Exhibit 99.1
------------
Triarc Companies, Inc.
280 Park Avenue
New York, NY 10017
For Immediate Release
CONTACT: Anne A. Tarbell
(212) 451-3030
www.triarc.com
TRIARC REPORTS SECOND QUARTER AND FIRST HALF 2005 RESULTS
o Arby's(R) same store sales continue to increase
o Deerfield's assets under management exceed $10 billion
New York, NY, August 11, 2005 - Triarc Companies, Inc. (NYSE: TRY; TRY.B)
announced today the results of operations for its second quarter and first half
ended July 3, 2005.
Consolidated Highlights
-----------------------
o Consolidated revenues increased to $93.7 million in the 2005 second quarter
($181.4 million in the 2005 first half) from $77.5 million in the 2004
second quarter ($146.7 million in the 2004 first half) primarily reflecting
$11.8 million in asset management and related fees of Deerfield & Company
LLC ("Deerfield") ($24.7 million in the 2005 first half), in which Triarc
acquired an approximate 64% capital interest in July 2004, as well as
increases in royalties and franchise and related fees and net sales from
company-owned Arby's(R) restaurants for the 2005 periods. Second quarter
2005 Arby's systemwide same-store sales were up 3% versus the 2004 second
quarter (up 3% in the 2005 first half).
o Consolidated net income was $0.4 million, or $0.01 per diluted Class A and
Class B share, in the 2005 second quarter (net income of $3.1 million, or
$0.05 per diluted Class A and Class B share, in the 2005 first half),
compared with a net loss of $(1.3) million, or $(0.02) per diluted Class A
and Class B share in the 2004 second quarter (net loss of $(4.4) million,
or $(0.07) per diluted Class A and Class B share, in the 2004 first half).
o Consolidated earnings before interest, taxes, depreciation and amortization
("EBITDA") (which we define as operating profit plus depreciation and
amortization, other than amortization of deferred financing costs) was $8.3
million in the 2005 second quarter ($14.2 million in the 2005 first half),
compared with $6.8 million in the 2004 second quarter ($10.1 million in the
2004 first half). The attached table provides the calculation of EBITDA and
a reconciliation of EBITDA to our consolidated net income (loss).
o Consolidated operating profit decreased to $2.7 million in the 2005 second
quarter ($3.2 million in the 2005 first half) compared with $3.3 million in
the 2004 second quarter ($3.3 million in the 2004 first half), due to
higher general and administrative expenses, principally reflecting higher
incentive compensation, increased headcount and a second quarter 2005
provision for stock-based compensation, primarily offset by the impact of
the restaurant revenue increases noted above and the operating profit of
Deerfield.
o The 2005 second quarter included a $3.1 million gain ($12.7 million in the
2005 first half) primarily related to sales of common stock of Encore
Capital Group, Inc. (NASDAQ: ECPG), a strategic equity investment of the
Company. The Company currently owns approximately 5.4% of Encore's
outstanding shares.
o Consolidated depreciation and amortization was $5.5 million in the 2005
second quarter ($11.1 million in the 2005 first half) versus $3.5 million
in the 2004 second quarter ($6.8 million in the 2004 first half). These
increases reflect the depreciation and amortization related to Deerfield as
well as the depreciation and amortization of software and hardware related
to the implementation of new back office and point-of-sale systems at
company-owned Arby's restaurants in the second half of 2004.
o Consolidated interest expense was $12.5 million in the 2005 second quarter
($22.7 million in the 2005 first half), compared with $9.0 million in the
2004 second quarter ($18.6 million in the 2004 first half). These increases
principally reflect activity of the Deerfield Opportunities Fund (the
"Opportunities Fund"), a multi-strategy hedge fund managed by Deerfield in
which the Company has an investment and which employs leverage in its
investment strategies, partially offset by lower balances of the majority
of the Company's debt.
o Consolidated net investment income increased to $7.6 million in the 2005
second quarter ($16.7 million in the 2005 first half) from $4.6 million in
the 2004 second quarter ($11.2 million in the 2004 first half). These
increases primarily reflect (1) increases in interest income principally
due to the activity of the Opportunities Fund and, to a lesser extent, an
increase in average rates on interest-bearing investments and (2) charges
in the 2004 periods for other than temporary unrealized losses that did not
recur to the same extent in the 2005 periods. These increases were
partially offset by decreases in recognized net gains (losses) principally
reflecting realized net losses on securities sold short with an obligation
to purchase.
Restaurant Operations Highlights
--------------------------------
o On July 25, 2005, Triarc completed the acquisition of RTM Restaurant Group
("RTM"). RTM was Arby's largest franchisee, with 775 Arby's restaurants in
22 states. Beginning in the 2005 third quarter, the financial results of
Triarc's restaurant operations will reflect the inclusion of RTM. As a
result of the RTM acquisition, among other things, for the remainder of
2005, our restaurant operations' net sales are expected to increase
significantly while our royalties and franchise and related fees will
decrease significantly due to the elimination in consolidation of royalties
and franchise and related fees from RTM.
o Net sales from the company-owned Arby's restaurants were $55.0 million in
the 2005 second quarter ($106.2 million in the 2005 first half), compared
with $52.7 million in the 2004 second quarter ($99.4 million in the 2004
first half). Royalties and franchise and related fees were $26.9 million in
the 2005 second quarter ($50.5 million in the 2005 first half), up from
$24.8 million in the 2004 second quarter ($47.3 million in the 2004 first
half).
o The 2005 second quarter increase in sales from company-owned restaurants of
$2.3 million ($6.8 million for the 2005 first half) reflects the effect of
a 4% increase in same-store sales for company-owned restaurants in the 2005
second quarter (6% increase in same-store sales in the 2005 first half)
compared with the 3% increase in the 2004 second quarter (relatively flat
same-stores sales performance in the 2004 first half). These increases
reflect new product introductions including Market Fresh(R) wraps and
sandwiches, improved marketing, advertising and promotional programs and
operational initiatives targeting continued improvement in customer service
levels and convenience.
o 2005 second quarter same-store sales for franchised restaurants increased
3% (3% for the 2005 first half) compared with a 4% increase in same-store
sales in the 2004 second quarter (2% increase in the 2004 first half),
reflecting the impact of the new product introductions and advertising and
marketing programs discussed above. Royalties and franchise and related
fees were also positively impacted by royalties from 86 franchised Arby's
restaurants opened since June 27, 2004, with generally higher than average
sales volumes, replacing the royalties from 62 generally underperforming
franchised restaurants closed since June 27, 2004.
o Systemwide same-store sales were up 3% in the 2005 second quarter (up 3% in
the 2005 first half) versus an increase of 4% in the 2004 second quarter
(up 2% in the 2004 first half). While third quarter 2005 systemwide
same-store sales are expected to be relatively flat, given an exceptionally
strong performance in the 2004 third quarter, we currently expect the
increase in systemwide same-store sales to be positive for the remainder of
2005, primarily reflecting the impact of new advertising and marketing
initiatives as well as new product introductions.
o The gross margin for our company-owned restaurants increased to 25% of
sales in the 2005 second quarter from 21% in the 2004 second quarter and to
24% in the 2005 first half from 21% in the 2004 first half. These increases
principally reflect improved product mix, better oversight and training of
store management, improved operational reporting made available by the new
back office and point-of-sale restaurant systems implemented in the second
half of 2004 that facilitated labor efficiencies and reduced food waste and
the impact of certain price increases for some of our Arby's products.
o Our restaurant business operating profit increased to $19.9 million in the
2005 second quarter ($34.0 million in the 2005 first half) versus $14.9
million in the 2004 second quarter ($26.9 million in the 2004 first half),
reflecting the impact of the revenue increases and improved gross margins
noted above.
o Depreciation and amortization from our restaurant operations was $2.6
million in the 2005 second quarter ($5.5 million in the 2005 first half)
versus $2.3 million in the 2004 second quarter ($4.3 million in the 2004
first half). These increases reflect the implementation of new back office
and point-of-sale restaurant systems in our company-owned restaurants.
o Restaurant business EBITDA was $22.4 million in the 2005 second quarter
($39.5 million in the 2005 first half), compared with $17.2 million in the
2004 second quarter ($31.2 million in the 2004 first half), reflecting the
factors discussed above. Restaurant EBITDA is reconciled to consolidated
EBITDA, which is in turn reconciled to consolidated net income (loss), in
the attached table.
o In the 2005 second quarter, the Arby's system opened 26 new units (37 in
the 2005 first half) and closed 11 generally underperforming units (24 in
the 2005 first half). As of July 3, 2005, Arby's had commitments from
franchisees to build 432 new units through 2011, including commitments from
RTM to build 171 new units.
Asset Management Highlights
---------------------------
o Triarc accounts for Deerfield, its asset management business, as a
consolidated subsidiary with a minority interest. For the 2005 second
quarter, Deerfield's reported asset management and related fees, operating
profit, depreciation and amortization and EBITDA, after the effects of
purchase accounting adjustments associated with the Deerfield acquisition
in July 2004 and before the effect of minority interests, were $11.8
million, $0.1 million, $1.5 million and $1.6 million, respectively. For the
2005 first half, those amounts were $24.7 million, $3.0 million, $2.6
million and $5.6 million, respectively.
o Excluding the effects of purchase accounting adjustments associated with
the Deerfield acquisition in July 2004, for the 2005 second quarter,
Deerfield's asset management and related fees, operating profit,
depreciation and amortization and EBITDA, before the effect of minority
interests, were $11.9 million, $1.6 million, $0.1 million and $1.7 million,
respectively. For the 2005 first half, those amounts were $25.4 million,
$5.9 million, $0.2 million and $6.1 million, respectively. The attached
table provides a reconciliation of these measures to the corresponding
measures without exclusion of the effects of purchase accounting
adjustments associated with the Deerfield acquisition.
o As of August 1, 2005, Deerfield had approximately $10.2 billion of assets
under management ("AUM"), of which approximately $117 million was
attributable to investments by Triarc. Deerfield's AUM at August 1, 2005
consisted of approximately $8.5 billion in 18 CDOs and a structured loan
fund, approximately $900 million in six hedge funds, approximately $730
million in a real estate investment trust and approximately $70 million in
several managed accounts.
o On June 29, 2005, Deerfield Triarc Capital Corp. ("Deerfield Triarc")
completed the initial public offering of approximately 25 million shares of
its common stock and began trading on the New York Stock Exchange under the
ticker symbol "DFR." Formed in December 2004, Deerfield Triarc is a real
estate investment trust managed by Deerfield that invests in real
estate-related securities and various other asset classes, which currently
has approximately $730 million in net equity. Triarc and its subsidiaries
beneficially own approximately 2.7% of Deerfield Triarc's common stock.
Commenting on asset management operations, Nelson Peltz, Triarc's Chairman
and Chief Executive Officer, said: "We are very pleased with both the growth of
Deerfield's assets under management and the expansion of its asset management
activities."
Peltz added: "We expect Deerfield's assets under management to continue to
grow due to its strong CDO franchise and anticipated growth in product
offerings. As a result, we expect Deerfield to deliver higher asset management
and related fees and improved operating profit. Greg Sachs and his team have
built a strong asset management franchise with an exciting future."
Commenting on Arby's 2005 first half results, Peter May, Triarc's President
and Chief Operating Officer, said: "Arby's first half financial results were
strong. We are particularly pleased with the continued improvement in Arby's
operating performance."
May added: "We are excited about the RTM acquisition. The combination of
our restaurant operations with RTM creates a large, fully integrated and growing
restaurant company. We believe that Doug Benham and his team will provide strong
and effective leadership at the newly formed Arby's Restaurant Group."
Commenting on Triarc's possible corporate restructuring, Peltz concluded:
"As we look ahead, we see a number of opportunities for growth at both Arby's
and Deerfield. Both businesses, led by strong management teams, have great
organizations capable of further expansion. The proposed corporate restructuring
has the potential to unlock the value of both businesses. In the coming months,
our Board of Directors and senior management will continue to thoroughly review
the feasibility, as well as the risks and opportunities, of a possible corporate
restructuring, with the goal of enhancing Triarc shareholder value."
Triarc is a holding company and, through its subsidiaries, the franchisor
of the Arby's restaurant system, which is comprised of approximately 3,500
restaurants. Of these restaurants, more than 1,000 are owned and operated by
subsidiaries of Triarc. Triarc also owns an approximate 64% capital interest in
Deerfield & Company LLC, a Chicago-based asset manager offering a diverse range
of fixed income and credit-related strategies to institutional investors with
$10.2 billion under management as of August 1, 2005.
# # #
Notes and Table To Follow
NOTES TO PRESS RELEASE
----------------------
1. In addition to the results provided in accordance with U.S. Generally
Accepted Accounting Principles ("GAAP") in this press release, we
present EBITDA because we believe it is a useful supplement to
operating profit in understanding and assessing our consolidated
results as well as the results of our segments. We also use EBITDA to
evaluate our segment performance and allocate resources. Because all
companies do not calculate EBITDA or similarly titled financial
measures in the same way, those measures may not be consistent with
the way we calculate EBITDA. Our presentation of EBITDA is not
intended to replace the presentation of our financial results in
accordance with GAAP. EBITDA should not be considered as an
alternative to operating profit or net income or (loss).
2. In addition to the results provided in accordance with GAAP in this
press release, we present Deerfield's asset management and related
fees, operating profit, depreciation and amortization and EBITDA
before the effect of minority interests, excluding the effects of
purchase accounting adjustments associated with the Deerfield
acquisition. We believe these non-GAAP financial measures enhance
management's ability to compare Deerfield's historical and future
operating results and to compare Deerfield's operating results to
those of its competitors. We also believe these non-GAAP financial
measures are useful to investors in allowing for greater transparency
of supplemental information used by management in its financial and
operational decision-making. Our presentation of certain non-GAAP
performance measures of Deerfield is not intended to replace the
presentation of its financial results in accordance with GAAP.
3. Systemwide same-store sales represent sales at all company-owned and
all franchised stores. We believe that reviewing the increase or
decrease in systemwide same-store sales compared with the same period
in the prior year is useful to investors in analyzing the growth of
the Arby's brand and assessing trends in our restaurant operations.
4. We define gross margin as the difference between net sales and cost of
sales divided by net sales.
5. The description of the RTM acquisition contained herein is only a
summary and is qualified in its entirety by reference to the
definitive agreements relating to the acquisition, copies of which
have been filed by us with the Securities and Exchange Commission as
exhibits to our current and/or periodic filings under the Securities
Exchange Act of 1934, as amended.
6. There can be no assurance RTM will be successfully integrated into our
existing operations.
7. There can be no assurance that we will be able to identify appropriate
future acquisition targets or that we will be able to successfully
integrate any future acquisitions into our existing operations.
8. The statements in this press release that are not historical facts,
including, most importantly, information concerning possible or
assumed future results of operations of Triarc Companies, Inc. and its
subsidiaries (collectively, "Triarc" or the "Company") and statements
preceded by, followed by, or that include the words "may," "believes,"
"plans," "expects," "anticipates" or the negation thereof, or similar
expressions, constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"). All statements that address operating performance,
events or developments that are expected or anticipated to occur in
the future, including statements relating to revenue growth, earnings
per share growth or statements expressing general optimism about
future operating results, are forward-looking statements within the
meaning of the Reform Act. These forward-looking statements are based
on our current expectations, speak only as of the date of this press
release and are susceptible to a number of risks, uncertainties and
other factors. Our actual results, performance and achievements may
differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. For those
statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Reform Act. Many important
factors could affect our future results and could cause those results
to differ materially from those expressed in the forward-looking
statements contained herein. Such factors include, but are not limited
to, the following:
o competition, including pricing pressures and the potential impact of
competitors' new units on sales by Arby's(R) restaurants;
o consumers' perceptions of the relative quality, variety and value of
the food products the Company offers;
o success of operating initiatives;
o development costs;
o advertising and promotional efforts;
o brand awareness;
o the existence or absence of positive or adverse publicity;
o new product and concept development by the Company and its
competitors, and market acceptance of such new product offerings and
concepts;
o changes in consumer tastes and preferences, including changes
resulting from concerns over nutritional or safety aspects of beef,
poultry, french fries or other foods or the effects of food-borne
illnesses such as "mad cow disease" and avian influenza or "bird flu";
o changes in spending patterns and demographic trends;
o the business and financial viability of key franchisees;
o the timely payment of franchisee obligations due to the Company;
o availability, location and terms of sites for restaurant development
by the Company and its franchisees;
o the ability of the Company's franchisees to open new restaurants in
accordance with their development commitments, including the ability
of franchisees to finance restaurant development;
o delays in opening new restaurants or completing remodels;
o anticipated or unanticipated restaurant closures by the Company and
its franchisees;
o the Company's ability to identify, attract and retain potential
franchisees with sufficient experience and financial resources to
develop and operate Arby's restaurants;
o changes in business strategy or development plans, and the willingness
of the Company's franchisees to participate in its strategy;
o business abilities and judgment of the Company's and its franchisees'
management and other personnel;
o availability of qualified restaurant personnel to the Company and to
its franchisees;
o the Company's ability, if necessary, to secure alternative
distribution of supplies of food, equipment and other products to
Arby's restaurants at competitive rates and in adequate amounts, and
the potential financial impact of any interruptions in such
distribution;
o changes in commodity (including beef), labor, supplies and other
operating costs and availability and cost of insurance;
o adverse weather conditions;
o significant reductions in the Company's client assets under management
(which would reduce the Company's advisory fee revenue), due to such
factors as weak performance of the Company's investment products
(either on an absolute basis or relative to our competitors or other
investment strategies), substantial illiquidity or price volatility in
the fixed income instruments that the Company trades, loss of key
portfolio management or other personnel, reduced investor demand for
the types of investment products the Company offers, and loss of
investor confidence due to adverse publicity;
o increased competition from other asset managers offering similar types
of products to those the Company offers;
o pricing pressure on the advisory fees that the Company can charge for
its investment advisory services;
o difficulty in increasing assets under management, or efficiently
managing existing assets, due to market-related constraints on trading
capacity or lack of potentially profitable trading opportunities;
o removal of the Company as investment manager of one or more of the
collateral debt obligation vehicles (CDOs) or other accounts it
manages, or the reduction in the Company's CDO management fees because
of payment defaults by issuers of the underlying collateral;
o availability, terms (including changes in interest rates) and
deployment of capital;
o changes in legal or self-regulatory requirements, including
franchising laws, investment management regulations, accounting
standards, environmental laws, overtime rules, minimum wage rates and
taxation rates;
o the costs, uncertainties and other effects of legal, environmental and
administrative proceedings;
o the impact of general economic conditions on consumer spending or
securities investing, including a slower consumer economy and the
effects of war or terrorist activities;
o the Company's ability to identify appropriate acquisition targets in
the future and to successfully integrate any future acquisitions into
its existing operations; and
o other risks and uncertainties affecting the Company referred to in its
Annual Report on Form 10-K for the fiscal year ended January 2, 2005
(see especially "Item 1. Business--Risk Factors" and "Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations") and in its other current and periodic filings
with the Securities and Exchange Commission, all of which are
difficult or impossible to predict accurately and many of which are
beyond the Company's control.
All future written and oral forward-looking statements attributable to us
or any person acting on our behalf are expressly qualified in their entirety by
the cautionary statements contained or referred to above. New risks and
uncertainties arise from time to time, and it is impossible for us to predict
these events or how they may affect us. We assume no obligation to update any
forward-looking statements after the date of this press release as a result of
new information, future events or developments, except as required by federal
securities laws. In addition, it is our policy generally not to make any
specific projections as to future earnings, and we do not endorse any
projections regarding future performance that may be made by third parties.
Triarc Companies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Second Quarter and Six Months Ended June 27, 2004 and July 3, 2005
Second Quarter Ended Six Months Ended
-------------------- -----------------
2004 2005 2004 2005
---- ---- ---- ----
(In thousands except per share amounts)
(Unaudited)
Revenues:
Net sales............................................$ 52,661 $ 54,989 $ 99,385 $ 106,179
Royalties and franchise and related fees............. 24,804 26,947 47,271 50,526
Asset management and related fees (a)................ -- 11,787 -- 24,715
--------- --------- --------- ---------
77,465 93,723 146,656 181,420
--------- --------- --------- ---------
Costs and expenses:
Cost of sales, excluding depreciation and
amortization....................................... 41,604 41,038 78,989 80,227
Cost of services, excluding depreciation and
amortization (a)................................... -- 4,614 -- 8,763
Advertising and selling.............................. 4,629 4,427 8,796 9,010
General and administrative, excluding
depreciation and amortization...................... 24,472 35,374 48,782 69,188
Depreciation and amortization, excluding
amortization of deferred financing costs........... 3,464 5,541 6,815 11,067
--------- --------- --------- ---------
74,169 90,994 143,382 178,255
--------- --------- --------- ---------
Operating profit................................. 3,296 2,729 3,274 3,165
Interest expense....................................... (9,004) (12,484) (18,638) (22,737)
Insurance expense related to long-term debt............ (958) (859) (1,949) (1,763)
Investment income, net................................. 4,645 7,576 11,169 16,676
Gain on sale of businesses............................. 6 3,056 22 12,664
Other income, net...................................... 779 1,483 739 1,113
--------- --------- --------- ---------
Income (loss) from continuing operations before
income taxes and minority interests ........... (1,236) 1,501 (5,383) 9,118
(Provision for) benefit from income taxes.............. (50) (497) 941 (3,010)
Minority interests in income (loss) of consolidated
subsidiaries......................................... 10 (1,056) 10 (3,481)
--------- --------- --------- ---------
Income (loss) from continuing operations......... (1,276) (52) (4,432) 2,627
Gain on disposal of discontinued operations............ -- 471 -- 471
--------- --------- --------- ---------
Net income (loss)................................$ (1,276) $ 419 $ (4,432) $ 3,098
========= ========= ========= =========
EBITDA (b).............................................$ 6,760 $ 8,270 $ 10,089 $ 14,232
========= ========= ========= =========
Basic and diluted income (loss) per share of Class A
common stock and Class B common stock:
Continuing operations..............................$ (.02) $ -- $ (.07) $ .04
Discontinued operations............................ -- .01 -- .01
--------- -------- --------- ---------
Net income (loss)..................................$ (.02) $ .01 $ (.07) $ .05
========= ======== ======== =========
Shares used to calculate income (loss) per share:
Class A common stock
Basic.............................................. 22,319 23,749 21,156 23,729
========= ========= ========= =========
Diluted............................................ 22,319 (c) 23,749 (c) 21,156 (c) 24,913
========= ========= ========= =========
Class B common stock
Basic.............................................. 40,675 41,921 40,415 41,882
========= ========= ========= =========
Diluted............................................ 40,675 (c) 41,921 (c) 40,415 (c) 44,656
========= ========= ========= =========
<FN>
(a) On July 22, 2004 the Company completed the acquisition of a 63.6% capital
interest in Deerfield. Deerfield, through its wholly-owned subsidiary
Deerfield Capital Management LLC, is an asset manager offering a diverse
range of fixed income and credit-related strategies to institutional
investors.
</FN>
(b) The calculation of EBITDA by segment and a reconciliation of consolidated
EBIDTA to net income or loss follow:
Second Quarter Ended Six Months Ended
-------------------- -------------------
2004 2005 2004 2005
---- ---- ---- ----
(In thousands)
Operating profit (loss):
Restaurants................................................$ 14,867 $ 19,879 $ 26,863 $ 34,006
Asset management .......................................... -- 111 -- 2,951
General corporate.......................................... (11,571) (17,261) (23,589) (33,792)
--------- --------- ---------- --------
Consolidated operating profit............................. 3,296 2,729 3,274 3,165
--------- --------- ---------- --------
Plus: depreciation and amortization, excluding amortization
of deferred financing costs:
Restaurants................................................ 2,333 2,553 4,348 5,489
Asset management........................................... -- 1,534 -- 2,617
General corporate.......................................... 1,131 1,454 2,467 2,961
--------- --------- ---------- --------
Consolidated depreciation and amortization, excluding
amortization of deferred financing costs................ 3,464 5,541 6,815 11,067
--------- --------- ---------- --------
EBITDA:
Restaurants................................................ 17,200 22,432 31,211 39,495
Asset management........................................... -- 1,645 -- 5,568
General corporate.......................................... (10,440) (15,807) (21,122) (30,831)
--------- --------- ---------- --------
Consolidated EBITDA....................................... 6,760 8,270 10,089 14,232
Depreciation and amortization, excluding amortization
of deferred financing costs................................ (3,464) (5,541) (6,815) (11,067)
Interest expense.............................................. (9,004) (12,484) (18,638) (22,737)
Insurance expense related to long-term debt................... (958) (859) (1,949) (1,763)
Investment income, net........................................ 4,645 7,576 11,169 16,676
Gain on sale of businesses.................................... 6 3,056 22 12,664
Other income, net............................................. 779 1,483 739 1,113
--------- --------- ---------- --------
Income (loss) from continuing operations before income
taxes and minority interests............................ (1,236) 1,501 (5,383) 9,118
(Provision for) benefit from income taxes..................... (50) (497) 941 (3,010)
Minority interests in income (loss) of consolidated subsidiaries 10 (1,056) 10 (3,481)
--------- --------- ---------- --------
Income (loss) from continuing operations.................. (1,276) (52) (4,432) 2,627
Gain on disposal of discontinued operations................... -- 471 -- 471
--------- --------- ---------- --------
Net income (loss).........................................$ (1,276) $ 419 $ (4,432) $ 3,098
========= ========= ========== ========
<FN>
(c) The shares used to calculate diluted loss per share are the same as
those used to calculate basic loss per share for the 2004 and 2005
second quarters and the first six months of 2004 since there were net
losses from continuing operations and, therefore, the effects of all
potentially dilutive securities on the loss from continuing operations
per share would have been antidilutive. Had the Company reported net
income for the 2004 and 2005 second quarters and the first six months
of 2004, the shares used to calculate diluted income per Class A
common share would have been 23,399,000, 24,961,000 and 22,590,000
respectively, reflecting the effect of dilutive stock options and, for
the 2005 second quarter, contingently issuable restricted stock. The
shares used to calculate diluted income per Class B common share for
those periods would have been 42,836,000, 44,874,000 and 43,283,000
respectively, also reflecting the effect of dilutive stock options
and, for the 2005 second quarter, contingently issuable restricted
stock. The effects of dilutive stock options represented in such
amounts reflect the average price of the Company's stock during that
period. The effects of contingently issuable restricted stock reflect
the price of the Company's Class B common stock at July 3, 2005. These
dilutive effects may not be representative of the effects that may
occur in future periods. Accordingly, this information is presented
for informational purposes only. In addition to the effect of dilutive
stock options, the Company's 5% Convertible Notes are currently
convertible into 4,375,000 shares of the Company's Class A common
stock and 8,750,000 shares of the Company's Class B common stock. Such
additional shares were not included in the diluted shares above due to
the substantial income that would be required before the Convertible
Notes became dilutive.
</FN>
(d) The reconciliation of certain operating measures of Deerfield before
purchase accounting adjustments to such measures after purchase accounting
adjustments for the 2005 second quarter and six months ended follows:
Depreciation and
Amortization,
Excluding
Asset Amortization
Management of Deferred
and Related Operating Financing
Fees(1) Profit(1) Costs(1) EBITDA(1)
----------- --------- ---------- --------
(In thousands)
For the quarter ended July 3, 2005:
Before purchase accounting adjustments (2) ........ $11,878 $ 1,639 $ 97 $ 1,736
Expected asset management fees recorded as a
receivable in purchase accounting.............. (91) (91) -- (91)
Amortization of intangible assets recorded in
purchase accounting............................ -- (1,437) 1,437 --
-------- --------- -------- --------
After purchase accounting adjustments..............$ 11,787 $ 111 $ 1,534 $ 1,645
======== ========= ======== ========
For the six months ended July 3, 2005:
Before purchase accounting adjustments (2) ........ $25,383 $ 5,909 $ 181 $ 6,090
Expected asset management fees recorded as a
receivable in purchase accounting.............. (668) (668) -- (668)
Cost of services recorded as a liability
in purchase accounting (3)..................... -- 146 -- 146
Amortization of intangible assets recorded in
purchase accounting............................ -- (2,436) 2,436 --
-------- --------- -------- --------
After purchase accounting adjustments..............$ 24,715 $ 2,951 $ 2,617 $ 5,568
======== ========= ======== ========
<FN>
- ---------------
(1) All amounts are before the effects of minority interests.
(2) The asset management and related fees, operating profit and EBITDA
before purchase accounting adjustments reflect the elimination of
asset management fees paid to Deerfield by Triarc of $0.4 million for
the 2005 second quarter and $0.8 million for the six months ended
July 3, 2005.
(3) Represents incentive compensation relating to the receivable recorded
in purchase accounting.
</FN>