TRIARC COMPANIES INC, 10-K, 1997-03-31

TRIARC COMPANIES INC
10-K, 1997-03-31
EATING & DRINKING PLACES

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TRIARC COMPANIES, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
(MARK ONE)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996.

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

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)

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

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

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

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------------------------------ -----------------------------
CLASS A COMMON STOCK, $.10 PAR VALUE NEW YORK STOCK EXCHANGE

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 class of the registrant's voting securities) held
by non-affiliates of the registrant was approximately $286,000,000 as of March
15, 1997. There were 24,112,109 shares of the registrant's Class A Common Stock
and 5,997,622 shares of the registrant's Class B Common Stock outstanding as of
March 15, 1997.

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"ARBY'S," "RC COLA," "DIET RC," "ROYAL CROWN," "ROYAL CROWN
DRAFT COLA," "DIET RITE," "NEHI," "NEHI LOCKJAW," "UPPER 10," "KICK,"
"THIRST THRASHER," "MISTIC," "ROYAL MISTIC" AND "PATCO"
ARE REGISTERED TRADEMARKS OF TRIARC COMPANIES, INC. OR ITS SUBSIDIARIES.

<PAGE>

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K (this "Form 10-K"),
including statements under "Item 1. Business" and "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). Such forward
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of
Triarc Companies, Inc. ("Triarc") and its subsidiaries to be materially
different from any future results, performance or achievements express or
implied by such forward-looking statements. Such factors include, but are not
limited to, the following: general economic and business conditions;
competition; success of operating initiatives; development and operating costs;
advertising and promotional efforts; brand awareness; the existence or absence
of adverse publicity; acceptance of new product offerings; changing trends in
customer tastes; the success of multi-branding; changes in business strategy or
development plans; quality of management; availability, terms and deployment of
capital; business abilities and judgment of personnel; availability of qualified
personnel; Triarc not receiving from the Internal Revenue Service a favorable
ruling that the spinoff referred to herein will be tax-free to Triarc and its
stockholders or the failure to satisfy other customary conditions to closing for
transactions of the types referred to herein; labor and employee benefit costs;
availability and cost of raw materials and supplies; changes in, or failure to
comply with, government regulations; regional weather conditions; changes in
wholesale propane prices; operating hazards and risks associated with handling,
storing and delivering combustible liquids such as propane; construction
schedules; trends in and strength of the textile industry; the costs and other
effects of legal and administrative proceedings; and other risks and
uncertainties referred in this Form 10-K, National Propane Partners, L.P.'s
registration statement on Form S-1 and other current and periodic filings by
Triarc, RC/Arby's Corporation and National Propane Partners, L.P. with the
Securities and Exchange Commission. Triarc will not undertake and specifically
declines 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.

ITEM 1. BUSINESS.

INTRODUCTION

Triarc is a holding company which, through its subsidiaries, is engaged in
four businesses: beverages, restaurants, dyes and specialty chemicals and
liquefied petroleum gas. The beverage operations are conducted through Royal
Crown Company, Inc. ("Royal Crown") and Mistic Brands, Inc. ("Mistic"); the
restaurant operations are conducted through Arby's, Inc. (d/b/a Triarc
Restaurant Group) ("Arby's"); the dyes and specialty chemical operations are
conducted through C.H. Patrick & Co., Inc. ("C.H. Patrick"); and the liquefied
petroleum gas operations are conducted through National Propane Corporation
("National Propane"), the managing general partner of National Propane Partners,
L.P. (the "Partnership") and its operating subsidiary partnership, National
Propane, L.P. (the "Operating Partnership"). Prior to June 29, 1995, the
liquefied petroleum gas operations were also conducted through Public Gas
Company ("Public Gas") which, on such date was merged with National Propane. At
the time of such merger, Public Gas was an indirect wholly-owned subsidiary of
Southeastern Public Service Company ("SEPSCO"), which in turn is an indirect
wholly-owned subsidiary of Triarc (National Propane and Public Gas are sometimes
collectively referred to herein as the "LP Gas Companies"). In addition, prior
to April 29, 1996, Triarc was also engaged in the textile business through
Graniteville Company ("Graniteville"). On such date the textile related assets
of Graniteville were sold. See "Item 1.-- Business -- Strategic Alternatives."
For information regarding the revenues, operating profit and identifiable assets
for Triarc's four businesses for the year ended December 31, 1996, see "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note 29 to the Consolidated Financial Statements of Triarc
Companies, Inc. and Subsidiaries (the "Consolidated Financial Statements"). See
"Item 1. Business -- General -- Discontinued and Other Operations" for a
discussion of certain remaining ancillary businesses which Triarc intends to
dispose of or liquidate as part of its business strategy.

Triarc's corporate predecessor was incorporated in Ohio in 1929. Triarc
was reincorporated in Delaware, by means of a merger, in June 1994. Triarc's
principal executive offices are located at 280 Park Avenue, New York, New York
10017 and its telephone number is (212) 451-3000.

BUSINESS STRATEGY

The key elements of Triarc's business strategy include (i) focusing
Triarc's resources on its four businesses -- beverages, restaurants, dyes and
specialty chemicals and liquefied petroleum gas, (ii) building strong operating
management teams for each of the businesses, and permitting each of these teams
to operate in a decentralized environment, (iii) providing strategic leadership
and financial resources to enable the management teams to develop and implement
specific, growth-oriented business plans and (iv) rationalizing Triarc's
organizational structure.

In March 1995, Triarc retained investment banking firms to review strategic
alternatives to maximize the value of its specialty chemicals, textile and
liquefied petroleum gas operations. In April 1996, Triarc consummated the sale
of its textile business and in July 1996 formed a master limited partnership to
hold its propane business and sold approximately 57.3% of the master limited
partnership to the public. In October 1996, Triarc announced that its Board of
Directors approved a plan to offer up to approximately 20% of the shares of its
beverage and restaurant businesses to the public through an initial public
offering and to spinoff the remainder of the shares of such businesses to
Triarc's stockholders. Consummation of such spinoff is subject to receipt of a
favorable ruling from the Internal Revenue Service (the "IRS") that the spinoff
will be tax-free to Triarc and its stockholders. The request for the ruling from
the IRS contains several complex issues and there can be no assurance that
Triarc will receive the ruling or consummate the spinoff. In addition, in
February 1997, Triarc announced that certain of its subsidiaries, including
Arby's, had entered into an agreement with RTM, Inc. ("RTM"), the largest
franchisee in the Arby's system, to sell to an affiliate of RTM all of the 355
company-owned Arby's restaurants owned by such subsidiaries. On March 27, 1997,
Triarc announced that it had entered into a definitive agreement to acquire
Snapple Beverage Corp. ("Snapple") from The Quaker Oats Company for $300 million
in cash, subject to certain post-closing adjustments. The acquisition, which is
expected to be consummated during the second quarter of 1997, is subject to
customary closing conditions, including Hart-Scott-Rodino antitrust clearance.
See "Item 1. Business -- Strategic Alternatives."

The senior operating officers of Triarc's businesses have implemented
individual plans focused on increasing revenues and improving operating
efficiency. In addition, Triarc continuously evaluates acquisitions and business
combinations to augment its businesses. The implementation of this business
strategy may result in increases in expenditures for, among other things,
capital projects and acquisitions and, over time, marketing and advertising. See
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations."

STRATEGIC ALTERNATIVES

Acquisition of Snapple Beverage Corp.

On March 27, 1997, Triarc announced that it had entered into a definitive
agreement to acquire Snapple from The Quaker Oats Company for $300 million in
cash, subject to certain post-closing adjustments. The acquisition, which is
expected to be consummated during the second quarter of 1997, is subject to
customary closing conditions, including Hart-Scott-Rodino antitrust clearance.
Snapple, with its ready-to-drink teas and juice drinks, is a market leader in
the premium beverage category. Snapple had 1996 sales of approximately $550
million. Triarc, which owns Mistic, will operate Snapple and Mistic under the
leadership of Michael Weinstein, chief executive officer of the Triarc Beverage
Group. See "Item 1. Business -- Business Segments -- Beverages."

Spinoff Transactions

On October 29, 1996, Triarc announced that its Board of Directors approved a
plan to offer up to approximately 20% of the shares of its beverage and
restaurant businesses to the public through an initial public offering and to
spinoff the remainder of the shares of such businesses to Triarc's stockholders
(collectively, the "Spinoff Transactions"). In connection with the Spinoff
Transactions, it is expected that National Propane may be merged with and into
Triarc, with Triarc becoming the managing partner, and National Propane SGP,
Inc., a subsidiary of National Propane ("SGP"), remaining the special general
partner of the Partnership and the Operating Partnership. Consummation of the
Spinoff Transactions will be subject to, among other things, receipt of a
favorable ruling from the IRS that the Spinoff Transactions will be tax-free to
Triarc and its stockholders. The request for the ruling from the IRS contains
several complex issues and there can be no assurance that Triarc will receive
the ruling or that Triarc will consummate the Spinoff Transactions. The Spinoff
Transactions are not expected to occur prior to the end of the second quarter of
1997. Triarc is currently evaluating the impact, if any, of the proposed
acquisition of Snapple on the anticipated structure of the Spinoff Transactions.

A registration statement has not been filed with the Securities and Exchange
Commission with respect to the proposed offering of common stock of Triarc's
restaurant and beverage businesses. The offering of common stock will be made
only by means of a prospectus. The common stock may not be sold, nor may offers
to buy be accepted prior to the time the registration statement becomes
effective. This Form 10-K does not constitute an offer to sell or the
solicitation of an offer to buy such common stock, nor will there be any sale of
the common stock in any state in which such an offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state.

Sale of Company-Owned Restaurants

On February 13, 1997, Triarc announced that Arby's, Arby's Restaurant
Development Corporation ("ARDC"), Arby's Restaurant Holding Company ("ARHC") and
Arby's's Restaurant Operations Company ("AROC"), each an indirect wholly-owned
subsidiary of Triarc, entered into a stock purchase agreement with RTM and RTM
Partners Inc. ("Holdco") pursuant to which Holdco would acquire from ARDC, ARHC
and AROC (the "Sellers") all of the stock of two corporations ("Newco") owning
all of the Sellers' 355 company-owned Arby's restaurants. The purchase price is
approximately $71 million, consisting primarily of the assumption of
approximately $69 million in mortgage indebtedness and capitalized lease
obligations. The consummation of the transaction is subject to customary closing
conditions, including receipt of necessary consents and regulatory approvals.

In connection with the transaction, the sellers will receive options to
purchase from Holdco up to an aggregate of 20% of the common stock of Newco.
RTM, Holdco and two affiliated entities also agreed to enter into a guarantee in
favor of the sellers and Triarc guaranteeing payment of, among other things, the
assumed debt obligations. RTM has also agreed to cause Newco to build an
additional 190 Arby's restaurants over the next 14 years pursuant to a
development agreement. This is in addition to a previous commitment RTM entered
into in 1996 to build an additional 210 Arby's restaurants.

Arby's future role in the Arby's system as a franchisor will be to enhance
the strength of the Arby's brand by increasing the number of restaurants in the
Arby's system and by establishing a "cut above" positioning for the Arby's brand
through upgraded menu items and facilities, while continuing to bring new
concepts to the system, such as P.T. Noodles, ZuZu and T.J. Cinnamons. See "
Item 1. -- Business Segments -- Restaurants."

Graniteville Sale

On April 29, 1996 Triarc and Graniteville sold (the "Graniteville Sale") to
Avondale Mills, Inc. ("Avondale"), Graniteville's textile business, other than
the assets and operations of C.H. Patrick and certain other excluded assets, for
a net purchase price of $243 million in cash. Pursuant to the Asset Purchase
Agreement, Avondale assumed all liabilities relating to the textile business,
other than income taxes, long-term debt (which was repaid at closing) and
certain other specified liabilities.

In connection with the Graniteville Sale, Avondale and C.H. Patrick entered
into a 10-year supply agreement (the "Supply Agreement") pursuant to which C.H.
Patrick has the right, subject to certain bidding procedures, to supply to the
combined Graniteville/Avondale textile operations certain of its dyes and
chemicals. See "Item 1. Business -- Business Segments -- Dyes and Specialty
Chemicals."

Formation of National Propane Master Limited Partnership

In July 1996 National Propane Partners, L.P., a master limited partnership
("MLP") formed by National Propane, completed an initial public offering (the
"IPO") of approximately 6.3 million common units representing limited partner
interests and received therefrom net proceeds aggregating approximately $117.4
million. Upon completion of the IPO, National Propane held an approximate 44.6%
interest in the MLP (on a combined basis) and the public held the remaining
interest.

Concurrently with the closing of the IPO, both National Propane and SGP
contributed substantially all of their assets to the Operating Partnership (the
"Conveyance") as a capital contribution and the Operating Partnership assumed
substantially all of the liabilities of National Propane and SGP (other than
certain income tax liabilities). Immediately thereafter, National Propane and
SGP conveyed their limited partner interests in the Operating Partnership to the
Partnership. As a result of such contributions, each of National Propane and SGP
have a 1.0% general partner interest in the Partnership
and a 1.0101% general partner interest in the Operating Partnership. In
addition, National Propane received in exchange for its contribution to the
Partnership 4,533,638 subordinated units and the right to receive certain
incentive distributions.

Also immediately prior to the closing of the IPO, National Propane issued
$125 million aggregate principal amount of 8.54% first mortgage notes due 2010
(the "First Mortgage Notes") to certain institutional investors in a private
placement. Approximately $59.3 million of the net proceeds from the sale of the
First Mortgage Notes (the entire net proceeds of which were approximately $118.4
million) were used by National Propane to pay a dividend to Triarc. The
remainder of the net proceeds from the sale of the First Mortgage Notes
(approximately $59.1 million) were contributed by National Propane to the
Operating Partnership to repay a portion of National Propane's then existing
bank debt and certain other indebtedness of National Propane and its
subsidiaries.

After the repayment of the indebtedness described above, the net proceeds of
the IPO were contributed to the Operating Partnership which used such proceeds
to repay all remaining indebtedness under National Propane's then existing bank
debt, to make a $40.7 million loan to Triarc (the "Partnership Loan") and to pay
certain accrued management fees and tax sharing payments due to Triarc from
National Propane.

Concurrently with the closing of the IPO, the Operating Partnership also
entered into a bank credit facility, which includes a $15 million revolving
credit facility to the used for working capital and other general partnership
purposes and a $40 million acquisition facility. See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations."

On November 7, 1996, the Partnership issued and sold an additional 400,000
common units in a private placement and received net proceeds of approximately
$7.4 million. Upon completion of the private placement, National Propane's
interest in the MLP (on a combined basis) was reduced to approximately 42.7%.
See "Item 1. Business -- Business Segments -- Liquefied Petroleum Gas."

CHANGE IN FISCAL YEAR

Effective January 1, 1997, Triarc adopted a 52/53 week fiscal convention for
itself and each subsidiary (other than National Propane) pursuant to which
Triarc's fiscal year (and that of such subsidiaries) will end on the last Sunday
in December in each year. Each fiscal year generally will be comprised of four
13 week fiscal quarters, although in some years the fourth quarter will
represent a 14 week period.

ORGANIZATIONAL STRUCTURE

The following chart sets forth the current organizational structure of
Triarc. Triarc directly or indirectly owns 100% of all of its subsidiaries and
approximately 42.7% of the Partnership and the Operating Partnership, on a
combined basis. As noted above Triarc has entered into a definitive agreement to
purchase 100% of the capital stock of Snapple. See "Item 1. Business --
Strategic Alternatives."

[The organizational chart shows the following: (i) Triarc owns 75.7% of National
Propane, the other 24.3% of which is owned by SEPSCO; (ii) Triarc owns 94.6% of
CFC Holdings Corp., the other 5.4% of which is owned by SEPSCO; (iii) Triarc
owns 100% of Mistic Brands, Inc.; (iv) Triarc owns 100% of GS Holdings, Inc.,
which owns 100% of SEPSCO and 50% of GVT Holdings, Inc., the other 50% of which
is owned by SEPSCO; (v) GVT Holdings, Inc. owns (indirectly) 100% of C.H.
Patrick; (vi) CFC Holdings Corp. owns 100% of RC/Arby's Corporation, which owns
100% of Royal Crown Company, Inc., Arby's, Inc., Arby's Restaurant Development
Corporation, Arby's Restaurant Holding Company and Arby's Restaurant Operations
Company; (vii) National Propane owns 100% of National Propane SGP, Inc., which
owns a 1.0% unsubordinated general partner interest in the Partnership and a
l.01% unsubordinated general partner interest in the Operating Partnership;
(viii) National Propane owns a 1.0% unsubordinated general partner interest, a
39.5% subordinated general partner interest in the Partnership and a 1.01%
unsubordinated general partner interest in the Operating Partnership; and (ix)
the Partnership owns a 97.98% limited partner interest in the Operating
Partnership.]

BUSINESS SEGMENTS

BEVERAGES (ROYAL CROWN AND MISTIC)

TRIARC BEVERAGE GROUP

On October 29, 1996, Triarc announced the establishment of the Triarc
Beverage Group, which oversees the operations of Triarc's two beverage
subsidiaries, Royal Crown and Mistic. Michael Weinstein, the chief executive
officer of Mistic and Royal Crown is the chief executive officer of the Triarc
Beverage Group and has direct operating responsibility for both companies. John
Carson, the chairman of Royal Crown, is chairman of the Triarc Beverage Group
and oversees international operations, private label sales, domestic strategic
franchising and industry affairs. The Triarc Beverage Group is in the process of
consolidating its headquarters operations in White Plains, New York. Royal Crown
and Mistic continue to operate independent sales and marketing operations to
serve their different distribution systems and marketplace needs. The finance,
administrative and operational functions of the two companies are being
consolidated to maximize efficiencies.

ACQUISITION OF SNAPPLE BEVERAGE CORP.

On March 27 1997, Triarc, announced that it had entered into a definitive
agreement to acquire Snapple from The Quaker Oats Company for $300 million in
cash, subject to certain post-closing adjustments. The acquisition, which is
expected to be consummated during the second quarter of 1997, is subject to
customary closing conditions, including Hart-Scott-Rodino antitrust clearance.
Snapple, with its ready-to-drink juice drinks, is a market leader in the premium
beverage category. Snapple had 1996 sales of approximately $550 million. See
"Item 1. Business -- Strategic Alternatives."

ROYAL CROWN

Royal Crown produces and sells concentrates used in the production of soft
drinks which are sold domestically and internationally to independent, licensed
bottlers who manufacture and distribute finished beverage products. Royal
Crown's major products have significant recognition and include: RC COLA, DIET
RC COLA, DIET RITE COLA, DIET RITE flavors, NEHI, UPPER 10, and KICK. Further,
Royal Crown is the exclusive supplier of cola concentrate to Cott Corporation
("Cott") which sells private label soft drinks to major retailers in the United
States, Canada, the United Kingdom, Australia, Japan, Spain and South Africa.

RC Cola is the third largest national brand cola and is the only national
brand cola available to non-Coca-Cola and non-Pepsi-Cola bottlers. DIET RITE is
available in a cola as well as various other flavors and formulations and is the
only national brand that is sugar-free (sweetened with 100% aspartame, a
non-nutritive sweetener), sodium-free and caffeine-free. DIET RC COLA is the
no-calorie version of RC COLA containing aspartame as its sweetening agent. NEHI
is a line of approximately 20 flavored soft drinks, UPPER 10 is a lemon-lime
soft drink and KICK is a citrus soft drink. Royal Crown's share of the overall
domestic carbonated soft drink market was approximately 1.9% in 1996 according
to Beverage Digest/Maxwell estimates. Royal Crown's soft drink brands have
approximately a 2.1% share of national supermarket volume, as measured by data
of Information Resources, Inc. ("IRI").

BUSINESS STRATEGY

Royal Crown's management is pursuing business strategies designed to
strengthen its distribution system, make more effective use of its marketing
resources, continue the expansion of its international and private label
businesses, develop new packages and concentrate resources on its core brands.
Additionally, in January 1997, Triarc sold its interest in Saratoga Beverage
Group, Inc. ("Saratoga") and Royal Crown terminated its relationship with
Saratoga. Royal Crown has also decided to discontinue selling Royal Crown Draft
Cola as a finished product. Royal Crown is evaluating the possibility of selling
concentrate for that product.

ADVERTISING AND MARKETING

A principal determinant of success in the soft drink industry is the ability
to establish a recognized brand name, the lack of which serves as a significant
barrier to entry to the industry. Advertising, promotions and marketing
expenditures in 1994, 1995 and 1996 were approximately $78.2 million, $86.2
million and $76.8 million, respectively. Royal Crown believes that its products
continue to enjoy nationwide brand recognition.

ROYAL CROWN'S BOTTLER NETWORK

Royal Crown sells its flavoring concentrates for branded products to
independent licensed bottlers in the United States and 61 foreign countries,
including Canada. Consistent with industry practice, each bottler is assigned an
exclusive territory within which no other bottler may distribute Royal Crown
branded soft drinks. As of December 31, 1996, Royal Crown products were packaged
and/or distributed domestically in 156 licensed territories, by 174 licensees,
covering 50 states. There were a total of 56 production centers operating
pursuant to 49 production and distribution agreements and 124 distribution only
agreements.

Royal Crown enters into a license agreement with each of its bottlers which
it believes is comparable to those prevailing in the industry. The duration of
the license agreements varies, but Royal Crown may terminate any such agreement
in the event of a material breach of the terms thereof by the bottler that is
not cured within a specified period of time.

Royal Crown's ten largest bottler groups accounted for 63.6% and 68.4% of
Royal Crown's domestic unit sales of concentrate for branded products during
1995 and 1996, respectively. The two largest bottler groups, Chicago Bottling
Group, and Beverage America, accounted for 20.1% and 10.2%, respectively, of
Royal Crown's domestic unit sales of concentrate for branded products during
1995 and 21.9% and 9.3%, respectively, during 1996.

PRIVATE LABEL

Royal Crown believes that private label sales through Cott, a leading
supplier of private label soft drinks, represent an opportunity to benefit from
the increased emphasis by national retailers on the development and marketing of
quality store brand merchandise at competitive prices. Royal Crown's private
label sales began in late 1990 and, as Cott's business expanded, more than
tripled from calendar year 1992 to calendar year 1994. Unit sales to Cott
declined in 1995, according to Cott, as a result of a significant reduction in
worldwide Cott system inventories and a slowing of the rapid growth Cott's
business has experienced. In 1996, sales to Cott rebounded as Cott's business
grew and its inventory normalized as Cott increased its purchases from Royal
Crown for certain non-cola concentrates. In 1994, 1995 and 1996, revenues from
the Cott business represented approximately 14.2%, 12.1% and 12.6%,
respectively, of Royal Crown's total revenues.

Royal Crown provides concentrate to Cott pursuant to a concentrate supply
agreement entered into in 1994 (the "Cott Worldwide Agreement"). Under the Cott
Worldwide Agreement, Royal Crown is Cott's exclusive worldwide supplier of cola
concentrates for retailer-branded beverages in various containers. In addition,
Royal Crown also supplies Cott with non-cola carbonated soft drink concentrates.
The Cott Worldwide Agreement requires that Cott purchase at least 75% of its
total worldwide requirements for carbonated soft drink concentrates from Royal
Crown. The initial term of the Cott Worldwide Agreement is 21 years, with
multiple six-year extensions.

Cott delivers the private label concentrate and packaging materials to
independent bottlers for bottling. The finished private label product is then
shipped to Cott's trade customers, including major retailers such as Wal-Mart,
A&P and Safeway. The Cott Worldwide Agreement provides that, as long as Cott
purchases a specified minimum number of units of private label concentrate in
each year of the Cott Worldwide Agreement, Royal Crown will not manufacture and
sell private label carbonated soft drink concentrates to parties other than Cott
anywhere in the world.

Through its private label program, Royal Crown develops new concentrates
specifically for Cott's private label accounts. The proprietary formulae Royal
Crown uses for its private label program are customer specific and differ from
those of Royal Crown's branded products. Royal Crown works with Cott to develop
a concentrate according to each trade customer's specifications. Royal Crown
retains ownership of the formulae for such concentrates developed after the date
of the Cott Worldwide Agreement, except upon termination of the Cott Worldwide
Agreement as a result of breach or non-renewal by Royal Crown.

PRODUCT DISTRIBUTION

Bottlers distribute finished product through four major distribution
channels: take home (consisting of food stores, drug stores, mass merchandisers,
warehouses and discount stores); convenience (consisting of convenience stores
and retail gas station mini-markets); fountain/food service (consisting of
fountain syrup sales and restaurant single drink sales); and vending (consisting
of bottle and can sales through vending machines). The take home channel is the
principal channel of distribution for Royal Crown products. According to IRI
data, the volume of Royal Crown products in food stores and drug stores in
1996 was down approximately 7% and 9%, respectively, as compared to 1995, while
the volume of Royal Crown products in mass merchandisers was down approximately
12% in 1996. Royal Crown brands historically have not been broadly distributed
through vending machines or convenience outlets; in 1996, the volume of Royal
Crown products in the convenience channel was down approximately 10% as compared
to 1995.

INTERNATIONAL

Sales outside the United States accounted for approximately 9.9% , 9.6% and
10.3% of Royal Crown's sales in 1994, 1995, and 1996, respectively. Sales
outside the United States of branded concentrates accounted for approximately
8.9%, 10.2% and 12.3% of branded concentrate sales in 1994, 1995 and 1996,
respectively. As of December 31, 1996, 90 bottlers and 13 distributors sold
Royal Crown brand products outside the United States in 61 countries, with
international sales in 1996 distributed among Canada 11.3%, Latin America and
Mexico 29.8%, Europe 33.3%, the Middle East/Africa 14.7% and the Far East 10.9%.
While the financial and managerial resources of Royal Crown have been focused on
the United States and Canada, Royal Crown's management believes significant
opportunities exist in international markets. In those countries where Royal
Crown brands are currently distributed, Royal Crown traditionally has provided
limited advertising support due to capital constraints. New bottlers were added
in 1996 to the following international markets:
Brazil (2), Sweden, Poland, Argentina, Korea, Syria and the C.I.S/Baltics (2).

PRODUCT DEVELOPMENT AND RAW MATERIALS

Royal Crown believes that it has a reputation as an industry leader in
product innovation. Royal Crown introduced the first national brand diet cola in
1961. The DIET RITE flavors line was introduced in 1988 to complement the cola
line and to target the non-cola segment of the market, which has been growing
faster than the cola segment due to a consumer trend toward lighter beverages.
In 1997, Royal Crown introduced a new version of DIET RITE COLA.

From time to time, Royal Crown purchases as much as a year's supply of
certain raw materials to protect itself against supply shortages, price
increases and/or political instabilities in the countries from which such raw
materials are sourced. Flavoring ingredients and sweeteners are generally
available on the open market from several sources.

MISTIC

Mistic's premium beverage business, acquired by Triarc in August 1995, has
expanded rapidly since its formation in late 1989 by increasing market
penetration in its original core markets located in the Northeast and
mid-Atlantic regions and, since 1991, by expanding distribution into other
domestic regional markets and selected international markets.

Mistic develops, produces and markets a wide variety of premium non-alcoholic
beverages, including non-carbonated and carbonated fruit drinks, ready-to-drink
brewed iced teas and naturally flavored sparkling waters under the Mistic, Royal
Mistic, Mistic Breeze and Mistic Rain Forest brand names. Mistic products are
manufactured by independent bottlers or co-packers and are sold in all 50 states
in the United States and in Canada, as well as in a number of foreign countries
through a network of approximately 225 beverage distributors. Mistic's products
are distributed through various channels including channels in which sales are
not measured by industry surveys. Mistic believes that, based on sales, it is
among the three leading premium beverage brands.

Mistic's management has developed and is implementing business strategies
that focus on: (i) improving distributor relations by, among other things,
developing long term relationships with key distributors; (ii) expanding
distribution in existing and new geographic markets and channels of trade; (iii)
enhancing promotional and equipment programs; (iv) improving advertising and
advertising efficiencies; and (v) developing new products.

PRODUCTS

Mistic products compete in a number of premium beverage product categories,
including carbonated and noncarbonated beverages, nectars (introduced in July
1996), teas and flavored teas, flavored seltzers and natural spring water.

These products are generally available in some combination of 16, 20 and 24
ounce glass bottles, 20 and 32 ounce PET (plastic) bottles and 12 ounce cans.
Approximately 80% of Mistic's 1996 sales consisted of non-carbonated fruit
flavored beverages and 14% consisted of teas and lemonade.

CO-PACKING ARRANGEMENTS

Mistic's products are produced by co-packers or bottlers under formulation
requirements and quality control procedures specified by Mistic. Mistic selects
and monitors the producers to ensure adherence to Mistic's production
procedures. Mistic regularly analyzes samples from production runs and conducts
spot checks of the production facilities. Mistic also purchases most raw
materials and arranges for their shipment to its co-packers and bottlers.
Mistic's three largest co-packers accounted for 44% of its aggregate case
production during 1996.

Mistic's contractual arrangements with its co-packers are typically for a
fixed term renewable at Mistic's option. During the term of the agreement, the
co-packer generally commits a certain amount of its monthly production capacity
to Mistic. Mistic has committed to order a certain guaranteed volume (in one
case) or percentage of its products sold in a region (in another case) or make
payments in lieu thereof. As a result of its co-packing arrangements, Mistic's
operations have not required significant capital expenditures or investments for
bottling facilities or equipment, and its production related fixed costs have
been minimal.

Mistic's management believes it has sufficient production capacity to meet
its 1997 requirements and that, in general, the industry has excess production
capacity that it can utilize if required.

RAW MATERIALS

Most raw materials used in the preparation and packaging of Mistic's products
are purchased by Mistic and supplied to its co-packers. Mistic has available
adequate sources of such raw materials, which are available from multiple
suppliers, although Mistic has chosen, for quality control purposes, to purchase
certain raw materials on an exclusive basis from single suppliers. Mistic
purchases all of its glass bottles from two suppliers, the largest of which
(representing approximately 80% of Mistic's purchases) was recently sold in
bankruptcy (in part to the smaller supplier). Mistic is currently negotiating
new supply and pricing arrangements with each of these suppliers and with third
parties. Mistic believes that alternate sources of glass bottles are available
to it.

DISTRIBUTION

Mistic's beverages are currently sold through a network of distributors, that
include specialty beverage, carbonated soft drink and licensed beer
distributors. Such distributors are typically granted exclusive rights to sell
Mistic products within a defined territory. Mistic has written agreements with
distributors who represent over 80% of Mistic's volume. Such agreements are
typically for a fixed term, are renewable at Mistic's option and are generally
terminable by the distributor upon specified prior notice.

Approximately 44.2%, 41.9% and 42.1% of Mistic's net sales in 1994, 1995, and
1996, respectively, were attributable to sales to Mistic's ten largest
distributors. Net sales to its largest distributor represented approximately 11%
of Mistic's net sales during each of 1995 and 1996.

Although Mistic's products historically have been sold primarily to
convenience stores, convenience store chains and delicatessens as a
"single-serve, cold box" item, Mistic has significantly expanded its
distribution to include supermarkets and other channels of distribution, such as
club store and national drug and convenience store chains (e.g., Sam's Wholesale
Clubs, Walgreens and 7-Eleven). Sales to supermarkets accounted for
approximately 15% to 20% of total net sales at December 31, 1996.

Mistic's international sales and distribution increased significantly in 1996
with entry into a new Korean distribution arrangement involving local
production, to Mistic's standards, by the distributor.

SALES AND MARKETING

Mistic's sales and marketing staff was approximately 90 as of December 31,
1996. Mistic's sales force is organized by zones under the direction of Zone
Sales Vice Presidents, Division Managers, Regional Sales Managers and Trade
Development Managers.

Mistic uses a mix of consumer and trade promotions as well as radio and
television advertising to market its products. Advertising and promotional
activities include Mistic's "Show Your Colors" campaign, commercials involving
NBA player Dennis Rodman (commencing late Spring 1997) and advertising on the
show of radio personality Howard Stern.

Mistic intends to maintain a consistent advertising campaign in its core and
expansion markets as an integral part of its strategy to stimulate consumer
demand and increase brand loyalty. In 1997 Mistic plans to employ a combination
of network advertising complemented with local spot advertising in its larger
markets; in most markets, television will be the primary medium and radio
secondary.

RESTAURANTS (ARBY'S)

TRIARC RESTAURANT GROUP

On June 6, 1996, Triarc announced that Arby's would do business under the
name Triarc Restaurant Group to reflect the company's commitment to the
multi-branded restaurant concept. See " -- Multi-Branding" below.

SALE OF COMPANY-OWNED RESTAURANTS

On February 13, 1997, Triarc announced that Arby's, ARDC, ARHC and AROC, each
an indirect wholly-owned subsidiary of Triarc, entered into a stock purchase
agreement with RTM and Holdco pursuant to which Holdco would acquire from the
Sellers (ARDC, ARHC and AROC) all of the stock of Newco which will own all of
the Sellers' 355 company-owned Arby's restaurants. The purchase price is
approximately $71 million, consisting primarily of the assumption of
approximately $69 million in mortgage indebtedness and capitalized lease
obligations. The consummation of the transaction is subject to customary closing
conditions, including receipt of necessary consents and regulatory approvals.
See "Item 1. --Business -- Strategic Alternatives."

GENERAL

Arby's is the world's largest franchise restaurant system specializing in
slow-roasted meat sandwiches with an estimated market share in 1996 of
approximately 73% of the roast beef sandwich segment of the quick service
sandwich restaurant category. In addition, Triarc believes that Arby's is the
11th largest quick service restaurant chain in the United States, based on
domestic system-wide sales. As of December 31, 1996, Arby's restaurant system
consisted of 3,022 restaurants, of which 2,859 operated within the United States
and 163 operated outside the United States. As of December 31, 1996, Arby's
owned and operated 355 restaurants and the remaining 2,667 restaurants were
owned and operated by franchisees. At December 31, 1996, all but 16 restaurants
outside the United States were franchised. System-wide sales were approximately
$1.8 billion in 1994, approximately $1.9 billion in 1995 and approximately $2.0
billion in 1996.

In addition to its various slow-roasted meat sandwiches, Arby's restaurants
also offer a selected menu of chicken, submarine sandwiches, side-dishes and
salads. A breakfast menu is also available at some Arby's restaurants. In
addition, Arby's has entered into agreements with three multi-branding partners
and intends to expand its multi-branding efforts which will add other brands'
items to Arby's menu items at such multi-branded restaurants. See " --
Multi-Branding" below.

Arby's revenues are derived from three principal sources: (i) sales at
company-owned restaurants (which will terminate upon the closing of the
transaction with RTM, see "--Sale of Company-Owned Restaurants"); (ii) royalties
from franchisees and (iii) one-time franchise fees from new franchisees. During
1994, 1995, and 1996 approximately 77% , 80% and 80% respectively, of Arby's
revenues were derived from sales at company-owned restaurants and approximately
23% , 20%, and 20% respectively, were derived from royalties and franchise fees.

INDUSTRY

The U.S. restaurant industry is highly fragmented, with approximately 415,000
units nationwide. Industry surveys indicate that the largest chains accounted
for approximately 18% of all units and 30% of all industry sales in 1996.
According to data compiled by the National Restaurant Association, total
domestic restaurant industry sales were estimated to be approximately $200
billion in 1996, of which approximately $98 billion was estimated to be in the
quick service restaurant ("QSR") or fast food segment.

ARBY'S RESTAURANTS

The first Arby's restaurant opened in Youngstown, Ohio in 1964. As of
December 31, 1996, Arby's restaurants were being operated in 48 states and 13
foreign countries. At December 31, 1996, the five leading states by number of
operating units were: Ohio, with 234 restaurants; Texas, with 183 restaurants;
California, with 166 restaurants; Michigan, with 155 restaurants; and Florida,
with 150 restaurants. The leading country outside the United States is Canada
with 111 restaurants.

Arby's restaurants in the United States and Canada typically range in
size from 700 square feet to 4,000 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 20 full and part-time
employees. Staffing levels, which vary during the day, tend to be heaviest
during the lunch hours.

The following table sets forth the number of company-owned and franchised
Arby's restaurants at December 31, 1994, 1995 and 1996.

THROUGH DECEMBER 31, 1996
----------------------------
1994 1995 1996
----- ----- -----

Company-owned restaurants.. 288 373 355
Franchised restaurants..... 2,500 2,577 2,667
------ ----- ------
Total restaurants..... 2,788 2,950 3,022

From April 1993 through December 31, 1995, Arby's had an accelerated program
of opening company-owned restaurants. Arby's opened 49 company-owned restaurants
in 1995, as compared to nine company-owned restaurants in 1994 and five
company-owned restaurants in Transition 1993. In 1996, new restaurant openings
slowed down as management focused resources on converting existing restaurants
to multi-brand restaurants and upgrading facilities offering an expanded menu.
In 1996 Arby's opened three company-owned restaurants. In order to facilitate
new company-owned restaurant openings, in 1995 and 1996, RC/Arby's, ARDC and
ARHC entered into a series of transactions including loan agreements with FFCA
Mortgage Corp. (formerly known as FFCA Acquisition Corp.), a subsidiary of
Franchise Finance Corporation of America, pursuant to which they borrowed, in
the aggregate, $62.7 million ($58.4 million of which was outstanding as of
December 31, 1996), of the $87.3 million available under such agreements. In
February 1997, Triarc announced that it had entered into an agreement with RTM
to sell to an affiliate of RTM all of the 355 company-owned Arby's restaurants.
See "Item 1. Business -- Strategic Alternatives."

FRANCHISE NETWORK

At December 31, 1996, there were 571 Arby's franchisees operating 2,667
separate locations. The initial term of the typical "traditional" franchise
agreement is 20 years. As of December 31, 1996, Arby's did not offer any
financing arrangements to its franchisees, except that in certain development
agreements Arby's has made available extended payment terms.

As of December 31, 1996, Arby's had received prepaid commitments for the
opening of up to 429 new domestic franchised restaurants over the next ten
years. Arby's plans opening approximately 115 new domestic franchised
restaurants in 1997. Arby's also expects that 20 new franchised restaurants
outside of the United States will open in 1997. In addition, as noted above, RTM
has agreed to cause Newco to build an additional 190 Arby's restaurants
pursuant to a development agreement. See "Item 1. -- Business -- Strategic
Alternatives." Arby's also has territorial agreements with international
franchisees in five countries at December 31, 1996. Under the terms of these
territorial agreements, many of the international franchisees have the exclusive
right to open Arby's restaurants in specific regions or countries, and, in some
cases, the right to sub-franchise Arby's restaurants. Arby's management expects
that future international franchise agreements will more narrowly limit the
geographic exclusivity of the franchisees and prohibit sub-franchise
arrangements.

Arby's offers franchises for the development of both single and multiple
"traditional" restaurant locations. All franchisees are required to execute
standard franchise agreements. Arby's standard U.S. franchise agreement
currently provides for, among other things, an initial $37,500 franchise fee for
the first franchised unit and $25,000 for each subsequent unit and a monthly
royalty payment based on 4.0% of restaurant sales for the term of the franchise
agreement. As a result of lower royalty rates still in effect under earlier
agreements, the average royalty rate paid by franchisees during 1996 was 3.1%.
Franchisees typically pay a $10,000 commitment fee, credited against the
franchise fee referred to above, during the development process for a new
traditional restaurant.

In December 1994, Arby's began granting development agreements which give
developers rights to develop Arby's limited menu restaurants in conjunction with
either an existing operating food service or other business in non-traditional
locations for a specified term. These agreements require a $1,000 development
deposit per store which is then applied toward royalties which are to be paid at
a rate of 10% of sales (which includes the AFA contribution referred to below).
The developer/franchisee is required to sign an individual franchise agreement
for a term of five years. As of December 31, 1996, there were 30 franchised
limited menu restaurants in operation.

Franchised restaurants are operated in accordance with 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 continuously monitors
franchisee operations and inspects restaurants periodically to ensure that
company practices and procedures are being followed.

MULTI-BRANDING

Arby's continues to pursue the development of a multi-branding strategy,
which allows a single restaurant to offer the consumer distinct, but
complementary, brands at the same restaurant. Collaborating to offer a broader
menu is intended to increase sales per square foot of facility space, a key
measure of return on investment in retail operations. Arby's has obtained
exclusive worldwide rights to operate or grant franchises to operate ZuZu
restaurants, which offer handmade Mexican food, at multi-brand locations. In
addition, in 1995 Arby's acquired P.T. Noodle's, which offers a variety of
Asian, Italian and American dishes based on serving corkscrew noodles with a
variety of different sauces. In August 1996, Arby's completed the purchase of
the tradenames, trademarks, service marks, logos, signs, recipes, secret
formulas and technical information of T.J. Cinnamons, Inc., an operator and
franchisor of retail bakeries specializing in gourmet cinnamon rolls and related
products. As of March 1, 1997, 22 company-owned Arby's restaurants were
multi-brand locations, including 14 that offer P.T. Noodles' products, five that
offer ZuZu's products and three that offer T.J. Cinnamons' products. While
multi-branding with ZuZu continues, Triarc has determined to write-off its
approximately $5.4 investment in the equity of ZuZu, Inc.

ADVERTISING AND MARKETING

Arby's advertises primarily through regional television, radio and
newspapers. Payment for advertising time and space is made by local advertising
cooperatives in which owners of local franchised restaurants and Arby's, to the
extent that it owns local company-owned restaurants, participate. Franchisees
and Arby's contribute 0.7% of gross sales to the Arby's Franchise Association
("AFA"), which produces advertising and promotion materials for the system. Each
franchisee is also required to spend a reasonable amount, but not less than 3%
of its monthly gross 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 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 gross sales. In 1994, 1995 and
1996, Arby's expenditures for advertising and marketing in support of
company-owned stores were $17.2 million, $22.4 million, and $25.8 million,
respectively.

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. A full-time quality assurance employee is assigned to each of the
four independent processing facilities that process roast beef for Arby's
domestic restaurants. The quality assurance employee inspects the roast beef for
quality and uniformity. In addition, a laboratory at Arby's headquarters tests
samples of roast beef periodically from each franchisee. Each year,
representatives of Arby's conduct unannounced inspections of operations of each
franchisee to ensure that Arby's policies, practices and procedures are being
followed. Arby's field representatives also provide a variety of on-site
consultative services to franchisees.

PROVISIONS AND SUPPLIES

Arby's roast beef is provided by four independent meat processors. Franchise
operators are required to obtain roast beef from one of the four approved
suppliers. Arby's, through the non-profit purchasing cooperative ARCOP, Inc.
("ARCOP"), which negotiates contracts with approved suppliers on behalf of
Arby's and its franchisees, has entered into "cost-plus" contracts and purchases
with these suppliers. Arby's believes that satisfactory arrangements could be
made to replace any of its 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, which products are available from numerous
suppliers. Food, proprietary paper and operating supplies are also made
available, through national contracts employing volume purchasing, to Arby's
franchisees through ARCOP.

DYES AND SPECIALTY CHEMICALS (C.H. PATRICK)

GENERAL

C.H. Patrick produces and markets dyes and specialty chemicals primarily to
the textile industry. In April 1996, Triarc and Avondale completed the sale of
the textile business of Graniteville to Avondale for a net purchase price of
$243 million in cash. C.H. Patrick and certain other non-textile related assets
were excluded from the transaction.In connection with the Graniteville Sale,
Avondale and C.H. Patrick entered into the Supply Agreement pursuant to which
C.H. Patrick has the right, subject to certain bidding procedures, to supply the
combined Graniteville/Avondale textile operations certain of its dyes and
chemicals. See "Item 1. Business -- Strategic Alternatives."

BUSINESS STRATEGY

C.H. Patrick believes that it has a reputation in the textile industry as
both a consistent producer of quality products and an innovator of new products
to meet the changing needs of its customers. The management of C.H. Patrick has
developed and is implementing business strategies that focus on developing new
products and markets and developing relationships with new clients who
previously chose not to do business with an operation directly related to a
competitor. Prior to the Graniteville Sale, C.H. Patrick was a wholly-owned
subsidiary of Graniteville.

PRODUCTS AND MARKETS

C.H. Patrick develops, manufactures and markets dyes and specialty chemicals,
primarily to the textile industry. Management believes that C.H. Patrick has
earned a reputation for producing high quality, innovative dyes and specialty
chemicals. During each of 1994 and 1995, approximately 59% of C.H. Patrick's
sales were to non-affiliated manufacturers and 41% were to Graniteville. In
connection with the Graniteville Sale, C.H. Patrick and Avondale entered into
the Supply Agreement, pursuant to which C.H. Patrick has the right, subject to
certain bidding procedures, to supply to the combined Graniteville/Avondale
textile operations certain of its dyes and chemicals. See "Item 1.
Business--Strategic Alternatives." In 1996, approximately 59% of C.H. Patrick's
sales were to non-affiliated manufacturers and 41% were to
Graniteville/Avondale.

C.H. Patrick processes dye presscakes and other basic materials to produce
and sell indigo, vat, sulfur and disperse liquid dyes, as well as disperse, vat
and aluminum powder dyes. The majority of C.H. Patrick's dye products are used
in the continuous dyeing of cotton and polyester/cotton blends. C.H. Patrick
also manufactures various textile
softeners, surfactants, dyeing auxiliaries and permanent press resins, as well
as several acrylic polymers used in textile finishing as soil release agents.

In August 1994, C.H. Patrick acquired a minority interest in Taysung
Enterprise Company, Ltd., ("Taysung") a Taiwanese manufacturer of dyes and
chemicals. C.H. Patrick also obtained exclusive distribution rights in North,
Central and South America for Taysung products for a period of five years. In
1995 C.H. Patrick wrote off its investment in Taysung. In February 1997, C.H.
Patrick was advised that Taysung is considering winding down its business and/or
selling a substantial portion of its business. See Note 20 to the Consolidated
Financial Statements.

MARKETING AND SALES

Major dye customers rely on bidding systems to obtain the most competitive
pricing. The bidding might be quarterly, semi-annual or annual. Generally, the
bids are non-binding purchase orders. Historically, these agreements have been
honored. In the chemical business, customers normally do not use a bidding
procedure but order on an as-needed basis.

Generally, C.H. Patrick's sales are to domestic customers primarily based in
the Southeast, where most of the U.S. textile industry is concentrated. C.H.
Patrick has six salespeople and five technical service representatives, based in
North Carolina, South Carolina and Georgia, who work closely with customers and
C.H. Patrick's technical and quality management groups. Field personnel are
supported by C.H. Patrick's laboratory staff who perform services such as
competitive product analysis through such methods as gas chromatography, high
pressure liquid chromatography, infrared analysis, nuclear magnetic resonance
and elemental analysis.

C.H. Patrick advertises on a regular basis in textile trade journals. Direct
mail campaigns have been used in past years to market vat and sulfur dyes as
well as dyeing and preparation chemicals. C.H. Patrick has utilized both
telemarketing and direct mail to introduce its services to the marketplace.

C.H. Patrick distributes its products through its own salesforce. C.H.
Patrick owns a fleet of nine tanktrucks, two box trailers, three tractors, and
two smaller trucks which deliver Patrick's products to customers from its
plants. Common carriers are also used both for bulk deliveries and drum
shipments.

RAW MATERIALS

C.H. Patrick purchases various raw materials, including indigo, vat and
sulfur crude presscakes and glyoxal, from a number of suppliers and does not
rely on a sole source to any material extent. C.H. Patrick does not foresee any
significant difficulties in obtaining necessary raw materials or supplies.

LIQUEFIED PETROLEUM GAS (NATIONAL PROPANE)

National Propane, as managing general partner of the Partnership and the
Operating Partnership, is engaged primarily in (i) the retail marketing of
liquefied petroleum gas ("propane") to residential, commercial and industrial,
and agricultural customers and to dealers that resell propane to residential and
commercial customers and (ii) the retail marketing of propane related supplies
and equipment, including home and commercial appliances. Triarc believes that
the Partnership is the sixth largest retail marketer of LP gas in terms of
volume in the United States. As of December 31, 1996, the Partnership had 166
service centers supplying markets in 25 states. The Partnership's operations are
located primarily in the Midwest, Northeast, Southeast, and Southwest regions of
the United States.

Since April 1993, National Propane has, among other things, consolidated its
operations into a single company with a national brand and logo. As part of such
consolidation, Public Gas was merged with and into National Propane during the
second quarter of 1995. Prior to such merger, Public Gas (which had been owned
99.7% by SEPSCO) became a wholly-owned subsidiary of SEPSCO. In connection
therewith, on February 22, 1996, SEPSCO redeemed all of its outstanding 11-7/8%
Senior Subordinated Debentures due February 1, 1998 (the "SEPSCO 11-7/8%
Debentures"). See Note 13 to the Consolidated Financial Statements. In July 1996
National Propane completed an initial public offering of common units in the
MLP. See "Item 1 -- Business -- Strategic Alternatives."

BUSINESS STRATEGY

The Partnership's operating strategy is to increase efficiency, profitability
and competitiveness, while better serving its customers, by building on the
efforts it is already undertaken to improve pricing management, marketing and
purchasing and to consolidate its operations. In addition, the Partnership's
strategies for growth involve expanding its operations and increasing its market
share through strategic acquisitions and internal growth, including the opening
of new service centers. The Partnership intends to take two approaches to
acquisitions: (i) primarily to build on its broad geographic base by acquiring
smaller, independent competitors that operate within the Partnership's existing
geographic areas and incorporating them into the Partnership's distribution
network and (ii) to acquire propane businesses in areas in the United States
outside of its current geographic base where it believes there is growth
potential and where an attractive return on its investment can be achieved. In
1996 and 1997 National Propane and the Partnership acquired six propane
businesses for an aggregate purchase price of approximately $3.0 million. In
addition to pursuing expansion through acquisition, the Partnership intends to
pursue internal growth at its existing service centers and to expand its
business by opening new service centers. The Partnership believes that it can
attract new customers and expand its market base by (i) providing superior
service, (ii) introducing innovative marketing programs and (iii) focusing on
population growth areas. The Partnership also intends to continue to expand its
business by opening new service centers, known as "scratch-starts," in areas
where there is relatively little competition. Scratch-starts are newly opened
service centers generally staffed with one or two employees, which typically
involve minimal startup costs because the infrastructure of the new service
center is developed as the customer base expands and the Partnership can, in
many circumstances, transfer existing assets, such as storage tanks and
vehicles, to the new service center. Under this program, by December 31, 1996,
the Partnership had opened three new service centers in California and one in
each of Idaho, Georgia and South Carolina.

PRODUCTS, SERVICES AND MARKETING

The Partnership distributes its propane through a nationwide distribution
network integrating 166 service centers located in 24 states. The Partnership's
operations are located primarily in the Midwest, Northeast, Southeast and
Southwest regions of the United States.

Typically, service centers are found in suburban and rural areas where
natural gas is not readily available. Generally, such locations consist of an
office and a warehouse and service facility, with one or more 18,000 to 30,000
gallon storage tanks on the premises. Each service center is managed by a
district manager and also typically employs a customer service representative, a
service technician and one or two bulk truck drivers. However, new service
centers established under the Partnership's "scratch start" program may not have
offices, warehouses or service facilities and are typically staffed initially by
one or two employees.

In 1996 the Partnership served approximately 250,000 active customers. No
single customer accounted for 10% or more of the Partnership's revenues in 1995
or 1996. Generally, the number of customers increases during the fall and winter
and decreases during the spring and summer. Historically, approximately 67% of
the Partnership's retail propane volume has been sold during the six-month
season from October through March, as many customers use propane for heating
purposes. Consequently, sales, gross profits and cash flows from operations are
concentrated in the Partnership's first and fourth fiscal quarters.

Year-to-year demand for propane is affected by the relative severity of the
winter and other climatic conditions. For example, while the frigid temperatures
that were experienced by the United States in January and February of 1994
significantly increased the overall demand for propane, the warm weather during
the winter of 1994-1995 significantly reduced such demand. The Partnership
believes, however, that the geographic diversity of its areas of operations
helps to reduce its exposure to regional weather patterns. In addition, sales to
the commercial and industrial markets, while affected by economic patterns, are
not as sensitive to variations in weather conditions as sales to residential and
agricultural markets.

Retail deliveries of propane are usually made to customers by means of
bobtail and rack trucks. Propane is pumped from the bobtail truck, which
generally holds 2,800 gallons of propane, into a stationary storage tank on the
customer's premises. The capacity of these tanks usually ranges from
approximately 50 to approximately 1,000 gallons, with a typical tank having a
capacity of 250 to 500 gallons. Typically, service centers deliver propane to
most of their
residential customers at regular intervals, based on estimates of such
customers' usage, thereby eliminating the customers' need to make affirmative
purchase decisions. The Partnership also delivers propane to retail customers in
portable cylinders, which typically have a capacity of 23.5 gallons. When these
cylinders are delivered to customers, empty cylinders are picked up for
replenishment at the Partnership's distribution locations or are refilled in
place. The Partnership also delivers propane to certain other retail customers,
primarily dealers and large commercial accounts, in larger trucks known as
transports, which have an average capacity of approximately 9,000 gallons.
Propane is generally transported from refineries, pipeline terminals and storage
facilities (including the Partnership's underground storage facilities in
Hutchinson, Kansas and Loco Hills, New Mexico) to the Partnership's bulk plants
by a combination of common carriers, owner-operators, railroad tank cars and, in
certain circumstances, the Partnership's own highway transport fleet.

The Partnership also sells, leases and services equipment related to its
propane distribution business. In the residential market, the Partnership sells
household appliances such as cooking ranges, water heaters, space heaters,
central furnaces and clothes dryers, as well as less traditional products such
as barbecue equipment and gas logs. In the industrial market, the Partnership
sells or leases specialized equipment for the use of propane as fork lift truck
fuel, in metal cutting and atmospheric furnaces and for portable heating for
construction. In the agricultural market, specialized equipment is leased or
sold for the use of propane as engine fuel and for chicken brooding and crop
drying. The sale of specialized equipment, service income and rental income
represented less than 10% of the Partnership's operating revenues during 1996.
Parts and appliance sales, installation and service activities are conducted
through a wholly-owned corporate subsidiary of the Operating Partnership.

PROPANE SUPPLY AND STORAGE

The profitability of the Partnership is dependent upon the price and
availability of propane as well as seasonal and climatic factors. Contracts for
the supply of propane are typically made on a year-to-year basis, but the price
of the propane to be delivered depends upon market conditions at the time of
delivery. Worldwide availability of both gas liquids and oil affects the supply
of propane in domestic markets, and from time to time the ability to obtain
propane at attractive prices may be limited as a result of market conditions,
thus affecting price levels to all distributors of propane. Generally, when the
wholesale cost of propane declines, the Partnership believes that its margins on
its retail propane distribution business would increase in the short-term
because retail prices tend to change less rapidly than wholesale prices.
Conversely, when the wholesale cost of propane increases, retail marketing
profitability will likely be reduced at least for the short-term until retail
prices can be increased. Since 1993, the Partnership has generally been
successful in maintaining retail gross margins on an annual basis despite
changes in the wholesale cost of propane. There may be times, however, when the
Partnership will be unable to fully pass on cost increases to its customers.
Consequently, the Partnership's profitability will be sensitive to changes in
wholesale propane prices, and a substantial increase in the wholesale cost of
propane could adversely affect the Partnership's margins and profitability.
Except for occasional opportunistic buying and storage of propane, the
Partnership has not engaged in any significant hedging activities with respect
to its propane supply requirements.

The Partnership purchased propane from over 35 domestic and Canadian
suppliers during 1996, primarily major oil companies and independent producers
of both gas liquids and oil, and it also purchased propane on the spot market.
In 1996, the Partnership purchased approximately 82% and 18% of its propane
supplies from domestic and Canadian suppliers, respectively. Approximately 95%
of all propane purchases by the Partnership in 1996 were on a contractual basis
(generally, under one year agreements subject to annual renewal), but the
percentage of contract purchases may vary from year to year as determined by the
Managing General Partner. Supply contracts generally do not lock in prices but
rather provide for pricing in accordance with posted prices at the time of
delivery or the current prices established at major storage points, such as Mont
Belvieu, Texas and Conway, Kansas. The Partnership is not currently a party to
any supply contracts containing "take or pay" provisions.

Warren Petroleum Company ("Warren"), supplied 16% of the Partnership's
propane in 1996 and Amoco and Conoco each supplied approximately 10%. The
Partnership believes that if supplies from Warren, Amoco or Conoco were
interrupted, it would be able to secure adequate propane supplies from other
sources without a material disruption of its operations; however, the
Partnership believes that the cost of procuring replacement supplies might be
materially higher, at least on a short-term basis. No other single supplier
provided more than 10% of the Partnership's total propane supply during 1996.

The Partnership owns underground storage facilities in Hutchinson, Kansas and
Loco Hills, New Mexico, leases
above ground storage facilities in Crandon, Wisconsin and Orlando, Florida, and
owns or leases smaller storage facilities in other locations throughout the
United States. As of December 31, 1996, the Partnership's total storage capacity
was approximately 33.1 million gallons (including approximately one million
gallons of storage capacity currently leased to third parties). For a further
description of these facilities, see "Item 2. Properties."

GENERAL

TRADEMARKS

Royal Crown considers its concentrate formulae, which are not the subject of
any patents, to be trade secrets. In addition, RC COLA, DIET RC, ROYAL CROWN,
ROYAL CROWN DRAFT COLA, DIET RITE, NEHI, NEHI LOCKJAW, UPPER 10, KICK, and
THIRST THRASHER are registered as trademarks in the United States, Canada and a
number of other countries. Royal Crown believes that its trademarks are material
to its business.

Mistic is the owner of the MISTIC, ROYAL MISTIC, MISTIC BREEZE and MISTIC
RAIN FOREST trademarks and considers them to be material to its business.

Arby's is the sole owner of the ARBY'S trademark and considers it, and
certain other trademarks owned or licensed by Arby's, to be material to its
business. Pursuant to its standard franchise agreement, Arby's grants each of
its franchisees the right to use Arby's trademarks, service marks and trade
names in the manner specified therein.

C.H. Patrick is the sole owner of the PATCO trademark and considers it to be
material to its business.

The Partnership and the Operating Partnership utilize a number of trademarks
and tradenames which they own (including "National PropaneTM"), some of which
have a significant value in the marketing of their products.

The material trademarks of Royal Crown, Mistic, Arby's and C.H. Patrick are
registered in the U.S. Patent and Trademark Office and various foreign
jurisdictions. Royal Crown's, Arby's, Mistic's and C.H. Patrick's rights to such
trademarks in the United States will last indefinitely as long as they continue
to use and police the trademarks and renew filings with the applicable
governmental offices. No challenges have arisen to Royal Crown's, Mistic's,
Arby's or C.H. Patrick's right to use the foregoing trademarks in the United
States.

COMPETITION

Triarc's four businesses operate in highly competitive industries. Many of
the major competitors in these industries have substantially greater financial,
marketing, personnel and other resources than does Triarc.

Royal Crown's soft drink products and Mistic's premium beverage products
compete generally with all liquid refreshments and in particular with numerous
nationally-known soft drinks such as Coca-Cola and Pepsi-Cola and New Age
beverages such as Snapple and AriZona iced teas. Royal Crown and Mistic compete
with other beverage companies not only for consumer acceptance but also for
shelf space in retail outlets and for marketing focus by Royal Crown's and
Mistic's distributors, most of which also distribute other beverage brands. The
principal methods of competition in the beverage industry include product
quality and taste, brand advertising, trade and consumer promotions, pricing,
packaging and the development of new products.

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

In recent years, both the beverage and restaurant businesses have experienced
increased price competition resulting in significant price discounting
throughout these industries. Price competition has been especially intense with
respect to sales of beverage products in food stores, with local bottlers
granting significant discounts and allowances off
wholesale prices in order to maintain or increase market share in the food store
segment. When instituting its own discount promotions, Arby's has experienced
increases in sales but, with respect to company-owned restaurant operations,
lower gross margins. While the net impact of price discounting in the soft drink
and QSR industries cannot be quantified, such practices could have an adverse
impact on Triarc.

C.H. Patrick has many competitors, including large chemical companies and
smaller concerns. No single manufacturer dominates the industry in which C.H.
Patrick participates. The principal elements of competition include quality,
price and service.

Most of the Operating Partnership's service centers compete with several
marketers or distributors of LP gas and certain service centers compete with a
large number of marketers or distributors. Each of the Operating Partnership's
service centers operate in its own competitive environment because retail
marketers tend to locate in close proximity to customers in order to lower the
cost of providing service. The principle competitive factors affecting this
industry are reliability of service, responsiveness to customers and the ability
to maintain competitive prices. LP gas competes primarily with natural gas,
electricity and fuel oil as an energy source, principally on the basis of price,
availability and portability. LP gas serves as an alternative to natural gas in
rural and suburban areas where natural gas is unavailable or portability of the
product is required. LP gas is generally more expensive than natural gas in
locations served by natural gas, although LP gas is sold in such areas as a
standby fuel for use during peak demand periods or during interruptions in
natural gas service. Although the extension of natural gas pipelines tends to
displace LP gas distribution in the areas affected, National Propane believes
that new opportunities for LP gas sales arise as more geographically remote
areas are developed. LP gas is generally less expensive to use than electricity
for space heating, water heating, clothes drying and cooking. Although LP gas is
similar to fuel oil in certain applications, as well as in market demand and
price, LP gas and fuel oil have generally developed their own distinct
geographic markets, reducing competition between such fuels. In addition, the
use of alternative fuels, including LP gas, is mandated in certain specified
areas of the United States that do not meet federal air quality standards.

WORKING CAPITAL

Royal Crown's and Arby's working capital requirements are generally met
through cash flow from operations. Accounts receivable of Royal Crown are
generally due in 30 days and Arby's franchise royalty fee receivables are due
within 10 days after each month end.

Mistic's working capital requirements are generally met through cash flow
from operations, supplemented by advances under a credit facility entered into
in connection with the Mistic Acquisition (as subsequently amended, the "Mistic
Credit Agreement") which initially provided Mistic with a $60 million term loan
facility ($54 million at March 1, 1997) and a $20 million ($12 million at March
1, 1997) revolving credit facility (of which approximately $15 million was
available at March 1, 1997). Accounts receivable of Mistic are generally due in
30 days.

Working capital requirements for C.H. Patrick are generally met from
operating cash flow supplemented by advances under a credit facility entered
into following the Graniteville Sale, which provides for a $35 million term loan
($33.8 million at March 1, 1997) and a $15 million ($0.5 million at March 1,
1997) revolving credit facility (of which approximately $14.5 million was
available at March 1, 1997). Trade receivables of C.H. Patrick are generally due
in 30 days.

Working capital requirements for the Operating Partnership fluctuate due to
the seasonal nature of its business. Typically, in late summer and fall,
inventories are built up in anticipation of the heating season and are depleted
over the winter months. During the spring and early summer, inventories are at
low levels due to lower demand. Accounts receivable reach their highest levels
in the middle of the winter and are gradually reduced as the volume of LP gas
sold declines during the spring and summer. Working capital requirements are
generally met through cash flow from operations supplemented by advances under a
revolving working capital facility which provides the Operating Partnership with
a $15 million line of credit (of which $8.3 million was available at March 1,
1997). Accounts receivable are generally due within 30 days of delivery. See
"Item 1. Business -- Strategic Alternatives" and "Business Segments -- Liquefied
Petroleum Gas."

GOVERNMENTAL REGULATIONS

Each of Triarc's businesses is subject to a variety of federal, state and
local laws, rules and regulations.

Arby's is subject to regulation by the Federal Trade Commission and state
laws governing the offer and sale of franchises and the substantive aspects of
the franchisor-franchisee relationship. In addition, Arby's is subject to the
Fair Labor Standards Act and various state laws governing such matters as
minimum wages, overtime and other working conditions. Pursuant to an amendment
to the Fair Labor Standards Act, the federal minimum wage was increased from
$4.25 per hour to $4.75 per hour, effective October 1, 1996, with an additional
increase to $5.15 per hour to become effective on September 1, 1997. Significant
numbers of the food service personnel at Arby's restaurants are paid at rates
related to the federal and state minimum wage, and increases in the minimum wage
may therefore increase the labor costs of Arby's and its franchisees. Arby's is
also subject to the Americans with Disabilities Act (the "ADA"), which requires
that all public accommodations and commercial facilities meet certain federal
requirements related to access and use by disabled persons. Compliance with the
ADA requirements could require removal of access barriers and non-compliance
could result in imposition of fines by the U.S. government or an award of
damages to private litigants. Although Arby's management believes that its
facilities are substantially in compliance with these requirements, Arby's may
incur additional costs to comply with the ADA. However, Triarc does not believe
that such costs will have a material adverse effect on Triarc's consolidated
financial position or results of operations. From time to time, Arby's has
received inquiries from federal, state and local regulatory agencies or has been
named as a party to administrative proceedings brought by such regulatory
agencies. Triarc does not believe that any such inquiries or proceedings will
have a material adverse effect on Triarc's consolidated financial position or
results of operations.

The production and marketing of Royal Crown and Mistic beverages are subject
to the rules and regulations of various federal, state and local health
agencies, including the United States Food and Drug Administration (the "FDA").
The FDA also regulates the labeling of Royal Crown and Mistic products. In
addition, Royal Crown's and Mistic's dealings with their licensees and/or
distributors may, in some jurisdictions, be subject to state laws governing
licensor-licensee or distributor relationships.

National Propane and the Operating Partnership are subject to various
federal, state and local laws and regulations governing the transportation,
storage and distribution of LP gas, and the health and safety of workers,
primarily OSHA and the regulations promulgated thereunder. On February 19, 1997,
the U.S. Department of Transportation published its Interim Final Rule for
Continued Operation of Present Propane Trucks (the "Interim Rule"). The Interim
Rule is intended to address perceived risks during the transfer of propane. The
Interim Rule required certain immediate changes in the Partnership's operating
procedures, and in the next six to 12 months, may require (i) some or all of the
Partnership's cargo tanks to be retrofitted and (ii) some modifications to the
Partnership's bulk plants. The Partnership, as well as the National Propane Gas
Association and the propane industry in general, is in the process of studying
the Interim Rule and the appropriate response thereto. At this time, the
Partnership is not in a position to determine what the ultimate long-term cost
of compliance with the Interim Rule will be.

Except as described herein, Triarc is not aware of any pending legislation
that in its view is likely to affect significantly the operations of Triarc's
subsidiaries. Triarc believes that the operations of its subsidiaries comply
substantially with all applicable governmental rules and regulations.

ENVIRONMENTAL MATTERS

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

As a result of certain environmental audits in 1991, SEPSCO became aware of
possible contamination by hydrocarbons and metals at certain sites of SEPSCO's
ice and cold storage operations of the refrigeration business and
has filed appropriate notifications with state environmental authorities and in
1994 completed a study of remediation at such sites. SEPSCO has removed certain
underground storage and other tanks at certain facilities of the refrigeration
operations and has engaged in certain remediation in connection therewith. Such
removal and environmental remediation involved a variety of remediation actions
at various facilities of SEPSCO located in a number of jurisdictions. Such
remediation varied from site to site, ranging from testing of soil and ground
water for contamination, development of remediation plans and removal in certain
instances of certain contaminated soils. Remediation is required at thirteen
sites which were sold to or leased by the purchaser of the ice operations.
Remediation has been completed on five of these sites and is ongoing at eight
others. Such remediation is being made in conjunction with the purchaser, which
has satisfied its obligation to pay up to $1,000,000 of such remediation costs.
Remediation is also required at seven cold storage sites which were sold to the
purchaser of the cold storage operations. Remediation has been completed at one
site, and is ongoing at three other sites. Remediation is expected to commence
on the remaining three sites in 1997 and 1998. Such remediation is being made in
conjunction with such purchaser who is responsible for the first $1,250,000 of
such costs. In addition, there were fifteen additional inactive properties of
the former refrigeration business where remediation has been completed or is
ongoing and which have either been sold or are held for sale separate from the
sales of the ice and cold storage operation. Of these, ten have been remediated
at an aggregate cost of $952,000 through December 31, 1996. In addition, during
the environmental remediation efforts on idle properties, SEPSCO became aware of
two sites which may require demolition in the future. Based on currently
available information and the current reserve levels, Triarc does not believe
that the ultimate outcome of the remediation and/or removal and demolition will
have a material adverse effect on its 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."

In May 1994 National Propane was informed of coal tar contamination which was
discovered at its properties in Marshfield, Wisconsin. National Propane
purchased the property from a company which had purchased the assets of a
utility that had previously owned the property. National Propane believes that
the contamination occurred during the use of the property as a coal gasification
plant by such utility. In order to assess the extent of the problem, National
Propane engaged environmental consultants who began work in August 1994. In
December 1994, the environmental consultants issued a report to National Propane
which estimated the range of potential remediation costs to be between $0.4
million and $0.9 million, depending upon the actual extent of impacted soils,
the presence and extent, if any, of impacted ground water and the remediation
method actually required to be implemented. In February 1996, based upon new
information, National Propane's environmental consultants issued a second report
which presented the two most likely remediation methods and revised estimates of
the costs of such methods. The report estimated the range of costs for the first
method, which involved treatment of groundwater and excavation, treatment and
disposal of contaminated soil, to be from $1.6 million to $3.3 million. The
range for the second method, which involved treatment of ground water and
building a containment wall, was from $0.4 million to $0.8 million. As of March
1, 1997, National Propane's environmental consultants have begun but have not
completed additional testing. Based upon the new information compiled to date,
which is not yet complete, it appears that the containment wall remedy is no
longer appropriate, and the likely remedy will involve treatment of ground water
and treatment by soil-vapor extraction of certain contaminated "hot spots" in
the soil, installation of a soil cap and, if necessary, excavation, treatment
and disposal of contaminated soil. As a result, the environmental consultants
have revised the range of estimated costs for the remediation to be from $0.8
million to $1.6 million. Based on discussions with National Propane's
environmental consultants, an acceptable remediation plan should fall within
this range. National Propane will have to agree upon the final plan with the
State of Wisconsin. Since receiving notice of the contamination, National
Propane has engaged in discussions of a general nature concerning remediation
with the State of Wisconsin. These discussions are ongoing and there is no
indication as yet of the time frame for a decision by the State of Wisconsin on
the method of remediation. Accordingly, it is unknown what remediation method
will be used. Based on the preliminary results of the ongoing investigation,
there is a potential that the contaminant plume may extend to locations
downgradient from the original site. If it is ultimately confirmed that the
contaminant plume extends under such properties and if such plume is
attributable to contaminants emanating from the Marshfield property, there is
the potential for future third-party claims. National Propane is also engaged in
ongoing discussions of a general nature with the successor to the utility that
operated a coal gasification plant on the property. The successor has denied any
liability for the costs of remediation of the Marshfield property or of
satisfying any related claims. If National Propane is found liable for any of
such costs, it will attempt to recover them from the successor owner. National
Propane has notified its insurance carriers of the contamination and the likely
incurrence of costs to undertake remediation and the possibility of related
claims. Pursuant to a lease relating to the Marshfield facility, the ownership
of which was not transferred to the Operating Partnership at the closing of the
IPO, the Partnership has agreed to be liable for any costs of remediation in
excess of amounts recovered from such successor or from insurance. Since the
remediation method to be used is
unknown, no amount within the cost ranges provided by the environmental
consultants can be determined to be a better estimate. Triarc does not believe
that the outcome of this matter will have a material adverse effect on Triarc's
consolidated results of operations or financial position. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

In 1993 Royal Crown became aware of possible contamination from hydrocarbons
in groundwater at two abandoned bottling facilities. In 1994, as a result of
tests necessitated by the removal of four underground storage tanks at Royal
Crown's no longer used distribution site in Miami, Florida, hydrocarbons were
discovered in the groundwater. Assessment is proceeding under the direction of
the Dade County Department of Environmental Resources Management ("DERM") to
determine the extent of the contamination. Remediation has commenced at this
site, and management estimates that total remediation costs (in excess of
amounts incurred through December 31, 1996) will be approximately $135,000,
depending on the actual extent of the contamination. Additionally, in 1994 the
Texas Natural Resources Conservation Commission approved the remediation of
hydrocarbons in the groundwater by Royal Crown at its former distribution site
in San Antonio, Texas. Remediation has commenced at this site. Management
estimates the total cost of remediation to be approximately $110,000 (in excess
of amounts incurred through December 31, 1996), of which 60-70% is expected to
be reimbursed by the State of Texas Petroleum Storage Tank Remediation Fund.
Royal Crown has incurred actual costs of $439,000, in the aggregate, through
December 31, 1996 for these matters. Triarc does not believe that the outcome of
these matters will have a material adverse effect on Triarc's consolidated
results of operations or financial position. See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

In 1987 Graniteville was notified by the South Carolina Department of Health
and Environmental Control (the "DHEC") that it discovered certain contamination
of Langley Pond ("Langley Pond") near Graniteville, South Carolina and that
Graniteville may be one of the responsible parties for such contamination. In
1990 and 1991, Graniteville provided reports to DHEC summarizing its required
study and investigation of the alleged pollution and its sources which concluded
that pond sediments should be left undisturbed and in place and that other less
passive remediation alternatives either provided no significant additional
benefits or themselves involved adverse effects. In March 1994 DHEC appeared to
conclude that while environmental monitoring at Langley Pond should be
continued, the most reasonable alternative was to leave the pond sediments
undisturbed and in place. In 1995 Graniteville submitted a proposal regarding
periodic monitoring of the site to which DHEC responded with a request for
additional information. This information was provided to DHEC in February 1996.
Triarc is unable to predict at this time what further actions, if any, may be
required in connection with Langley Pond or what the cost thereof may be. In
addition, Graniteville owns a nine acre property in Aiken County, South Carolina
(the "Vaucluse Landfill"), which was used as a landfill from approximately 1950
to 1973. The Vaucluse Landfill was operated jointly by Graniteville and Aiken
County. The United States Environmental Protection Agency conducted an Expanded
Site Inspection (an "ESI") in January 1994 and Graniteville conducted a
supplemental investigation in February 1994. In response to the ESI, DHEC
indicated its desire to have an investigation of the Vaucluse Landfill. On
August 22, 1995 DHEC requested that Graniteville enter into a consent agreement
to conduct an investigation. Graniteville responded to DHEC that a consent
agreement was inappropriate considering Graniteville's demonstrated willingness
to cooperate with DHEC requests and asked DHEC to approve Graniteville's April,
1995 conceptual investigation approach. The cost of the study proposed by
Graniteville is estimated to be between $125,000 and $150,000. Since an
investigation has not yet commenced, Triarc is currently unable to estimate the
cost, if any, to remediate the landfill. Such cost could vary based on the
actual parameters of the study. In connection with the Graniteville Sale, the
Company has agreed to indemnify Avondale for certain costs incurred by it in
connection with the foregoing matters that are in excess of the applicable
reserves. Based on currently available information, Triarc does not believe that
the outcome of these matters will have a material adverse effect on Triarc's
consolidated results of operations or financial position. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

SEASONALITY

Of Triarc's four businesses, the beverages, restaurants and LP gas businesses
are seasonal. In the beverage and restaurants businesses, the highest sales
occur during spring and summer (April through September). LP gas operations are
subject to the seasonal influences of weather which vary by region. Generally,
the demand for LP gas during the winter months, November through April, is
substantially greater than during the summer months at both the retail and
wholesale levels, and is significantly affected by climatic variations. As a
result of the foregoing, Triarc's revenues are highest during the first and
fourth calendar quarters of the year.

DISCONTINUED AND OTHER OPERATIONS

Triarc continues to own a few ancillary business assets. Consistent with
Triarc's strategy of focusing resources on its four principal businesses, from
1994 to 1996 SEPSCO completed its sale or discontinuance of substantially all of
its ancillary business assets. These sales or liquidations will not have a
material impact on Triarc's consolidated financial position or results of
operations. The precise timetable for the sale or liquidation of Triarc's
remaining ancillary business assets will depend upon Triarc's ability to
identify appropriate purchasers and to negotiate acceptable terms for the sale
of such businesses.

Insurance Operations: Historically, Chesapeake Insurance Company Limited
("Chesapeake Insurance"), an indirect wholly-owned subsidiary of Triarc, (i)
provided certain property insurance coverage for Triarc and certain of its
former affiliates; (ii) reinsured a portion of certain insurance coverage which
Triarc and such former affiliates maintained with unaffiliated insurance
companies (principally workers' compensation, general liability, automobile
liability and group life); and (iii) reinsured insurance risks of unaffiliated
third parties through various group participations. During Fiscal 1993,
Chesapeake Insurance ceased writing reinsurance of risks of unaffiliated third
parties, and during Transition 1993 Chesapeake Insurance ceased writing
insurance or reinsurance of any kind for periods beginning on or after October
1, 1993. Chesapeake Insurance continues to wind down its operations and settle
the remaining existing insurance claims of third parties.

In March 1994, Chesapeake Insurance consummated an agreement (which agreement
was effective as of December 31, 1993) with AIG Risk Management, Inc. ("AIG")
concerning the commutation to AIG of all insurance previously underwritten by
AIG on behalf of Triarc and its subsidiaries and affiliated companies for the
years 1977-1993, which insurance had been reinsured by Chesapeake Insurance. In
connection with such commutation, AIG received an aggregate of approximately
$63.5 million, consisting of approximately $29.3 million of commercial paper,
common stock and other marketable securities of unaffiliated third parties, and
a promissory note of Triarc in the original principal amount of approximately
$34.2 million. In December 1995, such promissory note was amended and restated
in order to reflect the forgiveness of $3.0 million of such indebtedness in
April 1995. In July 1996 Triarc paid $27.2 million in return for the
cancellation of the promissory note. See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources." For information regarding Triarc's insurance loss reserves
relating to Chesapeake's operations, See Note 1 to the Consolidated Financial
Statements.

Discontinued Operations: In the Consolidated Financial Statements, Triarc
reports as "discontinued operations" a few ancillary business assets, including
certain idle properties owned by SEPSCO. In 1994, SEPSCO completed its sale or
discontinuance of substantially all of its ancillary business assets. In
February 1995, SEPSCO sold to a former member of its management team the stock
of Houston Oil & Gas Company, Inc., a subsidiary which was engaged in the
natural gas and oil business ("HOG"), for an aggregate purchase price of
$800,000, consisting of $729,500 in cash, a waiver of certain bonuses payable by
SEPSCO to such former management member and a six month promissory note in the
original principal amount of $48,000, which has been paid in full. Since January
1996, SEPSCO has sold seven idle properties for an aggregate price of
approximately $485,000. In addition, in January, 1997, SEPSCO completed the sale
of a 42,000 square foot parcel of land located in Miami, Florida to a real
estate developer for a gross purchase price of approximately $1.6 million.

EMPLOYEES

As of December 31, 1996, Triarc and its four business segments employed
approximately 8,650 personnel, including approximately 1,610 salaried personnel
and approximately 7,040 hourly personnel. Triarc's management believes that
employee relations are satisfactory. At December 31, 1996, approximately 172 of
the total of Triarc's employees were covered by various collective bargaining
agreements expiring from time to time from the present through 1999.

ITEM 2. PROPERTIES.

Triarc maintains a large number of diverse properties. Management believes
that these properties, taken as a whole, are generally well maintained and are
adequate for current and foreseeable business needs. The majority of the
properties are owned. Except as set forth below, substantially all of Triarc's
materially important physical properties are being fully utilized.

Certain information about the major plants and facilities maintained by each
of Triarc's four business segments, as well as Triarc's corporate headquarters,
as of December 31, 1996 is set forth in the following table:

APPROXIMATE
SQ. FT. OF
ACTIVE FACILITIES FACILITIES-LOCATION LAND TITLE FLOOR SPACE
- --------------------------------------------------------------------------------
Corporate Headquarters.......New York, NY 1 leased 26,600
Beverages....................Concentrate Mfg:
Columbus, GA 1 owned 216,000
(including office)
Cincinnati, OH 1 leased 23,000
Royal Crown
Corporate Headquarters
Ft. Lauderdale, FL 1 leased 19,180*
Mistic Corporate
Headquarters
White Plains, NY 1 leased 32,320**
Restaurant...................355 Restaurants 75 owned ***
(all but 16 locations 280 leased
throughout the
United States)
Corporate Headquarters 1 leased 58,429
Ft. Lauderdale, FL
Specialty Chemical and Dyes..Greenville, SC 2 owned 103,000
Williston, SC 1 owned 75,000
LP Gas.......................Office 1 leased 17,000
166 Service Centers 185 owned 532,000
81 Storage Facilities 62 leased ****
(various locations
throughout the
United States)
2 Underground storage
terminals
2 Above ground
storage terminals

APPROXIMATE
SQ. FT. OF
INACTIVE FACILITIES FACILITIES-LOCATION LAND TITLE FLOOR SPACE
- -------------------------------------------------------------------------------
Restaurant...................Restaurants 1 owned ***
10 leased
Textiles.....................Fabric Mfg. 2 owned 382,000

- ------------
* Royal Crown and Arby's also share 18,759 square feet of common space at the
headquarters of their parent corporation, RC/Arby's.

** In connection with the formation of the Triarc Beverage Group,
approximately one-half of the lease obligation for Mistic's headquarters
has been assumed by Royal Crown. See "Item 1. Business--Business
Segments -- Beverages."

*** While Arby's restaurants range in size from approximately 700 square feet
to 4,000 square feet, the typical company-owned Arby's restaurant in the
United States is approximately 2,750 square feet. It is expected that all
of the company-owned Arby's restaurants will be sold. See "Item 1. Business
- Strategic Alternatives and "Business Segments -- Restaurants."

**** The LP gas facilities have approximately 33 million gallons of storage
capacity (including approximately one million gallons of storage capacity
currently leased to third parties). All such properties were transferred
to the Operating Partnership. See "Item 1. Business -- Strategic
Alternatives" and "-- Business Segments -- Liquefied Petroleum Gas."

Arby's also owns seven and leases fifteen restaurants which are leased or
sublet principally to franchisees.

Substantially all of the properties used in the and propane and dyes and
specialty chemicals segments are pledged as collateral for certain debt. In
addition, substantially all of the properties used by Mistic and certain of the
properties used in the restaurant segment are pledged as collateral for certain
debt. All other properties owned by Triarc are without significant encumbrances.

Certain information about the materially important physical properties of
Triarc's discontinued and other operations as of December 31, 1996 is set forth
in the following table:

APPROXIMATE
SQ.FT. OF
INACTIVE FACILITIES FACILITIES-LOCATION LAND TITLE FLOOR SPACE
- -------------------------------------------------------------------------------

Refrigeration..... Ice mfg. and cold storage 4 owned 92,000
Ice mfg. 13 owned 173,000
National Propane.. Undeveloped land 3 owned N/A

ITEM 3. LEGAL PROCEEDINGS.

In the fall of 1995, Granada Investments, Inc., Victor Posner and the three
former court-appointed members of a special committee of the Triarc Board ("the
Triarc Special Committee") formed in 1993 by order of the United States District
Court for the Northern District of Ohio (which order was subsequently
terminated) asserted claims against Triarc for money damages and declaratory
relief, and, in the case of the former court-appointed directors, additional
fees. On January 30, 1996 the court held that it had no jurisdiction and
dismissed all proceedings in this matter. Posner filed a notice of appeal, but
subsequently withdrew the appeal voluntarily.

In October 1995 Triarc commenced an action against Posner and a Posner
Entity in the United States District Court for the Southern District of New York
in which it asserted breaches by them of their reimbursement obligations under
the Settlement Agreement (see "Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.") The defendants have asserted certain affirmative
defenses and a counterclaim seeking a declaratory judgment that $2.9 million of
a $6.0 million settlement payment paid by defendants to Triarc pursuant to the
Settlement Agreement should be credited against defendants' obligations, if any,
to reimburse Triarc's fees and expenses under the Settlement Agreement.
Cross-motions for summary judgment have been filed and are pending.

In November, 1995, the Company commenced an action in New York State court
alleging that the three former court-appointed directors violated the
release/agreements they executed in March 1995 by seeking additional fees of
$3.0 million. The action was removed to federal court in New York. The
defendants have filed a third-party complaint against Nelson Peltz, the
Company's Chairman and Chief Executive Officer, seeking judgment against him for
any amounts recovered by Triarc against them. On December 9, 1996, the court
denied Triarc's motion for summary judgment. Discovery in the action has
commenced.

On December 6, 1995, the three former court-appointed members of the Triarc
Special Committee

commenced an action in the United States District Court for the Northern
District of Ohio seeking (among other things), an adjudication of certain
parties' actual or potential claims with respect to certain shares of Triarc's
Class A Common Stock held by the plaintiffs, an order restoring the plaintiffs
to Triarc's Board of Directors and additional fees. On February 6, 1996, the
court dismissed the action without prejudice. The plaintiffs filed a notice of
appeal, but subsequently dismissed the appeal voluntarily.

On June 27, 1996, the three former court-appointed directors commenced an
action against Nelson Peltz, Victor Posner and Steven Posner in the United
States District Court for the Northern District of Ohio seeking an order
returning the plaintiffs to Triarc's Board of Directors, a declaration that the
defendants bear continuing obligations to refrain from certain financial
transactions under a February 9, 1993 undertaking given by DWG Acquisition
Group, L.P., and a declaration that Mr. Peltz must honor all provisions of the
undertaking. On October 10, 1996, Mr. Peltz moved for judgment on the pleadings,
or, in the alternative, for a stay of the proceedings pending a resolution of
the New York action described above. The motion is pending.

In addition to the matters described immediately above and the matters
referred to or described under "Item 1. Business -- General -- Environmental
Matters," Triarc and its subsidiaries are involved in claims, litigation and
administrative proceedings and investigations of various types in several
jurisdictions. As discussed below, certain of these matters relate to
transactions involving companies which, prior to April 1993 were affiliates of
Triarc and which subsequent to April 1993 became debtors in bankruptcy
proceedings.

In connection with certain former cost sharing arrangements, advances,
insurance premiums, equipment leases and accrued interest, Triarc had
receivables due from APL Corporation, a former affiliate until April 1993,
aggregating $38,120,000 as of April 30, 1992, against which a valuation
allowance of $34,713,000 was recorded. In July 1993 APL became a debtor in a
proceeding under Chapter 11 of the Bankruptcy Code (the "APL Proceeding"). In
February 1994 the official committee of unsecured creditors of APL filed a
complaint (the "APL Litigation") against Triarc and certain companies formerly
or presently affiliated with Victor Posner or with Triarc, alleging causes of
action arising from various transactions allegedly caused by the named former
affiliates. The Chapter 11 trustee of APL was subsequently added as a plaintiff.
The complaint asserts various claims against Triarc and seeks an undetermined
amount of damages from Triarc as well as certain other relief. In April 1994
Triarc responded to the complaint by filing an Answer and Proposed Counterclaims
and Set-Offs (the "Answer"). In the Answer, Triarc denies the material
allegations in the complaint and asserts counterclaims and set-offs against APL.
On June 8, 1995, the United States Bankruptcy Court for the Southern District of
Florida (the "Bankruptcy Court") entered an order confirming the Creditors'
Committee's First Amended Plan of Reorganization (the "Plan") in the APL
Proceeding. The Plan provides, among other things, that Security Management
Corporation ("SMC"), a company controlled by Victor Posner, will own all of the
common stock of APL and that SMC, among other entities, is authorized to object
to claims made in the APL Proceeding. The Plan also provides for the dismissal
with prejudice of the APL Litigation. In August, 1995, SMC filed an objection
(the "Objection") to the claims against APL filed by Triarc and Chesapeake
Insurance. On September 5, 1995, Triarc and Chesapeake Insurance filed responses
to the Objection denying the material allegations in the Objection. In addition,
Triarc and Chesapeake Insurance filed a motion to dismiss the Objection on the
basis that SMC is barred from making the Objections because of the dismissal
with prejudice of the APL Litigation under the Plan. The Bankruptcy Court
entered an order that, among other things, dismissed the APL Litigation and
dismissed the Objection. In December 1995, APL filed a motion for rehearing and
reconsideration of the final judgment of dismissal of the APL Litigation and SMC
filed a motion for rehearing and reconsideration of the order dismissing the
Objection. On March 12, 1996, the Bankruptcy Court denied APL's and SMC's
motions for rehearing. SMC and APL have appealed, and their appeal is pending.

On December 11, 1995, Triarc and Chesapeake commenced a proceeding in the
Bankruptcy Court under section 1144 of the Bankruptcy Code, naming Victor
Posner, SMC and APL as defendants, and naming the official committee of
unsecured creditors of APL as a nominal defendant (the "1144 Proceeding").
Triarc commenced the 1144 proceeding because of motions pending on December 11,
1995 (the final date on which such a proceeding could be commenced under the
Bankruptcy Code), in which APL and SMC sought to continue prosecuting the APL
Litigation against Triarc and Chesapeake Insurance notwithstanding that the Plan
required the dismissal of the APL Litigation with prejudice. In the event APL
and SMC were to prevail in such attempts, Triarc would seek to have the
confirmation order revoked or modified in certain respects, including to prevent
the prosecution of the APL Litigation against Triarc and Chesapeake Insurance.
On January 25, 1996, SMC and APL filed a motion to dismiss the 1144 Proceeding.
On February 26, 1996, the committee of unsecured creditors of APL filed an

answer and affirmative defenses to the complaint in the 1144 Proceeding, denying
that the Plan required the dismissal of the APL Litigation. On April 15, 1996,
the court granted SMC's and APL's motion to dismiss on the ground that the
action was moot. Plaintiffs have appealed, and the appeal is pending.

On February 19, 1996, Arby's Restaurants S.A. de C.V. ("AR"), the master
franchisee of Arby's in Mexico, commenced an action in the civil court of Mexico
against Arby's for breach of contract. AR alleged that a non-binding letter of
intent dated November 9, 1994 between AR and Arby's constituted a binding
contract pursuant to which Arby's had obligated itself to repurchase the master
franchise rights from AR for $2.5 million. AR also alleged that Arby's had
breached a master development agreement between AR and Arby's. Arby's promptly
commenced an arbitration proceeding on the ground that the franchise and
development agreements each provided that all disputes arising thereunder were
to be resolved by arbitration. Arby's is seeking a declaration in the
arbitration to the effect that the November 9, 1994 letter of intent was not a
binding contract and therefore AR has no valid breach of contract claim, as well
as a declaration that AR's commencement of suspension of payments proceedings in
February 1995 had automatically terminated the master development agreement. In
the civil court proceeding, the court denied a motion by Arby's to suspend the
proceedings pending the results of the arbitration, and Arby's has appealed that
ruling. In the arbitration, some evidence has been taken but proceedings have
been suspended by the court handling the suspension of payments proceedings.
Arby's is contesting AR's claims vigorously and believes that it has meritorious
defenses to AR's claims.

On November 4, 1996, the bankruptcy trustee appointed in the case of Prime
Capital Corporation ("Prime") (formerly known as Intercapital Funding Resources,
Inc.) made a demand on Chesapeake Insurance and SEPSCO, seeking the return of
payments aggregating $5.3 million which Prime allegedly made to those entities
during 1994 and suggesting that litigation would be commenced against SEPSCO and
Chesapeake Insurance if these monies were not returned. The trustee has
commenced avoidance actions against SEPSCO and Chesapeake Insurance (as well as
actions against certain current and former officers of Triarc or their spouses
with respect to payments made directly to them) in January 1997, claiming the
payments to them were preferences or fraudulent transfers. (SEPSCO and
Chesapeake Insurance had entered into separate joint ventures with Prime, and
the payments at issue were made in connection with termination of the
investments in such joint ventures.) Triarc believes, based on advice of
counsel, that SEPSCO and Chesapeake Insurance have meritorious defenses to the
trustee's claims and that discovery may reveal additional defenses. Accordingly,
SEPSCO and Chesapeake Insurance intend to vigorously contest the claims asserted
by the trustee. However, it is possible that the trustee may be successful in
recovering the payments. The maximum amount of SEPSCO's and Chesapeake
Insurance's aggregate liability is approximately $5.3 million plus interest;
however, to the extent SEPSCO or Chesapeake Insurance return to Prime's estate
any amount of the challenged payments, they will be entitled to an unsecured
claim against such estate. The court has scheduled a trial for the week of May
27, 1997.

Other matters arise in the ordinary course of Triarc's business, and it is
the opinion of management that the outcome of any such matter will not have a
material adverse effect on Triarc's consolidated financial condition or results
of operations.

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

Triarc held its 1996 Annual Meeting of Shareholders on June 6, 1996. The
matters acted upon by the shareholders at that meeting were reported in Triarc's
quarterly report on Form 10-Q for the quarter ended June 30, 1996.

PART II

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

The principal market for Triarc's Class A Common Stock is the New York
Stock Exchange ("NYSE") (symbol: TRY). On June 29, 1995, at Triarc's request,
the Class A Common Stock was delisted from trading on the Pacific Stock
Exchange. The high and low market prices for Triarc's Class A Common Stock, as
reported in the consolidated transaction reporting system, are set forth below:

MARKET PRICE
--------------------
FISCAL QUARTERS HIGH LOW
- -------------------------------------------------------------------------------

1995
FIRST QUARTER ENDED MARCH 31.......................... $13 1/4 $ 11 1/8
SECOND QUARTER ENDED JUNE 30.......................... 16 3/4 13 1/8
THIRD QUARTER ENDED SEPTEMBER 30...................... 15 5/8 12 3/8
FOURTH QUARTER ENDED DECEMBER 31...................... 14 1/4 9 1/2
1996
FIRST QUARTER ENDED MARCH 31.......................... $14 3/8 $ 10 7/8
SECOND QUARTER ENDED JUNE 30.......................... 13 3/8 11 1/2
THIRD QUARTER ENDED SEPTEMBER 30...................... 12 7/8 10
FOURTH QUARTER ENDED DECEMBER 31...................... 12 3/4 10 3/4

Triarc did not pay any dividends on its common stock in Fiscal 1995, Fiscal
1996 or in the current year to date and does not presently anticipate the
declaration of cash dividends on its common stock in the near future.

On April 23, 1993, DWG Acquisition Group, L.P. ("DWG Acquisition"), a
Delaware limited partnership the sole general partners of which are Nelson Peltz
and Peter W. May, acquired shares of common stock of Triarc (then known as DWG
Corporation ("DWG")) from Victor Posner ("Posner") and certain entities
controlled by Posner (together with Posner, the "Posner Entities"), representing
approximately 28.6% of Triarc's then outstanding common stock. As a result of
such acquisition and a series of related transactions which were also
consummated on April 23, 1993, the Posner Entities no longer hold any shares of
voting stock of Triarc or any of its subsidiaries. Pursuant to a Settlement
Agreement dated as of January 9, 1995 (the "Settlement Agreement") among Triarc
and Posner and certain Posner Entities, a Posner Entity converted the $71.8
million stated value of Triarc's 8-1/8% Redeemable Convertible Preferred Stock
(which paid an aggregate dividend of approximately $5.8 million per annum) owned
by it into 4,985,722 shares of Triarc's non-voting Class B Common Stock. In
addition, an additional 1,011,900 shares of Triarc's Class B Common Stock were
issued to Posner and a Posner Entity (which shares are, among other things,
subject to a right of first refusal in favor of Triarc or its designee). Such
conversion and issuance of Class B Common Stock resulted in an aggregate
increase of approximately $83.8 million in Triarc's common shareholders' equity.
All such shares of Class B Common Stock can be converted without restriction
into shares of Class A Common Stock if they are sold to a third party
unaffiliated with the Posner Entities. Triarc, or its designee, has certain
rights of first refusal if such shares are sold to an unaffiliated third party.
There is no established public trading market for the Class B Common Stock.
Triarc has no class of equity securities currently issued and outstanding except
for the Class A Common Stock and the Class B Common Stock.

Because Triarc is a holding company, its ability to meet its cash
requirements (including required interest and principal payments on the
Partnership Loan) is primarily dependent upon its cash on hand and marketable
securities and cash flows from its subsidiaries including loans and cash
dividends and reimbursement by subsidiaries to Triarc in connection with its
providing certain management services and payments by subsidiaries under certain
tax sharing agreements. In connection with the Spinoff Transactions it is
expected that Triarc will retain all or substantially all of its cash on hand
and marketable securities. Upon completion of the Spinoff Transactions, however,
it is expected that Triarc will no longer be entitled to receive cash dividends
or tax sharing payments (relating to the period subsequent to the Spinoff
Transactions) from its restaurant and beverage businesses. It is anticipated
that Triarc may enter into a management and administrative services agreement
with the businesses that are spun-off. Under the terms of various indentures and
credit arrangements, Triarc's principal subsidiaries (other than National
Propane) are currently unable to pay any dividends or make any loans or advances
to Triarc. The relevant restrictions of such debt instruments are described
under "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations --Liquidity and Capital Resources" and in Note 13 to the
Consolidated Financial Statements.

On July 8, 1996, Triarc announced that its management was authorized, when
and if market conditions
warranted, to purchase from time to time during the twelve month period
commencing July 8, 1996, up to $20 million of its outstanding Class A Common
Stock. As of March 15, 1997, Triarc had repurchased 44,300 shares of Class A
Common Stock at an aggregate cost of approximately $496,500.

As of March 15, 1997, there were approximately 5,650 holders of record of
the Class A Common Stock and two holders of record of the Class B Common Stock.

ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

EIGHT MONTHS
ENDED
FISCAL YEAR ENDED APRIL 30, DECEMBER YEAR ENDED DECEMBER 31,
----------------------------- ---------- ----------------------------------------------
1992 (1) 1993 1993 (3) 1994 1995 1996
---- ---- ----- ---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<S> <C> <C> <C> <C> <C> <C>
Revenues................$1,074,703 $1,058,274 $ 703,541 $1,062,521 $1,184,221 $ 989,249
Operating profit (loss). 58,552 34,459 (4) 29,969(5) 68,933 (6) 33,989 (7) (6,979)(9)
Loss from continuing
operations............. (10,207) (44,549)(4) (30,439)(5) (2,093)(6) (36,994)(7) (8,485)(9)
Income (loss) from
discontinued operations,
net ................... 2,705 (2,430) (8,591) (3,900) -- --
Extraordinary items .... -- (6,611) (448) (2,116) -- (5,416)
Cumulative effect of
changes in accounting
principles, net........ -- (6,388) -- -- -- --
Net loss................ (7,502) (59,978)(4) (39,478)(5) (8,109)(6) (36,994)(7) (13,901)(9)
Preferred stock dividend
requirements (2)....... (11) (121) (3,889) (5,833) -- --
Net loss applicable to
common stockholders.... (7,513) (60,099) (43,367) (13,942) (36,994) (13,901)
Loss per share:
Continuing operations.. (.39) (1.73) (1.62) (.34) (1.24) (.28)
Discontinued operations .10 (.09) (.40) (.17) -- --
Extraordinary items.... -- (.26) (.02) (.09) -- (.18)
Cumulative effect of
changes in accounting
principles........... -- (.25) -- -- -- --
Net loss per share..... (.29) (2.33) (2.04) (.60) (1.24) (.46)
Total assets............ 821,170 910,662 897,246 922,167 1,085,966 854,404
Long-term debt.......... 289,758 488,654 575,161 612,118 763,346 500,529
Redeemable preferred stock -- 71,794 71,794 71,794 -- (8) --
Stockholders' equity
(deficit) 86,482 (35,387) (75,981) (31,783) 20,650 (8) 6,765
Weighted-average common
shares outstanding..... 25,867 25,808 21,260 23,282 29,764 29,898
</TABLE>

(1) Selected Financial Data for the fiscal year ended April 30, 1992 has been
retroactively restated to reflect the discontinuance of the Company's
utility and municipal services and refrigeration operations in 1993.

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

(3) The Company changed its fiscal year from a fiscal year ending April 30 to a
calendar year ending December 31 effective for the eight-month transition
period ended December 31, 1993 ("Transition 1993").

(4) Reflects certain significant charges recorded during the fiscal year ended
April 30, 1993 as follows: $51,689,000 charged to operating profit
representing $43,000,000 of facilities relocation and corporate
restructuring relating to a change in control of the Company and $8,689,000
of other net charges; $48,698,000 charged to loss from continuing operations
representing the aforementioned $51,689,000 charged to operating profit,
$8,503,000 of other net charges, less $19,391,000 of income tax benefit and
minority interest effect relating to the aggregate of the above charges, and
plus $7,897,000 of provision for income tax contingencies and $67,060,000
charged to net loss representing the aforementioned $48,698,000 charged to
operating profit, a $5,363,000 write-down relating to the impairment of
certain unprofitable operations and accruals for environmental remediation
and losses on certain contracts in progress, net of income tax benefit and
minority interests, a $6,611,000 extraordinary charge from the early
extinguishment of debt and $6,388,000 cumulative effect of changes in
accounting principles.
- -------------------------------------------

(5) Reflects certain significant charges recorded during Transition 1993 as
follows: $12,306,000 charged to operating profit principally representing
$10,006,000 of increased insurance reserves; $25,617,000 charged to loss
from continuing operations representing the aforementioned $12,306,000
charged to operating profit, $5,050,000 of certain litigation setttlement
costs, $3,292,000 of reduction to net realizable value of certain assets
held for sale other than discontinued operations, less $2,231,000 of income
tax benefit and minority interest effect relating to the aggregate of the
above charges, and plus a $7,200,000 provision for income tax contingencies;
and $34,437,000 charged to net loss representing the aforementioned
$25,617,000 charged to loss from continuing operations and an $8,820,000
loss from discontinued operations.

(6) Reflects certain significant charges recorded during 1994 as follows:
$9,972,000 charged to operating profit representing $8,800,000 of facilities
relocation and corporate restructuring and $1,172,000 of advertising
production costs that in prior periods were deferred; $4,782,000 charged to
loss from continuing operations representing the aforementioned $9,972,000
charged to operating profit, $7,000,000 of costs of a proposed acquisition
not consummated less $6,043,000 of gain on sale of natural gas and oil
business, less income tax benefit relating to the aggregate of the above
charges of $6,147,000; and $10,798,000 charged to net loss representing the
aforementioned $4,782,000 charged to loss from the early extinguishment of
debt from continuing operations, $3,900,000 loss from discontinued
operations and a $2,116,000 extraordinary charge from the early
extinguishment of debt.

(7) Reflects certain significant charges recorded during 1995 as follows:
$19,331,000 charged to operating profit representing a $14,647,000 charge
for a reduction in the carrying value of long-lived assets impaired or to be
disposed of, $2,700,000 of facilities relocation and corporate restructuring
and $1,984,000 of other net charges; and $15,199,000 charged to loss from
continuing operations and net loss representing the aforementioned
$19,331,000 charged to operating profit, $7,794,000 of equity in losses and
write-down of investments in affiliates, less $15,088,000 of net gains
consisting of $11,945,000 of gain on sale of excess timberland and
$3,143,000 of other net gains, less $2,938,000 of income tax benefit
relating to the aggregate of the above charges and plus a $6,100,000
provision for income tax contingencies.

(8) In 1995 all of the redeemable preferred stock was converted into common
stock and an additional 1,011,900 common shares were issued (see Notes 16
and 17 to the Consolidated Financial Statements) resulting in an $83,811,000
improvement in stockholders' equity (deficit).

(9) Reflects certain significant charges and credits recorded during 1996 as
follows: $73,100,000 charged to operating profit representing a $64,300,000
charge for a reduction in the carrying value of long-lived assets impaired
or to be disposed of and $8,800,000 of facilities relocation and corporate
restructuring; and $1,279,000 charged to loss from continuing operations and
net loss representing the aforementioned $73,100,000 charged to operating
profit, $77,000,000 of gains on sale of businesses, net (see Note 19 to the
Consolidated Financial Statements) and plus $5,179,000 of income tax
provision on the above net credits.

<PAGE>

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

INTRODUCTION

This "Management's Discussion and Analysis of Financial Condition and
Results of Operations" should be read in conjunction with the consolidated
financial statements included herein of Triarc Companies, Inc. ("Triarc" or,
collectively with its subsidiaries, the "Company"). Certain statements under
this caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" constitute "forward-looking statements" under the Reform
Act. See "Special Note Regarding Forward-Looking Statements" in "Part I"
preceding "Item 1". As used herein, "1996", "1995" and "1994" refer to the
calendar years ended December 31, 1996, 1995 and 1994, respectively.

RESULTS OF OPERATIONS

The diversity of the Company's business segments precludes any overall
generalization about trends for the Company.

Trends affecting the beverage segment in recent years have included the
increased market share of private label beverages, increased price competition
throughout the industry, the development of proprietary packaging and the
proliferation of new products being introduced including "premium" beverages.

Trends affecting the restaurant segment in recent years include consistent
growth of the restaurant industry as a percentage of total food-related
spending, with the quick service restaurant ("QSR"), or fast food segment in
which the Company operates (see below), being the fastest growing segment of the
restaurant industry. In addition, there has been increased price competition in
the QSR industry, particularly evidenced by the value menu concept which offers
comparatively lower prices on certain 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. Some QSR's have
been adding selected higher-priced premium quality items to their menus, which
appeal more to adult tastes and recover some of the margins lost in the
discounting of other menu items. Assuming consummation of the RTM sale (see
discussion below under "Liquidity and Capital Resources"), the Company's
restaurant operations will be exclusively franchising.

Propane, relative to other forms of energy, is gaining recognition as an
environmentally superior, safe, convenient, efficient and easy-to-use energy
source in many applications. The other significant trend affecting the propane
segment in recent years is the energy conservation trend, which from time to
time has negatively impacted the demand for energy by both residential and
commercial customers.

The dye and chemical business portion of the textile segment (see discussion
below of the April 1996 sale of the Textile Business) is subject to cyclical
economic trends and foreign competition that affect the domestic textile
industry. This competition creates pricing pressure which is passed along to the
suppliers of the textile industry who are then forced to absorb price decreases
or surrender business. This situation has been further exacerbated by (i) the
rapid growth of producers in China and India resulting in exports to the United
States markets in the domestic dye and chemical industry and (ii) the
establishment by European dye and chemical and fabric manufacturers of joint
ventures in Asian countries where labor, raw material and environmental costs
are lower.

1996 COMPARED WITH 1995

Revenues, excluding sales of $505.7 million and $157.5 million for 1995 and
1996, respectively, associated with the Textile Business sold on April 29, 1996
(see below), increased $153.2 million (22.6%) to $831.8 million in 1996.

Beverages - Revenues increased $94.6 million (44.1%) to $309.1 million due
to (i) $89.2 million of higher revenues from Mistic Brands, Inc. ("Mistic"),
the Company's premium beverage business, reflecting the 1996 full year
effect of the Mistic acquisition on August 9, 1995, (ii) a $6.9 million
increase in finished beverage product sales (as opposed to concentrate) and
(iii) a $1.7 million volume increase in private label concentrate sales, all
partially offset by a $3.2 million decrease in branded concentrate sales.

Restaurants - Revenues increased $15.6 million (5.7%) to $288.3 million due
to (i) a $14.1 million increase in net sales principally resulting from the
inclusion in 1996 of a full year of net sales for the 85 company-owned
restaurants added in 1995 (net of closings) and a 0.5% increase in
same-store sales and (ii) a $1.5 million increase in royalties and franchise
fees primarily resulting from a net increase of 90 (3.5%) franchised
restaurants, a 0.8% increase in same-store sales of franchised restaurants
and a 2.0% increase in average royalty rates due to the declining
significance of older franchise agreements with lower rates, the effects of
which were partially offset by a $1.8 million decrease in franchise fees
resulting from fewer franchise store openings in 1996.

Propane - Revenues increased $24.3 million (16.3%) to $173.3 million due to
the effect of higher selling prices of $15.8 million resulting from passing
on a portion of higher propane costs to customers and higher volume of $9.4
million primarily resulting from an increase in gallons sold to
non-residential customers, both partially offset by a $0.9 million decrease
in revenues from other product lines.

Textiles - (including specialty dyes and chemicals) - As discussed further
below in "Liquidity and Capital Resources", on April 29, 1996 the Company
sold its textile business segment other than its specialty dyes and chemical
business and certain other excluded assets and liabilities (the "Textile
Business"). Principally as a result of such sale, revenues of the Textile
Business decreased $329.3 million (60.1%) to $218.6 million. In addition,
lower revenues ($16.3 million) of the Textile Business in the four-month
period ended April 1996 compared with the comparable 1995 period contributed
to the decrease principally reflecting lower volume due to weak demand for
utility wear fabrics ($15.9 million). Overall revenues of the specialty dyes
and chemicals business decreased $0.6 million (0.9%) while revenues of this
business reported in consolidated "Net sales" in the accompanying condensed
consolidated statements of operations increased $18.9 million (44.7%) to
$61.1 million in 1996 as revenues from sales of $19.2 million to the
purchaser of the Textile Business subsequent to the April 29, 1996 sale of
the Textile Business were no longer eliminated in consolidation as
intercompany sales.

Gross profit (total revenues less cost of sales), excluding gross profit of
$44.9 million and $16.9 million for 1995 and 1996, respectively, associated with
the Textile Business, increased $40.9 million to $320.3 million in 1996. Such
increase is principally due to $34.0 million of higher gross profit due to the
full year effect of the Mistic acquisition in 1996. In addition, gross profit
was positively impacted by overall higher revenues in the Company's other
businesses partially offset by lower overall gross margins in such businesses.

Beverages - Margins decreased to 54.0% from 61.5% due to the full year
effect in 1996 from the inclusion of lower-margin finished product sales
principally associated with Mistic (38.5% gross margin in 1996) compared
with margins from concentrate sales.

Restaurants - Margins increased to 33.7% from 33.0% primarily due to lower
beef costs and health insurance costs and an improvement in labor
efficiencies due to fewer new store openings and related start-up costs in
1996 versus 1995, the effects of which were partially offset by a slightly
lower percentage of royalties and franchise fees (with no associated cost of
sales) to total revenues.

Propane - Margins decreased to 23.4% from 26.8% due to higher propane costs
that could not be fully passed through to customers, a shift in customer mix
toward lower-margin commercial accounts, slightly higher operating expenses
attributable to the increased cost of fuel for delivery vehicles and
start-up costs of six new propane plants opened in the last quarter of 1995
and the first half of 1996.

Textiles - As noted above, the Textile Business was sold in April 1996. As a
result, for the year ended December 31, 1996, margins for this segment
increased to 14.9% from 11.4% reflecting the higher-margin revenues of the
remaining specialty dyes and chemicals business. Margins for the specialty
dyes and chemicals business decreased to 22.3% from 24.6% due to weak
pricing reflecting competitive pressures currently being experienced in the
textile industry.

Advertising, selling and distribution expenses increased $10.5 million to
$139.7 million in 1996 due to (i) $21.4 million of expenses associated with
Mistic resulting from (a) the 1996 full year effect of its August 1995
acquisition and, to a lesser extent, (b) the nonrecurring effect of cooperative
advertising reimbursements to Mistic by distributors in 1995 which program was
discontinued in 1996 and replaced by increased selling prices and (ii) $3.4
million of higher advertising costs in the restaurant segment primarily in
response to competitive pressures, a larger company-owned store base and
multi-brand restaurant development. Such increases were partially offset by (i)
$9.4 million of decreases related to the beverage segment other than Mistic
reflecting (a) a net reduction in media spending for branded concentrate
products and Royal Crown Premium Draft Cola ("Draft Cola"), for which there had
been higher costs in connection with its launch in mid-1995 and (b) lower
beverage coupon costs reflecting reduced bottler utilization and (ii) a $5.1
million decrease reflecting the sale of the Textile Business in April 1996.

General and administrative expenses decreased $15.5 million to $131.4
million in 1996 resulting from $16.4 million of lower expenses of the textile
segment primarily reflecting the sale of the Textile Business and net decreases
in the remaining operations of the Company principally reflecting the effect of
cost reduction efforts and non-recurring 1995 charges including (i) $2.7 million
relating to the settlement of a patent infringement lawsuit, (ii) $2.2 million
of increased amortization of restricted stock reflecting $3.3 million of
accelerated vesting in 1995 of all grants of such stock and (iii) $2.1 million
for the closing of certain unprofitable restaurants. Such decreases were
partially offset by $8.6 million of higher expenses resulting from the full year
effect of Mistic in 1996.

The 1995 and 1996 reductions in carrying value of long-lived assets
impaired or to be disposed of result from the application of the evaluation
measurement requirements under Statement of Financial Accounting Standards
No.121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" which was adopted in 1995. The 1996 provision of $64.3
million was recorded principally to reduce the carrying value of certain
long-lived assets and certain identifiable intangibles to estimated fair value
principally relating to the estimated loss on the anticipated disposal of
long-lived assets in connection with the planned sale of all company-owned
restaurants (see further discussion below under "Liquidity and Capital
Resources"). The reduction in carrying value of long-lived assets impaired or to
be disposed of in the amount of $14.6 million in 1995 reflects a $12.0 million
reduction in the net carrying value of certain restaurants and other long-lived
restaurant assets which were determined to be impaired and a $2.6 million
reduction in the net carrying value of certain other restaurants and equipment
to be disposed of.

The 1996 facilities relocation and corporate restructuring charge of $8.8
million results from (i) $3.7 million of estimated losses on planned subleases
(principally for the write-off of nonrecoverable unamortized leasehold
improvements and furniture and fixtures) of surplus office space in excess of
anticipated sublease proceeds as a result of the planned sale of company-owned
restaurants discussed below under "Liquidity and Capital Resources" and the
relocation of the headquarters of Royal Crown Company, Inc. ("Royal Crown")
which are being centralized with Mistic's offices in White Plains, New York,
(ii) $2.2 million of employee severance costs associated with the relocation of
Royal Crown's headquarters, (iii) $1.3 million for terminating a beverage
distribution agreement, (iv) $0.6 million for the shutdown of the beverage
segment's Ohio production facility and other asset disposals, (v) $0.6 million
for consultant fees paid associated with combining certain operations of Royal
Crown and Mistic and (vi) $0.4 million of costs related to the planned spinoff
of the Company's restaurant/beverage group discussed below under "Liquidity and
Capital Resources". The 1995 charge of $2.7 million principally reflected
severance costs for terminated corporate employees.

Prior to 1994 the Company had fully reserved for secured receivables from
Pennsylvania Engineering Corporation ("PEC"), a former affiliate which had filed
for protection under the bankruptcy code. In 1995 the Company received $3.0
million with respect to amounts owed to the Company by PEC representing the
Company's allocated portion of the bankruptcy settlement; such amount was
classified as "Recovery of doubtful accounts of affiliates and former
affiliates" in the accompanying consolidated statement of operations.

Interest expense decreased $10.8 million to $73.4 million in 1996 due to
lower average levels of debt reflecting repayments prior to maturity of (i)
$191.4 million of debt of the Textile Business in connection with its sale on
April 29, 1996, (ii) the $36.0 million principal amount of the Company's 11 7/8%
senior subordinated debentures due February 1, 1998 (the "11 7/8% Debentures")
on February 22, 1996 and (iii) $34.7 million principal amount of a 9 1/2%
promissory note (the "9 1/2% Note") on July 1, 1996, partially offset by (i) the
full year effect in 1996 of (a) borrowings resulting from the Mistic acquisition
($68.7 million outstanding as of December 31, 1996) and (b) financing for
capital spending at the restaurant segment principally during the second through
fourth quarters of 1995 ($58.4 million outstanding as of December 31, 1996) and
(ii) borrowings under the Patrick Facility (see discussion below under
"Liquidity and Capital Resources") entered into in May 1996 ($33.9 million
outstanding as of December 31, 1996).

Gain on sales of businesses, net of $77.0 million in 1996 resulted from an
$85.2 million pretax gain resulting from the sale of a 57.3% interest in
National Propane Partners, L.P. (the "Partnership"), a partnership formed by
National Propane Corporation ("National Propane"), a wholly-owned subsidiary of
the Company, to acquire, own and operate the propane business (see further
discussion below under "Liquidity and Capital Resources") partially offset by
(i) a $4.5 million pretax loss on the sale of the Textile Business and (ii) a
$3.7 million pretax loss associated with the write-down of MetBev, Inc.
("MetBev"), a distributor of the Company's beverage products in the New York
City metropolitan area. Loss on sale of businesses, net in 1995 of $0.1 million
reflects a $1.0 million write-down of MetBev substantially offset by $0.9
million of gains related to the sales of the natural gas and oil businesses.

Other income, net decreased $4.3 million to $8.0 million in 1996. This was
due to a nonrecurring 1995 gain of $11.9 million on the sale of excess
timberland partially offset by (i) increased interest income of $5.1 million
from the Company's increased portfolio of cash equivalents and debt securities
as a result of proceeds in connection with the sale of (a) a 57.3% interest in
the Partnership and (b) the Textile Business and (ii) other net improvements.

The Company's provision from income taxes for 1996 represented an effective
rate of 244% which differs from the Federal income tax statutory rate of 35%
principally due to (i) a non-deductible loss on the sale of the Textile Business
of $2.9 million, or 63%, (ii) an additional provision for income tax
contingencies of $2.6 million, or 56%, (iii) the effect of the amortization of
nondeductible costs in excess of net assets of acquired companies ("Goodwill")
of $2.2 million, or 47%, and (iv) the effect of net operating losses for which
no tax benefit is available of $1.3 million, or 27%. The Company's benefit from
income taxes for 1995 represented an effective rate of 3% which was
significantly less than the statutory rate principally due to (i) a provision
for income tax contingencies relating to the examination of the Company's income
tax returns for the years 1989 through 1992 of $6.1 million, or 16%, (ii)
nondeductible amortization of Goodwill of $2.3 million, or 6% and (iii)
nondeductible amortization of restricted stock of $1.4 million, or 4%.

The minority interests in net income of consolidated subsidiary of $1.8
million in 1996 represent the limited partners' interest in the net income of
the Partnership since the sale of such interest in July 1996 (see further
discussion below under "Liquidity and Capital Resources").

The extraordinary items aggregating a charge of $5.4 million in 1996 result
from the early extinguishment of the 11 7/8% Debentures on February 22, 1996,
all of the debt of TXL Corp. ("TXL", formerly Graniteville Company), a
wholly-owned subsidiary of the Company, including its credit facility, in
connection with the sale of the Textile Business on April 29, 1996 and
substantially all of the long-term debt of National Propane and the 9 1/2% Note
in July 1996, and consist of (i) the write-off of $10.4 million of unamortized
deferred financing costs and $1.8 million of unamortized original issue
discount, (ii) the payment of prepayment penalties and related costs of $5.7
million and (iii) fees of $0.3 million, partially offset by (i) discount from
principal of $9.2 million on the early extinguishment of the 9 1/2% Note and
(ii) income tax benefit of $3.6 million.

1995 COMPARED WITH 1994

Revenues increased $121.7 million (11.5%) to $1,184.2 million in 1995.

Restaurants - Revenues increased $49.6 million (22.2%) due to (i) $50.1
million of net sales resulting from 85 additional company-owned restaurants
(including acquired restaurants) to a total of 373 at the end of 1995,
partially offset by a $5.3 million decrease in company-owned store sales due
primarily to increased competitive discounting and a decline in customer
orders, (ii) a $3.5 million increase in royalties resulting from a net
increase of 77 franchised restaurants, a 3.3% increase in average royalty
rates due to the declining significance of older franchise agreements with
lower rates, and a 0.9% increase in franchised same-store sales and (iii) a
$1.3 million increase in franchise fees and other revenues.

Beverages - Revenues increased $63.8 million (42.3%) consisting principally
of (i) $41.9 million of revenues from Mistic and (ii) $20.8 million of
finished beverage product sales (as opposed to concentrate) arising from the
Company's January 1995 acquisition of TriBev Corporation ("TriBev").

The remaining increase reflected sales from the launch of Draft Cola in the
New York and Los Angeles metropolitan areas during the second quarter of
1995.

Textiles - Revenues increased $11.0 million (2.0%) principally reflecting
higher sales of indigo-dyed sportswear ($33.8 million) and utility wear
($8.9 million) significantly offset by lower sales of piece- dyed sportswear
($27.6 million) and specialty products ($3.7 million). Selling prices for
the utility wear and sportswear product lines rose reflecting the partial
pass-through of higher cotton and polyester costs and indigo-dyed sportswear
was positively impacted by higher volume amounting to $21.1 million due to
improved market conditions reflecting the continued turnaround (since late
1994) in the denim market. The decrease in piece-dyed sportswear revenue was
attributable to a poor retail market.

Propane - Revenues decreased $2.7 million principally due to reduced propane
sales volume reflecting the exceptionally warm weather in the first quarter
of 1995 partially offset by the impact of acquisitions.

Gross profit increased $11.7 million to $324.3 million in 1995 due to the
operating results of the 1995 acquisition of (i) Mistic ($16.5 million) and (ii)
TriBev ($2.4 million), offset by lower margins in the existing businesses.

Restaurants - Margins decreased to 33.0% from 37.3% due primarily to (i)
$3.0 million of costs associated with replacing the point-of-sale register
system in all domestic company-owned restaurants and (ii) start-up costs
associated with the significantly higher number of new restaurant openings
(49 in 1995 versus 9 in 1994). Also affecting margins was the lower
percentage of royalties and franchise fees to total revenues.

Beverages - Margins decreased to 61.5% from 76.5% principally due to the
inclusion in 1995 of the lower-margin finished product sales associated with
Mistic (39.3%) and TriBev (11.4%) and lower margins associated with the
finished product sales of Draft Cola noted above.

Textiles - Margins decreased to 11.4% from 13.4% principally due to the
higher raw material cost of cotton (which reached its highest levels this
century) and polyester and other manufacturing cost increases in 1995 which
could not be fully passed on to customers in the form of higher selling
prices.

Propane - Margins decreased to 26.8% from 27.7% due to higher propane costs
which could only be partially passed on to customers in the form of higher
selling prices because of increased competition as a result of the
continuing effects of the substantially warmer weather in the first quarter
of 1995.

Advertising, selling and distribution expenses increased $19.5 million to
$129.2 million in 1995, of which $10.3 million relates to the results of the
acquired beverage operations. The remaining increase of $9.2 million reflects
(i) higher expenses in the beverage segment, reflecting increased spending in
connection with the introduction of Draft Cola, and (ii) higher expenses in the
restaurant segment primarily attributable to the increased number of
company-owned restaurants and increased promotional food costs relating to
competitive discounting.

General and administrative expenses increased $21.7 million to $146.8
million in 1995 of which $7.5 million relates to the results of the Mistic
acquisition. Among the factors causing the remaining increase of $14.2 million
are (i) $7.0 million of increases in the restaurant and beverage segments in
employee compensation, relocation and severance costs principally associated
with building an infrastructure to facilitate the then growth plans primarily in
the restaurant segment, (ii) a $2.7 million charge relating to the settlement of
a patent infringement lawsuit, (iii) a $2.2 million increase in amortization of
restricted stock reflecting $3.3 million of accelerated vesting in 1995 of all
grants of such stock, (iv) a $2.1 million provision for the closing of certain
unprofitable restaurants and (v) other general inflationary increases.

The 1995 $14.6 million reduction in carrying value of long-lived assets
impaired or to be disposed of, the $2.7 million facilities relocation and
corporate restructuring charge and the $3.0 million recovery of doubtful
accounts of affiliates and former affiliates are discussed above. The 1994
facilities relocation and corporate restructuring charges of $8.8 million
consisted of (i) costs associated with the relocation of Triarc's corporate
office from West Palm Beach, Florida to New York City and (ii) severance costs
related to terminated corporate employees.

Interest expense increased $11.2 million to $84.2 million in 1995 due to
higher average levels of debt reflecting the Mistic acquisition and financing
for higher capital spending at the restaurant segment and, to a lesser extent,
higher interest rates on certain of the Company's floating rate debt.

Loss on sale of businesses, net in 1995 of $0.1 million is discussed above.
Gain on sale of businesses in 1994 of $6.0 million resulted from the sale of the
Company's natural gas and oil business.

Other income, net increased $13.5 million to $12.3 million in 1995
principally due to the $11.9 million gain on sale of excess timberland.

The Company's benefit from income taxes for 1995 represented an effective
rate of 3% which differed from the statutory rate due to the reasons previously
discussed. The 1994 rate of 199% differed due to (i) the amortization of
Goodwill and (ii) state income taxes which exceed pretax losses due to the
effect of losses in certain states for which no benefit is available, partially
offset by the release of valuation allowances in connection with the utilization
of operating loss, depletion and tax credit carryforwards from prior periods.

The minority interest in income of consolidated subsidiaries of $1.3 million
in 1994 represents the minority interest in the income of Southeastern Public
Service Company ("SEPSCO"), a 71.1% owned subsidiary of Triarc until the 28.9%
minority ownership was acquired on April 14, 1994 (see Note 26 to the
consolidated financial statements).

The loss from discontinued operations of $3.9 million in 1994 reflects the
revised estimate of the loss on disposal of the Company's utility and municipal
services and refrigeration businesses. Such loss reflects increased estimates of
$6.4 million from the nonrecognition of notes received as partial proceeds on
the sale of certain businesses and operating losses of $2.0 million through
their respective dates of disposal, less minority interests and income tax
benefit aggregating $4.5 million. The additional operating loss reflects delays
in disposing of the businesses from the estimated disposal dates as of December
31, 1993.

The extraordinary charge in 1994 of $2.1 million represents a loss, net of
tax benefit, resulting from the early extinguishment in October 1994 of National
Propane's 13 1/8% senior subordinated debentures due March 1, 1999 which were
refinanced with a revolving credit and term loan facility. Such charge was
comprised of the write-offs of unamortized deferred financing costs of $0.9
million and of unamortized original issue discount of $2.6 million offset by
$1.4 million of income tax benefit.

LIQUIDITY AND CAPITAL RESOURCES

Consolidated cash and cash equivalents (collectively "cash") and short-term
investments increased $134.5 million during 1996 to $206.1 million of which cash
increased $90.2 million to $154.4 million. Such increase in cash primarily
reflects cash provided by (i) operating activities of $34.8 million and (ii)
investing activities of $161.0 million partially offset by cash used in
financing activities of $107.3 million. The net cash provided by operating
activities principally reflects (a) non-cash charges for (i) the reduction in
carrying value of long-lived assets of $64.3 million, (ii) depreciation and
amortization of $52.7 million and (b) $12.7 million of other adjustments to
reconcile net loss to net cash provided by operating activities, partially
offset by net loss of $13.9 million and an aggregate $77.0 million pretax gain
on sale of businesses, net (the proceeds of which are reported as financing and
investing activities, respectively,- see further discussion below) and cash used
in changes in operating assets and liabilities of $4.0 million. The cash used in
changes in operating assets and liabilities of $4.0 million reflects increases
in inventories of $15.8 million and receivables of $12.2 million substantially
offset by $23.2 million increase in accounts payable and accrued expenses. The
increase in receivables reflected increased consolidated revenues, exclusive of
those attributable to the Textile Business, in the fourth quarter of 1996
compared with the fourth quarter of 1995. The increase in inventories
principally reflected higher inventories (i) of the textile segment prior to the
April 29, 1996 sale of the Textile Business resulting from lower sales of the
Textile Business in the first quarter of 1996 compared with the last quarter of
1995, (ii) of Mistic due to lower than expected sales reflecting a relatively
cool and rainy peak spring and summer selling season (April to September) and
(iii) of the propane segment reflecting higher product costs. The increase in
accounts payable and accrued expenses was principally due to a $21.9 million
increase in accounts payable reflecting higher product costs in the propane
segment during the fourth quarter of 1996 versus the fourth quarter of 1995 and
higher consolidated inventories, other than the Textile Business, at December
31, 1996 compared with December 31, 1995. The Company expects continued positive
cash flows from operations during 1997. The net cash provided by investing
activities principally reflected net proceeds from the sale of the Textile
Business discussed below of $236.8 million partially offset by (i) net purchases
of short-term investments of $42.8 million, (ii) capital expenditures of $30.1
million and (iii) business acquisitions of $4.0 million. The net cash used in
financing activities reflects long-term debt repayments of $413.2 million,
including $191.4 million repaid in connection with the sale of the Textile
Business (see below), and $128.5 million repaid in connection with the sale of
partnership units in the Partnership in July 1996 (see below) and the
refinancing of the propane business, partially offset by (i) the $124.7 million
net proceeds from the sale of units in the Partnership, (ii) proceeds from
long-term debt borrowings of $164.0 million including $125.0 million associated
with the refinancing of the propane business and (iii) $30.0 million of
restricted cash used to pay long-term debt.

Working capital (current assets less current liabilities) was $195.2
million at December 31, 1996, reflecting a current ratio (current assets divided
by current liabilities) of 1.8:1. Such amount represents an increase in working
capital of $36.9 million over the working capital at December 31, 1995 of $158.3
million, which represented a current ratio of 1.6:1. The increase in working
capital principally reflects an aggregate net increase in cash, cash equivalents
and short-term investments reflecting net proceeds from sales of businesses (see
further discussion below) substantially offset by (i) the working capital as of
December 31, 1995 of the Textile Business sold in April 1996 and (ii) the effect
of the proposed sale of restaurants to RTM (see below) consisting of the excess
of (a) long-term debt to be assumed by the purchaser reclassified to current,
(b) the accrual of the current portion of operating lease payments not being
assumed by the purchaser and (c) the accrual of other costs related to the sale,
over the reclassification to current assets of assets held for sale.

The $275.0 million aggregate principal amount of 9 3/4% senior secured notes
due 2000 (the "9 3/4% Senior Notes") of RC/Arby's Corporation ("RCAC"), a
wholly-owned subsidiary of Triarc, mature on August 1, 2000 and do not require
any amoritzation of the principal amount thereof prior to such date.

Mistic maintains an $80.0 million credit agreement (as amended December 30,
1996, the "Mistic Bank Facility") with a group of banks. The Mistic Bank
Facility consists of a $20.0 million revolving credit facility and a $60.0
million term facility. Borrowings under the revolving credit facility are due in
their entirety in August 1999. However, Mistic must reduce the borrowings under
the revolving credit facility for a period of thirty consecutive days between
October 1 and March 31 of each year to less than or equal to (a) $12.5 million
between October 1, 1996 and March 31, 1997 (such requirement has been met in
February/March 1997) and (b) zero between October 1 and the following March 31
for each of the two years thereafter. There were $15.0 million of outstanding
borrowings under the revolving credit facility and $53.8 million under the term
facility as of December 31, 1996. The $53.8 million outstanding amount of the
term facility amortizes $6.2 million in 1997, $10.0 million in 1998, $11.3
million in 1999, $15.0 million in 2000 and $11.3 million in 2001. As of December
31, 1996 Mistic effectively had no availability under the Mistic Bank Facility
due to the fact that it was required to pay down its revolving credit borrowings
to $12.5 million for thirty consecutive days prior to March 31. Following the
paydown, Mistic had availability of approximately $2.0 million as of March 31,
1997.

Two subsidiaries of RCAC maintain loan and financing agreements with FFCA
Mortgage Corporation ("FFCA") which, as amended, permit borrowings in the form
of mortgage notes (the "Mortgage Notes") and equipment notes (the "Equipment
Notes") aggregating $87.3 million (the "FFCA Loan Agreements"). The Mortgage
Notes and Equipment Notes are repayable in equal monthly installments, including
interest, over twenty years and seven years, respectively. As of December 31,
1996, borrowings under the FFCA Loan Agreements aggregated $62.7 million
(including cumulative repayments of $4.3 million through December 31, 1996)
resulting in remaining availability of $24.6 million through December 31, 1997
to finance new company-owned restaurants whose sites are identified to the
lender by September 30, 1997 on terms similar to those of outstanding
borrowings. The assets of one of the borrowers, Arby's Restaurant Development
Corporation, will not be available to pay creditors of Triarc, RCAC or RCAC's
subsidiary Arby's, Inc. ("Arby's") until all loans under the FFCA Loan
Agreements have been repaid in full. As discussed below, in February 1997 the
Company entered into an agreement to sell all of its restaurants and, if such
sale is consummated on terms as they currently exist, the buyer would assume
$54.7 million of borrowings under the FFCA Loan Agreements, and the Company
would have no further availability under these financing agreements.

On May 16, 1996 C.H. Patrick & Co., Inc. ("C.H. Patrick"), a wholly-owned
subsidiary of TXL, entered into a $50.0 million credit agreement (the "Patrick
Facility") consisting of a $15.0 million revolving credit facility with no
outstanding borrowings as of December 31, 1996 and a term loan facility
consisting of two term loans (the "Term Loans") with aggregate outstanding
balances of $33.9 million as of December 31, 1996. C.H. Patrick had $15.0
million of availability under the Patrick Facility as of December 31, 1996. The
remaining balance of Term Loans amortizes $3.2 million in 1997, $2.9 million in
1998, $3.8 million in 1999, $4.4 million in 2000, $6.1 million in 2001, $10.4
million in 2002 and $3.1 million in 2003.

On July 2, 1996, National (see below) issued $125.0 million of 8.54% first
mortgage notes due June 30, 2010 (the "First Mortgage Notes") and repaid $128.5
million of National's long-term debt (including $123.2 million of outstanding
borrowings under National's then existing bank facility (the "Former Propane
Facility"). The First Mortgage Notes amortize in equal annual installments of
$15.625 million commencing June 2003 through June 2010. On July 2, 1996,
National entered into a $55.0 million bank credit facility (the "Propane Bank
Credit Facility") with a group of banks. The Propane Bank Credit Facility
includes a $15.0 million working capital facility (the "Working Capital
Facility") and a $40.0 million acquisition facility (the "Acquisition
Facility"), the use of which is restricted to business acquisitions and capital
expenditures for growth. There were $6.0 million of outstanding borrowings under
the Working Capital Facility and $1.9 million under the Acquisition Facility as
of December 31, 1996 leaving remaining availability of $9.0 million and $38.1
million, respectively, as of December 31, 1996. Borrowings under the Working
Capital Facility mature in their entirety in July 1999. However, the Partnership
must reduce the borrowings under the Working Capital Facility to zero for a
period of at least 30 consecutive days in each year between March 1 and August
31. The Acquisition Facility converts to a term loan in July 1998 and amortizes
thereafter in twelve equal quarterly installments through July 2001.

Under the Company's various debt agreements, substantially all of Triarc's
and its subsidiaries' assets other than cash and short-term investments are
pledged as security. In addition, (i) obligations under the 9 3/4% Senior Notes
have been guaranteed by RCAC's wholly-owned subsidiaries, Royal Crown and
Arby's, (ii) obligations under the First Mortgage Notes and the Propane Bank
Credit Facility have been guaranteed by National Propane and (iii) obligations
under the Mistic Bank Facility, the Patrick Facility, and $24.7 million of
borrowings under the FFCA Loan Agreements have been guaranteed by Triarc.
Assuming consummation of the RTM sale (see below), Triarc would remain
contingently liable under the guarantee upon the failure, if any, of RTM and its
acquisition entity to satisfy such obligation. As collateral for such
guarantees, all of the stock of Royal Crown, Arby's, Mistic and C.H. Patrick is
pledged as well as approximately 2% of the Unsubordinated General Partner
Interest (see below). Although the stock of National Propane is not pledged in
connection with any guaranty of debt obligations, it is pledged in connection
with the Partnership Loan (see below).

The Company's debt instruments require aggregate principal payments of $24.5
million during 1997. Such repayments consist of (i) $6.3 million and $2.5
million of term loan repayments under the Mistic Bank Facility and the Patrick
Facility, respectively, (ii) $6.0 million and $2.5 million, respectively, of
required paydowns, as discussed above, on the Partnership's Working Capital
Facility and Mistic's revolving credit facility, respectively, and (iii) $7.2
million of other debt repayments.

In July 1996 the Partnership consummated an initial public offering (the
"Offering") of an aggregate of approximately 6.3 million of its common units
representing limited partner interests (the "Common Units"), representing an
approximate 55.8% interest in the Partnership, for an offering price of $21.00
per Common Unit aggregating $117.4 million net of $15.0 million of underwriting
discounts and commissions and other estimated expenses related to the Offering.
In November 1996 the Partnership sold an additional 400 thousand Common Units
through a private placement (the "Equity Private Placement") at a price of
$21.00 per Common Unit aggregating $8.4 million before related fees of $1.0
million resulting in net proceeds to the Partnership of $7.4 million. The
combined sales of the Common Units resulted in a pretax gain to the Company in
1996 of $85.2 million before a provision for income taxes of $33.2 million.
Concurrently with the Offering, the Partnership issued to National Propane
approximately 4.5 million subordinated units (the "Subordinated Units"),
representing an approximate 38.7% subordinated general partner interest in the
Partnership after giving effect to the Equity Private Placement. In addition,
National Propane and a subsidiary hold a combined aggregate 4.0% unsubordinated
general partner interest (the "Unsubordinated General Partner Interest") in the
Partnership and a subpartnership, National Propane, L.P. (the "Operating
Partnership"). In connection therewith, National Propane transferred
substantially all of its propane-related assets and liabilities (principally all
assets and liabilities other than a receivable from Triarc, deferred financing
costs and net income tax liabilities of $81.4 million, $4.1 million and $21.6
million, respectively), aggregating net liabilities of $88.2 million, to the
Operating Partnership. The entity representative of both the operations of (i)
National Propane prior to such transfer of assets and liabilities and (ii) the
Partnership subsequent thereto, is referred to herein as "National".

On April 29, 1996, the Company completed the sale (the "Graniteville Sale")
of the Textile Business to Avondale Mills, Inc. ("Avondale") for $236.8 million
in cash, net of expenses of $8.4 million and net of $12.3 million of
post-closing adjustments. Avondale assumed all liabilities relating to the
Textile Business other than income taxes, long-term debt of $191.4 million which
was repaid at the closing and certain other specified liabilities.

In February 1997 the principal subsidiaries comprising the Company's
restaurant segment entered into an agreement (the "RTM Agreement") with RTM,
Inc. ("RTM"), the largest franchisee in the Arby's system, to sell to an
affiliate of RTM all of the 355 company-owned Arby's restaurants. The purchase
price consists of cash and a promissory note aggregating $2.0 million and the
assumption of approximately $69.7 million in mortgage and equipment notes and
substantially all capitalized lease obligations. The consummation of the sale is
subject to customary closing conditions, including receipt of necessary consents
and regulatory approvals, and is expected to occur during the second quarter of
1997. After the consummation of the sale, RTM's affiliate will operate the 355
restaurants as a franchisee and will pay royalties to the Company at a rate of
4% of those restaurants' net sales. As part of the transaction, RTM has agreed
to build an additional 190 Arby's restaurants over the next 14 years pursuant to
a development agreement. This is in addition to a previous commitment RTM
entered into last year to build an additional 210 Arby's restaurants.

Consolidated capital expenditures, including $0.2 million of capital leases,
amounted to $30.3 million in 1996. The Company expects that capital expenditures
during 1997, exclusive of those of the propane segment, will approximate $9.5
million. These anticipated expenditures include expenditures of (i) $4.0 million
in the restaurant segment which is significantly less than 1996 as a result of
the cessation of restaurant-related spending as a result of the planned sale to
RTM, (ii) $3.0 million for the specialty dyes and chemical business, (iii) $2.0
million in the beverage segment and (iv) $0.5 million at the corporate
headquarters. In addition, 1997 capital expenditures for the propane segment for
growth capital and maintenance capital expenditures are anticipated to be $6.0
million. As of December 31, 1996 there were approximately $2.8 million of
outstanding commitments for such capital expenditures. The Company anticipates
that it will meet its capital expenditure requirements through existing cash,
cash flows from operations and leasing arrangements.

In furtherance of the Company's growth strategy, the Company considers
selective acquisitions, as appropriate, to grow strategically and explore other
alternatives to the extent it has available resources to do so. During 1996 the
Company consummated several business acquisitions, principally restaurant
operations and propane businesses for $4.0 million of cash and the issuance of
$1.8 million of debt. More significantly, on March 27, 1997 Triarc announced
that it has entered into a definitive agreement to acquire Snapple Beverage
Corp. ("Snapple") from The Quaker Oats Company for $300 million subject to
certain post-closing adjustments. The acquisition is expected to be consummated
during the second quarter of 1997, subject to customary closing conditions,
including antitrust clearance. Triarc will seek third party financing for a
portion of the purchase price. Snapple is a producer and seller of premium
beverages and had sales for the year ended December 31, 1996 of approximately
$550 million.

The Federal income tax returns of the Company have been examined by the
Internal Revenue Service (the "IRS") for the tax years 1989 through 1992 and has
issued notices of proposed adjustments increasing taxable income by
approximately $145 million, the tax effect of which has not yet been determined.
The Company is contesting the majority of the proposed adjustments and,
accordingly, the amount of any payments required as a result thereof cannot
presently be determined. However, management of the Company expects to be
required to make payments in the latter part of 1997 relating to the portion of
the adjustments that are agreed to.

Under a program announced in July 1996, management of the Company has been
authorized to repurchase until July 1997, up to $20.0 million of its Class A
Common Stock. During 1996, the Company repurchased 44,300 shares of Class A
Common Stock for an aggregate cost of $0.5 million. Additional purchases may be
made until June 1997 when and if market conditions warrant.

The Company maintains two defined benefit pension plans under which benefits
are frozen. While the Company has no current plans to terminate the plans,
should interest rates increase to a level at which there would be an
insignificant cash cost to the Company to terminate the plans, the Company may
decide to do so. As of December 31, 1996, based on the 4.75% interest rate as
currently recommended by the Pension Benefit Guaranty Corporation (the "PBGC")
for purposes of such calculation, the Company would have incurred a cash outlay
of $2.8 million. Such liability upon plan termination is significantly dependent
upon the interest rate assumed for such calculation purposes and, within a
reasonable range, such contingent liability increases (decreases) by
approximately $0.5 million for each 1/2% decrease (increase) in the assumed
interest rate. Based upon current interest rates, the Company believes it would
be able to liquidate the pension obligations for less than the $2.8 million
determined using the PBGC rate should it choose to terminate the plans.

As of December 31, 1996 the Company's most significant cash requirement for
1997 is funding for the proposed Snapple acquisition which it expects to meet
through a combination of (i) existing cash and cash equivalents and short-term
investments ($206.1 million at December 31, 1996) and (ii) third party
financing. The Company's remaining principal cash requirements, exclusive of
operations, for 1997 consist principally of capital expenditures, excluding
those for the propane segment, of approximately $9.5 million, capital
expenditures for the propane segment of $6.0 million, debt principal payments
currently aggregating $24.5 million, quarterly distributions by the Partnership
to holders of the Common Units estimated to be $24.6 million (see below),
acquisitions other than Snapple, payments related to the portion of proposed
adjustments agreed to from income tax examinations and treasury stock purchases,
if any. The Company anticipates meeting such requirements through existing cash
and cash equivalents and short-term investments, cash flows from operations,
availability under the Propane Bank Credit Facility and the Patrick Facility and
financing a portion of its capital expenditures through capital lease
arrangements.

On October 29, 1996, Triarc announced that its Board of Directors approved a
plan to offer up to approximately 20% of the shares of its beverage and
restaurant businesses (operated through Mistic and RCAC) to the public through
an initial public offering and to spin off the remainder of the shares of such
businesses to Triarc stockholders (collectively, the "Spinoff Transactions").
Consummation of the Spinoff Transactions will be subject to, among other things,
receipt of a favorable ruling from the IRS that the Spinoff Transactions will be
tax-free to the Company and its stockholders. The request for the ruling from
the IRS contains several complex issues and there can be no assurance that
Triarc will receive the ruling or that Triarc will consummate the Spinoff
Transactions. The Spinoff Transactions are not expected to occur prior to the
end of the second quarter of 1997. Triarc is currently evaluating the impact, if
any, of the proposed acquisition of Snapple on the anticipated structure of the
Spinoff Transactions.

TRIARC

Triarc is a holding company whose ability to meet its cash requirements is
primarily dependent upon its cash on hand and short-term investments ($175.2
million as of December 31, 1996) and cash flows from its subsidiaries including
loans and cash dividends (see limitations below) and reimbursement by
subsidiaries to Triarc in connection with the providing of certain management
services and payments under certain tax sharing agreements with certain
subsidiaries.

In connection with the issuance of the First Mortgage Notes and the
Partnership's Offering discussed above, on July 2, 1996 Triarc received an
aggregate of $112.2 million from National. Such amount consisted of a dividend
of $59.3 million (from the proceeds of the First Mortgage Notes), a loan from
the Partnership of $40.7 million (the "Partnership Loan") and payment of
previously unpaid management fees, tax sharing payments and certain other
intercompany indebtedness aggregating $12.2 million. The Partnership Loan bears
interest at 13 1/2% payable in cash and is due in equal annual amounts of
approximately $5.1 million commencing 2003 through 2010. Concurrent with the
above transactions, an $81.4 million non-interest bearing advance payable to
National Propane was reduced to $30.0 million and converted to a demand note
payable bearing interest at 13 1/2% payable in cash (the "$30 Million Note").
Triarc does not anticipate it will be required to make any principal payments on
the $30 Million Note during 1997; however, if it should be required to do so,
Triarc believes it has adequate cash on hand to make such payments.

Triarc's principal subsidiaries, other than CFC Holdings Corp. ("CFC"
Holdings"), the parent of RCAC, and National Propane, are unable to pay any
dividends or make any loans or advances to Triarc during 1997 under the terms of
the various indentures and credit arrangements. While there are no restrictions
applicable to National Propane, National Propane is dependent upon cash flows
from the Partnership to pay dividends. Such cash flows are principally quarterly
distributions from the Partnership on the Subordinated Units and the
Unsubordinated General Partner Interest (see below). While there are no
restrictions applicable to CFC Holdings, CFC Holdings would be dependent upon
cash flows from RCAC to pay dividends and, as of December 31, 1996, RCAC was
unable to make any loans or advances to CFC Holdings.

Triarc's indebtedness to subsidiaries has been significantly reduced to
$72.4 million as of December 31, 1996 compared with $229.3 million as of
December 31, 1995 principally as a result of dividends or cancellations of such
indebtedness in connection with the Graniteville Sale and the Partnership's
issuance of the Common Units. Such $72.4 million of indebtedness consists of the
$40.7 million Partnership Loan, the $30 Million Note and a $1.7 million demand
note to a subsidiary of RCAC and requires no principal payments in 1997,
assuming no demand is made under the $30 Million Note or the $1.7 million note
payable to a subsidiary of RCAC.

Triarc's sources of cash consist principally of cash and cash equivalents
on hand and short-term investments ($175.2 million as of December 31, 1996),
reimbursement of general corporate expenses from subsidiaries in connection with
management services agreements, distributions from the Partnership, net payments
received under tax-sharing agreements with certain subsidiaries and investment
income on its cash equivalents and short-term investments. As a result of the
Graniteville Sale and the Partnership's issuance of the Common Units discussed
above, payments received under tax sharing agreements and the reimbursement of
general corporate expenses by the Textile Business have been eliminated and
payments from National Propane and the Partnership are limited. Management fees
and tax-sharing payments from C.H. Patrick (which prior to April 29, 1996 were a
component of the payments from the Textile Business) and distributions, if any,
from the Partnership and full year earnings on the additional cash equivalents
and short-term investments resulting from cash flows to Triarc resulting from
the Graniteville Sale and the Partnership's Offering will partially offset such
decreases. As a result, Triarc is expected to experience negative cash flows
from operations for its general corporate expenses for 1997. Triarc's principal
cash requirements are a portion of the funding for the proposed acquisition of
Snapple, general corporate expenses, any required advances to RCAC and Mistic
(see below), capital expenditures estimated to be approximately $0.5 million,
payments related to the portion of proposed adjustments agreed to from income
tax examinations and interest due on the $30 Million Note and the Partnership
Loan. Such interest will be higher in 1996 compared with 1995 due to the full
year effect of (i) changing the terms on the $30 Million Note to require cash
interest and (ii) the issuance of the Partnership Loan, both in July 1996.
Although Triarc probably will experience negative cash flows from operations,
considering its cash and cash equivalents and short-term investments, Triarc
should be able to meet all of its 1997 cash requirements discussed above.

RCAC

As of December 31, 1996, RCAC's cash requirements for 1997 consist
principally of capital expenditures of approximately $6.0 million, funding for
acquisitions, if any, and debt (including capitalized leases and an affiliated
note) principal repayments of $19.1 million, subject to Triarc's requirement for
RCAC to repay any or all of the outstanding balance under a $12.0 million demand
promissory note (the "Demand Note") included in the $19.1 million and the
assumption of debt obligations by RTM with respect to the RTM Agreement. RCAC
anticipates meeting such requirements through existing cash and/or cash flows
from operations, and, to the extent cash is required other than for repayments
to Triarc under the Demand Note, borrowings from Triarc to the extent available.
RCAC may be required to make repayments under the Demand Note to the extent of
its remaining cash balances in excess of its ongoing requirements for working
capital.

MISTIC

As of December 31, 1996, Mistic's principal cash requirements for 1997
consist principally of $6.3 million of term loan payments and the required
reduction of its revolving credit loans under its bank facility. Mistic
anticipates meeting such requirements through cash flows from operations and
borrowings from Triarc to the extent available ($3.5 million was borrowed from
Triarc in February 1997).

THE PARTNERSHIP

As of December 31, 1996, the Partnership's principal cash requirements for
1997 consist of quarterly distributions estimated to be $24.6 million (see
below), capital expenditures of approximately $6.0 million, (including $3.5
million for maintenance and $2.5 million for growth), funding for acquisitions
(including $1.0 million paid in January 1997), and the $6.0 million required
reduction of its Working Capital Facility. The Partnership expects to meet such
requirements through a combination of cash flows from operations, availability
under the Propane Bank Credit Facility and interest income on the Partnership
Loan. The Partnership must make quarterly distributions of its cash balances in
excess of reserve requirements, as defined, to holders of the Common Units, the
Subordinated Units and the Unsubordinated General Partner Interest within 45
days after the end of each fiscal quarter. Accordingly, positive cash flows will
generally be used to make such distributions. On February 14, 1997 the
Partnership paid a quarterly distribution for the quarter ended December 31,
1996 of $.525 per Common and Subordinated Unit with a proportionate amount for
the Unsubordinated General Partner Interest, or an aggregate of $6.1 million,
including $2.6 million paid to National Propane related to the Subordinated
Units and the Unsubordinated General Partner Interest.

C.H. PATRICK

As of December 31, 1996, C.H. Patrick's principal cash requirements for 1997
consist principally of principal payments under its Term Loans of $2.5 million
and capital expenditures of $3.0 million. C.H. Patrick anticipates meeting such
requirements through cash flows from operations. Should C.H. Patrick need to
supplement its cash flows, it has $15.0 million of availability under the
revolving credit portion of the Patrick Facility.

DISCONTINUED OPERATIONS

As of December 31, 1996, the Company has completed the sale of substantially
all of its discontinued operations but there remain certain liabilities to be
liquidated (the estimates of which have been accrued) as well as certain
contingent assets (principally a note from the sale of the cold storage
business) which may be collected, the benefits of which, however, have not been
recorded.

CONTINGENCIES

In July 1993 APL Corporation ("APL"), which was affiliated with the
Company until an April 1993 change in control, became a debtor in a proceeding
under Chapter 11 of the Federal Bankruptcy Code (the "APL Proceeding"). In
February 1994 the official committee of unsecured creditors of APL filed a
complaint (the "APL Litigation") against the Company and certain companies
formerly or presently affiliated with Victor Posner, the former Chief Executive
Officer of the Company ("Posner"), or with the Company, alleging causes of
action arising from various transactions allegedly caused by the named former
affiliates. The Chapter 11 trustee of APL was subsequently added as a plaintiff.
The complaint asserts various claims and seeks an undetermined amount of damages
from the Company, as well as certain other relief. In April 1994 the Company
responded to the complaint by filing an answer and proposed counterclaims and
set-offs denying the material allegations in the complaint and asserting
counterclaims and set-offs against APL. In June 1995 the bankruptcy court
confirmed the plaintiffs' plan of reorganization (the "APL Plan") in the APL
Proceeding. The APL Plan provides, among other things, that affiliates of Posner
(the "Posner Entities") will own all of the common stock of APL and are
authorized to object to claims made in the APL Proceeding. The APL Plan also
provides for the dismissal of the APL Litigation. Previously, in January 1995
Triarc received an indemnification pursuant to a settlement agreement entered
into by the Company and the Posner Entities on January 9, 1995 (the "Posner
Settlement") relating to, among other things, the APL Litigation. The Posner
Entities have filed motions asserting that the APL Plan does not require the
dismissal of the APL Litigation. In November 1995 the bankruptcy court denied
the motions and in March 1996 the court denied the Posner Entities' motion for
reconsideration. Posner and APL have appealed and their appeal is pending.

On December 6, 1995 the three former court-appointed members of a special
committee of Triarc's Board of Directors commenced an action in the United
States District Court for the Northern District of Ohio seeking, among other
things, additional fees of $3.0 million. On February 6, 1996 the court dismissed
the action without prejudice. The plaintiffs filed a notice of appeal, but
subsequently dismissed the appeal voluntarily.

In 1987 TXL was notified by the South Carolina Department of Health and
Environmental Control ("DHEC") that DHEC discovered certain contamination of
Langley Pond ("Langley Pond") near Graniteville, South Carolina and DHEC
asserted that TXL may be one of the parties responsible for such contamination.
In 1990 and 1991 TXL provided reports to DHEC summarizing its required study and
investigation of the alleged pollution and its sources which concluded that pond
sediments should be left undisturbed and in place and that other less passive
remediation alternatives either provided no significant additional benefits or
themselves involved adverse effects. In March 1994 DHEC appeared to conclude
that while environmental monitoring at Langley Pond should be continued, based
on currently available information, the most reasonable alternative is to leave
the pond sediments undisturbed and in place. In April 1995 TXL, at the request
of DHEC, submitted a proposal concerning periodic monitoring of sediment
dispositions in the pond. In February 1996 TXL responded to a DHEC request for
additional information on such proposal. TXL is unable to predict at this time
what further actions, if any, may be required in connection with Langley Pond or
what the cost thereof may be. In addition, TXL owned a nine acre property in
Aiken County, South Carolina (the "Vaucluse Landfill"), which was used as a
landfill from approximately 1950 to 1973. The Vaucluse Landfill was operated
jointly by TXL and Aiken County and may have received municipal waste and
possibly industrial waste from TXL as well as sources other than TXL. The United
States Environmental Protection Agency conducted an Expanded Site Inspection in
January 1994 and in response thereto DHEC indicated its desire to have an
investigation of the Vaucluse Landfill. In April 1995 TXL submitted a conceptual
investigation approach to DHEC. Subsequently, the Company responded to an August
1995 DHEC request that TXL enter into a consent agreement to conduct an
investigation indicating that a consent agreement is inappropriate considering
TXL's demonstrated willingness to cooperate with DHEC requests and asked DHEC to
approve TXL's April 1995 conceptual investigation approach. The cost of the
study proposed by TXL is estimated to be between $125.0 thousand and $150.0
thousand. Since an investigation has not yet commenced, TXL is currently unable
to estimate the cost, if any, to remediate the landfill. Such cost could vary
based on the actual parameters of the study. In connection with the Graniteville
Sale, the Company agreed to indemnify the purchaser for certain costs, if any,
incurred in connection with the foregoing matters that are in excess of
specified reserves, subject to certain limitations.

As a result of certain environmental audits in 1991, SEPSCO became aware
of possible contamination by hydrocarbons and metals at certain sites of
SEPSCO's ice and cold storage operations of the refrigeration business and has
filed appropriate notifications with state environmental authorities and in 1994
completed a study of remediation at such sites. SEPSCO has removed certain
underground storage and other tanks at certain facilities of its refrigeration
operations and has engaged in certain remediation in connection therewith. Such
removal and environmental remediation involved a variety of remediation actions
at various facilities of SEPSCO located in a number of jurisdictions. Such
remediation varied from site to site, ranging from testing of soil and
groundwater for contamination, development of remediation plans and removal in
some instances of certain contaminated soils. Remediation is required at
thirteen sites which were sold to or leased by the purchaser of the ice
operations. Remediation has been completed on five of these sites and is ongoing
at eight others. Such remediation is being made in conjunction with the
purchaser who has satisfied its obligation to pay up to $1.0 million of such
remediation costs. Remediation is also required at seven cold storage sites
which were sold to the purchaser of the cold storage operations. Remediation has
been completed at one site and is ongoing at three other sites. Remediation is
expected to commence on the remaining three sites in 1997 and 1998. Such
remediation is being made in conjunction with the purchaser who is responsible
for the first $1.25 million of such costs. In addition, there are fifteen
additional inactive properties of the former refrigeration business where
remediation has been completed or is ongoing and which have either been sold or
are held for sale separate from the sales of the ice and cold storage
operations. Of these, ten have been remediated through December 31, 1996 at an
aggregate cost of $1.0 million. In addition, during the environmental
remediation efforts on idle properties, SEPSCO became aware that plants on two
of the fifteen sites may require demolition in the future.

In May 1994 National was informed of coal tar contamination which was
discovered at one of its properties in Wisconsin. National purchased the
property from a company (the "Successor") which had purchased the assets of a
utility which had previously owned the property. National believes that the
contamination occurred during the use of the property as a coal gasification
plant by such utility. In order to assess the extent of the problem, National
engaged environmental consultants in 1994. As of March 1, 1997, National's
environmental consultants have begun but not completed their testing. Based upon
the new information compiled to date which is not yet complete, it appears the
likely remedy will involve treatment of groundwater and treatment of the soil,
installation of a soil cap and, if necessary, excavation, treatment and disposal
of contaminated soil. As a result, the environmental consultants' current range
of estimated costs for remediation is from $0.8 million to $1.6 million.
National will have to agree upon the final plan with the state of Wisconsin.
Since receiving notice of the contamination, National has engaged in discussions
of a general nature concerning remediation with the state of Wisconsin. These
discussions are ongoing and there is no indication as yet of the time frame for
a decision by the state of Wisconsin or the method of remediation. Accordingly,
the precise remediation method to be used is unknown. Based on the preliminary
results of the ongoing investigation, there is a potential that the contaminants
may extend to locations downgradient from the original site. If it is ultimately
confirmed that the contaminant plume extends under such properties and if such
plume is attributable to contaminants emanating from the Wisconsin property,
there is the potential for future third-party claims. National is also engaged
in ongoing discussions of a general nature with the Successor. The Successor has
denied any liability for the costs of remediation of the Wisconsin property or
of satisfying any related claims. However, National, if found liable for any of
such costs, would still attempt to recover such costs from the Successor.
National has notified its insurance carriers of the contamination, the likely
incurrence of costs to undertake remediation and the possibility of related
claims. Pursuant to a lease related to the Wisconsin facility, the ownership of
which was not transferred to the Operating Partnership at the closing of
Offering, the Partnership has agreed to be liable for any costs of remediation
in excess of amounts recovered from the Successor or from insurance. Since the
remediation method to be used is unknown, no amount within the cost ranges
provided by the environmental consultants can be determined to be a better
estimate.

In 1993 Royal Crown became aware of possible contamination from
hydrocarbons in groundwater at two abandoned bottling facilities. Tests have
confirmed hydrocarbons in the groundwater at both of the sites and remediation
has commenced. Remediation costs estimated by Royal Crown's environmental
consultants aggregate $0.56 million to $0.64 million with approximately $125
thousand to $145 thousand expected to be reimbursed by the State of Texas
Petroleum Storage Tank Remediation Fund at one of the two sites.

In 1994 Chesapeake Insurance Company Limited ("Chesapeake Insurance"), a
wholly-owned subsidiary of the Company, and SEPSCO invested approximately $5.1
million in a joint venture with Prime Capital Corporation ("Prime").
Subsequently in 1994, SEPSCO and Chesapeake Insurance terminated their
investments in such joint venture. In March 1995 three creditors of Prime filed
an involuntary bankruptcy petition under the Federal bankruptcy code against
Prime. In November 1996 the bankruptcy trustee appointed in the Prime bankruptcy
case made a demand on Chesapeake Insurance and SEPSCO for return of the
approximate $5.3 million. In January 1997 the bankruptcy trustee commenced
avoidance actions against Chesapeake Insurance and SEPSCO seeking the return of
the approximate $5.3 million allegedly received by Chesapeake Insurance and
SEPSCO during 1994 and alleging such payments from Prime were preferential or
constituted fraudulent transfers. The Company believes, based on advice of
counsel, that it has meritorious defenses to these claims and intends to
vigorously contest them. However, it is possible that the trustee will be
successful in recovering the payments. The maximum amount of SEPSCO's and
Chesapeake Insurance's aggregate liability is the approximate $5.3 million plus
interest; however, to the extent SEPSCO or Chesapeake Insurance return to Prime
any amount of the challenged payments, they will be entitled to an unsecured
claim for such amount. The court has scheduled a trial for the week of May 27,
1997.

On February 19, 1996, Arby's Restaurantes S.A. de C.V. ("AR"), the master
franchisee of Arby's in Mexico, commenced an action in the civil court of Mexico
against Arby's for breach of contract. AR alleged that a non-binding letter of
intent dated November 9, 1994 between AR and Arby's constituted a binding
contract pursuant to which Arby's had obligated itself to repurchase the master
franchise rights from AR for $2.5 million. AR also alleged that Arby's had
breached a master development agreement between AR and Arby's. Arby's promptly
commenced an arbitration proceeding since the franchise and development
agreements each provided that all disputes arising thereunder were to be
resolved by arbitration. Arby's is seeking a declaration in the arbitration to
the effect that the November 9, 1994 letter of intent was not a binding contract
and, therefore, AR has no valid breach of contract claim, as well as a
declaration that the master development agreement has been automatically
terminated as a result of AR's commencement of suspension of payments
proceedings in February 1995. In the civil court proceeding, the court denied
Arby's motion to suspend such proceedings pending the results of the
arbitration, and Arby's has appealed that ruling. In the arbitration, some
evidence has been taken but proceedings have been suspended by the court
handling the suspension of payments proceedings. Arby's is vigorously contesting
AR's claims and believes it has meritorious defenses to such claims.

The Company has accruals for all of the above matters aggregating
approximately $4.3 million. Based on currently available information and given
(i) DHEC's apparent conclusion in 1994 with respect to the Langley Pond matter,
(ii) the indemnification limitations with respect to the SEPSCO cold storage
operations, Langley Pond and the Vaucluse Landfill, (iii) potential
reimbursements by other parties as discussed above and (iv) the Company's
aggregate reserves for such legal and environmental matters, the Company does
not believe that the legal and environmental matters referred to above, as well
as ordinary routine litigation incidental to its businesses, will have a
material adverse effect on its consolidated results of operations or financial
position.

INFLATION AND CHANGING PRICES

Management believes that inflation did not have a significant effect on
gross margins during 1994, 1995 and 1996, since inflation rates generally
remained at relatively low levels. Historically, the Company has been successful
in dealing with the impact of inflation to varying degrees within the
limitations of the competitive environment of each segment of its business.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In October 1996, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
96-1, "Environmental Remediation Liabilities" ("SOP 96-1"). SOP 96-1 provides
guidance for the recognition and measurement of environmental liabilities and is
effective as of January 1, 1997. While an evaluation of the impact of SOP 96-1
has not been completed, the Company does not believe it will have a material
impact on its consolidated results of operations or financial position.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS

PAGE

Independent Auditors' Report.....................................
Consolidated Balance Sheets as of December 31, 1995 and 1996.....
Consolidated Statements of Operations for the years ended December 31,
1994, 1995 and 1996......................................................
Consolidated Statements of Additional Capital for the years ended December 31,
1994, 1995 and 1996.................................................
Consolidated Statements of Cash Flows for the years ended December 31, 1994,
1995 and 1996..................................................
Notes to Consolidated Financial Statements.......................
<PAGE>

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 31, 1996 and
1995, and the related consolidated statements of operations, additional capital,
and cash flows for each of the three years in the period ended December 31,
1996. 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 generally accepted auditing
standards. 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 31,
1996 and 1995, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, in 1995
the Company changed its method of accounting for impairment of long-lived assets
and for long-lived assets to be disposed of.

DELOITTE & TOUCHE, LLP

New York, New York
March 31, 1997
<PAGE>
<TABLE>
<CAPTION>

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

DECEMBER 31,
------------
1995 1996
---- ----
(IN THOUSANDS)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents ($45,965,000 and $134,869,000)...............$ 64,205 $ 154,405
Restricted cash and cash equivalents (Note 4) ......................... 34,033 3,057
Short-term investments (Note 5)....................................... 7,397 51,711
Receivables, net (Note 6).............................................. 168,534 80,613
Inventories (Note 7)................................................... 118,549 55,340
Assets held for sale (Note 1).......................................... -- 71,116
Deferred income tax benefit (Note 15).................................. 8,848 16,409
Prepaid expenses and other current assets.............................. 11,262 13,011
----------- ---------
Total current assets.............................................. 412,828 445,662
Properties, net (Note 8).................................................. 331,589 107,272
Unamortized costs in excess of net assets of acquired companies (Note 9).. 227,825 203,914
Trademarks (Note 10)...................................................... 57,146 57,257
Deferred costs and other assets (Note 11)................................. 56,578 40,299
----------- ---------
$ 1,085,966 $ 854,404
=========== =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (Notes 13 and 14)....................$ 83,531 $ 93,567
Accounts payable ...................................................... 61,908 52,437
Accrued expenses (Note 12)............................................. 109,119 104,483
----------- ---------
Total current liabilities......................................... 254,558 250,487
Long-term debt (Notes 13 and 14).......................................... 763,346 500,529
Insurance loss reserves .................................................. 9,398 9,828
Deferred income taxes (Note 15)........................................... 24,013 34,455
Deferred income and other liabilities..................................... 14,001 18,616
Minority interests (Note 19).............................................. -- 33,724
Commitments and contingencies (Notes 15, 23, 24 and 25)
Stockholders' equity (Notes 5, 16 and 17):
Class A common stock, $.10 par value; authorized 100,000,000 shares,
issued 27,983,805 shares ........................................ 2,798 2,798
Class B common stock, $.10 par value; authorized 25,000,000 shares,
issued 5,997,622 shares.......................................... 600 600
Additional paid-in capital............................................. 162,020 161,170
Accumulated deficit.................................................... (97,923) (111,824)
Less Class A common stock held in treasury at cost; 4,067,380 and
4,097,606 shares................................................. (45,931) (46,273)
Other.................................................................. (914) 294
----------- ---------
Total stockholders' equity ...................................... 20,650 6,765
----------- ---------
$ 1,085,966 $ 854,404
=========== =========

See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31,
------------------------
1994 1995 1996
---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Revenues:
Net sales.......................................... $ 1,011,428 $1,128,390 $ 931,920
Royalties, franchise fees and other revenues....... 51,093 55,831 57,329
----------- ---------- -----------
1,062,521 1,184,221 989,249
----------- ---------- -----------
Costs and expenses:
Cost of sales (Note 7)............................. 749,930 859,928 652,109
Advertising, selling and distribution (Note 1)..... 109,669 129,164 139,662
General and administrative......................... 125,189 146,842 131,357
Reduction in carrying value of long-lived assets
impaired or to be disposed of (Note 1).......... -- 14,647 64,300
Facilities relocation and corporate restructuring
(Note 18)....................................... 8,800 2,700 8,800
Recovery of doubtful accounts from affiliates
and former affiliates (Note 28)................. -- (3,049) --
----------- ---------- -----------
993,588 1,150,232 996,228
----------- ---------- -----------
Operating profit (loss)...................... 68,933 33,989 (6,979)
Interest expense .................................... (72,980) (84,227) (73,379)
Gain (loss) on sale of businesses, net (Note 19)..... 6,043 (100) 77,000
Other income (expense), net (Note 20)................ (1,185) 12,314 7,996
----------- ---------- -----------
Income (loss) from continuing operations
before income taxes and minority interests 811 (38,024) 4,638
Benefit from (provision for) income taxes (Note 15).. (1,612) 1,030 (11,294)
Minority interests in income of consolidated
subsidiaries (Note 19)........................... (1,292) -- (1,829)
----------- ---------- -----------
Loss from continuing operations.............. (2,093) (36,994) (8,485)
Loss from discontinued operations (Note 21).......... (3,900) -- --
----------- ---------- -----------
Loss before extraordinary items.............. (5,993) (36,994) (8,485)
Extraordinary items (Note 22)........................ (2,116) -- (5,416)
----------- ---------- -----------
Net loss..................................... (8,109) (36,994) (13,901)
Preferred stock dividend requirements (Note 16)...... (5,833) -- --
----------- ---------- -----------
Net loss applicable to common stockholders... $ (13,942) $ (36,994) $ (13,901)
=========== ========== ===========
Loss per share (Note 1):
Continuing operations........................ $ (.34) $ (1.24) $ (.28)
Discontinued operations...................... (.17) -- --
Extraordinary items.......................... (.09) -- (.18)
----------- ---------- -----------
Net loss..................................... $ (.60) $ (1.24) $ (.46)
=========== ========== ===========

See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ADDITIONAL CAPITAL
YEAR ENDED DECEMBER 31,
-----------------------
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
Additional paid-in capital:
<S> <C> <C> <C>
Balance at beginning of period................................................ $ 50,654 $ 79,497 $ 162,020
Common stock issued (Note 17):
Excess of book value of redeemable preferred stock
over par value of common stock issued upon conversion
in connection with the Posner Settlement (Note 16) ....................... -- 71,296 --
Excess of fair value over par value from issuance of common shares in
connection with the Posner Settlement (Note 28) ......................... -- 11,915 --
Other issuances ........................................................... 6 17 --
Excess (deficiency) of fair value of shares issued from treasury stock
over average cost of treasury shares in connection with:
SEPSCO Merger (Note 26) ............................................... 25,492 -- --
Grants of restricted stock ............................................ 601 (8) --
Excess of fair value at date of grant of common shares over the option
price for stock options granted (forfeited) (Note 17) ..................... 3,000 (588) (852)
Other ........................................................................ (256) (109) 2
--------- --------- ---------
Balance at end of period...................................................... $ 79,497 $ 162,020 $ 161,170
========= ========= =========
Accumulated deficit:
Balance at beginning of period................................................ $ (46,987) $ (60,929) $ (97,923)
Net loss ..................................................................... (8,109) (36,994) (13,901)
Dividends on preferred stock ................................................. (5,833) -- --
--------- --------- ---------
Balance at end of period...................................................... $ (60,929) $ (97,923) $(111,824)
========= ========= =========

Treasury stock (Note 17):
Balance at beginning of period................................................ $ (75,150) $ (45,473) $ (45,931)
Shares issued for SEPSCO Merger (Note 26) .................................... 30,364 -- --
Grants of restricted stock ................................................... 775 76 --
Purchases of common shares in open market transactions ....................... (1,025) (489) (496)
Other ........................................................................ (437) (45) 154
--------- --------- ---------
Balance at end of period...................................................... $ (45,473) $ (45,931) $ (46,273)
========= ========= =========
Other (Note 17):
Unearned compensation:
Balance at beginning of period............................................. $ (7,304) $ (7,416) $ (1,013)
Grants of restricted stock ................................................ (1,376) (68) --
Forteiture (grant) of below market stock options .......................... (3,000) 319 219
Amortization of below market stock options ................................ 907 761 489
Amortization of restricted stock:
Scheduled amortization .................................................. 3,357 1,950 --
Accelerated vesting ..................................................... -- 3,331 --
Other ..................................................................... -- 110 --
--------- --------- --------
Balance at end of period .................................................. (7,416) (1,013) (305)
--------- --------- --------
Net unrealized gains (losses) on "available-for-sale" marketable
securities (Note 5)
Balance at beginning of period ............................................ 8 (260) 99
Net change in unrealized gains (losses) on marketable securities .......... (268) 359 500
--------- --------- ---------
Balance at end of period .................................................. (260) 99 599
--------- --------- ---------
$ (7,676) $ (914) $ 294
========= ========= =========

See accompanying notes to consolidated financial statements.
</TABLE>

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

YEAR ENDED DECEMBER 31,
-----------------------
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ........................................................................ $ (8,109) $ (36,994) $ (13,901)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
(Gain) loss on sale of businesses ............................................ (6,043) 100 (77,000)
Reduction in carrying value of long-lived assets ............................. -- 14,647 64,300
Depreciation and amortization of properties .................................. 33,901 38,893 30,685
Amortization of costs in excess of net assets of acquired
companies, trademarks and other amortization ............................... 11,125 17,100 16,317
Amortization of original issue discount and deferred financing costs ......... 6,957 7,558 5,733
Provision for doubtful accounts .............................................. 1,021 4,067 6,104
(Gain) loss on sale of assets, net ........................................... (975) (10,264) 32
Other, net ................................................................... (2,754) 2,110 6,547
Changes in operating assets and liabilities:
Decrease in restricted cash and cash equivalents ...................... 548 2,771 976
Increase in receivables ................................................ (18,079) (12,812) (12,214)
Decrease (increase) in inventories ..................................... 2,544 (2,484) (15,765)
Decrease (increase) in prepaid expenses and other current assets ....... 2,776 (677) (190)
Increase (decrease) in accounts payable and accrued expenses ........... (29,196) (9,453) 23,164
--------- --------- ---------
Net cash provided by (used in) operating activities............... (6,284) 14,562 34,788
--------- --------- ---------
Cash flows from investing activities:
Net proceeds from the sale of the textile business .............................. -- -- 236,824
Business acquisitions, net of cash acquired of $2,067,000 in 1995 ............... (18,790) (111,204) (4,018)
Proceeds from sales of non-core businesses and properties........................ 39,077 19,599 2,196
Capital expenditures ............................................................ (61,639) (69,974) (30,079)
Cost of short-term investments purchased ........................................ (10,308) (27,490) (64,409)
Proceeds from short-term investments sold ....................................... 11,033 29,805 21,598
Investments in affiliates ....................................................... (7,368) (6,340) --
Other ........................................................................... (633) 254 (1,077)
--------- --------- ---------
Net cash provided by (used in) investing activities .............. (48,628) (165,350) 161,035
--------- --------- ---------
Cash flows from financing activities:
Repayments of long-term debt .................................................... (90,899) (31,953) (413,176)
Proceeds from long-term debt .................................................... 121,232 208,871 164,026
Restricted cash (from the proceeds of) used to repay long-term debt.............. -- (30,000) 30,000
Net proceeds from sale of partnership units in the propane subsidiary ........... -- -- 124,749
Distributions paid on partnership units of propane subsidiary.................... -- -- (3,309)
Deferred financing costs ........................................................ (5,573) (9,244) (9,129)
Payment of preferred dividends .................................................. (5,833) -- --
Other ........................................................................... (1,281) (1,226) (438)
--------- --------- ---------
Net cash provided by (used in) financing activities ............. 17,646 136,448 (107,277)
--------- --------- ---------

Net cash provided by (used in) continuing operations .............................. (37,266) (14,340) 88,546
Net cash provided by (used in) discontinued operations ............................ (1,471) (1,519) 1,654
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents .............................. (38,737) (15,859) 90,200
Cash and cash equivalents at beginning of period .................................. 118,801 80,064 64,205
--------- --------- ---------
Cash and cash equivalents at end of period ........................................ $ 80,064 $ 64,205 $ 154,405
========= ========= =========

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest...................................................................... $ 64,634 $ 73,918 $ 67,880
========== ========== =========
Income taxes, net............................................................. $ 5,925 $ 6,911 $ 1,529
========== ========== =========

Supplemental schedule of noncash investing and financing activities:
Total capital expenditures.................................................... $ 65,831 $ 71,220 $ 30,320
Amounts representing capitalized leases and other secured financing........... (4,192) (1,246) (241)
---------- ----------- ----------
Capital expenditures paid in cash............................................. $ 61,639 $ 69,974 $ 30,079
========== =========== ==========

Due to their noncash nature, the following transactions are also not
reflected in the respective consolidated statements of cash flows:

Pursuant to a settlement agreement, in January 1995 Triarc Companies, Inc.
("Triarc") issued 4,985,722 shares of its Class B Common Stock in exchange for
all of its then outstanding redeemable convertible preferred stock owned by an
affiliate of Victor Posner, the former Chairman and Chief Executive Officer of
Triarc ("Posner"), resulting in a decrease in redeemable preferred stock of
$71,794,000 and equal aggregate increases in Class B Common Stock of $498,000
and additional paid-in capital of $71,296,000. Further, an additional 1,011,900
shares of Class B Common Stock valued at $12,016,000 were issued to entities
controlled by Posner pursuant to such agreement in settlement of, among other
matters, a $12,326,000 previously accrued liability owed to an affiliate of
Posner, resulting in a gain of $310,000. See Note 28 to the consolidated
financial statements for further discussion.

In April 1994 Triarc acquired the 28.9% minority interest in its
subsidiary, Southeastern Public Service Company, that it did not already own
through the issuance of 2,691,824 shares of its Class A Common Stock. See Note
26 to the consolidated financial statements for further discussion.

See accompanying notes to consolidated financial statements.

</TABLE>
<PAGE>

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Triarc
Companies, Inc. (referred to herein as "Triarc" and, collectively with its
subsidiaries, as the "Company") and its principal subsidiaries. The principal
subsidiaries of the Company, all wholly-owned as of December 31, 1996, are CFC
Holdings Corp. ("CFC Holdings" - 98.4% owned prior to April 14, 1994), Mistic
Brands, Inc. ("Mistic" - acquired August 9, 1995), TXL Corp. ("TXL", formerly
Graniteville Company - 85.8% owned prior to April 14, 1994), National Propane
Corporation ("National Propane") and Southeastern Public Service Company
("SEPSCO" - 71.1% owned prior to April 14, 1994). CFC Holdings has as its
wholly-owned subsidiaries Chesapeake Insurance Company Limited ("Chesapeake
Insurance") and RC/Arby's Corporation ("RCAC"), and RCAC has as its principal
wholly-owned subsidiaries Arby's, Inc. ("Arby's") and Royal Crown Company, Inc.
("Royal Crown"). Additionally, RCAC has three wholly-owned subsidiaries which
own and/or operate Arby's restaurants, Arby's Restaurant Development Corporation
("ARDC"), Arby's Restaurant Holding Company ("ARHC") and Arby's Restaurant
Operations Company. TXL has as its principal wholly-owned subsidiary C.H.
Patrick & Co., Inc. ("C.H. Patrick") and operated the Textile Business prior to
the sale of such business in April 1996 (see Note 19). National Propane and its
subsidiary National Propane SGP Inc. ("SGP") own a combined 42.7% interest in
National Propane Partners, L.P. (the "Partnership"), a limited partnership
organized in 1996 to acquire, own and operate the propane business of National
Propane, and a subpartnership. National Propane and SGP are the general partners
of the Partnership. The entity representative of both the operations of (i)
National Propane prior to a July 2, 1996 conveyance of certain of its assets and
liabilities (see Note 19) to a subsidiary partnership of the Partnership and
(ii) the Partnership subsequent thereto, is referred to herein as "National".
All significant intercompany balances and transactions have been eliminated in
consolidation. See Note 19 for a discussion of the April 1996 sale of the
Textile Business, Note 27 for a discussion of the August 1995 Mistic acquisition
and Note 26 for a discussion of the April 1994 merger pursuant to which Triarc
acquired the remaining 28.9% of SEPSCO and, as a result, the 14.2% of TXL that
it did not already own.

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 commercial paper of high credit-quality entities and repurchase
agreements with high credit-quality financial institutions. Securities pledged
as collateral for repurchase agreements are segregated and held by the financial
institution until maturity of each repurchase agreement. While the market value
of the collateral is sufficient in the event of default, realization and/or
retention of the collateral may be subject to legal proceedings in the event of
default or bankruptcy by the other party to the agreement.

SHORT-TERM INVESTMENTS

The Company's marketable securities with readily determinable fair values
are accounted for as "available for sale" and, as such, net unrealized gains or
losses are reported as a separate component of stockholders' equity. Investments
in equity securities which are not readily marketable are accounted for at cost.
The cost of securities sold for all marketable securities is determined using
the specific identification method.

INVENTORIES

The Company's inventories are stated at the lower of cost or market. After
the April 1996 sale of the Textile Business, for which the cost of inventories
was determined on the last-in, first-out ("LIFO") basis, the cost of the
inventories of the remaining businesses of the Company is determined on the
first-in, first-out ("FIFO") basis (74% of inventories as of December 31, 1996),
the average cost basis (25% of inventories) which approximated the FIFO basis
and the LIFO basis (1% of inventories).

DEPRECIATION AND AMORTIZATION

Depreciation and amortization of properties is computed principally on the
straight-line basis using the estimated useful lives of the related major
classes of properties: 3 to 8 years for transportation equipment; 3 to 30 years
for machinery and equipment; and 14 to 60 years for buildings. Leased assets
capitalized and leasehold improvements are amortized over the shorter of their
estimated useful lives or the terms of the respective leases.

AMORTIZATION OF INTANGIBLES

Costs in excess of net assets of acquired companies ("Goodwill") arising
after November 1, 1970 are being amortized on the straight-line basis over 15 to
40 years; Goodwill arising prior to that date is not being amortized. Trademarks
are being amortized on the straight-line basis principally over 15 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.

IMPAIRMENTS

Intangible Assets

The amount of impairment, if any, in unamortized Goodwill is measured based
on projected future results of operations. To the extent future results of
operations of those subsidiaries to which the Goodwill relates through the
period such Goodwill is being amortized are sufficient to absorb the related
amortization, the Company has deemed there to be no impairment of Goodwill.

Long-Lived Assets

Effective October 1, 1995 the Company adopted SFAS No. 121, "Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".
This standard requires that long-lived assets and certain identifiable
intangibles held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In 1996 the Company recorded a provision of $64,300,000
in order to reduce the carrying value of certain long-lived assets and
identifiable intangibles principally relating to the estimated loss on the
anticipated sale of all company-owned restaurants (see Note 3).

DERIVATIVE FINANCIAL INSTRUMENT

The Company had an interest rate swap agreement entered into in order to
synthetically alter the interest rate of certain of the Company's fixed-rate
debt (see Note 13) until the swap's maturity in 1996. The Company calculated the
estimated remaining amount to be paid or received under the interest rate swap
agreement for the period from the periodic settlement date immediately prior to
the financial statement date through the end of the agreement based on the
interest rate applicable at the financial statement date and recognized such
amount which applied to the period from the last periodic settlement date
through the financial statement date as a component of interest expense. The
recognition of gain or loss from the interest rate swap agreement was
effectively correlated with the underlying debt. A payment received at the
inception of the agreement, which was deemed to be a fee to induce the Company
to enter into the agreement, was amortized over the full life of the agreement
since the Company was not at risk for any gain or loss on such payment.

STOCK-BASED COMPENSATION

In 1996 the Company adopted SFAS 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). SFAS 123 defines a fair value based method of
accounting for employee stock-based compensation and encourages adoption of that
method of accounting but permits accounting under the intrinsic value method
prescribed by an accounting pronouncement prior to SFAS 123. The Company has
elected to continue to measure compensation costs for its employee stock-based
compensation under the intrinsic value method. Accordingly, compensation cost
for the Company's stock options and restricted stock is measured as the excess,
if any, of the market price of the Company's stock at the date of grant over the
amount, if any, an employee must pay to acquire the stock. Compensation cost for
stock appreciation rights is recognized currently based on the change in the
market price of the Company's common stock during each period.

ADVERTISING COSTS

The Company accounts for advertising production costs by expensing such
production costs the first time the related advertising takes place. Advertising
costs amounted to $86,091,000, $101,251,000 and $108,728,000 for 1994, 1995 and
1996, respectively.

INCOME TAXES

The Company files a consolidated Federal income tax return with all of its
subsidiaries except Chesapeake Insurance, a foreign corporation, and prior to
April 14, 1994, TXL and SEPSCO. The income of the Partnership is taxable to its
partners and not the Partnership and, accordingly, income taxes are not provided
on the income of the Partnership to the extent of its minority ownership.
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

The Company records sales principally when inventory is shipped or
delivered. Prior to the sale of the Textile Business, the Company also recorded
sales to a lesser extent (7%, 6% and 2% of consolidated revenues for 1994, 1995
and 1996, respectively) on a bill and hold basis. In accordance with such
policy, the goods are completed, packaged and ready for shipment; such goods are
effectively segregated from inventory which is available for sale; the risks of
ownership of the goods have passed to the customer; and such underlying customer
orders are supported by written confirmation. Franchise fees are recognized as
income when a franchised restaurant is opened. Franchise fees for multiple area
developments represent the aggregate of the franchise fees for the number of
restaurants in the area development and are recognized as income when each
restaurant is opened in the same manner as franchise fees for individual
restaurants. Royalties are based on a percentage of restaurant sales of the
franchised outlet and are accrued as earned.

INSURANCE LOSS RESERVES

Insurance loss reserves include reserves for incurred but not reported
claims of $2,056,000 and $2,469,000 as of December 31, 1995 and 1996,
respectively. Such reserves for current and former affiliated company business
are based on either actuarial studies using historical loss experience or the
Company's calculations when historical loss information is not available. The
balance of the reserves for non-affiliated company business were either reported
by unaffiliated reinsurers, calculated by the Company or based on claims
adjustors' evaluations. Management believes that the reserves are fairly stated.
Adjustments to estimates recorded resulting from subsequent actuarial
evaluations or ultimate payments are reflected in the operations of the periods
in which such adjustments become known. The Company no longer insures or
reinsures any risks for periods commencing on or after October 1, 1993.

LOSS PER SHARE

Loss per share has been computed by dividing the net loss applicable to
common stockholders (net loss plus dividend requirements on Triarc's then
outstanding preferred stocks in 1994) by the weighted average number of
outstanding shares of common stock during the period. Such weighted averages
were 23,282,000, 29,764,000 and 29,898,000 for 1994, 1995 and 1996,
respectively. Common stock equivalents were not used in the computation of loss
per share because such inclusion would have been antidilutive. Fully diluted
loss per share is not applicable since the inclusion of contingent shares would
also be antidilutive.

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 is a holding company which is engaged in four lines of business
(each with the indicated percentage of the Company's consolidated revenues for
the year ended December 31, 1996): beverages (31%), restaurants (29%), dyes and
chemicals (included in the textile business segment) and the Textile Business
until its sale in April 1996 (22%) and propane (18%).

The beverage segment produces and sells a broad selection of carbonated
beverages and concentrates under the principal brand names RC COLA, DIET RC,
ROYAL CROWN, ROYAL CROWN DRAFT COLA, DIET RITE, NEHI, NEHI LOCKJAW, UPPER 10,
KICK and THIRST THRASHER and premium beverages and ready-to-drink brewed iced
teas under the principal brand names MISTIC, ROYAL MISTIC, MISTIC RAIN FOREST
and MISTIC BREEZE. The restaurant segment primarily franchises and operates (see
Note 3 regarding the February 1997 agreement to sell all company-owned
restaurants) Arby's quick service restaurants representing the largest franchise
restaurant system specializing in roast beef sandwiches. The propane segment is
engaged primarily in the retail marketing of propane to residential customers,
commercial and industrial customers, agricultural customers and resellers. The
propane segment also markets propane-related supplies and equipment including
home and commercial appliances. The textile segment produces and markets dyes
and specialty chemicals primarily for the textile industry and, prior to the
1996 sale of the Textile Business (see Note 19), the textile segment
manufactured, dyed and finished cotton, synthetic and blended (cotton and
polyester) apparel fabrics principally for (i) utility wear and (ii) sportswear,
casual wear and outerwear. The Company's operations principally are throughout
the United States.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles 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 are for costs related to (i) insurance
loss reserves (see Note 1), (ii) provisions for examinations of its income tax
returns by the Internal Revenue Service ("IRS") (see Note 15), (iii) provisions
for impairment of long-lived assets and for long-lived assets to be disposed of
(see Note 3) and (iv) provisions for environmental and other legal contingencies
(see Note 25).

CERTAIN RISK CONCENTRATIONS

The Company's vulnerability to risk concentrations related to significant
customers and vendors, products sold and sources of its raw materials, are
mitigated due to the diversification of the segments, of which none accounted
for more than 31% of consolidated revenues in 1996. Risk of geographical
concentration is also minimized since each of the segments generally operates
throughout the United States with minimal foreign exposure.

(3) PLANNED TRANSACTIONS

SPINOFF

On October 29, 1996, the Company announced that its Board of Directors
approved a plan to offer up to approximately 20% of the shares of its beverage
and restaurant businesses (operated through Mistic and RCAC) to the public
through an initial public offering and to spin off the remainder of the shares
of such businesses to Triarc stockholders (collectively, the "Spinoff
Transactions"). Consummation of the Spinoff Transactions will be subject to,
among other things, receipt of a favorable ruling from the IRS that the Spinoff
Transactions will be tax-free to the Company and its stockholders. The request
for the ruling from the IRS contains several complex issues and there can be no
assurance that Triarc will receive the ruling or that Triarc will consummate the
Spinoff Transactions. The Spinoff Transactions are not expected to occur prior
to the end of the second quarter of 1997. Triarc is currently evaluating the
impact, if any, of the proposed acquisition of Snapple Beverage Corp. (see Note
31) on the anticipated structure of the Spinoff Transactions.

SALE OF RESTAURANTS

In 1996 the Company recorded a $58,900,000 charge to (i) reduce the
carrying value of the long-lived assets to be sold (reported as "Assets held for
sale" in the accompanying consolidated balance sheet as of December 31, 1996) by
approximately $46,000,000 to estimated fair value consisting of adjustments to
"Properties, net" of $36,343,000, "Unamortized costs in excess of net assets of
acquired companies" of $5,214,000 and "Deferred costs and other assets" of
$4,443,000 and (ii) provide for associated net liabilities of approximately
$12,900,000, principally reflecting the present value of certain equipment
operating lease obligations which will not be assumed by the purchaser and
estimated closing costs. The estimated fair value was determined based on the
terms of the RTM Agreement including the anticipated sales price. During 1996
the operations of the restaurants to be disposed of had net sales of
$231,041,000 and a pretax loss of $3,897,000. Such loss reflects $10,071,000 of
allocated general and administrative expenses and $8,692,000 of interest expense
related to the mortgage and equipment notes and capitalized lease obligations
directly related to the operations of the restaurants being sold to RTM.

In 1995 the Company recorded a provision of $14,647,000 in its restaurant
segment consisting of a $12,019,000 reduction in the net carrying value of
certain restaurants and other restaurant-related long-lived assets which were
determined to be impaired and a $2,628,000 reduction to a net carrying value of
$975,000 of certain restaurants and related equipment to be disposed. Such
provision reduced "Properties, net" by $12,425,000, "Unamortized costs in excess
of net assets of acquired companies" by $1,260,000 and "Deferred costs and other
assets" by $962,000 to reflect the fair value of the respective assets. The fair
value was generally determined by applying a fair market capitalization rate to
the estimated expected future annual cash flows. The results of operations of
the restaurants to be disposed resulted in a pre-tax loss of $806,000 for the
year ended December 31, 1995.

(4) RESTRICTED CASH AND CASH EQUIVALENTS

The following is a summary of the components of restricted cash and cash
equivalents (in thousands):
<TABLE>
<CAPTION>

DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
Indemnity escrow account relating to sale of business (Note 21).................$ 500 $ 464
Deposits securing outstanding letters of credit principally for the purpose
of securing certain performance and other bonds and payments due
under leases............................................................... 3,533 2,593
Borrowings restricted to the February 22, 1996 redemption of
long-term debt (Note 13)...................................................... 30,000 --
---------- ---------
$ 34,033 $ 3,057
========== =========
</TABLE>

(5) SHORT-TERM INVESTMENTS
The Company's short-term investments are stated at fair value, except for
an investment in limited partnerships which is stated at cost. The cost
(amortized cost for corporate debt securities), gross unrealized gains and
losses, fair value and carrying value, as appropriate, of the Company's
short-term investments at December 31, 1995 and 1996 are as follows (in
thousands):
<TABLE>
<CAPTION>
1995 1996
------------------------------------------ --------------------------------------------------
CARRYING
GROSS GROSS VALUE AND GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR AMORTIZED UNREALIZED UNREALIZED FAIR CARRYING
COST GAINS LOSSES VALUE COST GAINS LOSSES VALUE VALUE
---- ----- ------ ----- ---- ----- ------ ----- -----
Marketable securities:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity securities..............$ 661 $ 103 $ (63) $ 701 $ 14,373 $ 982 $ (424) $ 14,931 $ 14,931
Corporate debt securities...... 5,732 116 (40) 5,808 16,113 24 (36) 16,101 16,101
Mutual fund.................... -- -- -- -- 10,312 367 -- 10,679 10,679
Debt securities issued by
foreign governments.......... 873 15 -- 888 -- -- -- -- --
------- ------ -------- ------- -------- -------- ------- --------- ---------
Total marketable
securities............. 7,266 $ 234 $ (103) 7,397 40,798 $ 1,373 $ (460) $ 41,711 41,711
====== ======== ======== ======= =========
Investment in limited
partnerships................... -- -- 10,000 10,000
------- ------- -------- ---------
$ 7,266 $ 7,397 $ 50,798 $ 51,711
======= ======= ======== =========
</TABLE>
Maturities of corporate debt securities (all of which are classified as
available-for-sale) are as follows at December 31, 1996 (in thousands):
<TABLE>
<CAPTION>

AMORTIZED FAIR
COST VALUE
---- -----

<S> <C> <C>
Due within one year..................................... $ 3,086 $ 3,089
Due after one year through five years................... 12,670 12,657
Due after five years through eight years................ 357 355
------- --------
$16,113 $16,101
======= ========
</TABLE>

Gross realized gains and gross realized losses on sales of marketable
securities are included in "Other income (expense), net" (see Note 20) in the
accompanying consolidated statements of operations and are as follows (in
thousands):

1994 1995 1996
---- ---- ----

Gross realized gains...................$ 404 $ 314 $1,034
Gross realized losses.................. (539) (568) (333)
------ ----- ------
$ (135) $(254) $ 701
====== ===== ======

The net unrealized gains on marketable securities (all of which are
classified as available-for-sale) consist of the following (in thousands):

DECEMBER 31,
------------
1995 1996
---- ----

Net unrealized gains............................$ 131 $ 913
Income tax provision............................ (32) (314)
------ ------
$ 99 $ 599
====== ======

The net changes in the unrealized after tax gain (loss) on marketable
securities included as a component of stockholders' equity were $(268,000),
$359,000 and $500,000 in 1994, 1995 and 1996, respectively.

(6) RECEIVABLES, NET

The following is a summary of the components of receivables (in thousands):
<TABLE>
<CAPTION>

DECEMBER 31,
------------
1995 1996
---- ----
Receivables:
<S> <C> <C>
Trade............................................. $ 160,920 $ 81,161
Other............................................. 15,109 6,649
--------- ---------
176,029 87,810
Less allowance for doubtful accounts (trade)...... 7,495 7,197
--------- ---------
$ 168,534 $ 80,613
========= =========
</TABLE>

Substantially all receivables are pledged as collateral for certain debt
(see Note 13).

(7) INVENTORIES

The following is a summary of the components of inventories (in thousands):
<TABLE>
<CAPTION>

DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
Raw materials....................................................$ 40,195 $ 25,405
Work in process.................................................. 6,976 467
Finished goods................................................... 71,378 29,468
--------- --------
$ 118,549 $ 55,340
========= ========
</TABLE>
The current cost of LIFO inventories exceeded the carrying value thereof by
approximately $8,739,000 and $330,000 at December 31, 1995 and 1996,
respectively. In 1994 and 1995 certain inventory quantities were reduced,
resulting in liquidations of LIFO inventory quantities carried at lower costs
from prior years. The effect of such liquidations was to decrease cost of sales
by $2,462,000 and $1,206,000, respectively. There was no such liquidation in
1996; the lower LIFO inventories resulted from the April 1996 sale of the
Textile Business (see Note 19).

Substantially all inventories are pledged as collateral for certain debt
(see Note 13).

(8) PROPERTIES

The following is a summary of the components of properties, at cost (in
thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
Land .......................................................... $ 32,441 $ 9,199
Buildings and improvements and leasehold improvements.......... 147,505 31,932
Machinery and equipment ....................................... 329,886 157,237
Transportation equipment ...................................... 27,262 24,950
Leased assets capitalized ..................................... 19,296 888
--------- ---------
556,390 224,206
Less accumulated depreciation and amortization ................ 224,801 116,934
--------- ---------
$ 331,589 $ 107,272
========= =========
</TABLE>

The decrease in properties from December 31, 1995 to December 31, 1996
principally resulted from (i) the April 1996 sale of the Textile Business and
(ii) the 1996 reduction in carrying value of certain long-lived assets to be
disposed of and reclassification as of December 31, 1996 of such assets to
"Assets held for sale" (see Note 3).

Substantially all properties are pledged as collateral for certain debt (see
Note 13).

(9) UNAMORTIZED COSTS IN EXCESS OF NET ASSETS OF ACQUIRED COMPANIES

The following is a summary of the components of the unamortized costs in
excess of net assets of acquired companies (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
Costs in excess of net assets of acquired
companies (Notes 19, 26 and 27)................$ 290,630 $ 274,037
Less accumulated amortization...................... 62,805 70,123
---------- ----------
$ 227,825 $ 203,914
========== ==========
</TABLE>

(10)TRADEMARKS

The following is a summary of the components of trademarks (in thousands):
<TABLE>
<CAPTION>

DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
Trademarks (Note 27)....................................$ 59,021 $ 63,348
Less accumulated amortization........................... 1,875 6,091
--------- ---------
$ 57,146 $ 57,257
========= =========
</TABLE>

(11)DEFERRED COSTS AND OTHER ASSETS

The following is a summary of the components of deferred costs and other
assets (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
Deferred financing costs................................$ 45,802 $ 34,102
Other................................................... 27,259 17,712
--------- ---------
73,061 51,814
Less accumulated amortization of deferred financing costs 16,483 11,515
--------- ---------
$ 56,578 $ 40,299
========= =========
</TABLE>

(12)ACCRUED EXPENSES

The following is a summary of the components of accrued expenses (in
thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
Accrued interest................................................. $ 27,370 $ 25,563
Accrued compensation and related benefits ....................... 23,181 20,511
Accrued advertising ............................................. 11,357 12,504
Net current liabilities of discontinued operations (Note 21)..... 3,462 3,589
Other ........................................................... 43,749 42,316
--------- ---------
$ 109,119 $ 104,483
========= =========
</TABLE>

TRIARC COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

(13)LONG-TERM DEBT
<TABLE>
<CAPTION>

Long-term debt consisted of the following (in thousands):
DECEMBER 31,
------------
1995 1996
---- ----

<S> <C> <C>
9 3/4% senior secured notes due 2000 (a)................................................$ 275,000 $ 275,000
8.54% first mortgage notes due June 30, 2010 (b)........................................ -- 125,000
Mistic Bank Facility (c)
Term loan, bearing interest at a weighted average rate of 8.28% at
December 31, 1996................................................................ 58,750 53,750
Revolving loan, bearing interest at a weighted average rate of 8.45% at
December 31, 1996................................................................ 6,500 14,950
Mortgage notes payable to FFCA Mortgage Corporation ("FFCA"), bearing
interest at a weighted average rate of 11.09% as of December 31, 1996, due
through 2016 (d)...................................................................... 51,685 52,136
Equipment notes payable to FFCA, bearing interest at a weighted average
rate of 10.89% at December 31, 1996, due through 2003 (d)............................ 6,545 6,236
Patrick Facility term loans, bearing interest at a weighted average rate of
9.20% as of December 31, 1996, due through 2002 (e).................................. -- 33,875
Propane Bank Credit Facility (f)
Working capital facility, bearing interest at a rate of 8 1/4% at
December 31, 1996............................................................... -- 6,000
Acquisition facility, bearing interest at a weighted average rate of
7.16% at December 31, 1996...................................................... -- 1,885
Graniteville Credit Facility repaid in April 1996 prior to maturity (g)
Revolving loan...................................................................... 113,435 --
Term loan .......................................................................... 85,200 --
Former Propane Facility repaid in July 1996 prior to maturity (b)
Term loan .......................................................................... 84,083 --
Revolving loan ..................................................................... 43,229 --
11 7/8% senior subordinated debentures due February 1, 1998 repaid in
February 1996 (less unamortized original issue discount of $1,920) (h)................ 43,080 --
9 1/2% promissory note repaid in July 1996 (i) ......................................... 37,697 --
Notes, bearing interest at 7.94% to 13 1/2%, due through 2002 secured by
equipment ............................................................................ 13,651 3,436
Capitalized lease obligations (j) ..................................................... 19,143 15,974
Other................................................................................ 8,879 5,854
------------ ------------

Total debt ......................................................... 846,877 594,096
Less amounts payable within one year............................................ 83,531 93,567
------------ ------------
$ 763,346 $ 500,529
============ ============
</TABLE>

Aggregate annual maturities of long-term debt, including capitalized lease
obligations, are as follows as of December 31, 1996 (in thousands):

YEAR ENDING DECEMBER 31,
------------------------

1997................................................ $ 93,567
1998................................................ 27,330
1999................................................ 17,049
2000................................................ 296,391
2001................................................ 17,006
Thereafter.......................................... 142,753
---------
$ 594,096
=========

(a) In September 1993 RCAC entered into a three-year interest rate swap
agreement (the "Swap Agreement") in the amount of $137,500,000. Under the
Swap Agreement, interest on $137,500,000 was paid by RCAC at a floating rate
(the "Floating Rate") based on the 180-day London Interbank Offered Rate
("LIBOR") and RCAC received interest at a fixed rate of 4.72%. The Floating
Rate was set at the inception of the Swap Agreement through January 31, 1994
and thereafter was retroactively reset at the end of each six-month
calculation period through July 31, 1996 and on September 24, 1996. The
transaction effectively changed RCAC's interest rate on $137,500,000 of the
9 3/4% senior secured notes due 2000 (the "9 3/4% Senior Notes") from a
fixed-rate to a floating-rate basis. Under the Swap Agreement during 1994
RCAC received $614,000 which was determined at the inception of the Swap
Agreement. Thereafter RCAC paid (i) $439,000 during 1994 in connection with
the six-month reset period ended July 31, 1994, (ii) $2,271,000 during 1995
in connection with such year's two six-month reset periods and (iii)
$1,631,000 during 1996 in connection with such year's two six-month reset
periods and the reset period ending with the agreement's termination date of
September 24, 1996.

(b) On July 2, 1996 National issued $125,000,000 of 8.54% first mortgage notes
due June 30, 2010 (the "First Mortgage Notes") and repaid the $123,188,000
of then outstanding borrowings under its former revolving credit and term
loan facility (the "Former Propane Facility"). The First Mortgage Notes
amortize in equal annual installments of $15,625,000 commencing June 2003
through June 2010.

(c) During 1995 Mistic entered into an $80,000,000 credit agreement (as amended
by an amendment dated December 30, 1996, the "Mistic Bank Facility") with a
group of banks. The Mistic Bank Facility consists of a $20,000,000
revolving credit facility and a $60,000,000 term facility. Borrowings under
the Mistic Bank Facility bore interest at the prime rate through October
16, 1995 and thereafter, at Mistic's option, at either (i) 30, 60, 90 or
180-day LIBOR (5.5% to 5.6% as of December 31, 1996) plus 2 3/4% or (ii)
the higher of (a) the prime rate or (b) the Federal funds rate plus 1/2%,
in either case, plus 1 1/2%. Borrowings under the revolving credit facility
are due in their entirety in August 1999. However, Mistic must reduce the
borrowings under the revolving credit facility for a period of thirty
consecutive days between October 1 and March 31 of each year to less than
or equal to (a) $12,500,000 between October 1, 1996 and March 31, 1997 and
(b) zero between October 1 and the following March 31 for each of the two
years thereafter (such requirement was met in February/March 1997 for the
period between October 1, 1996 and March 31, 1997). Mistic must also make
mandatory prepayments in an amount equal to 75% for the year ended December
31, 1997 and 50% thereafter of excess cash flow, as defined. The term loans
amortize in installments of $6,250,000 in 1997, $10,000,000 in 1998,
$11,250,000 in 1999, $15,000,000 in 2000 and $11,250,000 in 2001. In
connection with the amendment dated December 30, 1996, commencing February
28, 1997, the borrowing base for the revolving credit facility is the sum
of 80% of eligible accounts receivable and 50% of eligible inventory, both
as defined.

(d) During 1995 ARDC and ARHC entered into loan and financing agreements with
FFCA Mortgage Corporation ("FFCA") which, as amended, permit borrowings in
the form of mortgage notes (the "Mortgage Notes") and equipment notes (the
"Equipment Notes") aggregating $87,294,000 (the "FFCA Loan Agreements").
The Mortgage Notes and Equipment Notes bear interest at rates in effect at
the time of the borrowings ranging from 10 1/8% to 11 1/2% plus, with
respect to the Mortgage Notes, participating interest to the extent gross
sales of the financed restaurants exceed certain defined levels which are
in excess of current levels. The Mortgage Notes and Equipment Notes are
repayable in equal monthly installments, including interest, over twenty
years and seven years, respectively. As of December 31, 1996, borrowings
under the FFCA Loan Agreements aggregated $62,697,000 (including cumulative
repayments of $4,325,000 through December 31, 1996) resulting in remaining
availability of $24,597,000 through December 31, 1997 to finance new
company-owned restaurants whose sites are identified to FFCA by September
30, 1997 on terms similar to those of outstanding borrowings. The assets of
ARDC of approximately $37,000,000 will not be available to pay creditors of
Triarc, RCAC or Arby's until all loans under the FFCA Loan Agreements have
been repaid in full. As discussed in Note 3, in February 1997 the Company
entered into an agreement to sell all of its restaurants and, if such sale
is consummated on terms as they currently exist, the purchaser would assume
$54,709,000 of borrowings under the FFCA Loan Agreements.

(e) On May 16, 1996 C.H. Patrick entered into a $50,000,000 credit agreement
(the "Patrick Facility") consisting of a $15,000,000 revolving credit
facility with no outstanding borrowings as of December 31, 1996 and a
$35,000,000 term facility consisting of two term loans (the "Term Loans").
Borrowings under the Patrick Facility bore interest at the higher of the
prime rate or 1/2% over the Federal funds rate (the "Base Rate") through
July 29, 1996. Subsequent thereto, one of the Term Loans with an outstanding
balance of $14,000,000 as of December 31, 1996 and borrowings under the
revolving credit facility ("Revolving Loans") bear interest, at the option
of C.H. Patrick, at (i) 30, 60, 90 or 180-day LIBOR plus 2 3/4% or (ii) the
Base Rate plus 1 3/4%, and the other Term Loan with an outstanding balance
of $19,875,000 as of December 31, 1996 bears interest at (i) 30, 60, 90 or
180-day LIBOR plus 3 1/4% or (ii) the Base Rate plus 2 1/4%. The remaining
$33,875,000 of Term Loans amortizes $3,187,000 in 1997, $2,938,000 in 1998,
$3,750,000 in 1999, $4,375,000 in 2000, $6,125,000 in 2001, $10,438,000 in
2002 and $3,062,000 in 2003. C.H. Patrick must also make mandatory
prepayments in an amount equal to 75% of excess cash flow, as defined (no
such prepayments were required in 1996). The borrowing base for revolving
credit loans is the sum of (i) 85% of eligible accounts receivable, as
defined (excludes accounts receivable due from the buyer of the Textile
Business - see Note 19), (ii) 75% of accounts receivable due from the buyer
of the Textile Business, (iii) the lesser of (a) 50% of eligible inventory,
as defined and (b) $10,000,000 and (iv) any amounts deposited with the
lenders in respect of letter of credit liabilities, less $50,000.

(f) On July 2, 1996 National entered into a $55,000,000 bank credit facility
(the "Propane Bank Credit Facility") with a group of banks. The Propane Bank
Credit Facility includes a $15,000,000 working capital facility (the
"Working Capital Facility") and a $40,000,000 acquisition facility (the
"Acquisition Facility"), the use of which is restricted to business
acquisitions and capital expenditures for growth. The Propane Bank Credit
Facility bears interest, at National's option, at either (i) 30, 60, 90 or
180-day LIBOR plus a margin generally ranging from 1% to 1 3/4% depending on
National's financial condition (such margin was 1 1/4% with respect to
borrowings under the Working Capital Facility and 1 1/2% with respect to
borrowings under the Acquisition Facility at December 31, 1996) or (ii) the
higher of (a) the prime rate and (b) the Federal funds rate plus 1/2 of 1%,
in either case, plus a margin of up to 1/4%. Borrowings under the Working
Capital Facility mature in their entirety in July 1999. However, the
Partnership must reduce the borrowings under the Working Capital Facility to
zero for a period of at least 30 consecutive days in each year between March
1 and August 31. The Acquisition Facility converts to a term loan in July
1998 and amortizes thereafter in twelve equal quarterly installments through
July 2001.

(g) In April 1996 all then outstanding obligations under a senior secured credit
facility (the "Graniteville Credit Facility") maintained by TXL and C.H.
Patrick with a commercial lender aggregating $180,243,000 were repaid
concurrently with the sale of the Textile Business (see Note 19).

(h) On February 22, 1996 the 11 7/8% senior subordinated debentures due February
1, 1998 (the "11 7/8% Debentures") were redeemed. The cash for such
redemption came from the proceeds of $30,000,000 of 1995 borrowings, which
were restricted to the redemption of the 11 7/8% Debentures, under National
Propane's former revolving credit and term loan facility, liquidation of
marketable securities and existing cash balances.

(i) On July 1, 1996 Triarc paid $27,250,000 to National Union Fire Insurance
Company of Pittsburgh, PA ("National Union") in full satisfaction of a 9
1/2% promissory note payable to National Union (the "National Union Note")
with a then outstanding balance of $36,487,000 (including accrued interest
of $1,790,000). If the settlement of certain insurance liabilities commuted
to National Union effective December 31, 1993 did not exceed certain
predetermined levels, the National Union Note was to be reduced by up to
$3,000,000 in each of 1995 and 1996. Prior to the repayment of the National
Union Note, the Company received such $3,000,000 in the form of reductions
in the principal of the National Union Note in each of 1995 and 1996 and
recorded such amounts as reductions of "General and administrative" in the
accompanying consolidated statements of operations.

(j) As discussed in Note 3, in February 1997 the Company entered into an
agreement to sell all of its restaurants and, if such sale is consummated on
terms as they currently exist, the purchaser would assume all capitalized
lease obligations associated with the restaurants currently estimated to be
$15,025,000.

Under the Company's various debt agreements, substantially all of Triarc's
and its subsidiaries' assets other than cash and short-term investments are
pledged as security. In addition, (i) obligations under the 9 3/4% Senior Notes
have been guaranteed by Royal Crown and Arby's, (ii) obligations under the First
Mortgage Notes and the Propane Bank Credit Facility have been guaranteed by
National Propane and (iii) obligations under the Mistic Bank Facility, the
Patrick Facility and $24,698,000 of borrowings under the FFCA Loan Agreements
have been guaranteed by Triarc. Assuming consummation of the RTM sale (see Note
3) Triarc would remain contingently liable under its guarantee upon the failure,
if any, of RTM and its acquisition entity to satisfy such obligation. As
collateral for such guarantees, all of the stock of Royal Crown, Arby's, Mistic
and C.H. Patrick is pledged as well as approximately 2% of the unsubordinated
general partner interest in the Partnership (see Note 19). Although the stock of
National Propane is not pledged in connection with any guaranty of debt
obligations, it is pledged in connection with a $40,700,000 intercompany loan
payable by Triarc to the Partnership.

The Company's debt agreements contain various covenants which (a) require
meeting certain financial amount and ratio tests; (b) limit, among other
matters, (i) the incurrence of indebtedness, (ii) the retirement of certain debt
prior to maturity, (iii) investments, (iv) asset dispositions, (v) capital
expenditures and (vi) affiliate transactions other than in the normal course of
business; and (c) restrict the payment of dividends by Triarc's principal
subsidiaries to Triarc.

Triarc's principal subsidiaries, other than CFC Holdings and National
Propane, are unable to pay any dividends or make any loans or advances to Triarc
during 1997 under the terms of the various indentures and credit arrangements.
While there are no restrictions applicable to National Propane, National Propane
is dependent upon cash flows from the Partnership, principally quarterly
distributions from the Partnership on the Subordinated Units and the 4%
unsubordinated general partner interest (see Note 19), to pay dividends. While
there are no restrictions applicable to CFC Holdings, CFC Holdings would be
dependent upon cash flows from RCAC to pay dividends and as of December 31, 1996
RCAC was unable to pay any dividends or make any loans or advances to CFC
Holdings.

(14)FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and fair values of the Company's financial instruments
for which such amounts differ in total are as follows (in thousands):
<TABLE>
<CAPTION>

DECEMBER 31,
------------
1995 1996
------------------------- ------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
------ ----- ------ -----
<S> <C> <C> <C> <C>
Long-term debt (Note 13):
9 3/4% Senior Notes.................$ 275,000 $ 226,000 $ 275,000 $ 283,000
First Mortgage Notes ............... -- -- 125,000 125,000
Mistic Bank Facility................ 65,250 65,250 68,700 68,700
FFCA Loan Agreements................ 58,230 61,264 58,372 61,814
Patrick Facility.................... -- -- 33,875 33,875
Propane Bank Credit Facility........ -- -- 7,885 7,885
Graniteville Credit Facility........ 198,635 198,635 -- --
Former Propane Facility............. 127,312 127,312 -- --
11 7/8% Debentures.................. 43,080 45,000 -- --
National Union Note ................ 37,697 36,128 -- --
Other long-term debt ............... 41,673 41,673 25,264 25,264
----------- ----------- ------------ ----------
$ 846,877 $ 801,262 $ 594,096 $ 605,538
=========== =========== ============ ==========
Swap Agreement (liability) (Note 13).....$ (684) $ (896) $ -- $ --
=========== =========== ============ ==========

</TABLE>

The fair values of the 9 3/4% Senior Notes are based on quoted market
prices at the respective reporting dates. The fair value of the First Mortgage
Notes was assumed to reasonably approximate their carrying value due to their
recent issuance in July 1996 and an insignificant change in borrowing rates
since that time. The fair values of the revolving loans and the term loans under
the Mistic Bank Facility and the Patrick Facility at December 31, 1995 and 1996,
the Propane Bank Credit Facility at December 31, 1996 and the Graniteville
Credit Facility and the Former Propane Facility at December 31, 1995
approximated their carrying values due to their floating interest rates. The
fair value of the Mortgage Notes and Equipment Notes under the FFCA Loan
Agreements at December 31, 1995 and 1996 was determined by discounting the
future monthly payments using the rate of interest available under such
agreements at December 31, 1995 and 1996. The aggregate par value of the
outstanding 11 7/8% Debentures as of December 31, 1995 was assumed to
approximate fair value since all were redeemed at par on February 22, 1996. The
fair value of the National Union Note as of December 31, 1995 was determined by
using a discounted cash flow analysis based on an estimate of the Company's then
current borrowing rate for a similar security. The fair values of all other
long-term debt were assumed to reasonably approximate their carrying amounts
since (i) for capitalized lease obligations, the weighted average implicit
interest rate approximates current levels and (ii) for equipment notes, the
remaining maturities are relatively short-term.

The fair value of the Swap Agreement at December 31, 1995 represented the
estimated amount RCAC would have paid to terminate the Swap Agreement, as quoted
by the counterparty.

(15)INCOME TAXES

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

1994 1995 1996
---- ---- ----

Domestic.............................$ (1,659) $ (36,076) $ 8,046
Foreign.............................. 2,470 (1,948) (3,408)
--------- ---------- ----------
$ 811 $ (38,024) $ 4,638
========= ========== ==========

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

1994 1995 1996
---- ---- ----
Current:
Federal.............................$ 2,167 $ (965) $ 2,888
State............................... 2,310 1,091 5,725
Foreign............................. 2,228 357 370
-------- --------- ---------
6,705 483 8,983
-------- -------- ---------

Deferred:
Federal............................ (4,985) (69) 7,547
State.............................. 645 (1,444) (5,236)
Foreign............................ (753) -- --
--------- --------- ---------
(5,093) (1,513) 2,311
--------- --------- ---------
Total....................$ 1,612 $ (1,030) $ 11,294
========= ========= =========

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

<TABLE>
<CAPTION>
DECEMBER 31,
------------
1995 1996
---- ----
<S> <C> <C>
Current deferred income tax assets (liabilities):
Accrued employee benefit costs................ $ 4,799 $ 4,218
Facilities relocation and corporate
restructuring............................... 2,221 2,366
Allowance for doubtful accounts .............. 2,474 2,135
Closed facilities reserves.................... 1,252 1,059
Other, net.................................... (99) 8,430
--------- ---------
10,647 18,208
Valuation allowance........................... (1,799) (1,799)
--------- ---------
8,848 16,409
Non-current deferred income tax assets (liabilities):
Reserve for income tax contingencies and other
tax matters................................ (26,065) (29,005)
Gain on sale of propane business (see Note 19) -- (33,163)
Net operating loss and alternative minimum tax
credit carryforward........................ 41,524 23,954
Depreciation and other properties basis
differences................................. (36,328) 9,743
Insurance losses not deducted................. 7,061 7,061
Other, net.................................... 7,433 4,593
--------- ---------
(6,375) (16,817)
Valuation allowance........................... (17,638) (17,638)
--------- ---------
(24,013) (34,455)
--------- ---------
$ (15,165) $ (18,046)
========= =========
</TABLE>

As of December 31, 1996 Triarc had a net operating loss carryforward for
Federal income tax purposes of approximately $19,000,000 expiring in the year
2008, the utilization of which is subject to annual limitations through 1998. In
addition, the Company has (i) alternative minimum tax credit carryforwards of
approximately $6,900,000 and (ii) depletion carryforwards of approximately
$600,000, both of which have an unlimited carryforward period.

A "valuation allowance" is provided when it is more likely than not that
some portion of deferred tax assets will not be realized. The Company has
established valuation allowances principally for that portion of the net
operating loss carryforwards and other net deferred tax assets related to
Chesapeake Insurance which entity as set forth in Note 1 is not included in
Triarc's consolidated income tax return.

The difference between the reported income tax provision (benefit) and the
tax provision (benefit) that would result from applying the 35% Federal
statutory rate to the income (loss) from continuing operations before income
taxes and minority interests is reconciled as follows (in thousands):
<TABLE>
<CAPTION>

1994 1995 1996
---- ---- ----

<S> <C> <C> <C>
Income tax (benefit) computed at Federal statutory rate.....................$ 284 $ (13,308) $ 1,623
Increase (decrease) in Federal taxes resulting from:
Non-deductible loss on sale of Textile Business (see Note 19).......... -- -- 2,928
Provision for income tax contingencies and other tax matters........... -- 6,100 2,582
Amortization of non-deductible Goodwill ............................... 2,171 2,286 2,166
Effect of net operating losses for which no tax carryback benefit
is available (utilization of operating loss, depletion and tax
credit carryforwards)............................................... (3,643) 986 1,269
State taxes (benefit), net of Federal income tax benefit (provision)... 1,921 (229) 318
Foreign tax rate in excess of United States Federal statutory rate
and foreign withholding taxes, net of Federal income tax benefit.... 479 307 241
Minority interests..................................................... -- -- (640)
Non-deductible amortization of restricted stock........................ -- 1,440 --
Other non-deductible expenses.......................................... 324 1,340 807
Other, net............................................................. 76 48 --
---------- ------------ -----------
$ 1,612 $ (1,030) $ 11,294
========== ============ ===========
</TABLE>

The Federal income tax returns of the Company have been examined by the
IRS for the tax years 1985 through 1988. The Company has resolved all issues
related to such audit and in connection therewith paid $5,182,000 and $674,000
in 1994 and 1996, respectively, in final settlement of such examination. Such
amounts had been fully reserved in years prior to 1994. The IRS has completed
its examination of the Company's Federal income tax returns for the tax years
from 1989 through 1992 and has issued notices of proposed adjustments increasing
taxable income by approximately $145,000,000, the tax effect of which has not
yet been determined. The Company is contesting the majority of the proposed
adjustments and, accordingly, the amount of any payments required as a result
thereof cannot presently be determined. During 1995 and 1996 the Company
provided $6,100,000 and $2,582,000, respectively, included in "Benefit from
(provision for) income taxes" and during 1994, 1995 and 1996 provided
$1,400,000, $2,900,000, and $2,000,000, respectively, included in "Interest
expense" relating to such examinations and other tax matters. Management of the
Company believes that adequate aggregate provisions have been made in 1996 and
prior periods for any tax liabilities, including interest, that may result from
the 1989 through 1992 examination and other tax matters.

(16)REDEEMABLE PREFERRED STOCK

The Company had 5,982,866 shares of its Redeemable Preferred Stock
outstanding at December 31, 1994, with a stated value of $12.00 per share,
bearing a cumulative annual dividend of 8 1/8% payable semi-annually,
convertible into 4,985,722 shares of class B common stock (the "Class B Common
Stock") (see Note 17) at $14.40 per share and requiring mandatory redemption on
April 23, 2005 at $12.00 per share. All of such Redeemable Preferred Stock was
owned by one of the affiliates (the "Posner Entities") of Victor Posner
("Posner"), the Company's former Chairman and Chief Executive Officer before an
April 1993 change in control. Pursuant to a settlement agreement entered into by
the Company and the Posner Entities on January 9, 1995 (the "Posner
Settlement"), all of the Redeemable Preferred Stock was converted into 4,985,722
shares of Class B Common Stock issued to a Posner Entity (the "Conversion" - see
Note 17). In connection therewith, the Company has no further obligation to
declare or pay dividends on the Redeemable Preferred Stock subsequent to the
last payment date of September 30, 1994.

(17)STOCKHOLDERS' EQUITY

The Company's class A common stock (the "Class A Common Stock") and its
Class B Common Stock are identical, except that Class A Common Stock has one
vote per share and Class B Common Stock is non-voting. Class B Common Stock
issued to the Posner Entities can only be sold subject to a right of first
refusal in favor of the Company or its designee. If held by a person(s) not
affiliated with Posner, each share of Class B Common Stock is convertible into
one share of Class A Common Stock. There were no changes in the 27,983,805
issued shares of Class A Common Stock during 1994, 1995 and 1996. Prior to
January 9, 1995 no shares of Class B Common Stock had been issued. On January 9,
1995 pursuant to the Posner Settlement the Company issued (i) 4,985,722 shares
of Class B Common Stock as a result of the Conversion and (ii) an additional
1,011,900 shares of Class B Common Stock to the Posner Entities with an
aggregate fair value of $12,016,000 in consideration for, among other matters,
(i) the settlement of all amounts due to the Posner Entities in connection with
the termination of the lease for the Company's former headquarters effective
February 1, 1994 and (ii) an indemnification by certain of the Posner Entities
of any claims or expenses incurred after December 1, 1994 involving certain
litigation relating to NVF Company and APL Corporation (see Note 25) and any
potential litigation relating to the bankruptcy filing of Pennsylvania
Engineering Corporation (see Note 28).

A summary of the changes in the number of shares of Class A Common Stock
held in treasury is as follows (in thousands):
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----

<S> <C> <C> <C>
Number of shares at beginning of period...................................... 6,661 4,028 4,067
Common shares acquired in open market transactions........................... 91 42 45
Restricted stock exchanged (see below) or reacquired......................... 40 11 4
Common shares issued from treasury upon exercise of stock options............ -- -- (10)
Common shares issued from treasury to directors.............................. (3) (7) (8)
Common shares issued from treasury in the SEPSCO Merger (Note 26)............(2,692) -- --
Restricted stock grants from treasury (see below)............................ (69) (7) --
------ ------- -------
Number of shares at end of period............................................ 4,028 4,067 4,098
====== ======= =======
</TABLE>
The Company has 25,000,000 authorized shares of preferred stock including
5,982,866 designated as Redeemable Preferred Stock, none of which were issued as
of December 31, 1995 and 1996.

The Company maintains a 1993 Equity Participation Plan (the "Equity Plan"),
which provides for the grant of stock options and restricted stock to certain
officers, key employees, consultants and non-employee directors. In addition,
non-employee directors are eligible to receive shares of Class A Common Stock in
lieu of retainer or meeting attendance fees. The Equity Plan provides for a
maximum of 10,000,000 shares of Class A Common Stock to be issued on the
exercise of options, granted as restricted stock or issued to non-employee
directors in lieu of fees and there remain 1,049,902 shares available for future
grants under the Equity Plan as of December 31, 1996.

A summary of changes in outstanding stock options is as follows (weighted
average option price data is not presented for periods prior to December 31,
1995 since such data was not required until the adoption of SFAS 123 in 1996):
<TABLE>
<CAPTION>

WEIGHTED AVERAGE
OPTIONS OPTION PRICE OPTION PRICE
------- ------------ ------------

<S> <C> <C> <C>
Outstanding at January 1, 1994.......... 1,972,500 $ 18.00 - $ 30.75
Granted during 1994..................... 5,753,400 $ 10.75 - $ 24.125
Terminated during 1994.................. (156,000) $ 18.00 - $ 30.75
------------
Outstanding at December 31, 1994........ 7,569,900 $ 10.75 - $ 30.00
Granted during 1995..................... 1,239,500 $ 10.125- $ 16.25
Terminated during 1995.................. (210,700) $ 10.75 - $ 30.00
------------
Outstanding at December 31, 1995........ 8,598,700 $ 10.125- $ 30.00 $17.19
Granted during 1996 (a)................. 136,000 $ 11.00 - $ 13.00 $12.16
Exercised during 1996................... (9,999) $10.75 $10.75
Terminated during 1996.................. (293,869) $ 10.125- $ 30.00 $13.51
------------
Outstanding at December 31, 1996........ 8,430,832 $ 10.125- $ 30.00 $17.24
============
Exercisable at December 31, 1996........ 3,476,486 $ 10.125- $ 30.00 $15.86
============
</TABLE>

(a) The weighted average grant date fair value of stock options granted
during 1996 was $6.81 (see discussion of stock option valuation below).

The following table sets forth information relating to stock options
outstanding at December 31, 1996:
<TABLE>
<CAPTION>

STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE
---------------------------------------------------------------------------- --------------------------------------
OUTSTANDING AT WEIGHTED AVERAGE WEIGHTED AVERAGE OUTSTANDING AT WEIGHTED AVERAGE
OPTION PRICE DECEMBER 31, 1996 YEARS REMAINING OPTION PRICE DECEMBER 31, 1996 OPTION PRICE
------------ ----------------- --------------- ------------ ----------------- ------------

Stock options under the Equity Plan generally have maximum terms of ten
years and vest ratably over periods not exceeding five years from date of grant.
However, an aggregate 3,500,000 performance stock options granted on April 21,
1994 to the Chairman and Chief Executive Officer and the President and Chief
Operating Officer vest in one-third increments upon attainment of each of the
three closing price levels for the Class A Common Stock for 20 out of 30
consecutive trading days by the indicated dates as follows:

ON OR PRIOR
TO APRIL 21, PRICE
------------ -----

1999...................................................... $ 27.1875
2000...................................................... $ 36.25
2001...................................................... $ 45.3125

Each option not previously vested, should such price levels not be attained
no later than each indicated date, will vest on October 21, 2003. In addition to
the 3,500,000 performance stock options discussed above, 350,000 of such stock
options were granted on April 21, 1994 to the Vice Chairman of the Company since
April 1993 (the "Vice Chairman"). In December 1995, it was decided that the Vice
Chairman's employment contract would not be extended and as of January 1, 1996
the Vice Chairman resigned as a director, officer and employee of the Company
and entered into a consulting agreement pursuant to which no substantial
services are expected to be provided. In accordance therewith, effective January
1, 1996 all of the 513,333 non-vested stock options previously issued to the
Vice Chairman (including 350,000 performance stock options which were granted
April 21, 1994) were vested in full. In January 1997 Triarc paid the Vice
Chairman $353,000 in consideration of the cancellation of all 680,000 stock
options previously granted to him. Such amount was included in the "Facilities
relocation and corporate restructuring" provision in 1995 (see Note 18).

Stock options under the Equity Plan are generally granted at not less than
the fair market value of the Class A Common Stock at the date of grant. However,
options granted, net of terminations, prior to 1994 included 275,000 options
issued at an option price of $20.00 which was below the $31.75 fair market value
of the Class A Common Stock at the date of grant representing an aggregate
difference of $3,231,000. Such amount is being recorded as compensation expense
over the applicable vesting period of one to five years. Prior to 1994, $231,000
of the aggregate difference was recognized as compensation expense. Effective
January 1, 1994 the Company recorded the remaining $3,000,000 of the aggregate
difference as unearned compensation and during 1994, 1995 and 1996, $907,000,
$761,000 and $489,000, respectively, was amortized to compensation expense and
credited to "Other stockholders' equity". During 1995 and 1996 certain below
market options were forfeited. Such forfeitures resulted in decreases to (i) the
"Unearned compensation" component of "Other stockholders' equity" of $319,000 in
1995 and $219,000 in 1996 representing the reversals of the unamortized values
at the dates of forfeiture, (ii) "Additional paid-in capital" of $588,000 in
1995 and $852,000 in 1996 representing the reversal of the initial value of the
forfeited below market stock options and (iii) "General and administrative" of
$269,000 in 1995 and $633,000 in 1996 representing the reversal of previous
amortization of unearned compensation relating to forfeited below market stock
options. The remaining unamortized balance relating to below market stock
options included in "Unearned compensation" is $305,000 at December 31, 1996.

A summary of the changes in the outstanding shares of restricted stock
granted by the Company from treasury stock is as follows:

Outstanding at January 1, 1994........................ 429,500
Granted during 1994................................... 68,750
Converted to Rights (see below) during 1994........... (26,000)
Repurchased by the Company............................ (3,500)
--------
Outstanding at December 31, 1994...................... 468,750
Granted during 1995................................... 6,700
Converted to Rights (see below) during 1995........... (4,550)
Forfeited during 1995................................. (6,700)
Vested during 1995 (see below)........................ (464,200)
--------
Outstanding at December 31, 1995 and 1996............. --
========

Grants of restricted stock, which provided for vesting over periods of
three to four years, resulted in aggregate unearned compensation of $1,376,000
and $68,000 for 1994 and 1995, respectively, based upon the market value of the
Company's Class A Common Stock at the respective dates of grant which ranged
from $10.125 to $24.125. The vesting of 150,000 shares of restricted stock
granted prior to 1994 to three court-appointed members of a special committee of
Triarc's Board of Directors (the "Special Committee Members") was accelerated in
connection with their decision not to stand for re-election as directors of the
Company at the 1995 annual stockholders meeting resulting in a charge for
amortization of unearned compensation in 1995 of $1,691,000 (including $723,000
which would have otherwise been amortized during the post-acceleration 1995
period). On December 7, 1995 the Compensation Committee of Triarc's Board of
Directors authorized management of the Company to accelerate the vesting of all
of the then outstanding shares of restricted stock. On January 16, 1996
management of the Company accelerated the vesting and the Company recorded the
resulting additional amortization of unearned compensation of $1,640,000 in its
entirety in 1995 which together with the $1,691,000 related to the Special
Committee Members, resulted in aggregate amortization of unearned compensation
in connection with accelerated vesting of $3,331,000. Prior to these accelerated
vestings of the restricted stock, the unearned compensation was being amortized
over the applicable vesting period and together with the amortization of
unearned compensation related to the accelerated vesting, was recorded as
"General and administrative". Such compensation expense was $3,122,000 in 1994
and $1,950,000 in 1995 (excluding the $3,331,000 relating to the previously
discussed accelerated vesting of restricted stock).

Effective January 1, 1996 the Company adopted SFAS 123. In accordance with
the intrinsic value method of accounting for stock options, the Company has not
recognized any compensation expense for stock options granted in 1995 and 1996
since the option price for all of such stock options was equal to the fair
market value of the Class A Common Stock at the respective dates of grant. Had
compensation expense been recognized for such 1995 and 1996 stock option grants
based on the fair value method as provided for in SFAS 123, the Company's net
loss and loss per share would have been as follows (in thousands except per
share data):

1995 1996
---- ----

Net loss......................... $ (37,284) $ (16,356)
Loss per share................... (1.25) (.55)

The fair value of stock options granted on the date of grant was estimated
using the Black-Scholes option pricing model with the following weighted average
assumptions:

Risk-free interest rate..................... 5.74%
Expected option life........................ 7 years
Expected volatility......................... 45.56%
Dividend yield.............................. None

Prior to 1994 and during the years ended December 31, 1994 and 1995, the
Company agreed to pay to employees terminated during each such period and
directors who were not reelected during 1994 and 1995 who held restricted stock
and/or stock options, an amount in cash equal to the difference between the
market value of Triarc's Class A Common Stock and the base value (see below) of
such restricted stock and stock options (the "Rights") in exchange for such
restricted stock or stock options. Such exchanges for restricted stock were for
10,000, 26,000 and 4,550 Rights prior to 1994 and in 1994 and 1995,
respectively, and for stock options were 40,000, 126,000, 97,700 and 12,500
Rights prior to 1994 and in 1994, 1995 and 1996, respectively. All such
exchanges were for an equal number of shares of restricted stock or stock
options except that the 4,550 Rights granted in 1995 were in exchange for 11,250
shares of restricted stock. The Rights which resulted from the exchange of stock
options have base prices ranging from $10.75 to $30.75 per share and the Rights
which resulted from the exchange of restricted stock all have a base price of
zero. The restricted stock for which Rights were granted (exclusive of the 6,700
shares for which Rights were not granted) was fully vested upon termination of
the employees. As a result of such accelerated vesting the Company incurred
charges representing unamortized unearned compensation of $331,000 and $13,000
during 1994 and 1995, respectively, included in "General and administrative". Of
the 316,750 Rights granted, (i) 36,000 and 4,550 relating to restricted stock
were exercised in 1995 and 1996, respectively, (ii) 16,000, 55,000 and 108,700
relating to stock options expired in 1994, 1995 and 1996, respectively and (iii)
16,500 relating to stock options were exercised in 1996. The remaining 80,000
Rights expire in 1997. Upon issuance of the Rights the Company recorded a
liability equal to the excess of the then market value of the Class A Common
Stock over the base price of the stock options or restricted stock exchanged.
Such liability has been adjusted to reflect changes in the fair market value of
Class A Common Stock subject to a lower limit of the base price of the Rights.

(18) FACILITIES RELOCATION AND CORPORATE RESTRUCTURING

The "Facilities relocation and corporate restructuring" set forth in the
accompanying consolidated statements of operations for 1994, 1995 and 1996
consists of the following charges (in thousands):
<TABLE>
<CAPTION>

1994(A) 1995(B) 1996(C)
------- ------- -------

<S> <C> <C> <C>
Estimated costs related to sublease of excess office space .................$ -- $ -- $ 3,700
Estimated restructuring charges associated with employee
severance costs.......................................................... 1,700 510 2,200
Costs of terminating beverage distribution agreement........................ -- -- 1,300
Estimated costs of beverage plant closing and other asset disposals......... -- -- 600
Consulting fees paid associated with combining certain
operations of Royal Crown and Mistic and other........................... -- -- 600
Costs related to the planned spinoff of the Company's
restaurant/beverage group................................................ -- -- 400
Cost related to consulting agreements between the Company
and its former Vice Chairman ............................................ -- 2,500 --
Employee relocation costs................................................... 3,800 -- --
Estimated costs (reductions) to relocate the Company's headquarters......... 3,300 (310) --
-------- --------- ---------
$ 8,800 $ 2,700 $ 8,800
======== ========= =========
</TABLE>

(a) The 1994 facilities relocation and corporate restructuring charges
principally related to the 1994 closing of the Company's former
corporate office in West Palm Beach, Florida, including the estimated
loss ($3,300,000) on the sublease of such office space in 1994 and
the write-off of unamortized leasehold improvements, severance costs
related to corporate employees terminated during 1994 and the
relocation during 1994 of certain employees formerly located in that
facility either to another South Florida location or the New York
City corporate office.

(b) The 1995 facilities relocation and corporate restructuring charge
related to (i) a $310,000 reduction of the estimated costs provided
prior to 1994 to terminate the lease on the Company's then existing
corporate facilities resulting from the Posner Settlement (see Note
28) and (ii) severance costs associated with the resignation of the
Vice Chairman of Triarc, who had served from April 23, 1993 to
December 31, 1995 (see Note 17), and the 1995 termination of other
corporate employees in conjunction with a reduction in corporate
staffing.

(c) The 1996 facilities relocation and corporate restructuring charge
principally relates to costs associated with (i) estimated losses on
planned subleases (principally for the write-off of nonrecoverable
unamortized leasehold improvements and furniture and fixtures) of
excess office space in excess of anticipated sublease proceeds as a
result of the RTM sale (see Note 3) and the relocation of Royal
Crown's headquarters which is being centralized with Mistic's offices
in White Plains, New York, (ii) employee severance costs associated
with the relocation of Royal Crown's headquarters, (iii) terminating a
beverage distribution agreement, (iv) the shutdown of the beverage
segment's Ohio production facility and other asset disposals, (v)
consultant fees paid associated with combining certain operations of
Royal Crown and Mistic and (vi) the planned spinoff of the Company's
restaurant/beverage group (see Note 3).

(19) GAIN (LOSS) ON SALES OF BUSINESSES, NET AND MINORITY INTEREST

The "Gain (loss) on sales of businesses, net" as reflected in the
accompanying consolidated statements of operations was $6,043,000, $(100,000)
and $77,000,000 in 1994, 1995 and 1996, respectively. During 1994 the Company
sold substantially all of the operating assets of SEPSCO's natural gas and oil
business for cash of $16,250,000 net of $750,000 initially held in escrow to
cover certain indemnities given to the buyer resulting in a pretax gain of
$6,043,000. During 1995 $250,000 of such escrow was released and a gain of such
amount was recognized. Also in 1995, the Company (i) sold the remaining natural
gas and oil assets for net proceeds of $728,000 which resulted in a pretax gain
of $650,000 and (ii) wrote off its then investment in MetBev (see Note 28), a
beverage distributor in the New York metropolitan area when the Company
determined the decline in value of such investment was other than temporary
which resulted in a pretax loss of $1,000,000. The gain in 1996 consisted of (i)
a pretax loss of $4,500,000 from the sale of the Company's textile business (see
below), (ii) a pretax gain of $85,175,000 from the sale of the Partnership (see
below) and (iii) a pretax loss of $3,675,000 associated with the write-down of
MetBev (see Note 28).

SALE OF TEXTILE BUSINESS
------------------------

On April 29, 1996, the Company completed the sale (the "Graniteville
Sale") of its textile business segment other than the specialty dyes and
chemicals business of C.H. Patrick and certain other excluded assets and
liabilities (the "Textile Business"), to Avondale Mills, Inc. ("Avondale"), for
$236,824,000 in cash, net of $8,437,000 of expenses and $12,250,000 of
post-closing adjustments. Avondale assumed all liabilities relating to the
Textile Business other than income taxes, long-term debt of $191,438,000 which
was repaid at the closing and certain other specified liabilities. In connection
with the Graniteville Sale, Avondale and C.H. Patrick have entered into a
10-year supply agreement pursuant to which C.H. Patrick is supplying certain
textile dyes and chemicals to the combined Textile Business/Avondale entity.
C.H. Patrick's right to supply Avondale is conditioned upon certain bidding
procedures which could result in Avondale purchasing the products from another
seller. As a result of the Graniteville Sale, the Company recorded a pre-tax
loss of $4,500,000 (including an $8,367,000 write-off of unamortized Goodwill
which has no tax benefit) and an income tax provision of $1,500,000 resulting in
an after-tax loss of $6,000,000 exclusive of an extraordinary charge in
connection with the early extinguishment of debt (see Note 22). As previously
set forth, the results of operations of the Textile Business have been included
in the accompanying consolidated statements of operations through April 29,
1996. See below for supplemental pro forma information for the year ended
December 31, 1996 giving effect to the sale of the Textile Business.

The assets and liabilities of the Textile Business sold and a
reconciliation to the net cash proceeds received from the sale of the Textile
Business, net of post-closing adjustments and expenses paid of $20,805,000, are
as follows (in thousands):
<TABLE>
<CAPTION>

<S> <C>
Receivables, net..................................................... $ 91,135
Inventories.......................................................... 76,294
Prepaid expenses and other current assets............................ 1,421
Accounts payable and accrued expenses................................ (46,060)
Properties, net...................................................... 111,039
Unamortized costs in excess of net assets of acquired companies...... 8,367
Other non-current liabilities, net................................... (872)
-----------
Net assets of the Textile Business................................ 241,324
Pre-tax loss on sale of Textile Business............................. (4,500)
-----------
Net cash proceeds from sale of the Textile Business .............. $ 236,824
===========
</TABLE>

SALE OF PROPANE BUSINESS
------------------------

In July 1996 the Partnership consummated an initial public offering (the
"Offering") of an aggregate 6,301,550 of its common units representing limited
partner interests (the "Common Units"), representing an approximate 55.8%
interest in the Partnership, for an offering price of $21.00 per Common Unit
aggregating $117,382,000 net of $14,951,000 of underwriting discounts and
commissions and other expenses related to the offering. In November 1996 the
Partnership sold an additional 400,000 Common Units through a private placement
(the "Private Placement Offering") at a price of $21.00 per Common Unit
aggregating $7,367,000 net of fees and expenses of $1,033,000. The sales of the
Common Units resulted in a pretax gain to the Company in 1996 of $85,175,000 and
a provision for income taxes of $33,163,000.

Concurrently with the Offering, the Partnership issued to National Propane
4,533,638 subordinated units (the "Subordinated Units"), representing an
approximate 38.7% subordinated general partner interest in the Partnership
(after giving effect to the subsequent July and November sales). In addition,
National Propane and a subsidiary (the "General Partners") hold a combined
aggregate 4.0% unsubordinated general partner interest (the "Unsubordinated
General Partner Interest") in the Partnership and a subpartnership, National
Propane, L.P. (the "Operating Partnership"). In connection therewith, National
Propane transferred substantially all of its propane-related assets and
liabilities (principally all assets and liabilities other than a receivable from
Triarc, deferred financing costs and net income tax liabilities amounting to
$81,392,000, $4,127,000 and $21,615,000, respectively), aggregating net
liabilities of $88,222,000, to the Operating Partnership. The $36,527,000 excess
of the aggregate net proceeds from the sales of the Common Units of $124,749,000
over the $88,222,000 of aggregate net liabilities contributed to the Operating
Partnership less (i) $1,323,000 of 1996 Partnership distributions to the General
Partners over the General Partners' interest in the net income of the
Partnership and (ii) $3,309,000 of 1996 distributions relating to the Common
Units, plus the $1,829,000 minority interest in 1996 (see below), is recorded as
minority interest liability at December 31, 1996.

To the extent the Partnership has net positive cash flows, it must make
quarterly distributions of its cash balances in excess of reserve requirements,
as defined, to holders of the Common Units, the Subordinated Units and the
Unsubordinated General Partner Interest within 45 days after the end of each
fiscal quarter. On November 14, 1996 the Partnership paid a distribution of
$0.525 per Common and Subordinated Unit with a proportionate amount for the
Unsubordinated General Partner Interest, or an aggregate $5,924,000, including
$2,616,000 to the General Partners.

The following unaudited supplemental pro forma condensed consolidated
summary operating data of the Company for 1996 gives effect to the sale of the
Textile Business and the repayment of related debt (see above) and, in a second
step, the formation of the Partnership, the Offering, the Private Placement
Offering, the issuance of the First Mortgage Notes, the repayment of existing
indebtedness and certain related transactions (collectively, the "Propane
Transactions") as if such transactions had been consummated as of January 1,
1996. The pro forma effects of the Propane Transactions include (i) the addition
of the estimated stand-alone general and administrative costs associated with
the operation of the propane business as a partnership, (ii) net decreases to
interest expense reflecting (a) the elimination of interest expense on the
refinanced debt partially offset by the interest expense associated with the
First Mortgage Notes and (b) the reduction in interest expense resulting from
the assumed repayment of other debt of the Company with the $114,680,000 net
proceeds of the Offering and the Private Placement Offering ($124,749,000) and
the issuance of the First Mortgage Notes ($118,400,000, net of $6,600,000 of
related deferred debt costs), net of the repayment of existing debt
($128,469,000), (iii) the net benefit from income taxes and increase in minority
interest in income of consolidated subsidiaries resulting from the effects of
the above transactions and related transactions which do not affect consolidated
pretax earnings. Such pro forma information does not purport to be indicative of
the Company's actual results of operations had such transactions actually been
consummated on January 1, 1996 or of the Company's future results of operations
and are as follows (in thousands except per share amounts):
<TABLE>
<CAPTION>

PRO FORMA FOR
PRO FORMA THE SALE OF THE
FOR THE SALE OF TEXTILE BUSINESS AND
THE TEXTILE THE PROPANE
BUSINESS TRANSACTIONS
-------- ------------

<S> <C> <C>
Revenues................................... $841,240 $ 841,240
Operating loss............................. (13,024) (13,774)
Loss before extraordinary items............ (6,467) (7,703)
Loss before extraordinary items per share.. (.22) (.26)
</TABLE>

MINORITY INTEREST
-----------------

The 1994 minority interest in income of consolidated subsidiaries of
$1,292,000 consists of minority interest in the 1994 net income of SEPSCO until
the 28.9% minority interest was acquired on April 14, 1994 (see Note 26). The
1996 minority interest of $1,829,000 represents the limited partners' weighted
average interest in the net income of the Operating Partnership since it
commenced operations in July 1996. (See further discussion above under "Sale of
Propane Business").

(20) OTHER INCOME (EXPENSE), NET

Other income (expense), net consists of the following components (in
thousands):
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Interest income ............................................. $ 4,664 $ 3,547 $ 8,612
Net realized gain (loss) on sales of marketable
securities (Note 5)........................................ (135) (254) 701
Gain on sale of excess timberland ........................... -- 11,945 --
Net gain (loss) on other sales of assets..................... 975 (1,681) (34)
Posner Settlement (a)........................................ -- 2,312 --
Insurance settlement for fire-damaged equipment.............. -- 1,875 --
Columbia Gas Settlement (b).................................. -- 1,856 --
Equity in losses of affiliate ............................... (573) (2,170) --
Write-down of investment in Taysung (c)...................... -- (4,624) --
Costs of a proposed acquisition not consummated (d).......... (7,000) -- --
Other, net .................................................. 884 (492) (1,283)
---------- ----------- ----------
$ (1,185) $ 12,314 $ 7,996
========== =========== ==========
</TABLE>

(a) Pursuant to the Posner Settlement, Posner paid the Company $6,000,000 in
January 1995 in exchange for, among other things, the release by the
Company of the Posner Entities from certain claims that it may have with
respect to (i) legal fees in connection with a modification to certain
litigation against the Company and certain of the present and former
directors (see Note 25), (ii) fees payable to the court-appointed members
of a special committee of the Company's Board of Directors and (iii) legal
fees paid or payable with respect to matters referred to in the Posner
Settlement, subject to the satisfaction by the Posner Entities of certain
obligations under the Posner Settlement. The Company used such funds to pay
(i) $2,000,000 to the court-appointed members of the special committee for
services rendered in connection with the consummation of the Posner
Settlement, (ii) attorney's fees of $850,000 in connection with such
modification, (iii) $200,000 in connection with the settlement of certain
litigation and (iv) $100,000 of other expenses resulting in a gain of
$2,850,000, of which $538,000 reduced "General and administrative" as a
recovery of legal expenses originally reported therein and $2,312,000 was
reported as "Other income (expense), net".

(b) The Company was a party to a class action lawsuit brought against Columbia
Gas System, Inc. ("Columbia Gas") in which the claimants charged that
Columbia Gas had overcharged the claimants for purchases of propane gas.
During the fourth quarter of 1995 the Company received $2,406,000 in full
settlement of the lawsuit which resulted in a gain of $1,856,000 net of
estimated expenses (the "Columbia Gas Settlement").

(c) The Taiwanese joint venture investment made by the Company in 1994
("Taysung") was written off in 1995 when the Company determined the
decline in value of such investment was other than temporary.

(d) In 1994 the Company entered into a definitive merger agreement with Long
John Silver's Restaurants, Inc. ("LJS"), an owner, operator and
franchisor of quick service fish and seafood restaurants, whereby the
Company would acquire all of the outstanding stock of LJS. In December 1994
the Company decided not to proceed with the acquisition of LJS due to the
higher interest rate environment and difficult capital markets which would
have resulted in significantly higher than anticipated costs and
unacceptable terms of financing. Accordingly, the Company recorded a charge
of $7,000,000 in 1994 for the expenses relating to the failed acquisition
of LJS representing commitment fees, legal, consulting and other costs.

(21) DISCONTINUED OPERATIONS

On July 22, 1993 SEPSCO's Board of Directors authorized the sale or
liquidation of SEPSCO's utility and municipal services and refrigeration
business segments (consisting of ice and cold storage operations) which have
been accounted for as discontinued operations in the Company's consolidated
financial statements. Prior to 1994 the Company sold the assets or stock of the
companies comprising SEPSCO's utility and municipal services business segment.
The sale of one of the businesses was subject to certain deferred purchase price
adjustments which were settled in March 1995 for (i) cash payments of $500,000
of which $300,000 was collected in 1995 and $200,000 was collected in 1996 plus
(ii) the proceeds from the sale of a property which was sold in May 1996 for
$164,000. Recognition of such proceeds in 1995 and 1996 has been deferred.

In April 1994 the Company sold substantially all of the operating assets
of the ice operations to unrelated third parties and in December 1994 sold the
stock or operating assets of the companies comprising the cold storage
operations to National Cold Storage, Inc., a company formed by two then officers
of SEPSCO. Such sales resulted in aggregate losses of approximately $9,300,000,
excluding any consideration of the then remaining $6,881,000 aggregate principal
payments then due on notes from the buyers of such businesses, since their
collection was not reasonably assured. The note relating to the sale of the ice
operations (the "Ice Note") had an original principal of $4,295,000 and bore
interest at 5% and the note relating to the sale of the cold storage operations
(the "CS Note") had an original principal of $3,000,000 and bears interest at
8%. Collections by the Company on the Ice Note were $120,000 of scheduled
principal payments and $294,000 of principal payments in advance during 1995 and
$120,000 of scheduled principal payments and $2,245,000 (discounted from
$3,761,000) of principal payments in advance during 1996 (of which $450,000 is
being held in escrow for future environmental spending). Recognition of such
proceeds from the Ice Note has been deferred. The CS Note is due in full in
2000.

In connection with the dispositions referred to above, SEPSCO reevaluated
the estimated losses from the sale of its discontinued operations provided prior
to 1994 and the Company provided $8,400,000 ($3,900,000 net of minority
interests of $2,425,000 and income tax benefit of $2,075,000) for the revised
estimated loss during 1994. The revised estimate in 1994 results from additional
unanticipated losses on disposal of the businesses of $6,400,000 and operating
losses from discontinued operations through their respective dates of disposal
of $2,000,000 principally reflecting delays in disposing of the businesses from
their estimated disposal dates. The increased loss on disposal was principally
due to nonrecognition of the Ice Note and the CS Note compared with the
previously anticipated full recognition of all proceeds from the sales of such
business once the businesses were sold.

After consideration of amounts provided in prior years, the Company
expects the liquidation of the remaining liabilities associated with the
discontinued operations will not have any material adverse impact on its
financial position or results of operations.

The loss from operations during 1994, which had been recognized prior
thereto, consisted of the following (in thousands):

Revenues ................................................ $ 11,432
Operating loss .......................................... (80)
Loss before income taxes and net loss ................... (405)

The principal remaining accounts of the discontinued operations relate to
liquidating obligations not transferred to the buyers of the discontinued
businesses and are reflected as net current liabilities of discontinued
operations aggregating $3,461,000 and $3,589,000 included in "Accrued expenses"
(see Note 12).

(22) EXTRAORDINARY ITEMS

In connection with the early extinguishment of the Company's 13 1/8%
debentures in 1994 and the early extinguishment of (i) the Company's 11 7/8%
Debentures due February 1, 1998 on February 22, 1996, (ii) all of the debt of
TXL, including the Graniteville Credit Facility, in connection with the sale of
the Textile Business (see Note 19) on April 29, 1996, (iii) substantially all of
the long-term debt of National Propane including the Former Propane Facility
(see Note 13) on July 2, 1996 and (iv) the National Union Note on July 1, 1996
(see Note 13), the Company recognized extraordinary charges consisting of the
following (in thousands):
<TABLE>
<CAPTION>
1994 1996
---- ----

<S> <C> <C>
Write-off of unamortized deferred financing costs........$ (875) $(10,469)
Write-off of unamortized original issue discount......... (2,623) (1,776)
Prepayment penalties..................................... -- (5,744)
Fees.................................................... -- (250)
Discount from principal on early extinguishment......... -- 9,237
---------- ----------
(3,498) (9,002)
Income tax benefit....................................... 1,382 3,586
---------- ----------
$ (2,116) $ (5,416)
========== ==========
</TABLE>

(23) PENSION AND OTHER BENEFIT PLANS

The Company maintains several 401(k) defined contribution plans covering
all employees who meet certain minimum requirements and elect to participate
including employees of Mistic subsequent to January 1, 1996 and excluding those
employees covered by plans under certain union contracts. Employees may
contribute various percentages of their compensation ranging up to a maximum of
15%, subject to certain limitations. The plans provide for Company matching
contributions at either 25% or 50% of employee contributions up to the first 5%
of an employee's contributions. The plans also provide for annual additional
contributions either equal to 1/4% of 1% of employee's total compensation or an
arbitrary aggregate amount to be determined by the employer. In connection with
these employer contributions, the Company provided $2,200,000, $3,024,000 and
$1,885,000 in 1994, 1995 and 1996, respectively. The decrease from 1995 to 1996
is principally due to the effect of the April 1996 sale of the Textile Business.

The Company provides or provided defined benefit plans for employees of
certain subsidiaries. Prior to 1994 all of the plans were frozen.

The components of the net periodic pension cost are as follows (in
thousands):
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----

<S> <C> <C> <C>
Current service cost (represents plan expenses).............. $ 177 $ 151 $ 160
Interest cost on projected benefit obligation................ 466 503 481
Return on plan assets (gain) loss............................ 138 (1,445) (762)
Net amortization and deferrals............................... (654) 993 240
-------- ------- -------
Net periodic pension cost ............................... $ 127 $ 202 $ 119
======== ======= =======
</TABLE>

The following table sets forth the plans' funded status (in thousands):
<TABLE>
<CAPTION>

AGGREGATE OF PLANS WHOSE
------------------------------------------
ASSETS EXCEEDED ACCUMULATED BENEFITS
ACCUMULATED BENEFITS EXCEEDED ASSETS
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations
Vested benefit obligation.........................$ 2,386 $ 2,227 $ 4,711 $ 4,634
Non-vested benefit obligation..................... -- -- 19 18
--------- --------- --------- ---------
Accumulated and projected benefit obligation...... 2,386 2,227 4,730 4,652
Plan assets at fair value......................... (2,762) (2,751) (3,941) (4,351)
--------- --------- --------- ---------
Funded status..................................... (376) (524) 789 301
Unrecognized net gain from plan experience........ 488 629 72 230
--------- --------- --------- ---------
Accrued pension cost..........................$ 112 $ 105 $ 861 $ 531
========= ========= ========= =========
</TABLE>

Significant assumptions used in measuring the net periodic pension cost
for the plans included the following: (i) the expected long-term rate of return
on plan assets was 8% and (ii) the discount rate was 7% for 1994, 8% for 1995
and 7% for 1996. The discount rate used in determining the benefit obligations
above was 7% at December 31, 1995 and 7.5% at December 31, 1996. The effects of
the 1995 increase and the 1996 decrease in the discount rate did not materially
affect the net periodic pension cost. The 1996 increase in the discount rate
used in determining the benefit obligation resulted in a decrease in the
accumulated and projected benefit obligation of $253,000.

Plan assets as of December 31, 1996 are invested in managed portfolios
consisting of government and government agency obligations (51%), common stock
(39%), corporate debt securities (5%) and other investments (5%).

Under certain union contracts, the Company is required to make payments to
the unions' pension funds based

upon hours worked by the eligible employees. In connection with these union
plans, the Company provided $756,000 in 1994 and $669,000 in each of 1995 and
1996. Information from the administrators of the plans is not available to
permit the Company to determine its proportionate share of unfunded vested
benefits, if any.

The Company maintains unfunded postretirement medical and death benefit
plans for a limited number of employees who have retired and have provided
certain minimum years of service. The medical benefits are principally
contributory while death benefits are noncontributory. Prior to the April 1996
sale of the Textile Business, a limited number of active employees, upon
retirement, were also covered. The net postretirement benefit cost for 1994,
1995 and 1996 as well as the accumulated postretirement benefit obligation as of
December 31, 1996 were insignificant.

(24) LEASE COMMITMENTS

The Company leases buildings and improvements and machinery and equipment.
Some leases provide for contingent rentals based upon sales volume.

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

1994 1995 1996
---- ---- ----

Minimum rentals............. $ 20,218 $ 25,898 $ 28,795
Contingent rentals.......... 1,454 987 794
---------- ----------- ----------
21,672 26,885 29,589
Less sublease income........ 3,459 5,358 5,460
---------- ----------- ----------
$ 18,213 $ 21,527 $ 24,129
========== =========== ==========

The Company's future minimum rental payments and sublease rental income
for leases having an initial lease term in excess of one year as of December 31,
1996 are set forth below. Such future minimum rental payments exclude an
aggregate $11,540,000 of future operating lease payments relating to equipment
to be transferred to RTM assuming consummation of the RTM sale (see Note 3) but
the obligations for which will remain with the Company. As such the Company has
provided for the present value of $9,677,000 of such lease payments in
"Reduction in carrying value of long-lived assets impaired or to be disposed
of". Such future minimum rental payments include an aggregate $105,165,000
($9,844,000, $9,264,000, $8,403,000, $7,828,000, $7,476,000 and $62,350,000 in
1997, 1998, 1999, 2000, 2001 and thereafter, respectively) of future operating
lease payments and, in addition, substantially all of the future capitalized
lease payments which will be assumed by RTM assuming consummation of the sale to
RTM. Such rental payments and sublease rental income were as follows (in
thousands):
<TABLE>
<CAPTION>

RENTAL PAYMENTS SUBLEASE INCOME
---------------------- ----------------------
CAPITALIZED OPERATING CAPITALIZED OPERATING
LEASES LEASES LEASES LEASES
------ ------ ------ ------

<S> <C> <C> <C> <C>
1997.............................................$ 16,170 $ 22,350 $ 81 $ 5,925
1998............................................. 105 17,098 60 3,639
1999............................................. 87 13,857 60 1,898
2000............................................. 87 12,038 57 973
2001............................................. 87 10,994 43 342
Thereafter....................................... 397 85,344 219 1,300
------------ ---------- ---------- ---------
Total minimum payments........................... 16,933 $ 161,681 $ 520 $ 14,077
========== ========== =========
Less interest.................................... 959
------------
Present value of minimum capitalized
lease payments.................................$ 15,974
============
</TABLE>

The present value of minimum capitalized lease payments is included, as
applicable, with long-term debt or the current portion of long-term debt in the
accompanying consolidated balance sheets (see Note 13).

In August 1994 the Company completed the sale and leaseback of the land
and buildings of fourteen company-owned restaurants. The net cash sale price of
such properties was $6,703,000. The Company has entered into individual
twenty-year land and building leases for such properties and has capitalized the
building portion of such leases while the land portion is being accounted for as
operating leases, reflected in the table above. Such sale resulted in a gain of
$605,000 which is being amortized to income over the twenty-year lives of the
leases.

(25) LEGAL AND ENVIRONMENTAL MATTERS

In July 1993 APL Corporation ("APL"), which was affiliated with the
Company until an April 1993 change in control, became a debtor in a proceeding
under Chapter 11 of the Federal Bankruptcy Code (the "APL Proceeding"). In
February 1994 the official committee of unsecured creditors of APL filed a
complaint (the "APL Litigation") against the Company and certain companies
formerly or presently affiliated with Posner or with the Company, alleging
causes of action arising from various transactions allegedly caused by the named
former affiliates. The Chapter 11 trustee of APL was subsequently added as a
plaintiff. The complaint asserts various claims and seeks an undetermined amount
of damages from the Company, as well as certain other relief. In April 1994 the
Company responded to the complaint by filing an answer and proposed
counterclaims and set-offs denying the material allegations in the complaint and
asserting counterclaims and set-offs against APL. In June 1995 the bankruptcy
court confirmed the plaintiffs' plan of reorganization (the "APL Plan") in the
APL Proceeding. The APL Plan provides, among other things, that the Posner
Entities will own all of the common stock of APL and are authorized to object to
claims made in the APL Proceeding. The APL Plan also provides for the dismissal
of the APL Litigation. Previously, in January 1995 Triarc received an
indemnification pursuant to the Posner Settlement relating to, among other
things, the APL Litigation. The Posner Entities have filed motions asserting
that the APL Plan does not require the dismissal of the APL Litigation. In
November 1995 the bankruptcy court denied the motions and in March 1996 the
court denied the Posner Entities' motion for reconsideration. Posner and APL
have appealed and their appeal is pending.

On December 6, 1995 the three former court-appointed members of a special
committee of Triarc's Board of Directors commenced an action in the United
States District Court for the Northern District of Ohio seeking, among other
things, additional fees of $3,000,000. On February 6, 1996 the court dismissed
the action without prejudice. The plaintiffs filed a notice of appeal, but
subsequently dismissed the appeal voluntarily.

In 1987 TXL was notified by the South Carolina Department of Health and
Environmental Control ("DHEC") that DHEC discovered certain contamination of
Langley Pond ("Langley Pond") near Graniteville, South Carolina and DHEC
asserted that TXL may be one of the parties responsible for such contamination.
In 1990 and 1991 TXL provided reports to DHEC summarizing its required study and
investigation of the alleged pollution and its sources which concluded that pond
sediments should be left undisturbed and in place and that other less passive
remediation alternatives either provided no significant additional benefits or
themselves involved adverse effects. In March 1994 DHEC appeared to conclude
that while environmental monitoring at Langley Pond should be continued, based
on currently available information, the most reasonable alternative is to leave
the pond sediments undisturbed and in place. In April 1995 TXL, at the request
of DHEC, submitted a proposal concerning periodic monitoring of sediment
dispositions in the pond. In February 1996 TXL responded to a DHEC request for
additional information on such proposal. TXL is unable to predict at this time
what further actions, if any, may be required in connection with Langley Pond or
what the cost thereof may be. In addition, TXL owned a nine acre property in
Aiken County, South Carolina (the "Vaucluse Landfill"), which was used as a
landfill from approximately 1950 to 1973. The Vaucluse Landfill was operated
jointly by TXL and Aiken County and may have received municipal waste and
possibly industrial waste from TXL as well as sources other than TXL. The United
States Environmental Protection Agency conducted an Expanded Site Inspection in
January 1994 and in response thereto the DHEC indicated its desire to have an
investigation of the Vaucluse Landfill. In April 1995 TXL submitted a conceptual
investigation approach to DHEC. Subsequently, the Company responded to an August
1995 DHEC request that TXL enter into a consent agreement to conduct an
investigation indicating that a consent agreement is inappropriate considering
TXL's demonstrated willingness to cooperate with DHEC requests and asked DHEC to
approve TXL's April 1995 conceptual investigation approach. The cost of the
study proposed by TXL is estimated to be between $125,000 and $150,000. Since an
investigation has not yet commenced, TXL is currently unable to estimate the
cost, if any, to remediate the landfill. Such cost could vary based on the
actual parameters of the study. In connection with the Graniteville Sale, the
Company agreed to indemnify the purchaser for certain costs, if any, incurred in
connection with the foregoing matters that are in excess of specified reserves,
subject to certain limitations.

As a result of certain environmental audits in 1991, SEPSCO became aware
of possible contamination by hydrocarbons and metals at certain sites of
SEPSCO's ice and cold storage operations of the refrigeration business and has
filed appropriate notifications with state environmental authorities and in 1994
completed a study of remediation at such sites. SEPSCO has removed certain
underground storage and other tanks at certain facilities of its refrigeration
operations and has engaged in certain remediation in connection therewith. Such
removal and environmental remediation involved a variety of remediation actions
at various facilities of SEPSCO located in a number of jurisdictions. Such
remediation varied from site to site, ranging from testing of soil and
groundwater for contamination, development of remediation plans and removal in
some instances of certain contaminated soils. Remediation is required at
thirteen sites which were sold to or leased by the purchaser of the ice
operations (see Note 21). Remediation has been completed on five of these sites
and is ongoing at eight others. Such remediation is being made in conjunction
with the purchaser who has satisfied its obligation to pay up to $1,000,000 of
such remediation costs. Remediation is also required at seven cold storage sites
which were sold to the purchaser of the cold storage operations (see Note 21).
Remediation has been completed at one site and is ongoing at three other sites.
Remediation is expected to commence on the remaining three sites in 1997 and
1998. Such remediation is being made in conjunction with the purchaser who is
responsible for the first $1,250,000 of such costs. In addition, there are
fifteen additional inactive properties of the former refrigeration business
where remediation has been completed or is ongoing and which have either been
sold or are held for sale separate from the sales of the ice and cold storage
operations. Of these, ten have been remediated through December 31, 1996 at an
aggregate cost of $952,000. In addition, during the environmental remediation
efforts on idle properties, SEPSCO became aware that plants on two of the
fifteen sites may require demolition in the future.

In May 1994 National was informed of coal tar contamination which was
discovered at one of its properties in Wisconsin. National purchased the
property from a company (the "Successor") which had purchased the assets of a
utility which had previously owned the property. National believes that the
contamination occurred during the use of the property as a coal gasification
plant by such utility. In order to assess the extent of the problem, National
engaged environmental consultants in 1994. As of March 1, 1997, National's
environmental consultants have begun but not completed their testing. Based upon
the new information compiled to date which is not yet complete, it appears the
likely remedy will involve treatment of groundwater and treatment of the soil,
installation of a soil cap and, if necessary, excavation, treatment and disposal
of contaminated soil. As a result, the environmental consultants' current range
of estimated costs for remediation is from $764,000 to $1,559,000. National will
have to agree upon the final plan with the state of Wisconsin. Since receiving
notice of the contamination, National has engaged in discussions of a general
nature concerning remediation with the state of Wisconsin. These discussions are
ongoing and there is no indication as yet of the time frame for a decision by
the state of Wisconsin or the method of remediation. Accordingly, the precise
remediation method to be used is unknown. Based on the preliminary results of
the ongoing investigation, there is a potential that the contaminants may extend
to locations downgradient from the original site. If it is ultimately confirmed
that the contaminant plume extends under such properties and if such plume is
attributable to contaminants emanating from the Wisconsin property, there is the
potential for future third-party claims. National is also engaged in ongoing
discussions of a general nature with the Successor. The Successor has denied any
liability for the costs of remediation of the Wisconsin property or of
satisfying any related claims. However, National, if found liable for any of
such costs, would still attempt to recover such costs from the Successor.
National has notified its insurance carriers of the contamination, the likely
incurrence of costs to undertake remediation and the possibility of related
claims. Pursuant to a lease related to the Wisconsin facility, the ownership of
which was not transferred to the Operating Partnership at the closing of
Offering, the Partnership has agreed to be liable for any costs of remediation
in excess of amounts recovered from the Successor or from insurance. Since the
remediation method to be used is unknown, no amount within the cost ranges
provided by the environmental consultants can be determined to be a better
estimate.

In 1993 Royal Crown became aware of possible contamination from
hydrocarbons in groundwater at two abandoned bottling facilities. Tests have
confirmed hydrocarbons in the groundwater at both of the sites and remediation
has commenced. Remediation costs estimated by Royal Crown's environmental
consultants aggregate $560,000 to $640,000 with approximately $125,000 to
$145,000 expected to be reimbursed by the State of Texas Petroleum Storage Tank
Remediation Fund at one of the two sites.

In 1994 Chesapeake Insurance and SEPSCO invested approximately $5,100,000
in a joint venture with Prime Capital Corporation ("Prime"). Subsequently in
1994, SEPSCO and Chesapeake Insurance terminated their investments in such joint
venture. In March 1995 three creditors of Prime filed an involuntary bankruptcy
petition under the Federal bankruptcy code against Prime. In November 1996 the
bankruptcy trustee appointed in the Prime bankruptcy case made a demand on
Chesapeake Insurance and SEPSCO for return of the approximate $5,300,000. In
January 1997 the bankruptcy trustee commenced avoidance actions against
Chesapeake Insurance and SEPSCO seeking the return of the approximate $5,300,000
allegedly received by Chesapeake Insurance and SEPSCO during 1994 and alleging
such payments from Prime were preferential or constituted fraudulent transfers.
The Company believes, based on advice of counsel, that it has meritorious
defenses to these claims and intends to vigorously contest them. However, it is
possible that the trustee will be successful in recovering the payments. The
maximum amount of SEPSCO's and Chesapeake Insurance's aggregate liability is the
approximate $5,300,000 plus interest; however, to the extent SEPSCO or
Chesapeake Insurance return to Prime any amount of the challenged payments, they
will be entitled to an unsecured claim for such amount. The court has scheduled
a trial for the week of May 27, 1997.

On February 19, 1996, Arby's Restaurantes S.A. de C.V. ("AR"), the master
franchisee of Arby's in Mexico, commenced an action in the civil court of Mexico
against Arby's for breach of contract. AR alleged that a non-binding letter of
intent dated November 9, 1994 between AR and Arby's constituted a binding
contract pursuant to which Arby's had obligated itself to repurchase the master
franchise rights from AR for $2,500,000. AR also alleged that Arby's had
breached a master development agreement between AR and Arby's. Arby's promptly
commenced an arbitration proceeding since the franchise and development
agreements each provided that all disputes arising thereunder were to be
resolved by arbitration. Arby's is seeking a declaration in the arbitration to
the effect that the November 9, 1994 letter of intent was not a binding contract
and, therefore, AR has no valid breach of contract claim, as well as a
declaration that the master development agreement has been automatically
terminated as a result of AR's commencement of suspension of payments
proceedings in February 1995. In the civil court proceeding, the court denied
Arby's motion to suspend such proceedings pending the results of the
arbitration, and Arby's has appealed that ruling. In the arbitration, some

evidence has been taken but proceedings have been suspended by the court
handling the suspension of payments proceedings. Arby's is vigorously contesting
AR's claims and believes it has meritorious defenses to such claims.

The Company has accruals for all of the above matters aggregating
approximately $4,300,000. Based on currently available information and given (i)
the DHEC's apparent conclusion in 1994 with respect to the Langley Pond matter,
(ii) the indemnification limitations with respect to the SEPSCO cold storage
operations, Langley Pond and the Vaucluse Landfill, (iii) potential
reimbursements by other parties as discussed above and (iv) the Company's
aggregate reserves for such legal and environmental matters, the Company does
not believe that the legal and environmental matters referred to above, as well
as ordinary routine litigation incidental to its businesses, will have a
material adverse effect on its consolidated results of operations or financial
position.

(26) SEPSCO MERGER AND LITIGATION SETTLEMENT

In December 1990 a purported shareholder derivative suit (the "SEPSCO
Litigation") was brought against SEPSCO's directors at that time and certain
corporations, including Triarc, in the United States District Court for the
Southern District of Florida (the "District Court"). On January 11, 1994 the
District Court approved a settlement agreement with the plaintiff in the SEPSCO
Litigation. In conjunction therewith, on April 14, 1994 SEPSCO's shareholders
other than the Company approved an agreement and plan of merger between Triarc
and SEPSCO (the "SEPSCO Merger") pursuant to which on that date a subsidiary of
Triarc was merged into SEPSCO in accordance with a transaction in which each
holder of shares of SEPSCO's common stock (the "SEPSCO Common Stock") other than
the Company, aggregating a 28.9% minority interest in SEPSCO, received in
exchange for each share of SEPSCO Common Stock, 0.8 shares of Triarc's Class A
Common Stock or an aggregate 2,691,824 shares. Following the SEPSCO Merger, the
Company owns 100% of the SEPSCO Common Stock. All settlement and related legal
costs were principally accrued in 1993 since it was during such period that the
Company determined that the litigation settlement was more likely than not to be
approved by the District Court.

The fair value as of April 14, 1994 of the 2,691,824 shares of Class A
Common Stock issued in the SEPSCO Merger, net of $3,750,000 of such
consideration which the Company estimated represented settlement costs of the
SEPSCO Litigation, aggregated $52,105,000 (the "Merger Consideration"). The
SEPSCO Merger was accounted for in accordance with the purchase method of
accounting and the Company's minority interest in SEPSCO of $28,217,000 was
eliminated. In accordance therewith, the excess of the Merger Consideration over
the Company's minority interest in SEPSCO of $23,888,000 was assigned to
"Properties" ($8,684,000), investment in the natural gas and oil business sold
in August 1994 (see Note 19) ($2,455,000), "Net current liabilities of
discontinued operations" ($2,425,000 - see Note 12) and "Deferred income taxes"
($2,485,000) with the excess of $17,659,000 recorded as Goodwill.

(27) ACQUISITIONS

On August 9, 1995 Mistic, a wholly-owned subsidiary of Triarc, acquired
(the "Mistic Acquisition") substantially all of the assets and operations,
subject to related operating liabilities, as defined, of certain companies which
develop, market and sell carbonated and non-carbonated fruit drinks,
ready-to-drink brewed iced teas and naturally flavored sparkling waters under
various trademarks and tradenames including MISTIC and ROYAL MISTIC. The
purchase price for the Mistic Acquisition, aggregating $98,324,000 (including
$2,067,000 of cash acquired) consisted of (i) $93,000,000 in cash, (ii)
$1,000,000 to be paid in eight equal quarterly installments which commenced in
November 1995, (iii) non-compete agreement payments to the seller aggregating
$3,000,000 and (iv) $1,324,000 of related expenses. The non-compete agreement
payments were or are payable $900,000 in August 1996, 1997 and 1998 and $300,000
in December 1998. In accordance with the Mistic acquisition agreement, the
non-compete payment due in 1996 was offset against amounts due from the seller.
The Mistic Acquisition was financed through (i) $71,500,000 of borrowings under
the Mistic Bank Facility (see Note 13) and (ii) $25,000,000 of borrowings under
the Graniteville Credit Facility.

The Company granted the syndicating lending bank in connection with the
Mistic Bank Facility agreement and two senior officers of Mistic stock
appreciation rights (the "Mistic Rights") for the equivalent of 3% and 9.7%,
respectively, of Mistic's outstanding common stock plus the equivalent shares
represented by such stock appreciation rights. The Mistic Rights granted to the
syndicating lending bank were immediately vested and of those granted to the
senior officers, one-third vest over time and two-thirds vest depending on the
performance of Mistic. The Mistic Rights provide for appreciation in the
per-share value of Mistic common stock above a base price of $28,637 per share,
which is equal to the Company's per share capital contribution to Mistic in
connection with the Mistic Acquisition. The Company recognizes periodically the
estimated increase or decrease in the value of the Mistic Rights; such amounts,
which are being charged or credited to "Interest expense" and "General and
administrative" for the Mistic Rights granted to the syndicating lending bank
and the two senior officers, respectively, were not significant in 1995 or 1996.

In addition to the Mistic Acquisition, the Company consummated several
additional business acquisitions during 1994, 1995 and 1996 principally
restaurant operations and propane businesses for cash of $18,790,000,
$18,947,000 and $4,018,000, respectively, and the issuance of debt in 1994 of
$3,763,000 and in 1996 of $1,750,000. All such acquisitions, including the
Mistic acquisition, have been accounted for in accordance with the purchase
method of accounting and in accordance therewith the purchase price was assigned
as follows (in thousands):
<TABLE>
<CAPTION>

DECEMBER 31,
------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Current assets....................................... $ -- $ 31,560 $ 257
Properties........................................... 14,803 12,641 838
Goodwill............................................. 8,414 34,438 162
Trademarks........................................... -- 58,100 3,950
Other intangible assets.............................. 1,711 5,373 1,107
Other assets......................................... 351 1,128 --
Current liabilities ................................. -- (24,790) (358)
Long-term debt assumed including current portion..... (2,726) (3,180) --
Other liabilities.................................... -- (4,066) (188)
--------- ----------- ----------
$ 22,553 $ 111,204 $ 5,768
========= =========== ==========
</TABLE>

(28) TRANSACTIONS WITH RELATED PARTIES

Until January 31, 1994 Triarc leased office space in Miami Beach, both for
its former corporate headquarters and on behalf of its subsidiaries and former
affiliates from one of the Posner Entities. Triarc gave notice to terminate the
lease prior to 1994 and all remaining lease obligations subsequent to the
termination were provided as facilities relocation and corporate restructuring
prior to 1994. Pursuant to the Posner Settlement (see note 16), all payments due
to the Posner Entities in connection with the termination of such lease were
settled resulting in a reduction of "Facilities relocation and corporate
restructuring" of $310,000 in 1995 (see Note 18). Such gain represented the
excess of a net accrued liability for the lease termination of $12,326,000
($13,000,000 less a security deposit of $674,000) over the fair value of the
1,011,900 shares of Class B Common Stock issued (see Note 17) of $12,016,000. In
addition, the Company reversed to "Interest expense" a 1994 accrual for interest
of $638,000 on the lease termination obligation.

The Company leases aircraft owned by Triangle Aircraft Services
Corporation ("TASCO"), a company owned by Messrs. Peltz and May for an annual
rent as of January 1, 1994 of $2,200,000, plus annual indexed cost of living
adjustments. Effective October 1, 1994 the original rent was reduced $400,000
reflecting the termination of the lease for one of the aircraft which was sold.
In connection with the sale of the aircraft the Company paid $130,000 of related
costs on behalf of TASCO. In connection with such lease the Company had rent
expense of $2,100,000, $1,910,000 and $1,973,000 for 1994, 1995 and 1996,
respectively. Pursuant to this arrangement, the Company also pays the operating
expenses of the aircraft directly to third parties.

The Company subleased through January 31, 1996 from an affiliate of
Messrs. Peltz and May approximately 26,800 square feet of furnished office space
in New York, New York owned by an unaffiliated third party (subsequent thereto
and through December 1996, the Company subleased the same office facility from
an unaffiliated third party). In addition, the Company subleased through its
expiration in September 1994 from another affiliate of Messrs. Peltz and May
approximately 15,000 square feet of office space in West Palm Beach, Florida
owned by an unaffiliated landlord. The aggregate amounts paid by the Company
during 1994, 1995 and 1996 with respect to affiliates of Messrs. Peltz and May
for such subleases, including operating expenses, but net of amounts received by
the Company for sublease of a portion of such space through January 1996 (see
below - $358,000, $357,000 and $30,000, respectively) were $1,620,000,
$1,350,000 and $1,100,000 respectively, which are less than the aggregate
amounts such affiliates paid to the unaffiliated landlords but represent amounts
the Company believes it would pay to an unaffiliated third party for similar
improved office space.

On December 20, 1994 the Company sold either the stock or operating assets
of the companies comprising the cold storage operations of SEPSCO's
refrigeration business segment to National Cold Storage, Inc. ("NCS"), a company
formed by two then officers of SEPSCO, for cash of $6,500,000, a $3,000,000 note
and the assumption by the buyer of certain liabilities of $2,750,000. Such sale,
excluding any consideration of the $3,000,000 note from NCS since its collection
is not reasonably assured, resulted in approximately $3,600,000 of the
$9,300,000 of losses on disposition of the refrigeration business segment (see
Note 21).

The Company had secured receivables from Pennsylvania Engineering
Corporation ("PEC"), a former affiliate, aggregating $6,664,000 which were fully
reserved prior to 1994. PEC had filed for protection under the bankruptcy code
and, moreover, the Company had significant doubts as to the net realizability of
the underlying collateral. During the fourth quarter of 1995, the Company
received $3,049,000 with respect to amounts owed from PEC representing the
Company's allocated portion of the bankruptcy settlement (the "PEC Settlement").

During 1995 the Company paid $1,000,000 and contributed a license for a
period of five years for the Royal Crown distribution rights for its products in
New York City and certain surrounding counties to MetBev, Inc. ("MetBev") in
exchange for preferred stock in MetBev representing a 37.5% voting interest and
a warrant to acquire 37.5% of the common stock of MetBev. The remaining 62.5%
was owned by other parties and was subject to certain vesting provisions. Upon
consummation of the sale of the MetBev distribution rights (see below), Triarc's
voting interest in MetBev was 44.7% principally due to the cancellation of
nonvested stock. Additionally, pursuant to a revolving credit agreement between
Triarc and MetBev, Triarc loaned $2,000,000 and $2,475,000 to MetBev in 1995 and
1996, respectively, which were secured by the receivables and inventories of
MetBev. MetBev has incurred significant losses from its inception and had
stockholders' deficits as of December 31, 1995 and 1996 of $2,524,000 and
$8,943,000, respectively. In December 1996, the distribution rights of MetBev
were sold to a third party and MetBev commenced the liquidation of its remaining
assets and liabilities. In connection therewith, in 1995 the Company provided a
reserve of $800,000 (included in "General and administrative") relating to its
loans to MetBev and wrote off its $1,000,000 investment (see Note 19) and in
1996 wrote down the remaining $3,675,000 (see Note 19). Further, the Company
provided $1,751,000 and $2,000,000 (included in "General and administrative") in
1995 and 1996, respectively, for uncollectible receivables from sales (with
minimal gross profit) of finished product to MetBev and in 1995 a guarantee of
MetBev third party accounts payable.

See also Notes 16, 17 and 18 with respect to other transactions with related
parties.

(29) BUSINESS SEGMENTS

The Company operates in four major segments, beverages, restaurants,
textiles and propane (see Note 2 for a description of each segment). The
beverage segment includes the operations acquired in the Mistic Acquisition
commencing August 9, 1995 (see Note 27). The textile segment represents only
the chemicals and dyes business after the sale of the Textile Business (see Note
19) on April 29, 1996.

Information concerning the various segments in which the Company operates
is shown in the table below. Operating profit is total revenue less operating
expenses. In computing operating profit, interest expense, general corporate
expenses and non-operating income and expenses, including interest income, have
not been considered. Operating profit for the restaurant segment reflects
provisions in 1995 and 1996 of $14,647,000 and $64,300,000, respectively, for
reductions in carrying value of long lived assets impaired or to be disposed of
(see Note 3). Identifiable assets by segment are those assets that are used in
the Company's operations in each segment. General corporate assets consist
primarily of cash and cash equivalents (including restricted cash), short-term
investments and other non-current investments and deferred financing costs.

No customer accounted for more than 10% of consolidated revenues in 1994,
1995 or 1996.
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues:
Beverages...............................$ 150,750 $ 214,587 $ 309,142
Restaurants............................. 223,155 272,739 288,293
Textiles................................ 536,918 547,897 218,554
Propane................................. 151,698 148,998 173,260
----------- ------------ -------------
Consolidated revenues...............$ 1,062,521 $ 1,184,221 $ 989,249
=========== ============ =============

Operating profit:
Beverages...............................$ 14,607 $ 4,662 $ 17,195
Restaurants............................. 15,542 (6,437) (48,741)
Textiles................................ 33,955 23,544 15,190
Propane................................. 20,378 14,516 15,586
----------- ------------ -------------
Segment operating profit (loss)..... 84,482 36,285 (770)
Interest expense........................ (72,980) (84,227) (73,379)
Non-operating income net................ 4,858 12,214 84,996
General corporate expenses.............. (15,549) (2,296) (6,209)
----------- ------------ -------------
Consolidated income (loss) from
continuing operations before
income taxes and minority
interests ........................$ 811 $ (38,024) $ 4,638
=========== ============ =============

Identifiable assets:
Beverages ..............................$ 190,568 $ 306,349 $ 304,538
Restaurants............................. 137,943 180,734 132,296
Textiles................................ 327,793 328,726 39,243
Propane................................. 133,321 139,025 156,192
----------- ------------ -------------
Total identifiable assets........... 789,625 954,834 632,269
General corporate assets................ 132,542 131,132 222,135
----------- ------------ -------------
Consolidated assets.................$ 922,167 $ 1,085,966 $ 854,404
=========== ============ =============

Capital expenditures:
Beverages...............................$ 1,309 $ 1,656 $ 1,529
Restaurants............................. 34,875 47,444 15,584
Textiles................................ 22,965 13,097 1,715
Propane................................. 6,599 8,966 6,973
Corporate............................... 83 57 4,519
----------- ------------ -------------
Consolidated capital expenditures...$ 65,831 $ 71,220 $ 30,320
=========== ============ =============
Depreciation and amortization of properties:
Beverages ..............................$ 772 $ 1,005 $ 1,480
Restaurants............................. 9,335 12,927 13,096
Textiles................................ 13,867 15,082 5,953
Propane................................. 9,337 9,546 10,017
Corporate............................... 590 333 139
----------- ------------ -------------
Consolidated depreciation and
amortization......................
$ 33,901 $ 38,893 $ 30,685
=========== ============ =============

</TABLE>
(30) QUARTERLY INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>

THREE MONTHS ENDED
------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,(A)
--------- -------- ------------- ---------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1995
<S> <C> <C> <C> <C>
Revenues.......................................$ 297,993 $ 279,281 $ 291,875 $ 315,072
Gross profit................................... 85,046 75,556 81,193 82,498
Operating profit (loss)........................ 24,741 12,279 12,713 (15,744)
Net income (loss).............................. 6,719 1,010 (5,776) (38,947)
Income (loss) per share (b).................... 0.23 0.03 (0.19) (1.30)
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
MARCH 31, JUNE 30, SEPTEMBER 30, (D) DECEMBER 31,(E)
--------- -------- ----------------- ---------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
1996
Revenues........................................$ 328,893 $ 246,477 $ 206,447 $ 207,432
Gross profit.................................... 92,970 86,948 77,800 79,422
Operating profit (loss)......................... 25,420 17,710 11,385 (61,494)
Income (loss) before extraordinary items ....... 1,785 (3,583) 47,332 (54,019)
Extraordinary charge (Note 22).................. (1,387) (7,151) 3,122 --
Net income (loss)............................... 398 (10,734) 50,454 (54,019)
Income (loss) per share (b):
Before extraordinary charge..................... .06 (.12) 1.50 (1.81)
Extraordinary items (c)......................... (.05) (.24) .10 --
Net income (loss)............................... .01 (.36) 1.60 (1.81)
</TABLE>

(a) The results for the three months ended December 31, 1995 were
materially affected by charges of $25,308,000 or $17,347,000 net of income tax
benefit of $7,961,000. Such net charges included (i) a reduction in carrying
value of long-lived assets impaired or to be disposed of amounting to
$14,647,000 (see Note 3), (ii) an aggregate $7,798,000 consisting of equity in
losses and writedown of investments in affiliates of $5,247,000 and related
provision for additional MetBev related losses of $2,551,000 (see Note 28),
(iii) facilities relocation and corporate restructuring charges of $3,010,000
(see Note 18), (iv) costs related to the settlement of a patent infringement
lawsuit of $1,718,000, (v) accelerated vesting of restricted stock of $1,640,000
(see Note 17) and (vi) interest accruals related to income tax contingencies of
$1,400,000 (see Note 15) less the PEC Settlement (see Note 28) and the Columbia
Gas Settlement (see Note 20) aggregating $4,905,000. Additionally, the results
for the three months ended December 31, 1995 include a provision for income tax
contingencies of $6,100,000 (see Note 15).

(b) The shares for income (loss) per share purposes represent the weighted
average shares outstanding plus, with respect to the three months ended
September 30, 1996, 2,519,000 shares for the effect of dilutive stock options.
Net income for income per share purposes for such period was increased by
$1,335,000 from the assumed reduction in interest expense, net of income taxes,
resulting from the utilization of the proceeds from the assumed exercise of
certain stock options to repurchase debt and eliminate the related interest
expense. Fully diluted income (loss) per share was not applicable to any period
since contingent issuances of common shares would have been antidilutive.

(c) The results for the three months ended March 31, 1996, June 30, 1996
and September 30, 1996 include extraordinary (charges) income in connection with
the early extinguishment of debt consisting of the following (in thousands):
<TABLE>
<CAPTION>

THREE MONTHS ENDED
------------------
MARCH 31, JUNE 30, SEPTEMBER 30,
--------- -------- -------------

<S> <C> <C> <C>
Write-off of unamortized deferred financing costs.$ (358) $ (5,985) $ (4,126)
Write-off of unamortized original issue discount.. (1,776) -- --
Prepayment penalties.............................. -- (5,519) (225)
Fees.............................................. -- -- (250)
Discount from principal on early extinguishment... -- -- 9,237
---------- ----------- ----------
(2,134) (11,504) 4,636
Income tax (provision) benefit.................... 747 4,353 (1,514)
---------- ----------- -----------
$ (1,387) $ (7,151) $ 3,122
=========== =========== ==========
</TABLE>

(d) The results for the three months ended September 30, 1996 were
materially affected by a net gain from the sale of businesses of $77,123,000 or
$46,899,000 net of income tax benefit of $30,224,000. Such net gains consisted
of an $83,447,000 gain on the Offering, partially offset by a $3,500,000 loss on
the sale of the Textile Business and a $2,825,000 loss associated with the
write-down of MetBev. See Note 19 for further discussion.

(e) The results for the three months ended December 31, 1996 were
materially affected by (i) facilities relocation and corporate restructuring
charges of $7,500,000 (see Note 18) or $4,701,000 net of $2,799,000 of income
tax benefit and (ii) a provision for the reduction in carrying value of
long-lived assets to be disposed of amounting to $64,300,000 (see Note 3) or
$39,444,000 net of $24,856,000 of income tax benefit.

(31) SUBSEQUENT EVENT

On March 27, 1997 Triarc announced that it has entered into a definitive
agreement to acquire Snapple Beverage Corp. from The Quaker Oats Company for
$300,000,000, subject to certain post-closing adjustments. The acquisition is
expected to be consummated during the second quarter of 1997, subject to
customary closing conditions, including antitrust clearance. Triarc will seek
third party financing for a portion of the purchase price. Snapple is a producer
and seller of premium beverages and had sales for the year ended December 31,
1996 of approximately $550,000,000.

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

Not applicable.

PART III

ITEMS 10, 11, 12 AND 13.

Items 10, 11, 12 and 13 to be furnished by amendment hereto on or prior to
April 30, 1997 or Triarc will otherwise have filed a definitive proxy statement
involving the election of directors pursuant to Regulation 14A which will
contain such information.

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:

Independent Auditors' Report

Schedule I -- Condensed Balance Sheets (Parent Company Only) -- as of December
31, 1995 and 1996; Condensed Statements of Operations (Parent
Company Only) -- for the years ended December 31, 1994, 1995 and
1996; Condensed Statements of Cash Flows (Parent Company Only) --
for the years ended December 31, 1994, 1995 and 1996

Schedule II -- Valuation and Qualifying Accounts for the years ended December
31, 1994, 1995 and 1996

Schedule V -- Supplemental Information Concerning Property Casualty Insurance
Operations for the years ended December 31, 1994, 1995 and 1996

All other 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.

EXHIBIT
NO. DESCRIPTION
------- -----------------------------------------------------------------

2.1-- Stock Purchase Agreement dated as of October 1, 1992 among DWG
Acquisition, Victor Posner, Security Management Corp. and Victor
Posner Trust No. 20, incorporated herein by reference to Exhibit
10 to Amendment No. 4 to Triarc's Current Report on Form 8-K dated
October 5, 1992 (SEC file No. 1-2207).
2.2 -- Amendment dated as of October 1, 1992 between Triarc and DWG
Acquisition, incorporated herein by reference to Exhibit 11 to
Amendment No. 4 to Triarc's Current Report on Form 8-K dated
October 5, 1992 (SEC file No. 1-2207).
2.3 -- Exchange Agreement dated as of October 1, 1992 between Triarc
and Security Management Corp., incorporated herein by reference to
Exhibit 12 to Amendment No. 4 to Triarc's Current Report on Form
8-K dated October 5, 1992 (SEC file No. 1-2207).
2.4 -- Asset Purchase Agreement dated as of March 31, 1996 by and among
Avondale Mills Inc., Avondale Incorporated, Graniteville Company
and the Registrant incorporated herein by reference to Exhibit 2.1
to the Triarc's Current Report on Form 8-K dated April 18, 1996
(SEC file No. 1-2207).
2.5 -- Asset Purchase Agreement dated as of August 9, 1995 among Mistic
Brands, Inc., Joseph Victori Wines, Inc., Best Flavors, Inc.,
Nature's Own Beverage Company and Joseph Umbach, the Companies,
and Joseph Umbach, incorporated herein by reference to Exhibit
2.1 to Triarc's Quarterly Report on Form 8-K dated August 9, 1995
(SEC file No. 1-2207).
2.6 -- Stock Purchase Agreement dated as of March 27, 1997 between The
Quaker Oats Company and Triarc, incorporated herein by reference
to Exhibit 2.1 to Triarc's Current Report on Form 8-K dated
March 31, 1997 (SEC file No. 1-2207).
3.1 -- Certificate of Incorporation of Triarc, as currently in effect,
incorporated herein by reference to Exhibit B to the 1994 Proxy
(SEC file No. 1-2207).
3.2 -- By-laws of Triarc, incorporated herein by reference to Exhibit
3.1 to Triarc's Current Report on Form 8-K dated March 31, 1997
(SEC file No. 1-2207).
4.1 -- Note Purchase Agreement dated as of April 23, 1993 among RCAC,
Triarc, RCRB Funding, Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, incorporated herein by reference to Exhibit 4
to Triarc's Current Report on Form 8-K dated April 23, 1993 (SEC
file No. 1-2207).
4.2 -- Indenture dated as of April 23, 1993 among RCAC, Royal Crown,
Arby's and The Bank of New York, incorporated herein by reference
to Exhibit 5 to Triarc's Current Report on Form 8-K dated April
23, 1993 (SEC file No. 1-2207).
4.3 -- Form of Indenture among RCAC, Royal Crown, Arby's and The Bank of
New York, as Trustee, relating to the 9 3/4% Senior Secured Notes
Due 2000, incorporated herein by reference to Exhibit 4.1 to
RCAC's Registration Statement on Form S-1 dated May 13, 1993
SEC file No. 33-62778).
4.4 -- Amended and Restated Loan Agreement dated as of October 13, 1995
by and between FFCA Acquisition Corporation and Arby's Restaurant
Development Corporation, incorporated herein by reference to
Exhibit 10.1 to RC/Arby's Corporation Quarterly Report on Form
10-Q for the quarter ended September 30, 1995 (SEC file No.
0-20286).
4.5 -- Loan Agreement dated as of October 13, 1995 by and between FFCA
Acquisition Corporation and Arby's Restaurant Holding Company,
incorporated herein by reference to Exhibit 10.2 to RC/Arby's
Corporation Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995 (SEC file No. 0-20286).
4.6 -- Credit Agreement dated as of August 9, 1995 among Mistic Brands,
Inc., The Chase Manhattan Bank (National Association) as agent,
and the other lenders party thereto (the "Mistic Credit
Agreement"), incorporated herein by reference to Exhibit 10.1 to
Triarc's Current Report on Form 8-K dated August 9, 1995 (SEC file
No. 1-2207).
4.7 -- Letter Agreement dated December 15, 1995 among Arby's Restaurant
Holding Company, Arby's Restaurant Development Corporation and
FFCA Acquisition Corporation, incorporated herein by reference to
Exhibit 4.25 to Triarc's Annual Report on Form 10-K for the year
ended December 31, 1995 (SEC file No. 1-2207).
4.8 -- Amendment Agreement dated as of October 6, 1995 among Mistic
Brands, Inc., The Chase Manhattan Bank, incorporated herein by
reference to Exhibit 4.26 to Triarc's Annual Report on Form 10-K
for the year ended December 31, 1995 (SEC file No. 1-2207).
4.9 -- Second Amendment Agreement dated as of March 15, 1996 among Mistic
Brands, Inc., The Chase Manhattan Bank, N.A., as agent, and the
other lenders party to the Mistic Credit Agreement incorporated
herein by reference to Exhibit 4.27 to Triarc's Annual Report on
Form 10-K for the year ended December 31, 1995 (SEC file No.
1-2207).
4.10 -- Third Amendment Agreement dated as of December 30, 1996 among
Mistic Brands, Inc.,The Chase Manhattan Bank, N.A., as agent, and
the other lenders party to the Mistic Credit Agreement,
incorporated herein by reference to Exhibit 4.4 to Triarc's
Current Report on Form 8-K dated March 31, 1997 (SEC file No.
1-2207).
4.11 -- Credit Agreement, dated as of June 26, 1996, among National
Propane, L.P., The First National Bank of Boston, as
administrative agent and a lender, Bank of America NT & SA, as a
lender, and BA Securities, Inc., as syndication agent,
incorporated herein by reference to Exhibit 10.1 to Current Report
of National Propane Partners, L.P. (the "Partnership") on Form 8-K
dated August 13, 1996 (SEC file No. 1-11867).
4.12 -- Note Purchase Agreement, dated as of June 26, 1996 ("Note Purchase
Agreement"), among National Propane, L.P. and each of the
Purchasers listed in Schedule A thereto relating to $125 million
aggregate principal amount of 8.54% First Mortgage Notes due June
30, 2010, incorporated herein by reference to Exhibit 10.2 to the
Partnership's Current Report on Form 8-K dated August 13, 1996
(SEC file No. 1-11867).
4.13 -- Consent, Waiver and Amendment dated November 5, 1996 among
National Propane, L.P. and each of the Purchasers under the Note
Purchase Agreement, incorporated herein by reference to Exhibit
4.1 to Triarc's Current Report on Form 8-K dated March 31, 1997
(SEC file No. 1-2207).
4.14 -- Second Consent, Waiver and Amendment dated January 14, 1997 among
National Propane, L.P. and each of the Purchasers under the Note
Purchase Agreement, incorporated herein by reference to Exhibit
4.2 to Triarc's Current Report on Form 8-K dated March 31, 1997
(SEC file No. 1-2207).
4.15 -- Credit Agreement dated as of May 16, 1996 between: CH. Patrick &
Co., Inc., the Registrant, each of the lenders party thereto,
Internationale Nederlanden (U.S.) Capital Corporation, as agent,
and The First National Bank of Boston, as co-agent, incorporated
herein by reference to Exhibit 4.3 to Triarc's Current Report on
Form 8-K dated March 31, 1997 (SEC file No. 1-2207).
4.16 -- Note dated July 2, 1996 of Triarc, payable to the order of
National Propane, L.P., incorporated herein by reference to
Exhibit 10.5 to the Partnership's Current Report on
Form 8-K dated August 13, 1996 (SEC file No. 1-11867).
4.17 -- Loan Agreement dated as of September 5, 1996 by and between FFCA
Mortgage Corporation and Arby's Restaurant Holding Company,
incorporated herein by reference to Exhibit 4.1 to RC/Arby's
Corporation's Current Report on Form 8-K dated November 14, 1996
(SEC file No. 0-20286).
4.18 -- Supplement to Loan Agreement as of June 26, 1996 among FFCA
Acquisition Corporation, Arby's Restaurant Holding Company, Arby's
Restaurant Development Corporation and the Registrant,
incorporated herein by reference to Exhibit 4.2 to RC/Arby's
Corporation's Current Report on Form 8-K dated November 14, 1996
(SEC file No. 0-20286).
4.19 -- Agreement Regarding Cross Collateralization and Cross-Default
Provisions as of June 26, 1996 by and among FFCA Acquisition
Corporation, Arby's Restaurant Development Corporation, Arby's
Restaurant Holding Company and Arby's, Inc., incorporated herein
by reference to Exhibit 4.3 to RC/Arby's Corporation's Current
Report on Form 8-K dated November 14, 1996 (SEC file No.
0-020286).
4.20 -- First Amendment dated as of March 27, 1997, to the Credit
Agreement dated as of June 26, 1996, among National Propane, L.P.,
The First National Bank of Boston, as administrative agent and a
lender, Bank of America NT & SA, as a lender, and BA Securities,
Inc., as syndication agent, incorporated herein by reference to
Exhibit 10.3 to National Propane Partners, L.P.'s Current Report
on Form 8-K dated March 31, 1997 (SEC file No. 1- 11867).
10.1 -- Employment Agreement dated as of April 24, 1993 between Donald L.
Pierce and Arby's, incorporated herein by reference to Exhibit 7
to Triarc's Current Report on Form 8-K dated April 23, 1993 (SEC
file No. 1-2207).
10.2 -- Employment Agreement dated as of April 24, 1993 among John C.
Carson, Royal Crown and Triarc, incorporated herein by reference
to Exhibit 8 to Triarc's Current Report on Form 8-K dated April
23, 1993 (SEC file No. 1-2207).
10.3 -- Employment Agreement dated as of April 24, 1993 between Ronald D.
Paliughi and National Propane Corporation (the "Paliughi
Employment Agreement"), incorporated herein by reference to
Exhibit 9 to Triarc's Current Report on Form 8-K dated April 23,
1993 (SEC file No. 1-2207).
10.4 -- Memorandum of Understanding dated September 13, 1993 between
Triarc and William Ehrman, individually and derivatively on behalf
of SEPSCO, incorporated herein by reference to Exhibit 10.1 to
Triarc's Current Report on Form 8-K dated September 13, 1993 (SEC
file No. 1-2207).
10.5 -- Stipulation of Settlement of Ehrman Litigation dated as of October
18, 1993, incorporated herein by reference to Exhibit 1 to
Triarc's Current Report on Form 8-K dated October 15, 1993 (SEC
File No. 1-2207).
10.6 -- Triarc's 1993 Equity Participation Plan, as amended, incorporated
herein by reference to Exhibit 10.1 to Triarc's Current Report on
Form 8-K dated March 31, 1997 (SEC file No.
1-2207).
10.7 -- Form of Non-Incentive Stock Option Agreement under Triarc's
Amended and Restated 1993 Equity Participation Plan, incorporated
herein by reference to Exhibit 10.2 to Triarc's Current Report on
Form 8-K dated March 31, 1997 (SEC file No. 1-2207).
10.8 -- Form of Restricted Stock Agreement under Triarc's Amended and
Restated 1993 Equity Participation Plan, incorporated herein by
reference to Exhibit 13 to Triarc's Current Report on Form 8-K
dated April 23, 1993 (SEC file No. 1-2207).
10.9 -- Consulting Agreement dated as of April 23, 1993 between Triarc and
Steven Posner, incorporated herein by reference to Exhibit 10.8 to
Triarc's Annual Report on Form 10-K for the fiscal year ended
April 30, 1993 (SEC file No. 1-2207).
10.10 -- Form of New Management Services Agreement dated as of April 23,
1993 between Triarc and certain of its subsidiaries, incorporated
herein by reference to Exhibit 10.11 to Triarc's Annual Report on
Form 10-K for the fiscal year ended April 30, 1993 (SEC file No.
1-2207).
10.11 -- Concentrate Sales Agreement dated as of January 28, 1994 between
Royal Crown and Cott, -- Confidential treatment has been granted
for portions of the agreement -- incorporated herein by reference
to Exhibit 10.12 to Amendment No. 1 to Triarc's Registration
Statement
on Form S-4 dated March 11, 1994 (SEC file No. 1-2207).
10.12 -- Form of Indemnification Agreement, between Triarc and certain
officers, directors, and employees of Triarc, incorporated herein
by reference to Exhibit F to the 1994 Proxy (SEC file No. 1-2207).
10.13 -- Amendment No. 1, dated December 7, 1994 to the Paliughi Employment
Agreement, incorporated herein by reference to Exhibit 10.1 to
Triarc's Current Report on Form 8-K dated March 29, 1995 (SEC file
No. 1-2207).
10.14 -- Settlement Agreement, dated as of January 9, 1995, among Triarc,
Security Management Corp., Victor Posner Trust No. 6 and Victor
Posner, incorporated herein by reference to Exhibit 99.1 to
Triarc's Current Report on Form 8-K dated January 11, 1995 (SEC
file No. 1-2207).
10.15 -- Employment Agreement, dated as June 29, 1994, between Brian L.
Schorr and Triarc, incorporated herein by reference to Exhibit
10.2 to Triarc's Current Report on Form 8-K dated March 29, 1995
(SEC file No. 1-2207).
10.16 -- Amendment No. 2, dated as of March 27, 1995, to the Paliughi
Employment Agreement, incorporated herein by reference to Exhibit
10.20 to Triarc's Annual Report on Form 10-K for the year ended
December 31, 1995 (SEC file No. 1-2207).
10.17 -- Letter Agreement, dated as of January 1, 1996 between Triarc and
Leon Kalvaria incorporated herein by reference to Exhibit 10.21 to
Triarc's Annual Report on Form 10-K for the year ended December
31, 1995 (SEC file No. 1-2207).
10.18 -- Employment and SAR Agreement dated as of August 9, 1995 between
Mistic Brands, Inc. and Michael Weinstein,.incorporated herein by
reference to Exhibit 10.2 to Triarc's Annual Report on Form 10-K
for the year ended December 31, 1995 (SEC file No. 1-2207).
10.19 -- Employment and SAR Agreement dated as of August 9, 1995 between
Mistic Brands, Inc. and Ernest J. Cavallo, incorporated herein by
reference to Exhibit 10.23 to Triarc's Annual Report on Form 10-K
for the year ended December 31, 1995 (SEC file No. 1-2207).
10.20 -- Amendment to Employment Agreement of Ronald D. Paliughi dated of
June 10, 1996, incorporated herein by reference to Exhibit 10.7 to
Partnership's Current Report on Form 8- K dated August 13, 1996.
(SEC file No. 1-11867).
10.21 -- Stock Purchase Agreement dated February 13, 1997 by and among
Arby's Inc., Arby's Restaurant Development Corporation, Arby's
Restaurant Holding Company, Arby's Restaurant Operations Company,
RTM Partners, Inc. and RTM, Inc., incorporated herein by reference
to Exhibit 10.1 to RCAC's Current Report on Form 8-K dated
February 20, 1997 (SEC file No. 0-20286).
10.22 -- Purchase Agreement among the Partnership, Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Janney Montgomery Scott
Inc., Rauscher Pierce Refsnes, Inc..and the Robinson-Humphrey
Company, Inc., incorporated herein by reference to Exhibit1.1 to
the Partnership's Current Report on Form 8-K dated August 13, 1996
(SEC file No. 1-11867).
10.23 -- Contribution and Assumption Agreement among the Partnership,
National Propane, National Propane SGP, Inc. and National Sales &
Service, Inc., incorporated herein by reference to Exhibit 10.4 to
the Partnership's Current Report on Form 8-K dated August 13,
1996 (SEC file No. 1-11867).
10.24 -- Conveyance, Contribution and Assumption Agreement among the
Partnership, National Propane and National Propane SGP, Inc.,
incorporated herein by reference to Exhibit 10.3 to the
Partnership's Current Report on Form 8-K dated August 13, 1996
(SEC file No. 1- 11867).
10.25 -- Purchase Agreement dated November 7, 1996 between the Partnership
and the buyer named therein (the "Buyer"), incorporated herein by
reference to Exhibit 10.1 to the Partnership's Current Report on
Form 8-K dated November 14, 1996 (SEC file No. 1-11867).
10.26 -- Registration Agreement dated November 7, 1996 between the
Partnership and the Buyer, incorporated herein by reference to
Exhibit 10.2 to the Partnership's Current Report on Form 8-K dated
November 14, 1996 (SEC file No. 1-11867).
10.27-- Supply Agreement dated as of March 31, 1996 by and between
Avondale Mills, Inc. and C.H. Patrick & Co., Inc. --
Confidential treatment has been granted for portions of the
Supply Agreement -- is incorporated herein by reference to
Exhibit 10 to Triarc's Current Report on Form 8-K/A dated June
25, 1996 (SEC file No. 1-2207).
10.28 -- Employment Agreement dated as of April 29, 1996 between Triarc and
John L. Barnes, Jr., incorporated herein by reference to Exhibit
10.3 to Triarc's Current Report on Form 8-K dated March 31, 1997
(SEC file No. 1-2207).
21.1 -- Subsidiaries of the Registrant*
23.1 -- Consent of Deloitte & Touche LLP*
27.1 -- Financial Data Schedule for the year ended December 31, 1996,
submitted to the Securities and Exchange Commission in electronic
format.*
99.1 -- Order of the United States District Court for the Northern
District of Ohio, dated February 7, 1995, incorporated herein by
reference to Exhibit 99.1 to Triarc's Current Report on Form
8-K dated March 29, 1995 (SEC file No. 1-2207).
- -----------------------
* Filed herewith

(B) Reports on Form 8-K:

Not applicable.

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 31, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 31, 1997 by the following persons on
behalf of the registrant in the capacities indicated.

SIGNATURE TITLES
- ----------------- -----------------------------------------

NELSON PELTZ Chairman and Chief Executive Officer
.................. And Director (Principal Executive Officer)
(NELSON PELTZ)

PETER W. MAY President and Chief Operating Officer, and
................. Director (Principal Operating Officer)
(PETER W. MAY)

JOHN L. BARNES, JR. Senior Vice President and Chief Financial
................. Officer (Principal Financial Officer)
(JOHN L. BARNES, JR.)

FRED H. SCHAEFER Vice President and Chief Accounting Officer
................. (Principal Accounting Officer)
(FRED H. SCHAEFER)

HUGH L. CAREY Director
......................
(HUGH L. CAREY)

CLIVE CHAJET Director
............................
(CLIVE CHAJET)

STANLEY R. JAFFE Director
..........................
(STANLEY R. JAFFE)

JOSEPH A. LEVATO Director
.........................
(JOSEPH A. LEVATO)

M.L. LOWENKRON Director
.........................
(M. L. LOWENKRON)

DAVID E. SCHWAB II Director
...........................
(DAVID E. SCHWAB II)

RAYMOND S. TROUBH Director
............................
(RAYMOND S. TROUBH)

GERALD TSAI, JR. Director
............................
(GERALD TSAI, JR.)
<PAGE>
INDEPENDENT AUDITORS' REPORT

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

We have audited the consolidated financial statements of Triarc Companies,
Inc. and subsidiaries (the "Company") as of December 31, 1996 and 1995, and for
each of the three years in the period ended December 31, 1996, and have issued
our report thereon dated March 31, 1997 (which report includes an explanatory
paragraph as to a change in the method of accounting for impairment of
long-lived assets and for long-lived assets to be disposed of); such
consolidated financial statements and report are included elsewhere in this Form
10-K. Our audits also included the consolidated financial statement schedules of
the Company, listed in Item 14(A)2. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such consolidated financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.

DELOITTE & TOUCHE LLP

New York, New York
March 31, 1997

<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I

TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
CONDENSED BALANCE SHEETS

December 31,
------------
1995 1996
---- ----
(In thousands)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents ..................................................$ 12,550 $ 123,535
Restricted cash and cash equivalents........................................ 23,385 376
Short-term investments...................................................... 18 51,629
Due from subsidiaries ...................................................... 29,763 32,148
Other receivables, net...................................................... 4,564 756
Deferred income tax benefit................................................. 4,264 3,483
Prepaid expenses and other current assets................................... 301 3,324
--------- ---------
Total current assets..................................................... 74,845 215,251
--------- ---------
Note receivable from subsidiary ................................................ 18,375 18,715
Investments in consolidated subsidiaries, at equity............................. 208,043 --
Properties, net................................................................. 186 4,558
Deferred income tax benefit..................................................... 15,964 --
Other assets ................................................................... 8,997 4,144
--------- ---------
$ 326,410 $ 242,668
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt...........................................$ 5,274 $ 3,000
Accounts payable............................................................ 1,456 2,598
Due to subsidiaries......................................................... 14,515 15,596
Accrued expenses............................................................ 21,955 19,865
--------- ---------
Total current liabilities................................................ 43,200 41,059
--------- ---------
Notes payable to subsidiaries................................................... 229,300 72,350
9 1/2% promissory note payable ................................................. 32,423 --
Accumulated reductions in stockholders' equity of subsidiaries in excess of
investment (a)............................................................... -- 78,487
Deferred income taxes........................................................... -- 43,370
Other liabilities............................................................... 837 637
Commitments and contingencies
Stockholders' equity:
Class A common stock, $.10 par value; authorized 100,000,000 shares,
issued 27,983,805 shares.................................................. 2,798 2,798
Class B common stock, $.10 par value; authorized 25,000,000 shares,
issued 5,997,622 shares................................................... 600 600
Additional paid-in capital.................................................. 162,020 161,170
Accumulated deficit......................................................... (97,923) (111,824)
Less Class A common stock held in treasury at cost; 4,067,380 and
4,097,606 shares......................................................... (45,931) (46,273)
Other....................................................................... (914) 294
--------- ---------
Total stockholders' equity .............................................. 20,650 6,765
--------- ---------
$ 326,410 $ 242,668
========= =========
</TABLE>
- ----------------

(a) The "Accumulated reductions in stockholders' equity of subsidiaries in
excess of investment" includes all of Triarc's direct and indirect owned
subsidiaries. The investment in subsidiaries has a negative balance as a
result of aggregate distributions from subsidiaries and forgiveness of
Triarc debt to subsidiaries in excess of the investment in the subsidiaries.
<PAGE>
<TABLE>
<CAPTION>

SCHEDULE I (CONTINUED)

TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF OPERATIONS

Year Ended December 31,
-----------------------
1994 1995 1996
---- ---- ----
(In thousands except per share amounts)

<S> <C> <C> <C>
Income and (expenses):
Equity in net income (losses) of continuing operations of
subsidiaries .................................................. $ 29,610 $(26,078) $(50,190)
Gain on sale of businesses, net.................................. -- -- 81,500
Interest income.................................................. 707 797 6,028
Interest expense ................................................ (28,807) (15,794) (8,235)
Reduction in carrying value of long-lived assets impaired or
to be disposed of ............................................. -- -- (5,400)
General and administrative expenses ............................. (6,660) (2,072) (4,449)
Facilities relocation and corporate restructuring................ (8,800) (2,700) (1,000)
Recovery of doubtful accounts from affiliates and former
affiliates..................................................... -- 3,049 --
Cost of a proposed acquisition not consummated................... (5,480) -- --
Shareholder litigation and other expenses ....................... (500) (24) --
Other income (expense) .......................................... (199) 2,305 492
-------- -------- --------
Income (loss) from continuing operations before income taxes... (20,129) (40,517) 18,746
Benefit (provision) from income taxes ............................... 18,036 3,523 (27,231)
-------- -------- --------
Loss from continuing operations................................ (2,093) (36,994) (8,485)
Equity in losses of discontinued operations of subsidiaries ......... (3,900) -- --
Extraordinary items.................................................. -- -- 5,752
Equity in extraordinary charges of subsidiaries...................... (2,116) -- (11,168)
-------- -------- --------
Net loss....................................................... (8,109) (36,994) (13,901)
Preferred stock dividend requirements................................ (5,833) -- --
-------- -------- --------
Net loss applicable to common stockholders .................... $(13,942) $(36,994) $(13,901)
======== ======== ========
Loss per share:
Continuing operations............................................ $ (.34) $ (1.24) $ (.28)
Discontinued operations.......................................... (.17) -- --
Extraordinary charges............................................ (.09) -- (.18)
-------- -------- --------
Net loss....................................................... $ (.60) $ (1.24) $ (.46)
======== ======== ========

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

SCHEDULE I (CONTINUED)

TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF CASH FLOWS

Year Ended December 31,
-----------------------
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ........................................................... $ (8,109) $ (36,994) $ (13,901)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Equity in net losses (income) of subsidiaries ................... (23,594) 26,078 60,444
Dividends from subsidiaries ..................................... 40,000 22,721 126,059
Gain on sale of businesses, net ................................. -- -- (81,500)
Discount from principal on early extinguishment of debt ......... -- -- (9,237)
Deferred income tax provision (benefit) ......................... (2,899) (382) 36,558
Change in due from/to subsidiaries and other affiliates including
capitalized interest ($21,017 in 1994 and $9,569 in 1995) ..... 33,034 1,332 2,203
Other, net ...................................................... 8,991 3,808 (1,576)
Decrease (increase) in receivables .............................. (649) (4,715) 133
Decrease (increase) in restricted cash .......................... (498) (166) 288
Decrease (increase) in prepaid expenses and other current
assets ........................................................ 2,399 (214) (23)
Increase (decrease) in accounts payable and accrued
expenses ...................................................... (18,249) 4,522 20,901
--------- --------- ---------
Net cash provided by operating activities .................. 30,426 15,990 140,349
--------- --------- ---------

Cash flows from investing activities:
Cost of short-term investments purchased ........................... -- -- (61,381)
Proceeds from short-term investments sold .......................... -- -- 11,244
Loans to subsidiaries, net of repayments ........................... -- (18,375) (340)
Business acquisitions .............................................. -- (29,240) --
Capital expenditures ............................................... (83) (57) (4,519)
Investment in an affiliate ......................................... -- (5,340) --
Capital contributed to a subsidiary ................................ -- (8,865) --
--------- --------- ---------
Net cash used in investing activities ...................... (83) (61,877) (54,996)
--------- --------- ---------

Cash flows from financing activities:
Repayments of long-term debt ....................................... -- -- (27,250)
Borrowings from subsidiaries, net of repayments .................... -- 45,900 30,600
Cash restricted for debt repayment paid by subsidiary in 1996....... -- (22,721) 22,721
Purchases of common shares in open market tranactions .............. (344) (1,170) (496)
Payment of preferred dividends ..................................... (5,833) -- --
Other .............................................................. -- (56) 57
--------- --------- ---------
Net cash provided by (used in) financing activities ....... (6,177) 21,953 25,632
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents ................... 24,166 (23,934) 110,985
Cash and cash equivalents at beginning of period ....................... 12,318 36,484 12,550
--------- --------- ---------
Cash and cash equivalents at end of period ............................. $ 36,484 $ 12,550 $ 123,535
========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
TRIARC COMPANIES, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS

Additions
Balance at Charged to Charged to Deductions Balance at
Beginning Costs and Other from End of
Description of Period Expenses Accounts Reserves Period
----------- --------- -------- -------- -------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1994:
Receivables - allowance for doubtful
accounts:
Trade ............................... $ 6,969 $ 1,021 $ 111 (1) $(2,711)(2) $ 5,390
========= ========= ========= ======= ===========
Insurance loss reserves................... $ 13,511 $ -- $ -- $(2,684)(3) $ 10,827
========= ========= ========= ======= ===========

Year ended December 31, 1995:
Receivables - allowance for doubtful
accounts:
Trade................................ $ 5,390 $ 3,267 $ 327 (1) $(2,840)(2) $ 6,144
Affiliate............................ -- 1,351 -- -- 1,351
--------- --------- --------- ------- ----------
Total............................. $ 5,390 $ 4,618 $ 327 $(2,840) $ 7,495
========= ========= ========= ======= ==========
Insurance loss reserves................... $ 10,827 $ 110 $ -- $(1,539)(3) $ 9,398
========= ========= ========= ======= ==========

Year ended December 31, 1996:
Receivables - allowance for doubtful
accounts:
Trade ............................... $ 6,144 $ 4,104 $ 331 (1) $ (5,933)(4) $ 4,646
Affiliate............................ 1,351 5,675 -- (4,475)(2) 2,551
--------- --------- --------- -------- ----------
Total............................. $ 7,495 $ 9,779 $ 331 $(10,408) $ 7,197
========= ========= ========= ======== ==========
Insurance loss reserves................... $ 9,398 $ 763 $ -- $ (333)(3) $ 9,828
========= ========= ========= ======== ==========
</TABLE>

(1) Recoveries of accounts previously determined to be uncollectible.
(2) Accounts determined to be uncollectible.
(3) Payment of claims and/or reclassification to "Accounts payable".
(4) Consists of $4,125,000 attributable to the sale of the Textile Business
(see Note 19 to the consolidated financial statements included elsewhere
herein) and $1,808,000 of accounts determined to be uncollectible.

SCHEDULE V
TRIARC COMPANIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION CONCERNING PROPERTY-CASUALTY
INSURANCE OPERATIONS

CLAIMS AND CLAIM
RESERVES ADJUSTMENT
FOR UNPAID EXPENSES INCURRED PAID
CLAIMS AND RELATED TO CLAIMS AND
CLAIM NET ---------- CLAIM
ADJUSTMENT EARNED INVESTMENT CURRENT PRIOR ADJUSTMENT PREMIUMS
AFFILIATION WITH REGISTRANT EXPENSES (1) PREMIUMS INCOME YEAR YEARS EXPENSES WRITTEN
- --------------------------- ------------ -------- ------ ---- ----- -------- -------
(IN THOUSANDS)

Consolidated property-casualty
entities:

<S> <C> <C> <C> <C> <C> <C> <C>
Year ended
December 31, 1994.........$ 10,827 $ 120 $ 529 $ 48 $ 386 $ 2,880 $ 120
========= ======== ========= ======== ========= ========= =========

Year ended
December 31, 1995.........$ 9,398 $ -- $ 486 $ 34 $ 530 $ 1,540 $ --
========= ======== ========= ======== ========= ========= =========

Year ended
December 31, 1996.........$ 9,828 $ -- $ 505 $ 48 $ 715 $ 333 $ --
========= ======== ========= ======== ========= ========= =========

</TABLE>

(1) Does not include claims losses of $1,610,000, $1,343,000 and $835,000 at
December 31, 1994, 1995, and 1996 respectively, which have been classified
as "Accounts payable".

<PAGE>
EXHIBIT 21.1

TRIARC COMPANIES, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
MARCH 31, 1997

The subsidiaries of Triarc Companies, Inc., their respective states or
jurisdictions of organization and the names under which such subsidiaries do
business are as follows:

STATE OR JURISDICTION
UNDER WHICH ORGANIZED

National Propane Corporation*.................................... Delaware
National Propane SGP, Inc.................................... Delaware
National Propane Partners, L.P.**........................ Delaware
National Propane, L.P.**.............................. Delaware
National Sales & Service, Inc..................... Delaware
Carib Gas Corporation of St. Croix (formerly
LP Gas Corporation of St. Croix)................ Delaware
Carib Gas Corporation of St. Thomas (formerly
LP Gas Corporation of St.Thomas)................ Delaware
NPC Leasing Corp................................................. New York
Citrus Acquisition Corporation................................... Florida
Adams Packing Association, Inc. (formerly New
Adams, Inc.)............................................. Delaware
Groves Company, Inc. (formerly New Texsun, Inc.)............. Delaware
Home Furnishing Acquisition Corporation.......................... Delaware
1725 Contra Costa Property, Inc. (formerly Couroc
of Monterey, Inc.)....................................... Delaware
Hoyne Industries, Inc. (formerly New Hoyne, Inc.)............ Delaware
Hoyne Industries of Canada Limited........................... Canada
Hoyne International (U.K.), Inc.............................. Delaware
GS Holdings, Inc................................................. Delaware
GVT Holdings, Inc.***........................................ Delaware
TXL Corp. ............................................... South Carolina
TXL International Sales, Inc............................. South Carolina
GTXL, Inc................................................ Delaware
TXL Holdings, Inc........................................ Delaware
C.H. Patrick & Co., Inc............................... South Carolina
Southeastern Public Service Company.......................... Delaware
Crystal Ice & Cold Storage, Inc....................... Delaware
Southeastern Gas Company.............................. Delaware
Geotech Engineers, Inc............................ West Virginia
Triarc Holdings 1, Inc........................................... Delaware
Triarc Holdings 2, Inc........................................... Delaware
Triarc Development Corporation................................... Delaware
Triarc Acquisition Corporation................................... Delaware
Mistic Brands, Inc............................................... Delaware

<PAGE>

TRIARC COMPANIES, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
MARCH 31, 1997

STATE OR JURISDICTION
UNDER WHICH ORGANIZED

CFC Holdings Corp.****........................................... Florida
Chesapeake Insurance Company Limited*****.................... Bermuda
RC/Arby's Corporation (formerly Royal Crown
Corporation)................................................. Delaware
RCAC Asset Management, Inc............................... Delaware
Arby's, Inc.............................................. Delaware
Arby's Building and Construction Co................... Georgia
Arby's Canada Inc..................................... Canada
Daddy-O's Express, Inc................................ Georgia
Arby's (Hong Kong) Limited............................ Hong Kong
Arby's De Mexico S.A. de CV........................... Mexico
Arby's Immobiliara................................ Mexico
Arby's Servicios.................................. Mexico
TJ Holding Company, Inc............................... Delaware
Arby's Restaurants, Limited.............................. United Kingdom
Arby's Limited........................................... United Kingdom
Arby's Restaurant Construction Company................... Delaware
Arby's Restaurant Development Corporation................ Delaware
Arby's Restaurant Holding Company........................ Delaware
Arby's Restaurants, Inc.................................. Delaware
Arby's Restaurant Operations Company..................... Delaware
RC-8, Inc. (formerly Tyndale, Inc.)...................... Indiana
RC-11, Inc. (formerly National Picture &
Frame Co.)............................................. Mississippi
Promociones Corona Real, S.A. de C.V..................... Mexico
RC Leasing, Inc.......................................... Delaware
Royal Crown Nederland B.V................................ Netherland
RC Cola Canada Limited (formerly Nehi Canada
Limited)............................................... Canada
Royal Crown Bottling Company of Texas (formerly
Royal Crown Bottlers of Texas, Inc.)..................... Delaware
Royal Crown Company, Inc. (formerly Royal Crown
Cola Co.).............................................. Delaware
RC Services Limited******............................. Ireland
Retailer Concentrate Products, Inc.................... Florida
TriBev Corporation.................................... Delaware

- -------------
* 24.3% owned by Southeastern Public Service Company and 75.7% owned by
Triarc Companies, Inc.
** National Propane Corporation is the managing general partner
of both partnerships and holds a combined 2%. unsubordinated general
partner interest therein and a 38.7% subordinated general partner
interest in National Propane Partners, L.P. National Propane SGP, Inc.
is the special general partner of both partnerships and holds a combined
2% unsubordinated general partner interest therein. The public owns a
57.3% limited partner interest in National Propane Partners, L.P.
National Propane Partners, L.P. is the sole limited partner of National
Propane, L.P.
*** 50% owned by GS Holdings, Inc. and 50% owned by Southeastern Public
Service Company.
**** 94.6% owned by Triarc Companies, Inc. and 5.4% owned by Southeastern
Public Service Company.
***** Common Stock 100% owned by CFC Holdings; Preferred Stock is owned 38.5%
by RC/Arby's Corporation, 23% by Southeastern Public Service Company and
38.5% by TXL Corp.
****** 99% owned by Royal Crown Company, Inc. and 1% owned by RC/Arby's
Corporation.

<PAGE>

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No.
33-60551 of Triarc Companies, Inc. on Form S-8 of our reports dated March 31,
1997 (which express an unqualified opinion and includes an explanatory paragraph
as to a change in the method of accounting for impairment of long-lived assets
and for long-lived assets to be disposed of), appearing in this Annual Report on
Form 10-K of Triarc Companies, Inc. for the year ended December 31, 1996.

DELOITTE & TOUCHE LLP

New York, New York
March 31, 1997

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE ACCOMPANYING
FORM 10-K OF TRIARC COMPANIES, INC. FOR THE YEAR ENDED DECEMBER 31, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-K.
</LEGEND>
<CIK> 0000030697
<NAME> TRIARC COMPANIES, INC.
<MULTIPLIER> 1,000

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