individuals upon
such exercises on the respective exercise dates. Since such shares of Class A
Common Stock were repurchased within six months after exercise of the related
stock options, the Company recognized

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TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 30, 2001

aggregate compensation cost of $10,422,000 representing the excess of the market
prices on the dates of purchase by the Company over the exercise prices of the
underlying stock options, net of any amortization related to such stock options
issued below market. Such amount was charged to 'General and administrative'
with an offsetting credit to 'Additional paid-in capital.' Shares repurchased
from two officers of the Company on December 29, 2000 for an aggregate cost of
$7,429,000 were not settled until January 2, and 3, 2001 and, accordingly, such
cost was included in 'Accounts payable' in the accompanying consolidated balance
sheet as of December 31, 2000.

During October 2000, as disclosed above, certain employees of Snapple
Beverage Group and Royal Crown who held stock options for Triarc's Class A
Common Stock surrendered 856,169 stock options prior to the Snapple Beverage
Sale. Such option holders received an amount initially equal to the excess of
$23.75 per option over the respective exercise prices of the underlying stock
option, or an aggregate $6,159,000 of cash, in this settlement. Such cash
payment, net of $274,000 previously amortized for stock options issued below
market, or $5,885,000, has been recorded in the 'Gain on disposal' component of
'Total income from discontinued operations' in the accompanying consolidated
income statement for the year ended December 31, 2000. Further, Triarc agreed to
pay cash compensation to certain of these individuals for each option
surrendered equal to the excess of the average of the five highest daily closing
prices of Triarc's Class A Common Stock during the 90-day period following the
October 25, 2000 date of the Snapple Beverage Sale over the $23.75 price used in
the settlement, which aggregated $599,000, and was paid in January 2001. Since
each of the five highest daily closing prices occurred during 2000, the Company
recorded the liability for the full $599,000 in 2000 with an equal offsetting
charge to 'General and administrative' expenses.

During 1999, 2000 and 2001, there were certain other modifications to the
vesting or exercise periods of stock options relating to certain terminated
employees of the Company. Such modifications resulted in aggregate compensation
of $410,000, $491,000 and $462,000 during 1999, 2000 and 2001, respectively,
which was credited to 'Additional paid-in-capital' and of which (1) $64,000,
$465,000 and $462,000 relating to employees of Triarc was charged to 'General
and administrative' during 1999, 2000 and 2001, respectively, and (2) $346,000
relating to employees of the Propane Partnership during 1999 and $26,000
relating to employees of Snapple Beverage Group and Royal Crown during 2000 was
reported in the 'Loss from operations' component of 'Total income from
discontinued operations.'

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

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TRIARC COMPANIES, INC. AND SUBSIDIARIES
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DECEMBER 30, 2001

- ---------

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

Stock options under the Snapple Beverage Plan were generally granted at the
fair value of Snapple Beverage Common Stock at the date of grant as determined
by independent appraisals. However, all 2,501 options granted in 2000 were
issued at option prices below the fair market value of Snapple Beverage Common
Stock on the date of grant resulting in aggregate compensation expense of
$1,157,000, of which $412,000 relating to an employee of Triarc was included in
'General and administrative' and $745,000 relating to employees of Snapple
Beverage Group was reported in the 'Loss from operations' component of 'Total
income from discontinued operations.' The weighted average grant date fair value
of the options granted during 2000 was $462.53. The weighted average grant date
fair value under the Black-Scholes option pricing model of the options granted
during 1999 was $222.69 for the 144,675 reissued options (see below) and $102.75
for the 4,850 newly granted options. Stock options under the Snapple Beverage
Plan had maximum terms of ten years and generally vested or would have vested
ratably over periods approximating three years. The options reissued in 1999
vested ratably on July 1 of 1999, 2000 and 2001.

The Snapple Beverage Plan provided for an equitable adjustment of options in
the event of a recapitalization or similar event. Effective as of May 17, 1999
the exercise prices of the Snapple Beverage Group options then outstanding that
were granted prior to January 4, 1999 were equitably adjusted for the effects of
net distributions of $91,342,000, principally consisting of transfers of cash
and deferred tax assets from Snapple Beverage Group to Triarc, partially offset
by the effect of the contribution of Stewart's to Snapple Beverage Group
effective May 17, 1999. The exercise prices of the options granted at $147.30
per share were equitably adjusted to $107.05 per share and the options granted
at $191.00 per share were equitably adjusted to $138.83 per share and a cash
payment (the 'Cash Payment') of $51.34 and $39.40 per share, respectively, was
due from the Company to the option holder following the exercise of the stock
options and the occurrence of certain other events (collectively, the 'Cash
Payment Events'). The Company accounted for the equitable adjustment of the
Snapple Beverage Group stock options in accordance with the intrinsic value
method. In accordance therewith, the equitable adjustment, exclusive of the Cash
Payment, was considered a modification to the terms of existing stock options.
For purposes of disclosure, including the determination of the pro forma
compensation expense set forth below, the equitable adjustment is reflected in
accordance with the fair value

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DECEMBER 30, 2001

method whereby it results in the deemed cancellation of existing options and the
reissuance of new options. Compensation expense for the Cash Payment was
recognized ratably over the vesting period of the stock options through the date
such options were no longer the responsibility of the Company in connection with
the Snapple Beverage Sale. Such compensation expense with respect to option
holders who were employees of Snapple Beverage Group was charged to the 'Loss
from operations' component of 'Total income from discontinued operations' and,
upon the release of the Company's obligation for such Cash Payment, the release
of the related accruals was reported in the 'Gain on disposal' component of
'Total income from discontinued operations.' See Note 16 for disclosure of the
effect of the Cash Payment for option holders who were employees of Triarc. No
compensation expense was recognized for the changes in the exercise prices of
the outstanding options because such modifications to the options did not create
a new measurement date under accounting principles generally accepted in the
United States of America.

As disclosed in Note 1, the Company accounts for stock options in accordance
with the intrinsic value method and, accordingly, has not recognized any
compensation expense for those stock options granted at option prices equal to
the fair market value of the Class A Common Stock or the Snapple Beverage Common
Stock, as applicable, at the respective dates of grant. The pro forma net income
and basic and diluted income per share set forth below adjusts such data as set
forth in the accompanying consolidated income statements to reflect for the
Equity Plans and, through October 25, 2000, the Snapple Beverage Plan (1)
compensation expense for all 1995 through 2001 stock option grants, including
those granted at below market option prices, and options reissued in 1999 as a
result of equitable adjustments of option prices under the Snapple Beverage
Plan, based on the fair value method, (2) the reduction in compensation expense
recorded in accordance with the intrinsic value method and (3) the income tax
effects thereof. In 2000 the reduction in compensation expense recorded in
accordance with the intrinsic value method exceeded the compensation expense
based on the fair value method due to the inclusion in expense in accordance
with the intrinsic value method of (a) $10,422,000 for the Company's repurchase
of Class A Common Stock from certain officers and a director representing the
excess of the market prices on the dates of purchase by the Company over the
exercise prices of the underlying stock options and (b) $5,885,000 related to
certain employees of Snapple Beverage Group and Royal Crown who surrendered
856,169 stock options for Triarc's Class A Common Stock prior to the Snapple
Beverage Sale for cash, at prices in excess of the exercise prices of the
underlying stock options, both as disclosed in more detail above. Such pro forma
net income and basic and diluted income per share are as follows (in thousands
except per share data):

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

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

(14) CORPORATE RESTRUCTURING CREDITS

In years prior to 1999 the Company provided for corporate restructuring
charges associated with the May 1997 Restaurant Sale. During 1999 the Company
reversed $303,000 of remaining excess accruals to 'General and administrative'
in the accompanying 1999 consolidated income statement. The components of
corporate restructuring credits in 1999 and an analysis of related activity
during 1999 in the corporate restructuring accrual, all of which represent cash
obligations, are as follows (in thousands):

- ---------

(a) The corporate restructuring accrual as of January 4, 1999 resulted from the
remaining balances from provisions in 1996 and 1997 and consisted
principally of (1) employee severance and related termination costs
associated with restructuring the restaurant business in connection with
the Restaurant Sale and (2) employee relocation costs, which were expensed
as incurred, associated with the Restaurant Sale. The severance and
termination costs resulted from the termination in 1997 of 54 employees
principally in finance and accounting, owned restaurant operations,
marketing and human resources as well as the president and chief executive
officer of Arby's.

(b) The 1999 corporate restructuring credits resulted from relatively
insignificant changes to the original estimates used in determining the
related provisions for the employee relocation costs and employee severance
and related termination cost components of the original corporate
restructuring charges in 1996 and 1997 which aggregated $5,597,000.

(15) CAPITAL MARKET TRANSACTION RELATED COMPENSATION

The capital market transaction related compensation results from incentive
compensation directly related to the consummation of the Snapple Beverage Sale
in October 2000 and the issuance of the Securitization Notes in November 2000
consisting of (1) an aggregate of $22,500,000 to the Executives which was
invested in two deferred compensation trusts (the 'Deferred Compensation
Trusts') for their benefit in January 2001 (see Note

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DECEMBER 30, 2001

24) and included in 'Deferred compensation payable to related parties' in the
accompanying consolidated balance sheets and (2) $3,510,000 paid to other
officers and employees in January 2001.

(16) CAPITAL STRUCTURE REORGANIZATION RELATED CHARGE

As disclosed in Note 13, the Company was required to make Cash Payments for
Snapple Beverage Group stock options granted prior to January 4, 1999 and
outstanding as of May 17, 1999 upon the Cash Payment Events. The Cash Payment
obligation relating to option holders who were employees of Triarc was
recognized as 'Capital structure reorganization related charges' of $2,126,000
and $306,000 in 1999 and 2000, respectively. The 1999 charge represents the
vested portion as of January 2, 2000 of the then aggregate maximum $2,592,000
cash payments to be recognized over the full vesting period. The 2000 charge
represents the additional vested portion during 2000 through the date of the
release of the Company's obligation for such Cash Payment as a result of the
Snapple Beverage Sale. Since the obligation for the Snapple Beverage Group stock
options were no longer the responsibility of the Company but remained the
responsibility of Snapple Beverage Group under Cadbury's ownership, the then
remaining accrual for these cash payments of $2,433,000 was released and
reported in the 'Gain on disposal' component of 'Total income from discontinued
operations' in the accompanying consolidated income statement for 2000 (see Note
20).

(17) INVESTMENT INCOME, NET

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

- ---------

(a) The Company recognized unrealized losses on certain marketable securities
classified as available-for-sale, certain investments in limited
partnerships, including 280 KPE, MCM and certain non-marketable preferred
stocks deemed to be other than temporary and reduced the cost basis of
those investments. Such losses were deemed to be other than temporary due
to declines in the underlying economics of specific marketable equity and
debt securities, MCM, 280 KPE and certain non-marketable preferred stocks
or volatility in capital and lending markets.

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(18) GAIN ON SALE OF BUSINESSES

Gain on sale of businesses in 1999 and 2001 consisted of the following (in
thousands):

- ---------

(a) Reflects the release of sales tax accruals no longer necessary due to the
expiration of statutory audit periods in connection with the Restaurant
Sale that were originally provided as a component of the loss on sale of
restaurants in 1997.

(19) OTHER INCOME, NET

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

- ---------

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

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

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(20) DISCONTINUED OPERATIONS

On October 25, 2000, the Company consummated the Snapple Beverage Sale (see
Note 3) and, as set forth in Note 1, these beverage businesses have been
accounted for as discontinued operations (the 'Beverage Discontinued
Operations') in 1999 and in 2000 through the date of sale. In addition, on
July 19, 1999, the Company consummated the Propane Partnership Sale (see
Note 3) and, as set forth in Note 1, the propane business has been accounted for
as a discontinued operation in 1999 through the date of sale. Further, prior to
1998 the Company sold the stock or the principal assets of the companies
comprising SEPSCO's utility and municipal services and refrigeration business
segments (the 'SEPSCO Discontinued Operations') which have been accounted for as
discontinued operations and of which there remain certain obligations not
transferred to the buyers of the discontinued businesses to be liquidated and
incidental properties of the refrigeration business to be sold.

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

The after-tax gain on disposal of discontinued operations resulted from the
following (in thousands):

The recognition of deferred gain (the 'Propane Deferred Gain') from the 1996
Propane Partnership IPO (see Note 3) occurred as the Company received cash
distributions from the Propane Partnership despite the Company's equity in the
losses of the Propane Partnership operations. The Company's investment in the
Propane Partnership was fully offset by the Propane Deferred Gain from the 1996
Propane Partnership IPO subsequent thereto through the 1999 Propane Partnership
Sale. Accordingly, as the Company received such cash distributions and the
Propane Partnership incurred losses, the Company recognized the aggregate amount
of the cash distributions plus the Company's equity in the losses of the Propane
Partnership such that the Company's investment remained fully offset by the
Propane Deferred Gain.

The additional gain during 1999 on disposal of the SEPSCO Discontinued
Operations represents reductions of previously recognized losses on disposal of
the SEPSCO Discontinued Operations recognized before 1999 as a result of the
resolution of all remaining tax issues relating to the IRS examination of
SEPSCO's tax returns for the years 1989 through 1993 and the eight-month
transition period ended December 31, 1993 (see Note 12). In connection
therewith, the Company recognized a $2,727,000 reduction of its previously
recognized estimated disposal losses principally representing the receipt by
SEPSCO of an income tax refund and the release by SEPSCO of income tax reserves
no longer deemed required based on the results of such IRS examination.

The income or loss from discontinued operations relating to Snapple Beverage
Group and Royal Crown through their date of sale of October 25, 2000 and the
Company's 42.7% interest in the Propane Partnership

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through its date of sale of July 19, 1999 reflecting the Propane Partnership
under the Equity Method, consisted of the following (in thousands):

The Company's discontinued operations had a provision for income taxes
despite a loss before income taxes for the years 1999 and 2000 principally due
to (1) the amortization of non-deductible unamortized costs in excess of net
assets of acquired companies and (2) the differing impact of the mix of pretax
loss or income among the combined entities since the Company files state income
tax returns on an individual company basis.

Net current liabilities relating to discontinued operations as of
December 31, 2000 and December 30, 2001 consisted of the following (in
thousands):

Accrued expenses, including accrued income taxes, of the Beverage
Discontinued Operations as of December 30, 2001 represent remaining liabilities
payable with respect to the Beverage Discontinued Operations. The $226,765,000
provision for income taxes for 2000 included in the 'Gain on disposal' component
of 'Total income from discontinued operations' consists of a current provision
of $235,529,000 included in 'Accrued expenses, including accrued income taxes,
of the Beverage Discontinued Operations' above, less the reversal of $8,764,000
of deferred income tax liabilities which are no longer required as a result of
the Snapple Beverage Sale. The net liabilities of SEPSCO Discontinued Operations
principally represents liabilities that have not been liquidated as of December
30, 2001. The Company expects that the liquidation of the remaining liabilities
associated with both the Beverage Discontinued Operations and the SEPSCO
Discontinued Operations as of December 30, 2001 will not have any material
adverse impact on its financial position or results of operations.

Prior to the year ended January 3, 1999, the Company recorded charges to
post-acquisition transition, integration and changes to business strategies
attributed to the acquisition of Snapple and Stewart's consisting of cash
obligations aggregating $16,029,000 and non-cash charges aggregating
$15,786,000. The components of the remaining reserves related to such charges as
of January 4, 1999 and an analysis of related activity during 1999, all of which
represent non-cash reserves, are as follows (in thousands):

(footnote on next page)

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(footnote from previous page)

(a) In the transition following the acquisition of Snapple, the Company decided
that, in order to improve its relationships with customers, it would not
actively seek to collect certain past due balances, disputed amounts or
amounts that were not sufficiently supportable and provided an additional
reserve for doubtful accounts. The adjustment in 1999 represented a credit
related to post-acquisition transition, integration and changes to business
strategies included in loss before income taxes in the summary of the
income from discontinued operations set forth above and resulted from
changes in the estimated amount of the additional Snapple reserve for
doubtful accounts from the amount originally provided by the Company.

(21) EXTRAORDINARY CHARGES

The 1999 extraordinary charges resulted from the early extinguishment of
(1) $284,333,000 of outstanding obligations under a former credit facility of
Snapple Beverage Group and (2) $275,000,000 of 9 3/4% senior notes due 2000 of
RC/Arby's. The 2000 extraordinary charges resulted from the early assumption or
extinguishment, as applicable, of (1) the Senior Notes co-issued by TCPG and
Snapple Beverage Group, (2) the Beverage Credit Facility maintained by Snapple,
Mistic, Stewart's, Royal Crown and RC/Arby's and (3) the Triarc Debentures. The
components of such extraordinary charges were as follows (in thousands):

(22) RETIREMENT BENEFIT PLANS

The Company maintains a 401(k) defined contribution plan (the 'Plan')
covering all of the Company's employees who meet certain minimum requirements
and elect to participate. Under the provisions of the Plan, employees may
contribute various percentages of their compensation ranging up to a maximum of
15% (20% effective January 1, 2002), subject to certain limitations. The Plan
provides for Company matching contributions at 50% of employee contributions up
to the first 6% thereof effective September 1, 1999 and up to the first 5%
thereof prior thereto. In addition, the Plan provides for discretionary annual
Company profit-sharing contributions to be determined by the employer regardless
of whether the employee otherwise elects to participate in the Plan. In
connection with both of these employer contributions, the Company provided as
compensation expense $757,000, $924,000 and $1,004,000 in 1999, 2000 and 2001,
respectively.

The Company maintains defined benefit plans for eligible employees through
December 31, 1988 of certain subsidiaries, benefits under which were frozen in
1992. The net periodic pension cost for 1999, 2000 and 2001, as well as the
accrued pension cost as of December 31, 2000 and December 30, 2001, were
insignificant. As of December 31, 2000 and December 30, 2001 the actuarial
present value of accumulated benefits exceeded plan assets and accrued pension
liabilities resulting in a minimum pension liability of $320,000 and $233,000,
respectively. The Company has no unrecognized prior service cost. Accordingly,
the unrecognized pension loss in 2000 and recovery in 2001, less related
deferred income taxes, has been reported as 'Unrecognized Pension Loss' and
'Recovery of Unrecognized Pension Loss,' respectively, as components of

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comprehensive income reported in the accompanying consolidated statements of
stockholders' equity (deficit) consisting of the following (in thousands):

(23) LEASE COMMITMENTS

The Company leases facilities and transportation and office equipment under
operating lease agreements that do not provide for any contingent rental
charges. Rental expense under operating leases consisted of the following
components (in thousands):

- ---------

(a) Rental expense decreased in 2000 from 1999 since as of January 19, 2000 the
Company, through its ownership of 280 Holdings, LLC, owns the airplane that
had previously been leased (see Note 24).

In connection with the Restaurant Sale, substantially all operating and
capitalized lease obligations associated with the sold restaurants were assumed
by RTM, although the Company remains contingently liable if the future lease
payments (which could potentially aggregate a maximum of approximately
$73,000,000 as of December 30, 2001 assuming RTM has made all scheduled payments
through that date under such lease obligations) are not made by RTM. The
Company's future rental payments, excluding the lease obligations assumed by
RTM, and sublease rental receipts for noncancelable leases having an initial
lease term in excess of one year as of December 30, 2001 are as follows (in
thousands):

(24) TRANSACTIONS WITH RELATED PARTIES

The Company leases a helicopter from a subsidiary of Triangle Aircraft
Services Corporation ('TASCO'), a company owned by the Executives, under a dry
lease which, subject to renewal, expires in September 2002. Annual rent for the
helicopter was $369,000 from January 19, 2000 through September 30, 2000, and
increased to $382,000 and $392,000 as of October 1, 2000 and October 1, 2001,
respectively, as a result of annual cost of living adjustments (the 'COLA').
Until January 19, 2000 the Company leased an airplane in addition to the
helicopter from TASCO or a subsidiary of TASCO pursuant to a dry lease for base
annual rent for both aircraft, adjusted to $3,360,000 as of January 4, 1999,
plus annual COLA. On January 19, 2000 the

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Company acquired the airplane through its acquisition of 280 Holdings, LLC, a
then subsidiary of TASCO which owned the airplane, for $27,210,000 consisting of
cash of $9,210,000 and the assumption of the $18,000,000 Promissory Note. The
purchase price was based on independent appraisals and was approved by the
Company's audit committee and board of directors. Pursuant to the dry lease for
both aircraft through January 19, 2000 and the dry lease for the helicopter
subsequent to January 19, 2000, the Company pays the operating expenses,
including repairs and maintenance, of the aircraft directly to third parties.
During 1999 the Company incurred $2,207,000 of repairs and maintenance for the
aircraft, principally relating to the airplane for required inspections and
overhaul of the engines and landing gear in accordance with Federal Aviation
Administration standards, and $7,278,000 of capitalized improvements to the
airplane. Rental expense attributable to the lease of the airplane until
January 19, 2000, the lease of the helicopter and amortization of a $2,500,000
option entered into in 1997 relating to the lease amounted to $3,850,000,
$574,000 and $385,000 for 1999, 2000 and 2001, respectively. On January 19, 2000
the Company was reimbursed $1,200,000 by TASCO representing the return of
substantially all of the remaining unamortized amount paid for this option.

On June 25, 1997 a class action lawsuit was filed asserting, among other
things, claims relating to certain awards of compensation to the Executives in
1994 through 1997. The lawsuit was settled effective March 1, 2001 whereby
(1) the case was dismissed with prejudice, (2) the Company received an
interest-bearing note (the 'Executives' Note') from the Executives, in the
aggregate amount of $5,000,000, receivable in three equal installments due
March 31, 2001, 2002 and 2003 and (3) as set forth in Note 13, the Executives
surrendered an aggregate of 775,000 stock options awarded to them in 1994. The
Company recorded the $5,000,000 during 2001 as a reduction of compensation
expense included in 'General and administrative' in the accompanying
consolidated income statement for the year ended December 30, 2001, since the
settlement effectively represents an adjustment of prior period compensation
expense. The Executives' Note bore interest initially at 6% per annum. The
interest rate was adjusted on April 2, 2001 to 4.92% per annum and will be
adjusted on April 1, 2002 by the difference, if any, between the one-month LIBOR
on such date and the one-month LIBOR on March 30, 2000 of 6.1325%. In accordance
therewith, the Company recorded interest income on the Executives' Note of
$148,000 for the year ended December 30, 2001. During 2001 the Company
collected the first installment of $1,666,000 on the Executives' Note and
$25,000 of related interest. The current portion and non-current portion of
the Executives' Notes, each of $1,667,000, are included in 'Receivables' and
'Deferred costs and other assets', respectively, in the accompanying
consolidated balance sheet as of December 30, 2001.

As set forth in Note 15, in January 2001 the Company established the
Deferred Compensation Trusts. Thereafter, deferred compensation expense is
recognized for any increase in the fair value of the investments in the Deferred
Compensation Trusts resulting in deferred compensation expense of $1,856,000
included in 'General and administrative' in the accompanying consolidated income
statement for 2001. Under accounting principles generally accepted in the United
States of America, the Company was only able to recognize investment income of
$171,000 on the investments in the Deferred Compensation Trusts resulting in a
$1,685,000 difference in the recognition of deferred compensation expense and
the related investment income. This difference will reverse in future periods as
either (1) the investments in the Deferred Compensation Trusts are sold and
previously unrealized gains are recognized without any offsetting increase in
compensation expense or (2) the fair values of the investments in the Deferred
Compensation Trusts decrease resulting in the recognition of a reduction of
deferred compensation expense without any offsetting losses recognized in
investment income. The related obligation is reported as 'Deferred compensation
payable to related parties' and the investments in the Deferred Compensation
Trusts, initially made in January 2001, are reported in 'Investments' in the
accompanying consolidated balance sheets.

As part of its overall retention efforts, the Company provides certain of
its management officers and employees, including the Executives, the opportunity
to co-invest with the Company in certain investments. The current co-investment
and corporate opportunity policy was initially adopted and approved by the
Company's audit committee in December 1999 and was subsequently amended in May
2001. The current policy provides that the Company may make loans to management,
not to exceed an aggregate of $5,750,000

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principal amount outstanding, where the Company's portion of the aggregate
co-investment is at least 20%. Each loan may not exceed two-thirds of the total
amount to be invested by any member of management in a co-investment and is to
be evidenced by promissory notes, of which at least one-half must be recourse
notes, secured by such member's co-investment shares. The promissory notes are
to mature no later than the lesser of (1) five years, (2) the sale of the
investment by the officer or employee or (3) the termination of employment of
the officer or employee; and shall bear interest at the prime rate payable
annually in arrears. The Company and certain of its management had entered into
four co-investments in accordance with this policy through December 30, 2001:
(1) EBT (see Note 8), (2) 280 KPE (see Note 8), (3) K12 Inc. ('K12'), a Cost
Investment and (4) 280 BT Holdings LLC ('280 BT'), a consolidated subsidiary
with a 44.1% minority interest comprised principally of certain of the Company's
management. Information pertaining to each of these co-investments is as follows
(dollars in thousands):

- ---------

(a) Reflects the collection of $3,000 in 2000, the reduction of $762,000 in
2001 for the release for future investment obligations which will not be
collected under the notes and the write-off of $219,000 in 2001 of
non-recourse notes which will not be collected due to the worthlessness of
the underlying investments held by 280 KPE (see Note 8) and included in
'General and administrative' in the accompanying consolidated income
statement for 2001. In addition, $14,000 of accrued interest associated
with the non-recourse notes will not be collected and was also written off
as a reduction of the 'Other interest income' (see Note 19) component of
'Other income, net' in 2001.

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

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In addition to the co-investments set forth in the preceding table, the
Company and certain of its present and former officers, including entities
controlled by them, have invested in MCM, resulting in the Company owning 8.4%
and the present and former officers collectively owning 19.3% as of
December 30, 2001. The Company and certain of its officers and employees had
co-invested in MCM prior to the MCM IPO in July 1999, resulting in the Company
acquiring its entire 8.4% share and certain of the present and former officers
acquiring a 15.7% collective share, as adjusted for the effect of the MCM IPO.

On January 12, 2000 the Company entered into a guarantee (the 'Note
Guaranty') of $10,000,000 principal amount of senior notes that mature in
January 2007 (the 'MCM Notes') issued by MCM to a major financial institution.
In consideration for the guaranty, the Company received a fee of $200,000 and
warrants to purchase 100,000 shares of MCM common stock at $.01 per share with
an estimated fair value on the date of grant of $305,000. The $10,000,000
guaranteed amount has been reduced to $6,698,000 as of December 30, 2001 and
will be further reduced by (1) any repayments of the MCM Notes, (2) any
purchases of the MCM Notes by the Company and (3) the amount of certain
investment banking or financial advisory services fees paid to the financial
institution or its affiliates or, under certain circumstances, other financial
institutions by the Company, MCM or another significant stockholder of MCM or
any of their affiliates. The present and former officers of the Company,
including entities controlled by them, are not parties to the Note Guaranty and
the present and former officers who collectively owned 15.7% of MCM as of the
MCM IPO, could indirectly benefit from not having any obligation under the Note
Guaranty.

In addition to the Note Guaranty, the Company and certain other stockholders
of MCM, including the present and former officers of the Company who had
invested prior to the MCM IPO, on a joint and several basis, have entered into
guaranties (the 'Bank Guaranties') and certain related agreements to guarantee
up to $15,000,000 of revolving credit borrowings of a subsidiary of MCM. The
Company would be responsible for approximately $1,800,000 assuming the full
$15,000,000 was borrowed and all of the parties, other than the Company, to the
Bank Guaranties and the related agreements fully perform thereunder. As of
December 30, 2001 MCM had $14,729,000 of outstanding revolving credit
borrowings. In connection therewith, at December 30, 2001 the Company had
$15,700,000 of highly liquid United States government agency debt securities in
a custodial account at such financial institution which under the Bank
Guaranties is subject to set off under certain circumstances if the parties to
the Bank Guaranties and related agreements fail to perform their obligations
thereunder. Such United States government agency debt securities are included in
'Cash (including cash equivalents)' in the accompanying consolidated balance
sheet.

MCM has encountered cash flow and liquidity difficulties in the past. While
it is not currently possible to determine if MCM may eventually default on any
of the aforementioned obligations, management of the Company currently believes
that it is possible, but not probable, that the Company will be required to make
payments under the Note Guaranty and/or the Bank Guaranties. Subsequent to
December 30, 2001, MCM's liquidity was positively impacted by a capital
investment and a debt forgiveness. Certain existing stockholders of MCM made an
aggregate $5,000,000 investment in newly-issued convertible preferred stock of
MCM, of which the Company invested $873,000 and certain of its present and
former officers, including entities controlled by them, invested $1,627,000. The
Company will recognize in its 2002 First Quarter its cumulative unrecorded
equity in losses of MCM of $744,000 through December 30, 2001 in connection with
its $873,000 additional investment in MCM. The Company discontinued applying the
Equity Method during the first quarter of 2001 when its investment in MCM was
reduced to zero. Concurrently with the $5,000,000 investment, the financial
institution which holds the MCM Notes forgave obligations aggregating
$5,323,000, consisting of $2,750,000 principal amount and $2,573,000 of accrued
interest thereon, reducing the outstanding principal amount of the MCM Notes to
$7,250,000, of which the Company continues to guarantee $6,698,000 under the
Note Guaranty. MCM had $658,000 of unamortized debt discount and deferred loan
costs associated with the notes forgiven. MCM will record an increase in its
additional paid-in capital of $4,665,000 for the forgiveness of this debt in its
2002 First Quarter, representing the $5,323,000 less the $658,000, and the
Company will record its equity of $393,000 in such amount as an increase in its
additional paid-in capital during its 2002 First Quarter.

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

The Company also has related party transactions disclosed in previous notes
consisting of accounts payable to two officers as of December 31, 2000 (see
Note 6), the Class B Repurchases from the Posner Entities (see Note 13) and
stock-based compensation (see Note 13).

(25) LEGAL AND ENVIRONMENTAL MATTERS

On March 23, 1999, a stockholder filed a complaint on behalf of persons who
held Triarc Class A Common Stock as of March 10, 1999 which, as amended in April
2000, alleges that the Company's statement related to the Tender Offer filed
with the Securities and Exchange Commission was materially false and misleading
and seeks damages in an unspecified amount, together with prejudgment interest,
the costs of suit, including attorneys' fees, an order permitting all
stockholders who tendered their shares in the Tender Offer to rescind the
transaction, and unspecified other relief. The complaint names the Company and
the Executives as defendants. On November 16, 2001, the defendants moved for
summary judgment dismissing the action in its entirety. On the same day, the
plaintiff moved to certify a class consisting of all persons or entities who
held Triarc Class A Common Stock as of March 10, 1999 and who allegedly suffered
damages thereby. The defendants have opposed that motion. These motions are
pending.

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

In 2001, a vacant property owned by the Company's non-operating subsidiary,
Adams, was listed by the United States Environmental Protection Agency on the
Comprehensive Environmental Response, Compensation and Liability Information
System ('CERCLIS') 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 approximately 1979. In October 2001, an environmental consultant engaged
by the Florida Department of Environmental Protection conducted a preliminary
investigation of the site, including soil and groundwater sampling. A final
report by the environmental consultant has not yet been issued although a
preliminary copy of the report indicates that the environmental consultant
believes that further unspecified action is warranted at the site. Based upon
the preliminary nature of the testing, the extent of the contamination of the
property and the remediation that might be required is not yet known. While it
is possible that the ultimate outcome of this matter could be significant, since
the Company is unable to determine the nature of the required remediation, if
any, the Company is unable to estimate the costs thereof.

In addition to the environmental matter and stockholder lawsuits described
above, the Company is involved in other litigation and claims incidental to its
businesses. The Company has reserves for all of its legal and environmental
matters aggregating $1,800,000 as of December 30, 2001. Although the outcome of
such

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matters cannot be predicted with certainty and some of these may be disposed of
unfavorably to the Company, based on currently available information, including
legal defenses available to Triarc and/or Adams, and given the Company's
aforementioned reserves, the Company does not believe that its legal and
environmental matters will have a material adverse effect on its consolidated
financial position or results of operations.

(26) QUARTERLY INFORMATION (UNAUDITED)

(footnotes on next page)

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(footnotes from previous page)

(a) Basic and diluted income (loss) per share have been computed consistently
with the annual calculations explained in Note 4. Basic and diluted income
(loss) per share are the same for the quarters ended December 31, 2000 and
September 30, 2001 since all potentially dilutive securities would have had
an antidilutive effect.

(b) The income from continuing operations for the quarter ended December 31,
2000 was materially affected by (1) a charge for capital market transaction
related compensation (see Note 15) of $26,010,000, or $24,746,000 after
income tax benefit of $1,264,000, and (2) compensation cost of $10,422,000,
or $8,168,000 after income tax benefit of $2,254,000, resulting from the
Company repurchasing 1,045,834 shares of its Class A Common Stock which
certain of the Company's officers and a director received upon exercise of
stock options (see Note 13).

(c) The income from continuing operations for the quarter ended April 1, 2001
was materially affected by a credit of $5,000,000, or $3,200,000 net of
income tax provision of $1,800,000, upon the receipt of the Executives'
Note in connection with the settlement of a class action lawsuit involving
certain awards of compensation to the Executives (see Note 24).

96

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

Not applicable.

PART III

ITEMS 10, 11, 12 AND 13.

The information required by items 10, 11, 12 and 13 will be furnished on or
prior to April 29, 2002 (and is hereby incorporated by reference) by an
amendment hereto or pursuant to a definitive proxy statement involving the
election of directors pursuant to Regulation 14A which will contain such
information. Notwithstanding the foregoing, information appearing in the
sections 'Executive Compensation Report of the Compensation Committee and
Performance Compensation Subcommittee' and 'Stock Price Performance Graph' shall
not be deemed to be incorporated by reference in this Form 10-K.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) 1. Financial Statements:

See Index to Financial Statements (Item 8).

2. Financial Statement Schedules:

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

3. Exhibits:

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

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

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

(b) Reports on Form 8-K:

On November 9, 2001, Triarc filed a Current Report on Form 8-K, which
included information under Item 7 of such form.

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

The consolidated financial statements of MCM Capital Group Inc., an
investment of the Company accounted for in accordance with the equity
method, are hereby incorporated by reference from Item 8. 'Consolidated
Financial Statements and Supplementary Data' from the Annual Report on
Form 10-K for the year ended December 31, 2001 of MCM Capital Group, Inc.
(SEC file no. 000-26489). A copy of the consolidated financial statements
incorporated by reference in this Item 14(d) is included as Exhibit 99.1
to this Form 10-K.

99

SIGNATURES

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

TRIARC COMPANIES, INC.
(Registrant)

NELSON PELTZ
....................................

NELSON PELTZ
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Dated: March 27, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 27, 2002 by the following persons on
behalf of the registrant in the capacities indicated.

100

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