-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZeO1LbOWRBSpApDTaEPcX0jFO5rprcG4u5uHyG/cN/h7fP1cxtP84J56/qjYPAlB D8VnHxEDtFgEQPhPxYl2UA== 0000030697-95-000014.txt : 19950516 0000030697-95-000014.hdr.sgml : 19950516 ACCESSION NUMBER: 0000030697-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIARC COMPANIES INC CENTRAL INDEX KEY: 0000030697 STANDARD INDUSTRIAL CLASSIFICATION: BROADWOVEN FABRIC MILLS, COTTON [2211] IRS NUMBER: 380471180 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02207 FILM NUMBER: 95539586 BUSINESS ADDRESS: STREET 1: 900 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 4076534000 MAIL ADDRESS: STREET 1: 900 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: DWG CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DWG CIGAR CORP DATE OF NAME CHANGE: 19680820 FORMER COMPANY: FORMER CONFORMED NAME: DEISEL WEMMER GILBERT CORP DATE OF NAME CHANGE: 19680820 10-Q 1 FORM 10Q FOR PERIOD 3/31/95 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to_________________ Commission file number: 1-2207 TRIARC COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 38-0471180 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 900 Third Avenue, New York, New York 10022 (Address of principal executive offices) (zip code) (212) 230-3000 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if it changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No There were 23,917,188 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 April 28, 1995. PART I. FINANCIAL INFORMATION Item 1. Financial Statements. TRIARC COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, March 31, 1994 1995 (In thousands) ASSETS (A) (Unaudited) Current assets: Cash and cash equivalents $ 80,064 $ 25,292 Marketable securities 9,453 9,395 Receivables, net 141,377 163,928 Inventories 105,662 105,594 Deferred income tax benefit 6,023 5,260 Prepaid expenses and other current assets 16,570 13,929 --------- --------- Total current assets 359,149 323,398 --------- --------- Properties, net 306,293 319,330 Unamortized costs in excess of net assets of acquired companies 202,797 201,028 Deferred costs and other assets 53,928 60,340 --------- --------- $ 922,167 $ 904,096 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Current portion of long-term debt $ 52,061 $ 39,863 Accounts payable 59,152 56,946 Accrued facilities relocation and corporate restructuring costs 22,773 8,705 Other accrued expenses 89,019 76,617 --------- --------- Total current liabilities 223,005 182,131 --------- --------- Long-term debt 612,118 614,374 Insurance loss reserves 10,827 10,739 Deferred income taxes 22,701 23,205 Deferred income and other liabilities 13,505 12,623 Redeemable preferred stock 71,794 -- Stockholders' equity (deficit): Common stock 2,798 3,398 Additional paid-in capital 79,497 162,710 Accumulated deficit (60,929) (54,210) Treasury stock (45,473) (45,946) Other (7,676) (4,928) --------- --------- Total stockholders' equity (deficit) (31,783) 61,024 --------- --------- $ 922,167 $ 904,096 ========= ========= (A) Derived from the audited consolidated financial statements as of December 31, 1994.
See accompanying notes to condensed consolidated financial statements. TRIARC COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31, ---------------------- 1994 1995 (In thousands except per share amounts) (Unaudited) Revenues: Net sales $258,693 $ 285,811 Royalties, franchise fees and other revenues 11,366 12,182 --------- --------- 270,059 297,993 --------- --------- Costs and expenses: Cost of sales 186,396 212,947 Advertising, selling and distribution 21,318 27,962 General and administrative 30,862 32,343 --------- --------- 238,576 273,252 --------- --------- Operating profit 31,483 24,741 Interest expense (17,035) (18,757) Other income, net 2,654 6,814 --------- --------- Income from continuing operations before income taxes and minority interests 17,102 12,798 Provision for income taxes (7,025) (6,079) --------- --------- 10,077 6,719 Minority interests in income of consolidated subsidiary (1,292) -- --------- --------- Net income $ 8,785 $ 6,719 ========= ========= Income per share: Primary $ .34 $ .23 ========= ========= Fully diluted $ .33 $ .22 ========= =========
See accompanying notes to condensed consolidated financial statements. TRIARC COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, ----------------------- 1994 1995 (In thousands) (Unaudited) Cash flows from operating activities: Net income $ 8,785 $ 6,719 Adjustments to reconcile net income to net cash and cash equivalents used in operating activities Depreciation and amortization of properties 8,406 9,099 Amortization of costs in excess of net assets of acquired companies 1,456 1,841 Amortization of original issue discount, deferred financing costs and unearned compensation 2,641 4,336 Provision for (reversal of) doubtful accounts (96) 784 Payments on facilities relocation and corporate restructuring (5,673) (1,075) Gain on sales of non-core businesses and properties (43) (2,230) Deferred income tax provision 3,176 1,267 Interest expense to be capitalized and not paid 801 889 Minority interests 1,292 -- Other, net (2,686) (1,066) Changes in operating assets and liabilities: Decrease (increase) in: Receivables (19,237) (23,335) Inventories (1,061) 778 Prepaid expenses and other current assets 3,797 1,682 Decrease in accounts payable and accrued expenses (33,078) (14,228) -------- -------- Net cash and cash equivalents used in operating activities (31,520) (14,539) -------- -------- Cash flows from investing activities: Acquisitions: Net current assets -- (426) Properties, net (7,547) (4,905) Trademarks, favorable lease acquisition costs, non-compete agreement and other assets (882) (6,403) Capitalized leases assumed and note payable issued 2,966 2,382 Costs in excess of net assets acquired (4,037) -- -------- -------- (9,500) (9,352) Proceeds from sales of non-core businesses and properties 232 2,969 Capital expenditures (11,260) (15,969) Purchase of marketable securities (5,927) (2,289) Proceeds from sales of marketable securities 4,022 2,449 -------- -------- Net cash and cash equivalents used in investing activities (22,433) (22,192) -------- -------- Cash flows from financing activities: Proceeds from long-term debt 8,630 -- Repayments of long-term debt (21,460) (15,483) Deferred financing costs -- (830) Acquisition of treasury stock -- (489) Payment of preferred dividends (2,917) -- -------- -------- Net cash and cash equivalents used in financing activities (15,747) (16,802) -------- -------- Net cash used in continuing operations (69,700) (53,533) Net cash provided by (used in) discontinued operations 376 (1,239) -------- -------- Net decrease in cash and cash equivalents (69,324) (54,772) Cash and cash equivalents at beginning of period 118,801 80,064 -------- -------- Cash and cash equivalents at end of period $ 49,477 $ 25,292 ======== ========
See accompanying notes to condensed consolidated financial statements. TRIARC COMPANIES, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 1995 (Unaudited) (1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Triarc Companies, Inc. ("Triarc" and, together with its subsidiaries, the "Company") have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. In the opinion of the Company, however, the accompanying condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company's financial position as of December 31, 1994 and March 31, 1995 and its results of operations and cash flows for the three-month periods ended March 31, 1994 and 1995. This information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994 ("Form 10-K"). Certain amounts included in the prior period's condensed consolidated financial statements have been reclassified to conform with the current period's presentation. (2) Inventories The following is a summary of the components of inventories:
December 31, March 31, 1994 1995 ---- ---- (In thousands) Raw materials $ 26,490 $ 29,990 Work in process 7,803 7,773 Finished goods 71,369 67,831 --------- --------- $105,662 $ 105,594 ========= =========
(3) Properties The following is a summary of the components of properties, net:
December 31, March 31, 1994 1995 ---- ---- (In thousands) Properties, at cost $515,109 $ 537,143 Less accumulated depreciation and amortization 208,816 217,813 --------- --------- $306,293 $ 319,330 ========= =========
(4) Posner Settlement On January 9, 1995 the Company entered into a settlement agreement (the "Settlement Agreement") with Victor Posner and certain entities controlled by him (collectively, the "Posner Entities"). Pursuant to the Settlement Agreement all of the 5,982,866 shares of redeemable preferred stock, with an aggregate book value of $71,794,000 and which were owned by the Posner Entities, were converted into 4,985,722 shares of the Company's Class B Common Stock (the "Conversion"). Further, an additional 1,011,900 shares of Class B Common Stock (valued at an aggregate $12,016,000) were issued to the Posner Entities (the "Issuance") in consideration for, among other matters, (i) the settlement of all amounts due to the Posner Entities in connection with termination of the lease for the Company's former headquarters ($12,326,000) and (ii) an indemnification by certain of the Posner Entities of any claims or expenses incurred after December 1, 1994 involving certain litigation and potential litigation relating to the Company and certain former affiliates. As a result of the Conversion and the Issuance, "Common stock" and "Additional paid-in capital" increased by $600,000 and $83,211,000, respectively, during the first quarter of 1995. The settlement of the lease termination resulted in a pretax gain to the Company of $310,000. In addition, the Company released accruals for (i) litigation expenses of $773,000 and (ii) interest on the lease termination obligation of $638,000. Further, pursuant to the Settlement Agreement, 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) certain legal fees related to shareholder litigation settled in 1993, (ii) fees payable to the court- appointed members of a special committee of the Company's Board of Directors (the "Special Committee") and (iii) legal fees paid or payable with respect to matters referred to in the Settlement Agreement, subject to the satisfaction by the Posner Entities of certain obligations under the Settlement Agreement. In accordance with an order issued by the United States District Court for the Northern District of Ohio on February 7, 1995, the Company used a portion of such funds to pay (i) $2,000,000 to the Special Committee for services rendered in connection with the consummation of the Settlement Agreement and related matters, (ii) attorney's fees of $850,000 in connection with the aforementioned shareholder litigation and (iii) $300,000 in connection with the settlement of certain litigation and other expenses related to the Settlement Agreement. Additionally, the Special Committee was disbanded and the three court-appointed members of the Special Committee decided not to stand for re-election as directors of the Company at the 1995 annual shareholders meeting. In connection therewith, the vesting of such directors' restricted stock was accelerated resulting in the recognition of previously unamortized deferred compensation of $1,690,000 during the first quarter of 1995 included in "General and administrative". As a result of all of the above, the Company recorded pretax income of $2,881,000 ($.06 per share after taxes on a fully diluted basis), consisting of charges, net, to "General and administrative" of $69,000 and credits to "Other income, net" of $2,312,000 and to "Interest expense" of $638,000, during the first quarter of 1995. (5) Income Per Share The common shares used in the calculations of primary and fully diluted income per share were as follows:
Three months ended March 31, ------------------ 1994 1995 ---- ---- (In thousands) Weighted average number of common shares outstanding 21,343 29,318 Common equivalent shares - effect of dilutive stock options 324 149 ------- ------- Common and common equivalent shares for primary per share purposes 21,667 29,467 Contingent issuances of common shares: Common shares which would have been issued upon the assumed conversion of preferred stock 4,986 -- Effect of common shares issued upon the conversion of preferred stock (see Note 4) assuming conversion as of the beginning of the period -- 499 Additional effect of dilutive stock options -- 26 ------- ------- Common, common equivalent and contingent shares for fully diluted per share purposes 26,653 29,992 ======= =======
The primary income per share has been computed by dividing the net income applicable to common stockholders (reduced by preferred stock dividend requirements of $1,458,000 for the three months ended March 31, 1994) by the number of common and common equivalent shares above. Fully diluted income per share has been computed by dividing the net income applicable to common stockholders, adjusted for the three months ended March 31, 1994 to add back the preferred stock dividend requirements noted above, by the number of common, common equivalent and contingent shares above. (6) Transactions with Related Parties The Company continues to have related party transactions of the same nature and general magnitude as those described in Note 28 to the consolidated financial statements contained in the Form 10-K. (7) Contingencies The Company continues to have legal and environmental contingencies of the same nature and general magnitude as those described in Note 25 to the consolidated financial statements contained in the Form 10-K. In connection with the Settlement Agreement (see Note 4) and as described in the Form 10-K, the Company received an indemnification from the Posner Entities of any claims or expenses incurred after December 1, 1994 involving certain litigation relating to the Company and certain of its former affiliates. After considering amounts provided in previous periods, the Company does not believe that the contingencies referred to above, as well as ordinary routine litigation, will have a material adverse effect on its consolidated financial position or results of operations. (8) Fire and Insurance Settlement On February 3, 1995 the Company's textile segment suffered fire damage to equipment in the weaving department at one of its manufacturing facilities. During the three months ended March 31, 1995 the textile segment received a settlement from its insurance company for the fire-damaged equipment and, in accordance therewith, recognized a pretax gain net of certain costs and expenses of $1,875,000 ($.04 per share after taxes on a fully diluted basis) included in "Other income, net". (9) Subsequent Event Effective as of May 1, 1995 two newly-formed wholly-owned subsidiaries of RC/Arby's Corporation ("RCAC" - a wholly-owned subsidiary of the Company), borrowed an aggregate of $37,294,000 from a commercial lender pursuant to a mortgage loan agreement. Borrowings consist of $34,384,000 of mortgage loans (the "Mortgage Loans") and $2,910,000 of equipment loans (the "Equipment Loans"), the proceeds of which will be used for capital expenditures, principally in the restaurant segment, general corporate purposes and to pay related fees and expenses. The Mortgage Loans and Equipment Loans (the "Loans") are repayable in equal monthly installments over twenty years and seven years, respectively, and bear interest at 11 1/2% plus, with respect to the Mortgage Loans, participating interest to the extent gross sales of the related restaurants exceed certain defined levels which are in excess of current levels. The two newly-formed wholly owned subsidiaries of RCAC may, at their option, eliminate the participating interest, if any, by effectively increasing the interest by amounts representing approximately 4% of the monthly principal and interest installments. The Loans are secured by restaurants and equipment with a net book value of $32,618,000 as of May 1, 1995. In connection therewith, all of the equipment securing the Equipment Loans, with a net book value of $2,747,000 as of May 1, 1995, has been released as security for the payment of RCAC's 9 3/4% senior notes due 2000. The assets of Arby's Restaurant Development Corporation, one of the new subsidiaries of RCAC, will not be available to pay creditors of Triarc, RCAC or RCAC's wholly-owned subsidiary, Arby's, Inc. until the Loans to it have been repaid in full. Triarc, the two new subsidiaries of RCAC and the commercial lender also entered into a commitment letter whereby the two subsidiaries will be able to borrow up to an additional $50,000,000 over the twelve months ending April 30, 1996, on substantially the same terms as described above to finance new restaurants. TRIARC COMPANIES, INC. AND SUBSIDIARIES Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations INTRODUCTION The "Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein should be read in conjunction with "Item 7. - Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K for the year ended December 31, 1994 ("Form 10-K") of Triarc Companies, Inc. ("Triarc" or, collectively with its subsidiaries, the "Company"). The recent trends affecting the Company's four business segments are described therein. RESULTS OF OPERATIONS Three Months Ended March 31, 1995 Compared with Three Months Ended March 31, 1994
Revenues Operating Profit Three months ended Three months ended March 31, March 31, ------------------ --------------- 1994 1995 1994 1995 ---- ---- ---- ---- (In thousands) Restaurants $ 48,836 $ 57,114 $ 3,625 $ 2,022 Soft Drink 35,252 45,516 7,591 4,681 Textiles 129,991 145,056 7,661 8,932 Liquefied Petroleum Gas 55,980 50,307 14,810 10,521 Other -- -- (246) (25) Unallocated general corporate expenses -- -- (1,958) (1,390) -------- -------- -------- -------- $270,059 $297,993 $ 31,483 $ 24,741 ======== ======== ======== ========
Revenues increased $27.9 millon to $298.0 million in the three months ended March 31, 1995. Restaurants - Revenues increased $8.2 million (17.0%) due to (i) an $8.7 million increase in net sales resulting from an average net increase of 48 (18.8%) company-owned restaurants partially offset by a $1.3 million (3.9%) decrease in company-owned same- store sales due to a decline in customer traffic and increased competitive discounting and (ii) a $0.8 million increase in royalties and franchise fees resulting from an average net increase of 74 (3.0%) franchised restaurants and a 1.0% increase in franchised same-store sales. Soft Drink - Revenues increased $10.3 million ($29.1%) reflecting (i) $5.0 million of finished soft drink product sales of C&C and the soft drink segment's branded products (as opposed to concentrate) arising from the Company's January 1995 acquisition of the trademark and distribution rights for C&C products and the distribution rights for the soft drink segment's branded products in the New York metropolitan area, (ii) a $3.2 million volume increase in branded concentrate sales principally due to domestic bottler forward buying in advance of an announced price increase effective in the second quarter of 1995 as well as significant sales to a new international customer and (iii) a $2.1 million volume increase in private label concentrate sales resulting from continued international expansion and domestic growth. Textiles - Revenues increased $15.1 million (11.6%) reflecting higher sales of indigo-dyed sportswear ($9.4 million) and utility wear ($7.4 million). The increase in indigo-dyed sportswear resulted from higher volume of $6.8 million due to improved market conditions reflecting the continued turnaround in the denim market which commenced in late 1994, higher selling prices reflecting the partial pass-through of higher cotton costs and improved product mix. The increase in utility wear resulted from higher volume ($4.2 million) reflecting stronger demand and higher selling prices reflecting the partial pass-through of higher cotton and polyester costs. Liquefied Petroleum Gas - Revenues decreased $5.7 million (10.1%) due to lower volume resulting from the exceptionally warm winter in virtually all markets where the liquefied petroleum ("LP") gas segment has operations. The winter was reputed to be the second warmest winter this century. Gross profit increased $1.4 million to $85.0 million in the three months ended March 31, 1995 while gross margin decreased to 28.5% compared to 31.0% for the comparable prior year period. Restaurants - Margins decreased due primarily to (i) reduced operating cost efficiencies as a result of start-up costs associated with the opening of new restaurants and lower company- owned same-store sales volume noted above and (ii) the proportionately lower royalties and franchise fees (with no associated cost of sales) as a percentage of total revenues. Soft Drink - Margins decreased due to the inclusion in the 1995 period of the lower-margin finished product sales resulting from the January 1995 acquisition noted above and, to a lesser extent, a shift in sales mix toward international sales where selling prices are lower. Textiles - Margins decreased principally due to the higher cost of cotton and polyester and other manufacturing costs in 1995 which could not be fully passed on to customers in the form of higher selling prices. Liquefied Petroleum Gas - Margins decreased due to higher propane costs which could only be partially passed on in the form of higher selling prices because of increased competition induced by substantially warmer weather. Advertising, selling and distribution expenses increased $6.6 million to $28.0 million in the three months ended March 31, 1995. Such increase principally consisted of (i) $4.9 million of higher expenses in the soft drink segment reflecting increased media and promotional activity and increased domestic and international key market development initiatives and (ii) $1.1 million of higher expenses in the restaurant segment primarily attributable to the increased number of company-owned restaurants and increased promotional food costs charged to advertising, selling and distribution expenses relating to the competitive discounting activity noted above. General and administrative expenses increased $1.5 million to $32.3 million in the three months ended March 31, 1995 principally due to costs associated with building an infrastructure within each of the restaurant and soft drink segments to facilitate expansion plans. Consolidated operating profit decreased $6.7 million to $24.7 million in the three months ended March 31, 1995 principally for the reasons described above. Interest expense increased $1.7 million to $18.8 million in the three months ended March 31, 1995 due to higher average levels of debt and, to a lesser extent, higher interest rates on the Company's floating-rate debt partially offset by the release of an accrual for $0.6 million of interest on a lease termination obligation which was settled in accordance with the January 1995 settlement agreement with Victor Posner (see Note 4 to the accompanying condensed consolidated financial statements). Other income, net increased $4.2 million to $6.8 million in the three months ended March 31, 1995. The major components of this increase were the (i) $2.3 million related to the January 1995 settlement agreement with Victor Posner (see Note 4 to the accompanying condensed consolidated financial statements) and (ii) a $1.9 million gain on insurance recovery relating to fire-damaged equipment. The provisions for income taxes in the three months ended March 31, 1995 and 1994 represent effective tax rates of 47% and 41%, respectively, which are higher than the Federal income tax statutory rate of 35% principally due to the effects of state income taxes, net of Federal benefit, and amortization of costs in excess of net assets of acquired companies which is not deductible for income tax purposes. Such effects in the 1994 quarter were partially offset by utilization of net operating loss carryforwards. The minority interests in net income of consolidated subsidiary in the 1994 period of $1.3 million consists of minority interests in the earnings 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. LIQUIDITY AND CAPITAL RESOURCES Consolidated cash and cash equivalents declined $54.8 million during the three months ended March 31, 1995 to $25.3 million at March 31, 1995. Such decrease reflects cash and cash equivalents used in (i) operating activities of $14.6 million, (ii) investing activities of $22.2 million, (iii) financing activities of $16.8 million and (iv) discontinued operations of $1.2 million. The net cash used in operating activities reflects net income of $6.7 million plus non-cash charges for depreciation and amortization of $15.3 million offset by (i) changes in operating assets and liabilities of $35.1 million and (ii) other items, net of $1.5 million. The change in operating assets and liabilities principally reflects an increase in receivables of $23.3 million and a decrease in accounts payable and accrued expenses of $14.2 million. The increase in receivables was due to (i) increased average daily sales, (ii) receivables resulting from the January 1995 soft drink acquisition discussed below and (iii) a $2.1 million insurance recovery receivable recorded during the three months ended March 31, 1995. The decrease in accounts payable and accrued expenses was due to (i) interest payments made during the first quarter of 1995 and (ii) the timing of payments for capital expenditures and trade payables. The cash used in investing activities principally reflects (i) capital expenditures of $16.0 million and (ii) cash paid for restaurant and soft drink acquisitions (see below) of $9.4 million partially offset by proceeds from sales of non- core businesses and properties of $3.0 million. The cash used in financing activities principally consists of repayments of long-term debt of $15.5 million. Total stockholders' equity improved to $61.0 million at March 31, 1995 from a deficit of $31.8 million at December 31, 1994. Such improvement was due to (i) the $83.8 million effect of the Company's issuances of its Class B Common Stock in connection with the settlement agreement described in Note 4 to the accompanying condensed consolidated financial statements, (ii) net income of $6.7 million, (iii) the recognition of $1.7 million of previously unamortized deferred compensation relating to the restricted stock of directors who declined to stand for re-election at the 1995 annual shareholders meeting and will provide no further service after the election of new directors in June 1995 and (iv) $0.6 million of other net increases. The Company's principal operating subsidiaries each have various credit facilities, including term loans, or senior note issuances outstanding which are described in detail in Note 13 to the consolidated financial statements contained in the Form 10-K. At March 31, 1995 Graniteville Company ("Graniteville") had $10.5 million of unused availability under its credit facility with an additional $8.0 million available at April 1, 1995 through June 30, 1995. National Propane Corporation ("National Propane") had $17.5 million of unused availability under its credit facility for general purposes, $14.5 million of availability for niche acquisitions and $30.0 million available conditioned upon completion of the intended merger of Public Gas Company ("Public Gas") and National Propane during the second quarter of 1995 and the redemption, in part, prior to December 31, 1995, of the $45.0 million outstanding principal amount of SEPSCO's 11 7/8% senior subordinated debentures due February 1, 1998 (the "11 7/8% Debentures"). Effective as of May 1, 1995 two newly-formed wholly-owned subsidiaries of RC/Arby's Corporation ("RCAC"), a wholly-owned subsidiary of Triarc, borrowed an aggregate of $37.3 million from a commercial lender pursuant to a mortgage loan agreement (the "Mortgage Loan Agreement"). Borrowings under the Mortgage Loan Agreement consist of $34.4 million of mortgage loans (the "Mortgage Loans") and $2.9 million of equipment loans (the "Equipment Loans"), the proceeds of which will be used for capital expenditures, principally in the restaurant segment, general corporate purposes and to pay related fees and expenses. The Mortgage Loans and Equipment Loans are repayable in equal monthly installments over twenty years and seven years, respectively, and bear interest at 11 1/2% plus, with respect to the Mortgage Loans, participating interest to the extent gross sales of the related restaurants exceed certain defined levels which are in excess of current levels. The two newly-formed wholly-owned subsidiaries of RCAC may, at their option, eliminate the participating interest, if any, by effectively increasing the interest by amounts representing approximately 4% of the monthly principal and interest installments. Triarc, the two new subsidiaries of RCAC and the commercial lender also entered into a commitment letter whereby the two subsidiaries will be able to borrow up to an additional $50.0 million over the twelve months ending April 30, 1996, on substantially the same terms as described above (the "Mortgage Loan Commitment"). Borrowings under the Mortgage Loan Commitment are limited to the financing of new restaurants. Principal repayments required under the Mortgage and Equipment Loans aggregate $0.4 million during the remainder of 1995. Under the Company's various debt agreements substantially all of the Company's assets are pledged as security. In addition, RCAC's 9 3/4% senior notes due 2000 (the "9 3/4% Senior Notes") have been guaranteed by RCAC's wholly-owned subsidiaries, Royal Crown Company, Inc. ("Royal Crown") and Arby's, Inc. ("Arby's") and the Graniteville Credit Facility and the Bank Facility have been guaranteed by Triarc. As collateral for such guarantees, all of the stock of Royal Crown, Arby's, Graniteville (50% of such stock is subject to a pre-existing pledge of such stock in connection with a Triarc intercompany note payable to SEPSCO in the principal amount of $26.5 million), National Propane and SEPSCO is pledged. The Company's debt instruments require aggregate principal payments of $23.4 million during the remainder of 1995, exclusive of requirements for the planned early repayment of the 11 7/8% Debentures, consisting of $9.0 million of payments of term loans under the Graniteville Credit Facility, $8.75 million of payments of term loans under the Bank Facility, $0.4 million of payments of borrowings under the Mortgage Loan Agreement and $5.25 million of payments of other debt. In connection with the merger of Public Gas and National Propane (in order to consolidate the Company's two LP gas operations within one entity) expected to occur later in the second quarter of 1995, the Company presently intends to cause SEPSCO to repay the 11 7/8% Debentures prior to maturity during 1995 with proceeds from a $30.0 million revolving loan (due 2000) under the Bank Facility (as previously discussed) and the remaining principal of $15.0 million from SEPSCO's existing cash and marketable securities ($17.3 million as of March 31, 1995). Consolidated capital expenditures, excluding properties of business acquisitions and including capital leases of $2.0 million, amounted to $18.0 million for the three months ended March 31, 1995. The Company expects that capital expenditures during the remainder of 1995 will approximate $64.0 million, subject to the availability of cash and other financing sources. These actual and anticipated expenditures are principally those of the restaurant segment in furtherance of its business strategies, principally for construction of new restaurants and remodeling of older restaurants (including the replacement of equipment). The Company anticipates it will meet its capital expenditures with a portion of the proceeds received from the Mortgage Loan Agreement, additional borrowings under the Mortgage Loan Commitment and through leasing arrangements; however, additions to the capitalized leases of RCAC (the parent of Arby's, the company which comprises the restaurant segment) are limited to $15.0 million annually for the aggregate of business acquisitions and capital expenditures, in accordance with the indenture pursuant to which the 9 3/4% Senior Notes were issued (of which approximately $4.4 million has been used through March 31, 1995). The Company anticipates financing its capital expenditures for new restaurants (expected to approximate $33.0 million) with $10.4 million of the remaining proceeds from borrowings under the Mortgage Loan Agreement and borrowings under the $50.0 Mortgage Loan Commitment and financing the remaining $19.0 million of planned capital expenditures of the restaurant segment with a combination of cash flows from operations and/or capital leases to the extent of their $10.6 million availability. Cash paid for business acquisitions amounted to $9.4 million during the three months ended March 31, 1995 almost entirely due to acquisitions of the Company's restaurant and soft drink segments. In February 1995 the Company's restaurant segment acquired an additional thirty-five previously franchised restaurants for cash of $6.4 million and the assumption of $2.4 million of capitalized lease obligations. In January 1995 the Company's soft drink segment acquired the trademark and distribution rights for C&C products and distribution rights for the soft drink segment's branded products in the New York metropolitan area and existing inventory for cash of $2.9 million. In furtherance of the Company's growth strategy, the Company will consider additional selective acquisitions, as appropriate, to build and strengthen its existing businesses. In connection therewith, the Company's restaurant segment signed a letter of intent to purchase sixteen franchised restaurants in Canada (expected to be consummated later in the second quarter of 1995) for cash of approximately $3.8 million and the assumption of approximately $2.0 million of capitalized leases. Under a program announced in late 1994, management of the Company has been authorized, when and if market conditions warrant, to repurchase, until June 1995, up to $20.0 million of its Class A Common Stock. Under this program, the Company repurchased 42,200 shares of Class A Common Stock during the first quarter of 1995 for an aggregate cost of $0.5 million. As of March 31, 1995 $18.5 million remains under the $20.0 million authorization. Such repurchases may continue through June 30, 1995 based on market conditions and the availability of funds for such purchases. As of March 31, 1995 the Company's principal cash requirements for the remainder of 1995 consist principally of capital expenditures of approximately $64.0 million to the extent not leased, debt principal payments aggregating $68.4 million (including the intended repayment prior to maturity of the 11 7/8% Debentures), $3.8 million for the acquisitions noted above and funding for additional acquisitions, if any, and funding for any requirements related to the stock repurchase program. The Company anticipates meeting such requirements through existing cash and cash equivalents and marketable securities, cash flows from operations, proceeds from borrowings under the Mortgage Loan Agreement, additional borrowings under the Mortgage Loan Commitment, borrowings available under Graniteville's and National Propane's credit facilities, and financing a portion of its capital expenditures through capital leases and operating lease arrangements. The ability of the Company to meet its long-term cash requirements is dependent upon its ability to obtain and sustain sufficient cash flows from operations supplemented as necessary by potential financings to the extent obtainable. Triarc Triarc is a holding company whose ability to meet its cash requirements is primarily dependent upon cash flows from its subsidiaries including loans and cash dividends to Triarc by subsidiaries 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. Under the terms of the various indentures, Triarc's principal subsidiaries are unable to pay any dividends or make any loans or advances to Triarc for the remainder of 1995, except for the following. Under the terms of its Bank Facility National Propane has $5.0 million available for the payment of dividends with an additional $30.0 million available which would be restricted to the redemption of SEPSCO's 11 7/8% Debentures which Triarc presently intends to cause SEPSCO to repay if and when the merger of Public Gas and National Propane is consummated. Under the indenture related to the 11 7/8% Debentures, SEPSCO was unable to pay any cash dividends to Triarc as of March 31, 1995, but may make loans or advances to Triarc and its subsidiaries. If and when the merger of Public Gas with National Propane is consummated and the 11 7/8% Debentures are repaid, the restriction on SEPSCO's ability to pay cash dividends to Triarc would be removed. As of March 31, 1995, Triarc had outstanding external indebtedness consisting of a $37.4 million note (including interest capitalized as additional principal of $3.2 million) issued in connection with the commutation of certain insurance obligations. In addition, Triarc owed subsidiaries an aggregate principal amount of $233.1 million, consisting of notes in the principal amounts of $49.3 million and $72.4 million owed to CFC Holdings and Graniteville, respectively (which bear interest at 9.5%), balances of $81.4 million of advances owed to National Propane (which bear interest at prime plus 1%) and $26.5 million and $3.5 million of notes payable to SEPSCO (which bear interest at 13% and 10.25%, respectively). Of the above indebtedness to subsidiaries, only the note payable to Graniteville requires the payment of cash interest (20% of the interest payment of April 15, 1995 and 40% of the payments of October 15, 1995 and thereafter). As of March 31, 1995 Triarc had notes receivable from RCAC and its subsidiaries in the aggregate amount of $25.5 million (of which $22.7 million bears an interest rate of 11.875% and $2.8 million bears a rate of 9.5%). Triarc expects its significant cash requirements for the remainder of 1995 will be limited to general corporate expenses including cash used in operations, loans or advances to the restaurant segment, as necessary, to enable it to meet its capital expenditure requirements, cash requirements for its facilities relocation and corporate restructuring accruals of $2.3 million and required interest payments of $2.1 million on its note payable to Graniteville (see above). Triarc believes that its expected sources of cash, including $6.0 million of repayments on notes receivable and $6.75 million of loans from RCAC or its subsidiaries received in May 1995, reimbursement of general corporate expenses from subsidiaries in connection with management services agreements to the extent such subsidiaries are able to pay and net payments received under tax sharing agreements with certain subsidiaries, which the Company does not anticipate having to remit to the IRS due to the availability of operating loss, depletion and tax credit carryforwards, will be sufficient to enable it to meet its short-term cash needs. RCAC As of March 31, 1995, RCAC's principal cash requirements for the remainder of 1995, exclusive of operating cash flows, consist principally of capital expenditures of approximately $52.0 million to the extent not leased, $3.8 million for the pending acquisition noted above, funding for additional acquisitions, if any, and debt (including borrowings under the Mortgage Loan Agreement) and affiliated note principal repayments of $17.6 million, of which $9.5 million of such affiliated note repayments were made from the proceeds of borrowings under the Mortgage Loan Agreement. RCAC anticipates meeting such requirements through cash flows from operations, borrowings under the Mortgage Loan Agreement, additional borrowings under the Mortgage Loan Commitment for new restaurants, borrowings and capital contributions to the extent available from Triarc and its subsidiaries, and financing a portion of its capital expenditures through capital leases and operating lease arrangements. The ability of the Company to meet its long-term cash requirements is dependent upon its ability to obtain and sustain sufficient cash flows from operations supplemented as necessary by potential financings to the extent obtainable. Graniteville and National Propane The Company expects that the continuing positive operating cash flows of Graniteville and National Propane and available borrowings, if required, under the Graniteville Credit Facility and the Bank Facility will be sufficient to enable those subsidiaries to meet their 1995 cash requirements. SEPSCO The Company expects that SEPSCO's existing cash and cash equivalents and marketable securities of $17.3 million at March 31, 1995, supplemented by collection of a $9.5 million note receivable from RCAC in connection with the Mortgage Loan Agreement financing will be more than adequate to meet its contractual cash requirements. Discontinued Operations As of March 31, 1995 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 two notes from the sale of the refrigeration business) which may be collected, the benefits of which, however, have not been recorded. Contingencies The Company continues to have legal and environmental contingencies of the same nature and general magnitude as those described in "Item 7. - Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Form 10-K. In connection with the Settlement Agreement (see Note 4 to the accompanying condensed consolidated financial statements) and as described in the Form 10-K, the Company received an indemnification from the Posner Entities of any claims or expenses incurred after December 1, 1994 involving certain litigation relating to the Company and certain of its former affiliates. After considering amounts provided in previous periods, the Company does not believe that the contingencies referred to above, as well as ordinary routine litigation, will have a material adverse effect on its consolidated financial position or results of operations. TRIARC COMPANIES, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 5. Other Information Effective as of May 1, 1995, RC/Arby's Corporation ("RCAC") and its affiliates entered into a series of transactions pursuant to which two new wholly-owned subsidiaries of RCAC, Arby's Restaurant Development Corporation ("ARDC") and Arby's Restaurant Holding Company ("ARHC"), obtained ownership of approximately 53 Arby's restaurants, in the aggregate, from RCAC and Arby's, Inc. ("Arby's"). In connection therewith, among other things, RCAC entered into contribution agreements with each of ARDC and ARHC to convey the real property and improvements relating to 37 and two Arby's restaurants to ARDC and ARHC, respectively. Arby's also entered into a purchase and sale agreement with each of ARDC and ARHC pursuant to which ARDC and ARHC purchased from Arby's ten and four restaurants, respectively, as well as the personal property and equipment from the 37 and two Arby's restaurants, respectively, being conveyed through the contribution agreements. ARDC entered into leases with a new wholly-owned subsidiary of RCAC, Arby's Restaurant Operations Company ("AROC") for each of the 47 restaurants acquired by it pursuant to which AROC will operate such restaurants. Triarc has, under certain circumstances, guaranteed payments by AROC under such leases. In addition, Arby's entered into license agreements with each of AROC and ARHC pursuant to which AROC and ARHC will operate the restaurants with Arby's as franchisor and AROC and ARHC as franchisees. Triarc has, under certain circumstances, guaranteed the payment by AROC of royalty payments under AROC's license agreements. Arby's also entered into management agreements with each of AROC, ARDC and ARHC pursuant to which Arby's will provide certain management services, as well as financial and accounting services to such companies. In connection with the foregoing transactions, ARDC entered into a loan agreement with FFCA Acquisition Corporation ("FFCA") pursuant to which ARDC borrowed an aggregate of approximately $29.4 million, of which approximately $27.7 million is a 20-year loan (the "ARDC Loan") secured by substantially all of the assets of ARDC, including the 47 Arby's restaurants and equipment acquired by ARDC as described above, and approximately $1.7 million is a seven-year loan secured by such equipment (the "ARDC Equipment Loan"). The ARDC Loan is repayable in equal monthly installments over the 20-year term of the loan and bears interest at the rate of 11.5% per annum, subject to adjustment, on a note by note basis, if the gross sales of the related Arby's restaurant exceeds a specified amount (participating interest). ARDC may, at its option, convert all or a portion of the ARDC Loan from a participating rate of interest to the payment of "additional interest," pursuant to which interest on each note would increase bi-annually by an amount equal to approximately 4% of the then applicable monthly loan repayment amount. The ARDC Loan matures on May 1, 2015. The ARDC Equipment Loan is repayable in equal monthly installments over the seven year term of the loan and bears interest at the rate of 11.5% per annum. The ARDC Equipment Loan matures on May 1, 2002. The assets of ARDC, which secure the ARDC Loan and the ARDC Equipment Loan, will not be available to pay creditors of Triarc, RCAC or Arby's until the ARDC Loan has been repaid in full. ARHC also entered into a financing transaction with FFCA pursuant to which it borrowed an aggregate of approximately $7.9 million, of which approximately $6.7 million is a 20-year loan (the "ARHC Loan") secured by substantially all of the assets of ARHC, including the six Arby's restaurants and equipment acquired by ARHC as described above and approximately $1.2 million is a seven-year loan secured by such equipment (the "ARHC Equipment Loan"). The ARHC Loan bears interest at the same annual interest rate as the ARDC Loan, provides for the payment of participating and additional interest, as described above, and is repayable in equal monthly installments. The ARHC Loan matures on May 1, 2015. The ARHC Equipment Loan is repayable in equal monthly installments over the seven-year term of the loan and bears interest at the rate of 11.5% per annum. The ARHC Equipment Loan matures on May 1, 2002. Triarc has guaranteed repayment by ARHC of the ARHC Loan and the ARHC Equipment Loan. The Company, ARDC, ARHC and FFCA also executed a commitment letter pursuant to which, in order to facilitate the building of new Arby's restaurants, ARDC and ARHC will be able to borrow an additional $50 million, in the aggregate, over the next twelve months on substantially the same terms as described above. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 4.1 - Third Amendment dated as of March 31, 1995 to the Revolving Credit and Term Loan Agreement, dated as of October 7, 1994, among National Propane Corporation, The Bank of New York, as agent, The First National Bank of Boston and Internationale Nederlanden (U.S.) Capital Corporation, as co-agents, and the lenders party thereto. 4.2 - Loan Agreement dated as of May 1, 1995 by and between FFCA Acquisition Corporation and Arby's Restaurant Development Corporation, incorporated herein by reference to Exhibit 4.1 to RC/Arby's Corporation Quarterly Report on Form 10-Q dated March 31, 1995 (SEC File No. 0-20286). 27.1- Financial Data Schedule for the fiscal quarter ended March 31, 1995, submitted to the Securities and Exchange Commission in electronic format. (b) Reports on Form 8-K The registrant filed a report on Form 8-K on January 11, 1995 with respect to the closing of the Settlement Agreement among the registrant, Security Management Corp., Victor Posner Trust No. 6 and Victor Posner. The registrant filed a report on Form 8-K on March 29, 1995 pursuant to which the registrant filed certain exhibits required to be filed in connection with its Annual Report on Form 10-K for the year ended December 31, 1994. TRIARC COMPANIES, INC. AND SUBSIDIARIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRIARC COMPANIES, INC. Date: May 15, 1995 By: /S/ JOSEPH A. LEVATO ____________________________________ Joseph A. Levato Executive Vice President and Chief Financial Officer (On behalf of the Company) By: /S/ FRED H. SCHAEFER ___________________________________ Fred H. Schaefer Vice President and Chief Accounting Officer (Principal accounting officer) EX-4.1 2 AMENDMENT TO LOAN AGREEMENT CONFORMED COPY THIRD AMENDMENT, dated as of March 31, 1995 (this "Amendment"), to the REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as of October 7, 1994 (as amended and as the same may be further amended, supplemented, modified or extended from time to time, the "Agreement"), among NATIONAL PROPANE CORPORATION, a Delaware corporation (the "Borrower"), each of the several lenders from time to time parties thereto (each a "Lender" and, collectively, the "Lenders"), THE BANK OF NEW YORK, as Administrative Agent for the Lenders (the "Administrative Agent") and THE FIRST NATIONAL BANK OF BOSTON and INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION, as Co-Agents. W I T N E S S E T H: WHEREAS, under the Agreement there are currently outstanding certain term loans (referred to therein as the "Tranche A Term Loans" and the "Tranche B Term Loans") in the principal amounts of $60,000,000 and $30,000,000, respectively, and there is available to the Borrower a revolving credit facility (referred to therein as the "Revolving Credit Commitment") in the amount of $40,000,000 a portion of which (referred to therein as the "Letter of Credit Sublimit") may be utilized by the issuance of letters of credit for the account of the Borrower, the outstanding balance of a portion of which (the "Acquisition Sublimit") is to be converted to term loans (referred to therein as the "Tranche D Term Loans") on the third anniversary of the Closing Date (as defined in the Agreement), and there is available an additional term loan (referred to therein as the "Tranche C Term Loan") in the amount of $20,000,000, subject, among other things, to (i) the prior or simultaneous merger of Public Gas Company into the Borrower and (ii) the prior or simultaneous repayment by Southeastern Public Service Company ("SEPSCO") of certain outstanding bonds (the "SEPSCO Bonds"); and WHEREAS, it is in the best interests of the Borrower, SEPSCO and Guarantor to consummate the Public Gas Merger (as defined in the Agreement) during the second quarter of 1995 and to postpone redemption by SEPSCO of the SEPSCO Bonds until no later than December 31, 1995; and WHEREAS, the Borrower desires to borrow the Tranche C Term Loan and to use the proceeds to prepay the Tranche A Term Loan in part, to obtain an increase in the Revolving Credit Commitment by $20,000,000 and to obtain a letter of credit the proceeds of which are to be used to make a Restricted Payment (as defined in the Agreement) previously contemplated to be made from the proceeds of the Tranche C Term Loan; and WHEREAS, under the Agreement, various financial covenants are measured against the Borrower's "Consolidated EBITDA", and for the purpose of calculating Consolidated EBITDA, as defined in the Agreement, management fees paid from the Borrower to Triarc Companies, Inc., a Delaware corporation (the "Guarantor"), are treated as an expense whether they are paid in cash or accrued; and WHEREAS, the Borrower and the Guarantor desire to postpone, from time to time, the payment of all or a portion of the management fees payable by Borrower to the Guarantor without affecting any of the Borrower's financial covenants; and WHEREAS, the parties desire to amend the Agreement to reflect the foregoing. NOW, THEREFORE, the parties hereby agree as follows: Section 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference contained in the Agreement shall, from and after the date hereof, refer to the Agreement as amended hereby. Section 2. Revolving Credit Commitment Increase. Effective as of the date on which the Tranche A Term Loan shall have been prepaid by $20,000,000 from the proceeds of the Tranche C Term Loan, the Total Revolving Credit Commitment shall be increased from $40,000,000 to $60,000,000 and Schedule 1 to the Agreement shall be replaced by Schedule 1 attached hereto. The Borrower shall execute and deliver to the Revolving Credit Lenders, in exchange for the Revolving Credit Notes held by them, new Revolving Credit Notes reflecting the increase in the Total Revolving Credit Commitment. Section 3. Amendment of Section 1.01(b) of the Agreement. Section 1.01(b) of the Agreement is hereby amended as follows: (a) The definition of "Consolidated EBITDA" is hereby amended to read in its entirety as follows: "'Consolidated EBITDA' means, for the Borrower for any period, the sum (without duplication) of (a) the consolidated net income of the Borrower and its Subsidiaries for such period, determined in accordance with GAAP, adjusted to exclude non-recurring gains and losses on unusual items (including without limitation, Asset Sales); and (b) income taxes, Consolidated Interest Expense, depreciation, and amortization (including without limitation, amortization associated with goodwill, deferred debt expenses, restricted stock and option costs and non- competition agreements) and all accrued but unpaid management fees payable to the Guarantor (including all such management fees which were previously paid to Guarantor but have been returned by Guarantor and thus are owing by Borrower to Guarantor) for such period." (b) The definition of the term "General Purposes Sublimit" is amended in its entirety to read as follows: "'General Purposes Sublimit' means, the $45 million portion of the Total Revolving Credit Commitment which may, at any one time, be borrowed for general corporate purposes or issued as a Letter of Credit or Letters of Credit pursuant to Section 2.08 hereof, and which is not a part of the `Acquisition Sublimit'." (c) The definition of the term "Letter of Credit Sublimit" is amended in its entirety to read as follows: "`Letter of Credit Sublimit' means, the $35 million portion of the General Purposes Sublimit which may at any one time be outstanding in the form of a Letter or Letters of Credit." Section 4. Amendment to Section 2.05(b)(i) of the Agreement. Section 2.05(b)(i) of the Agreement is hereby amended to read in its entirety as follows: "(i) The General Purposes Sublimit, and the Total Revolving Credit Commitment, shall be reduced by $30,000,000 at the close of business on December 31, 1995 if the letter of credit referred to in Section 7.02(a) shall not have been drawn on in accordance with its terms on or prior to that date. On the third anniversary of the Closing Date, the Acquisition Sublimit will terminate, and the Total Revolving Credit Commitment will be reduced by the amount of the Acquisition Sublimit then in effect. The Total Revolving Credit Commitment will automatically reduce by $1,416,666.66 on June 30, 1995, $1,416,666.67 on December 31, 1995, $1,500,000.00 on June 30, 1996, $1,500,000.00 on December 31, 1996, $1,541,666.67 on June 30, 1997, $1,541,666.67 on December 31, 1997, $1,979,166.67 on June 30, 1998, $1,979,166.67 on December 31, 1998, $2,020,833.33 on June 30, 1999 and $2,020,833.33 on December 31, 1999 (37.5% of each such reduction to be applied to a reduction of the Acquisition Sublimit as long as the same shall be in effect and the balance thereof to be applied to a reduction of the General Purposes Sublimit). The Revolving Credit Commitment shall be reduced to $0 pursuant to the mandatory prepayment described in Section 3.08. All such reductions shall be permanent. Section 5. Amendment to Section 3.09(a) of the Agreement. Section 3.09(a) of the Agreement is hereby amended to read in its entirety as follows: "Section 3.09. Additional Prepayment Provisions. (a) Pro Rata Reduction. Each prepayment (other than prepayments of Revolving Credit Loans required by mandatory reductions and terminations of the Total Revolving Credit Commitment pursuant to Section 2.05(b)(i)) (i) shall reduce pro rata each of the Tranche A Term Loans, Tranche B Term Loans and Tranche D Term Loans (to the extent they exist) and thereafter shall reduce pro rata the Tranche C Loans and thereafter shall reduce pro rata the Total Revolving Credit Commitment and (ii) shall reduce the installments of each such Loan pro rata among their maturities; provided that any such reduction in the Total Revolving Credit Commitment (other than a mandatory reduction pursuant to Section 2.05((b)(i)) shall first be applied to the Acquisition Sublimit and thereafter to the General Purposes Sublimit; and provided, further, that the prepayment from proceeds of the Tranche C Term Loan shall reduce only the Tranche A Term Loans. At the time of each such reduction of the Total Revolving Credit Commitment, the Borrower shall be required to prepay Revolving Credit Loans to the extent that the aggregate outstanding principal amount of Revolving Credit Loans and outstanding Letter of Credit Obligations would otherwise exceed the reduced Total Revolving Credit Commitment." Section 6. Amendment to Section 4.06 of the Agreement. Section 4.06 of the Agreement is hereby amended to read in its entirety as follows: "Section 4.06 Use of Proceeds. It is understood that funds provided by (a) Revolving Credit Loans made and Letters of Credit issued under the General Purposes Sublimit may be used for general corporate purposes of the Borrower (b) Revolving Credit Loans made under the Acquisition Sublimit may be used only for the purpose of making Permitted Acquisitions, (c) Tranche A Term Loans and Tranche B Term Loans may be used for the purpose of repaying the Subordinated Debt in full, (d) Revolving Credit Loans, Tranche A Term Loans and Tranche B Term Loans may be used for the purpose of making all or part of a Restricted Payment or Payments to the Guarantor or its Affiliates and (e) Tranche C Term Loans may be used only to prepay $20,000,000 of the Tranche A Term Loan." Section 7. Amendment of Section 7.02 of the Agreement. Section 7.02(a) of the Agreement is hereby deleted in its entirety and replaced with the following: "(a) At the request of the Borrower the Administrative Agent shall have issued a letter or letters of credit pursuant to Section 2.08 not to exceed the aggregate amount of $30,000,000 expiring on December 31, 1995, pursuant to which a drawing may be made only for the payment of dividends to the Guarantor which the Guarantor will use for the partial repayment of intercompany indebtedness of the Guarantor to SEPSCO and/or the payment of dividends to SEPSCO, provided that, (i) Guarantor shall have caused SEPSCO to give the trustee for the SEPSCO Bonds irrevocable notice of redemption of all of the SEPSCO Bonds then outstanding and (ii) Administrative Agent shall have received such assurances from the Guarantor as it may reasonably require that sufficient funds to redeem the portion of such SEPSCO Bonds in excess of the amount of such letter of credit drawing will be available to SEPSCO." The obligations of the Tranche C Term Lenders to make the Tranche C Term Loans will not be subject to the conditions precedent referred to in paragraphs (b) and (c) of Section 7.02, but a drawing under the letter of credit referred to in Section 7.02(a), as amended hereby, will be subject to the prior satisfaction of those conditions precedent. The issuance of and payment under such letter of credit will be deemed to constitute the $30,000,000 Restricted Payment referred to in Section 8.02(e)(i)(B) of the Agreement. Section 8. Amendment of Section 8.02(b)(i) of the Agreement. The proviso in Section 8.02(b)(i) of the Agreement is hereby deleted in its entirety. Section 9. Representations and Warranties. The Borrower represents and warrants to the Administrative Agent and the Lenders (a) that the execution and delivery of this Amendment by it has been duly authorized by all necessary corporate action, (b) that this Amendment constitutes the valid and legally binding obligation of the Borrower enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer and other similar laws relating to or affecting creditors' rights generally and to general equity principles and (c) the execution, delivery and performance of this Amendment does not violate or contravene the terms of the Borrower's charter documents, by-laws or any agreement or instrument binding on the Borrower or its property. Section 10. Governing Law. This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York. Section 11. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Section 12. Effectiveness. The amendment in Section 3(a) hereof shall become effective upon the execution of this Amendment by the Borrower, the Guarantor and the Required Banks (as defined in the Agreement). All other amendments effected hereby shall become effective upon the execution of this Amendment by the Borrower, the Guarantor and all of the Lenders. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. NATIONAL PROPANE CORPORATION By: /s/ Terry D. Weikel Name: Terry D. Weikel Title: Senior Vice President & CFO THE BANK OF NEW YORK, as Administrative Agent and as a Lender By: /s/ Robert W. Towns Name: Robert W. Towns Title: Vice President THE FIRST NATIONAL BANK OF BOSTON By: /s/ Michael Kane Name: Michael Kane Title: Managing Director THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Nathan L. Bloch Name: Nathan L. Bloch Title: Vice President INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION By: /s/ Robert L. Fellows Name: Robert L. Fellows Title: Vice President USL CAPITAL CORPORATION By: /s/ Craig F. Bruzzone Name: Craig F. Bruzzone Title: Vice President, Municipal and Corporate Finance PILGRIM PRIME RATE TRUST By: /s/ Kathleen Lenarcic Name: Kathleen Lenarcic Title: Assistant Portfolio Manager VAN KAMPEN MERRITT PRIME RATE INCOME TRUST By: /s/ Jeffrey W. Maillet Name: Jeffrey W. Maillet Title: Vice Pres. & Portfolio Mgr. Triarc Companies Inc., as Guarantor, hereby consents to the foregoing Third Amendment TRIARC COMPANIES, INC. By: /s/ T. E. Shultz Vice President & Asst. Treasurer SCHEDULE 1 Revolving Credit Commitments Commitment As Lender of Effective Date The Bank of New York $25,384,615.38 Internationale Nederlanden (U.S.) 10,615,384.62 Capital Corporation The First National Bank of Chicago 9,000,000.00 The First National Bank of Boston 15,000,000.00 $60,000,000.00 EX-27 3 FINANCIAL DATA SCHEDULE FOR 3/31/95
5 This schedule contains summary financial information extracted from the condensed consolidated financial statements included in the accompanying Form 10-Q of Triarc Companies, Inc. for the three-month period ended March 31, 1995 and is qualified in its entirety by reference to such Form 10-Q. 0000030697 TRIARC COMPANIES, INC. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 25,292 9,395 163,928 0 105,594 323,398 537,143 217,813 904,096 182,131 614,374 3,398 0 0 57,626 904,096 285,811 297,993 212,947 212,947 0 0 18,757 12,798 6,079 6,719 0 0 0 6,719 .23 .22
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