Seven Up RC Bottling Company of Southern California Inc – ‘10-K405’ for 12/31/96

As of:  Monday, 4/7/97   ·   For:  12/31/96   ·   Accession #:  898430-97-1416   ·   File #:  0-28726

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Form 10-K405 Dated 12/31/96                           60    261K 
 2: EX-27       Financial Data Schedule                                2      6K 

10-K405   —   Form 10-K405 Dated 12/31/96
Document Table of Contents

10-K405
1st Page of 60
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 10-K 

X     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES       
------  EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996        

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE        
------  SECURITIES EXCHANGE ACT OF 1934                                         

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

Commission File Number
33-47718

SEVEN-UP/RC BOTTLING COMPANY
OF
SOUTHERN CALIFORNIA, INC. 
(Exact name of registrant as specified in its charter)

DELAWARE                              95-4284699            
(State or other jurisdiction of               (I.R.S. Employer                  
incorporation or organization)             Identification Number)               

3220 East 26th Street                                         
Vernon, California                      90023             
(Address of principal executive offices)         (Zip code)                     

(213) 268-7779
(Registrant's telephone number, including area code)

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 report(s)), and (2) has been subject to    
such filing requirements for the past 90 days.    YES  X    NO    .             
                                        ---      ---

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

 At March 31, 1997 there were 5,000,000 shares of Common Stock outstanding and
the aggregate market value of the outstanding shares held by non-affiliates was 
approximately $60,000,000 based on the closing price per share reported on the  
OTC Bulletin Board on such date.                                                

================================================================================

10-K405
2nd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 2nd
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC. 

                         INDEX

                                                                [Download Table]

                                                           Page
                                                               
PART I                                                         

Item 1.        Business                                     2  
Item 2.        Properties                                  13  
Item 3.        Legal Proceedings                           14  
Item 4.        Submission of Matters to a Vote of              
                 Security Holders                          15  

PART II                                                        

Item 5.        Market for Registrants' Common Equity           
                 and Related Stockholder Matters           16  
Item 6.        Selected Financial Data                     17  
Item 7.        Management's Discussion and Analysis of         
                 Financial Condition and Results of            
                 Operations                                19  
Item 8.        Financial Statements and Supplementary          
                 Data                                      26  
Item 9.        Changes of and Disagreements with               
                 Accountants on Accounting and Financial       
                 Disclosure                                27  

PART III                                                       

Item 10.       Directors and Executive Officers of the         
                 Registrant                                28  
Item 11.       Executive Compensation                      29  
Item 12.       Security Ownership of Certain Beneficial        
                 Owners and Management                     33  
Item 13.       Certain Relationships and Related               
                 Transactions                              35  

PART IV                                                        

Item 14.       Exhibits, Financial Statement Schedules         
                 and Reports on Form 8-K                   36  

SIGNATURES.............................................    37  

-1- 

10-K405
3rd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 3rd
PART I                                                                          

ITEM 1.   BUSINESS                                                              

GENERAL                                                                         

Seven-Up/RC Bottling Company of Southern California, Inc., a Delaware 
corporation ("Seven-Up/RC" or the "Company"), is among the largest beverage     
distributors in the United States, and is the largest bottler of Seven-Up in the
United States.  Seven-Up/RC manufactures and distributes a broad range of       
beverage products in Southern California, Central California, and in portions of
Nevada and New Mexico.  Seven-Up/RC has the exclusive right within its          
territories to manufacture and/or distribute Seven-Up (lemon-lime), Royal Crown 
(cola), A&W (root beer and cream soda), Sunkist (orange and lemonade), Hawaiian 
Punch (fruit punch), Schweppes (ginger-ale and mixers), Evian (imported still   
water), Perrier (imported mineral water), Welch's (grape, strawberry and        
pineapple), Mistic (teas and juices), Yoo-Hoo (chocolate drink) and in its New  
Mexico franchise territory, Snapple (teas and juices).  Seven-Up/RC's           
consolidated net sales in 1996 were $294,491,000, which includes $37,935,000 of 
net sales from Seven-Up/RC's wholly-owned subsidiary, Seven-Up/RC Bottling      
Company of Puerto Rico, Inc. ("Puerto Rico"), which was divested in June 1996 in
connection with the Plan of Reorganization described below.                     

  Seven-Up/RC competes as an independent bottler on the basis of its large
portfolio of franchised brands, its significant combined market share, its      
ability to market, distribute and merchandise its products effectively and      
favorable demographics within its territories.  Seven-Up/RC's portfolio of      
franchised brands consists of highly recognizable trademarks that are in almost 
all cases the first ranking brand in their respective beverage flavor           
categories.  Seven-Up/RC's combined market share of its franchised brands and   
products that are produced under contract manufacturing agreements, enables it  
to realize purchasing, manufacturing, marketing and delivery efficiencies.      
Additionally, Seven-Up/RC's territories have many attributes that contribute to 
revenue growth in the beverage industry, including a favorable climate and a    
high density of retail outlets in populous areas.                               

Seven-Up/RC's products are made available to its customers through a  
network of distribution facilities that are strategically positioned within     
major population areas, and it distributes essentially all of its products      
directly to retail outlets through its direct-store-door ("DSD") distribution   
system.  Through its DSD distribution system, Seven-Up/RC provides efficient,   
high-quality service to the more than 35,000 retail outlets that it serves.     
These retail outlets include supermarkets, warehouse clubs, convenience stores  
and other retail establishments that serve a combined population of over 30     
million consumers.                                                              

Seven-Up/RC's business strategy is to manufacture and distribute a    
franchised portfolio of leading trademarked beverages in each beverage flavor   
category and to create an additional source of revenue through contract         
manufacturing.  In accordance with this strategy, its Liquitrend division       
("Liquitrend") engages in contract manufacturing, which utilizes excess         
production capacity by manufacturing beverage products for a variety of small,  
independent franchisors, retailers selling private label products and           
wholesalers that distribute private label products for consumption both inside  
and outside of the United States.                                               

 On May 13, 1996, Seven-Up/RC and its parent, Beverage Group Acquisition
Corporation, a Delaware corporation ("BGAC"), filed petitions for relief under  
Chapter 11 of the United States Bankruptcy Code.  BGAC had no independent       
operations and was a wholly-owned subsidiary of WB Bottling Corporation ("WB    
Bottling"), a privately held Delaware corporation.  On May 16, 1996, Seven-Up/RC
and BGAC filed their Joint Plan of Reorganization; subsequently, Seven-Up/RC and
BGAC filed their First Amended Joint Plan of Reorganization dated June 19, 1996 
(the "Plan of Reorganization").  The Plan of Reorganization was consummated on  
August 15, 1996.  Pursuant to the Plan of Reorganization, $140,000,000 aggregate
principal amount of 11.5% Senior Secured Notes Due 1999 of Seven-Up/RC (the     
"Senior Secured Notes"), together with the accrued interest thereon, was        
discharged.  In connection with such discharge, the holders of the Senior       
Secured Notes received  98% of the                                              

-2- 

10-K405
4th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 4th
equity of Seven-Up/RC (subject to dilution to the extent certain warrants and   
options to be granted by Seven-Up/RC are exercised, and $55 million of proceeds 
from the sale of the stock of Puerto Rico.   In addition, BGAC was merged into  
Seven-Up/RC.                                                                    

Seven-Up/RC's executive offices are located at 3220 East 26th Street, 
Vernon, California 90023.  The telephone number at the Vernon location is (213) 
268-7779.                                                                       

-3- 

10-K405
5th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 5th
BEVERAGE INDUSTRY                                                               

 Soft drinks are the most widely consumed beverage in the United States.
Retail sales for the American soft drink industry in 1995 were estimated to be  
approximately $52 billion, of which approximately 58% were cola sales.          
Historically, the soft drink industry has been an industry of continual change  
and evolution.  It is characterized by a relative absence of technological risk,
lack of foreign competition and significant barriers to entry, primarily due to 
geographic exclusivity agreements with franchisors.  Its competitive climate    
requires bottlers and franchisors to adapt quickly to market challenges,        
including changes in consumer tastes and package preferences and continuing     
developments in manufacturing and distribution methods.                         

-4- 

10-K405
6th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 6th
TERRITORIES AND PRODUCTS                                                        

   The warm climate in Seven-Up/RC's territories considerably influences the
trend towards higher per capita consumption of beverages.  In addition, the high
density of retail outlets in populous areas of its territories results in lower 
distribution costs.                                                             

Unlike its principal competitors, Seven-Up/RC does not rely on any one
trademark for a substantial majority of its sales.  This diversification results
in each brand receiving significant attention from the Company while providing  
the franchisor with the marketing and merchandising benefits of a larger        
bottler.  Seven-Up/RC is committed to the profitability of its DSD business and 
will not seek to gain market share at the expense of profitability.  The        
following table shows the percentage of DSD case sales for 1996 for each of the 
brands distributed in its territories:                                          

                                                                [Download Table]

Brand                          %  
-----                        -----
                                  
Seven-Up                      45.1
A&W Brands                    10.6
Royal Crown                    9.6
Sunkist                        8.1
Evian                          5.7
Hawaiian Punch                 5.6
Welch's                        3.9
Schweppes                      2.9
Perrier                        1.4
Other (including fountain)    7.10
                             -----
                             100.0
                             =====

   Liquitrend manufactures a variety of beverage products pursuant to short-
term and long-term contracts.  Liquitrend also exports beverage products to     
Mexico and the Far East.                                                        

Seven-Up/RC's portfolio of franchised brands consists of highly       
recognizable trademarks that are market leaders in their respective beverage    
flavor categories.  Seven-Up/RC believes that it is able to achieve a           
competitive number of promotional displays and a competitive amount of shelf    
space in retail outlets because of the strength and diversification of the      
trademarks in its brand portfolio.                                              

  Seven-Up/RC's brand portfolio has a significantly higher combined market
share of the beverages sold in its territories as compared to most other        
independent bottlers.  However, Coca-Cola and Pepsi-Cola together account for   
over 60% of the soft drinks sold in these territories.  Seven-Up/RC believes    
that it is able to effectively compete in its territories because its combined  
market share gives it marketing and merchandising advantages that it would not  
otherwise have with a smaller or less diversified portfolio.                    

-5- 

10-K405
7th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 7th
BOTTLING RIGHTS                                                                 

  Seven-Up/RC has agreements with franchisors pursuant to which it has the
exclusive right to manufacture and/or distribute certain beverage products in   
specified territories, and generally has non-exclusive rights to produce,       
distribute and market certain soft drink syrups in premix (ready-to-use) and    
postmix (concentrated) form for fountain sales.                                 

     Syrup concentrates are one of the primary ingredients of beverage products.
Concentrate formulas are highly proprietary and are owned solely by the         
respective franchisors.  The franchisors manufacture and sell to Seven-Up/RC    
concentrates from which the beverage products are produced.  The franchisors are
entitled to set the price for their concentrate unilaterally.  Under the        
franchise agreements, in connection with the marketing and distribution of the  
beverage products, Seven-Up/RC has the right to use the trade names and         
trademarks and associated patents, copyrights, designs and labels, all of which 
are owned by the respective franchisors.                                        

     Seven-Up/RC considers its franchise agreements with Cadbury Beverages North
America (trade names of Seven-Up, A&W, Sunkist, Welch's, Schweppes, Canada Dry  
and Crystal Light), Royal Crown Cola Co., and Great Brands of Europe, Inc. to be
material to its operations.  These and other franchise agreements generally     
contain certain affirmative obligations that include, but are not limited to,   
maintenance of sufficient production and distribution facilities to satisfy     
fully the demand for the various beverage products in its territories,          
maintenance of quality control standards as prescribed by the franchisor,       
maintenance of sound financial capacity, use of best efforts to promote sales,  
submission of annual marketing, management, and advertising plans for approval  
(which approval may not be unreasonably withheld) and the submission of reports 
as to the implementation of these plans.  The agreements generally prohibit     
Seven-Up/RC from engaging in specific activities, including, but not limited to,
distributing or selling the beverage products outside the specified franchise   
territories, producing or handling competing products or other products or      
packages that would imitate, infringe upon or cause confusion with the beverage 
products, trade dress, containers or trademarks of the franchisor and assigning,
transferring or pledging an agreement, or any interest therein, whether         
voluntarily, involuntarily or by operation of law, without prior consent.  No   
franchisor has ever terminated any of Seven-Up/RC's franchise agreements as a   
result of the breaching of any provisions thereof and Seven-Up/RC considers its 
relationship with each of the franchisors to be satisfactory.                   

    However, on July 28, 1995, the Company received a notice of termination of
the distribution agreement dated September 12, 1990 (the "Distribution          
Agreement") with Great Brands of Europe, Inc. ("GBE").  The Distribution        
Agreement grants the Company the exclusive right to distribute Evian Water in   
Southern California.  In its notice of termination, GBE stated its belief that  
termination was justified, based on the Company's decision to suspend interest  
payments on its Senior Secured Notes.  Additionally, the termination notice     
stated that the Company would be allowed to distribute Evian Water on an at will
basis.  GBE's notice of termination was not effective until the expiration of   
the contractually specified cure period.  Before the cure period (as extended by
agreement between the parties) expired, the Company and GBE reached a settlement
pursuant to which the termination notice was withdrawn and the Distribution     
Agreement was amended.  The Distribution Agreement, as amended on January 12,   
1996, grants certain termination rights to GBE in the event that certain        
execution performance standards are not met.                                    

 The franchise agreements are either perpetual or for several years with
automatic renewals.  A franchisor may terminate the rights to produce, market   
and distribute products upon an event of default by Seven-Up/RC and in certain  
other limited circumstances.  Events of default include, but are not limited to,
failure to fulfill the affirmative obligations or violations of the prohibited  
activities as described above.  Seven-Up/RC generally may terminate an agreement
at any time without cause by giving proper notice to the franchisor.            
Termination of bottling rights with respect to its principal products would     
constitute an event of default under Seven-Up/RC's revolving credit facility and
might have a material adverse effect on the financial position of Seven-Up/RC.  

-6- 

10-K405
8th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 8th
MANUFACTURING                                                                   

 Seven-Up/RC produced 34.8 million cases in 1996 in its Vernon and Buena
Park, California, and its Albuquerque, New Mexico manufacturing plants.         

     Seven-Up/RC's largest manufacturing plant is located in Vernon, California,
which is a combination manufacturing and distribution facility built in 1977.   
The Vernon plant operates two bottle lines and two can lines that can produce 42
million cases annually.  Seven-Up/RC's Buena Park plant is diversified with four
separate lines that produce cans, bottle, fountain products and pasteurized     
products.  The Buena Park facility has a 27 million annual case capacity.  The  
Albuquerque plant is a combined manufacturing and distribution facility that is 
capable of producing 3 million cases annually with one can line and one bottle  
line.                                                                           

The manufacturing process consists of receiving, batching, filling and
packaging product.  Empty containers are received in bulk and are moved from the
supplier's trailers to de-palletizing equipment, which automatically places the 
empty containers on conveyors that carry them to the filling equipment.  Treated
water, concentrate, sweetener and additives are combined in large stainless     
steel tanks and are mixed, or "batched," with a motorized impeller.  Each       
respective batch is then carbonated and sent to the filling equipment.  At the  
same time, containers arrive by conveyor and are rinsed to remove any           
particulate matter.  At the Vernon and Buena Park facilities, the containers are
"air-rinsed" using ionized air and vacuum to remove dust particles.  The filling
equipment fills the air-rinsed containers with batched product at extremely high
speeds.  At the Vernon and Buena Park facilities, the containers are filled with
batched product at ambient water temperature.  This warm-fill process eliminates
costs associated with refrigeration of the product (to reduce foaming in the    
filling process) and its subsequent warming (to reduce packaging damage caused  
by condensation).  The filled cans and bottles are then automatically scanned or
manually inspected to test filling level and cap or end placement.  Cans are    
either packaged in multi-pack cartons or in corrugated trays and fastened with  
plastic rings.  Bottles are usually packaged in returnable plastic shells.  Each
packaged case is then automatically transported to a "palletizer" where it is   
stacked on a wooden pallet to be stored before distribution.                    

   Seven-Up/RC purchases concentrate for its franchised brands directly from
franchisors in accordance with franchise agreements.  Price increases for       
concentrate are not limited by such agreements, but are imposed unilaterally by 
franchisors and have been historically 3 to 5% annually.  The majority of Seven-
Up/RC's other raw materials are purchased through a national cooperative of     
"non-Coke/Pepsi" bottlers that meet minimum volume requirements.  The           
cooperative leverages the combined purchasing volume of its members in the      
negotiation of raw material costs.  Most raw material contracts are for a period
of one year or less.  As a member of the cooperative, Seven-Up/RC believes that 
its costs for raw materials are comparable to those of its competitors.  Key raw
materials and their approximate percentage of material costs for 1996 include:  
concentrate (32.3%); aluminum cans (21.9%); purchased finished goods (including 
Evian, Snapple, Perrier and Yoo-Hoo) (18.6%); plastic bottles (9.0%); sweetener 
(8.4%); glass bottles (2.6%); packaging (1.9%); and other (5.3% including bottle
closures and additives).  Seven-Up/RC believes that adequate alternative sources
exist for the majority of its raw materials with the exception of concentrate   
and purchased finished goods.                                                   

Seven-Up/RC maintains a stringent quality control program.  Automatic 
quality testing is performed on all of its products prior to and during the     
bottling process.  A microbiologist and skilled technicians are kept on staff to
test product, containers and packaging.                                         

  Seven-Up/RC maintains an inventory management program that minimizes raw
material inventory carrying costs and potential spoilage.  In addition, only one
day's supply of certain raw materials are kept on hand, including sweetener,    
cans and bottles.                                                               

-7- 

10-K405
9th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 9th
SALES AND DISTRIBUTION                                                          

    Seven-Up/RC's sales methods differ according to its geographic markets and
specific customer segments with sales oriented towards high-volume customers    
such as large retail chains, which results in economies of scale in selling and 
distribution expenses.  Product orders are taken in advance by a salesperson and
are generally delivered and merchandised within 24 hours by other employees.    

Seven-Up/RC utilizes its distribution channels to maximize market     
penetration with its principal method of distribution being DSD.  DSD is the    
Company's preferred method of distribution because Seven-Up/RC has greater      
control over the sales, marketing and merchandising of its products.  Deliveries
are made by Seven-Up/RC's fleet of delivery vehicles located at each of its     
distribution facilities.                                                        

    The scope of Liquitrend's activities may be limited by the terms of Seven-
Up/RC's franchise agreements and excess manufacturing capacity as Liquitrend    
utilizes this excess capacity to indirectly participate in other geographic     
markets.  Liquitrend manufactures products for beverage or retail grocery       
companies that lack sufficient volume to justify the capital investment of a    
manufacturing plant.                                                            

Seven-Up/RC makes cold drinks available to consumers through vending  
machines, fountain equipment and visi-coolers (bottler identified refrigerated  
cabinets).  Vending machines are either sold, leased or loaned to retail outlets
or distributors who are responsible for machine maintenance and product         
restocking.  Visi-coolers are generally loaned to large retail outlets and      
convenience stores.  In addition, Seven-Up/RC is involved in full-service       
vending.  This process requires that the Company fill and service these vending 
machines and that a commission on sales is paid to the owner of the             
establishment at which the vending machine is placed.  Fountain equipment       
dispenses products in restaurants, bars, amusement parks, theaters and other    
similar locations.  Seven-Up/RC sells either premix, a ready-to-use product, or 
postmix, a concentrated product, to retailers in stainless steel or disposable  
containers for use in fountain equipment.  However, Seven-Up/RC's fountain      
market share is not significant.                                                

    During 1996, no single customer accounted for 10% or more of Seven-Up/RC's
sales, and the Company is not dependent on any single customer.  A significant  
portion of Seven-Up/RC's sales are made to large retail chains.  However,       
because consumer demand requires these chains to stock Seven-Up/RC's products   
and because they are the only distributor of its products within its            
territories, Seven-Up/RC does not expect any of these large retail chains to    
discontinue its products.                                                       

-8- 

10-K405
10th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 10th
MARKETING                                                                       

The marketing of beverage products is the primary basis of competition
among soft drink bottlers.  Successful bottlers must competitively price its    
products, creatively advertise in their territories and effectively execute     
promotional programs.  Seven-Up/RC's marketing efforts are directed towards     
brand management, key account management, promotional activities and            
merchandising.  Seven-Up/RC believes that its marketing program's allow it to   
compete effectively in its markets.                                             

Marketing programs for each of Seven-Up/RC's franchised brands are    
coordinated with the franchisors by its brand management group.  National       
advertising campaigns are developed by the franchisors, while Seven-Up/RC brand 
managers develop local advertising campaigns, implement brand development       
strategies, direct promotional activities on a company-wide basis and monitor   
marketing support in accordance with annual marketing agreements with the       
franchisors.                                                                    

  Seven-Up/RC's success is closely tied to its on-going relationships with
its key accounts.  Key account managers are responsible for coordinating        
promotional activities for a select group of accounts.  These activities include
placing "feature" newspaper advertisements that coincide with competitive       
pricing programs, obtaining authorization from the customer for new products and
packages, and designing customer promotional programs to meet specific customer 
needs.                                                                          

  A significant portion of Seven-Up/RC's promotional efforts focus on off-
invoice allowances, newspaper advertising and coupons.  The goal of these       
activities is to competitively position Seven-Up/RC brands in the marketplace   
and to obtain "feature" retail advertisements and end-aisle displays in high    
volume retail outlets.  End-aisle and secondary displays are important marketing
tools because they are tied to special promotions and feature advertisements    
that stimulate sales and encourage impulse purchases.                           

     Seven-Up/RC's merchandising activities seek to maintain high visibility and
availability of its products in large grocery chains.  Merchandisers are        
responsible for building displays in conjunction with promotional programs and  
restocking products on the beverage aisle of grocery stores.  Seven-Up/RC       
assists its customers in obtaining maximum space utilization of the beverage    
aisle by employing a state-of-the-art computer program, which determines the    
most efficient use of shelf space based on sales volume and consumer preferences
for product and packaging.  This service is provided to its key accounts as a   
means of enhancing its relationship with these customers.                       

     Marketing expenditures are incurred by Seven-Up/RC, it's franchisors and by
cooperative arrangements between the two.  Retail promotional programs are      
Seven-Up/RC's most significant marketing expenditures and are paid for by the   
Company and supported through cooperative arrangements with its franchisors.    
National media advertising is funded by Seven-Up/RC's franchisors, while local  
media advertising is funded by the Company or through cooperative arrangements. 

-9- 

10-K405
11th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 11th
COMPETITION                                                                     

   The soft drink industry is highly competitive.  Over the past decade, the
bottling industry has undergone significant horizontal consolidation (bottlers  
acquiring bottlers) and vertical consolidation (franchisors acquiring           
franchisors).  Competition among bottlers is dependent on price, volume,        
advertising, promotional incentives and franchisor subsidies.                   

     Seven-Up/RC's principal competitors are Coca-Cola Enterprises, Inc. ("CCE")
and the Pepsi-Cola Company ("COBO"), each of which is closely affiliated with   
its respective syrup company.  Price competition between CCE and COBO has       
resulted in a consistent market-wide erosion of earnings over the past ten      
years.                                                                          

    Seven-Up/RC competes in its markets by balancing the various elements that
impact market share and profitability, and believes that long-term profitability
is closely tied to market share stability.  Additionally, Seven-Up/RC attempts  
to remain a "low-cost producer" through selected investments in manufacturing   
and distribution technology.                                                    

-10-

10-K405
12th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 12th
EMPLOYEES                                                                       

   Seven-Up/RC employed 1,314 employees as of December 31, 1996.  A majority
of these employees (58%) are hourly workers covered by collective bargaining    
agreements.  Various local chapters of the International Brotherhood of         
Teamsters, Chauffeurs, Warehousemen and Helpers of America represent employees  
at Las Vegas, Santa Maria and San Diego under contracts expiring in 1998, 1999  
and 2001, respectively.  Seven-Up/RC has not had any strikes or work stoppages  
in the past 20 years and considers its relationship with its employees to be    
satisfactory.                                                                   

  On February 13, 1997, employees covered by the United Industrial Workers
elected to be represented by the Amalgamated Industrial Workers Union.  Seven-  
Up/RC does not expect that this event will have a significant impact on its     
future financial performance or the relationship with its employees.            

-11-

10-K405
13th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 13th
GOVERNMENT REGULATION                                                           

     The production, distribution and sale of many of Seven-Up/RC's products are
subject to the Federal Food, Drug and Cosmetic Act, the Occupational Safety and 
Health Act, various Federal environmental statutes and various other Federal,   
state and local statutes regulating the production, sale, safety, advertising,  
labeling and franchising of beverages.                                          

California imposes a recycling fee on all containers of carbonated    
beverages.  The fee is $.025 per container holding 24 ounces or less and $.05   
per container holding 25 ounces or more, which may automatically be increased if
target recycling rates are not reached.  Containers of carbonated beverages must
clearly display specific information, which informs consumers that the fee will 
be used exclusively for recycling efforts.  Seven-Up/RC is required to pay the  
fee, but it is included on the invoice for products and assessed to the consumer
at the retail level.  Seven-Up/RC believes that future fee increases will be    
minimal because of the success of California's recycling program.  However, a   
significant increase in the fee could materially decrease consumption of        
carbonated beverages in California.                                             

     Substantially all of Seven-Up/RC's facilities are subject to federal, state
and local laws regulating the environment.  Compliance with these laws has not  
had any material effect upon the capital expenditures, net income or competitive
position of Seven-Up/RC.  Costs of compliance with existing and future          
environmental laws cannot be predicted with any degree of certainty and may     
significantly affect Seven-Up/RC's operations.                                  

 Seven-Up/RC does not presently sell products in any state that requires
deposits on bottle or can containers, but operating costs could be significantly
affected if a national container deposit law were to be implemented.            

-12-

10-K405
14th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 14th
ITEM 2.   PROPERTIES                                                            

   Seven-Up/RC's headquarters are located in Vernon, California, and it owns
two combination manufacturing and distribution facilities, located in Vernon,   
California and Albuquerque, New Mexico and one manufacturing facility located in
Buena Park, California.  Seven-Up/RC has eleven additional distribution         
facilities, of which six are owned (located in Bakersfield, Orange, San Diego,  
San Fernando and Santa Maria, California and Las Vegas, Nevada) and five are    
leased (located in Fresno, El Centro, Oxnard, Redlands and Vernon, California). 
The leased facilities are subject to customary commercial leases with terms     
expiring between 1997 and 2003.  Seven-Up/RC believes that its owned and leased 
facilities are sufficient to meet its operating requirements in the foreseeable 
future.                                                                         

-13-

10-K405
15th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 15th
ITEM 3.   LEGAL PROCEEDINGS                                                     

   Seven-Up/RC is not a party to any legal proceedings other than those that
occur in the normal course of business.                                         

-14-

10-K405
16th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 16th
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   

 Seven-Up/RC did not submit any matter to a vote of its security holders
during the fourth quarter of 1996.                                              

-15-

10-K405
17th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 17th
PART II                                                                         

ITEM 5.   MARKET FOR THE REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER     
MATTERS                                                     

Prior to September 6, 1996 (on or about such date), there was no      
established public trading market for the common stock of Seven-Up/RC (the      
"Common Stock").  On or about September 6, 1996, the Common Stock began trading 
on the over-the-counter market under the symbol "SURC" and prices were quoted in
the Pink Sheets (the "Pink Sheets") operated by the National Quotation Bureau   
Inc.  Shortly thereafter, the Common Stock was listed on the OTC Bulletin Board.
The following table sets forth on a per share basis, for the periods indicated, 
the high and low sales prices of  the Common Stock as reported in the Pink      
Sheets and on the OTC Bulletin Board.  Such over-the-counter market quotations  
in the Pink Sheets and the OTC Bulletin Board reflect inter-dealer prices,      
without retail mark-up, mark-down or commission and may not necessarily         
represent actual transactions.                                                  

                                                                [Download Table]

                                                    Price Range     
                                                --------------------
                                                  High        Low   
                                                --------------------
                                                                    
Fiscal 1996:                                                        
       Third Quarter                            $   10.13   $   9.00
       Fourth Quarter                               11.88       9.13
Fiscal 1997:                                                        
       First Quarter (through March 31, 1997)       12.00       9.88

Since August 15, 1996 (the date on which the Company emerged from     
bankruptcy), the Company has not declared or paid cash dividends on the Shares. 

 As of March 31, 1997, there were approximately 29 record holders of the
Common Stock.                                                                   

-16-

10-K405
18th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 18th
ITEM 6.   SELECTED FINANCIAL DATA                                               

 The following table sets forth selected financial data for Seven-Up/RC.
The data for the periods from January 1, 1996 through August 15, 1996 and from  
August 16, 1996 through December 31, 1996 and for the years ended December 31,  
1995 and 1994, and the data as of December 31, 1995 and 1996, were derived from 
the Company's Consolidated Financial Statements included elsewhere in this      
Annual Report on Form 10-K and should be read in conjunction with those         
financial statements and notes thereto.  The financial statements were audited  
by Arthur Andersen LLP, independent public accountants, whose report with       
respect thereto appears elsewhere in this Annual Report on Form 10-K.           

                                                        [Enlarge/Download Table]

                                     Reorganized                                                                                
                                    Company /(a)/                                  Predecessor Company /(a)/                    
                                    -------------  -----------------------------------------------------------------------------
                                     8/16 - 12/31   1/1 - 8/15                     Years Ended December 31,                     
                                    -------------  -----------   ---------------------------------------------------------------
                                        1996         1996          1995          1994             1993                1992      
                                    -------------  -----------   -----------    -----------       -----------       ------------
                                                      (Dollar amounts in thousands, except per share data)                      
                                                                                                                                
Statement of Operations Data:                                                                                                   
Net sales                           $ 91,647        $202,844      $ 396,725         $413,840        $ 371,062        $ 374,460  
Cost of goods sold                    74,058         164,320        334,942          342,336          299,735          295,481  
Administrative, marketing and                                                                                                   
   general expenses                   13,575          27,841         47,935           48,437           47,342           49,876  
Depreciation and amortization          3,688          10,399         18,180           17,251           17,983           18,428  
Restructure charges                       -              547          5,015               -                -                -   
                                    --------        --------      ---------         --------        ---------        ---------  
Operating income (loss)                  326            (263)        (9,347)           5,816            6,002           10,675  
Interest expense                         838          12,871         23,057           21,626           19,938           21,222  
Other income, net /(b)/                   50          34,309            210               95              418            1,236  
                                    --------        --------      ---------         --------        ---------        ---------  
(Loss) income before income                                                                                                     
   taxes, reorganization                                                                                                        
    expense and extraordinary                                                                                                   
    items                               (462)         21,175        (32,194)         (15,715)         (13,518)          (9,311) 

Reorganization expense /(c)/              -           13,011             -                -                -                -   
Provision for income taxes                -              345             -               185               -                -   
                                    --------        --------      ---------         --------        ---------        ---------  
(Loss) income before                                                                                                            
 extraordinary items                    (462)          7,819        (32,194)         (15,900)         (13,518)          (9,311) 
Extraordinary (gain) loss  /(d)/          -          (54,577)            -                -               826           11,223  
                                    --------        --------      ---------         --------        ---------        ---------  
Net (loss) income                   $   (462)       $ 62,396      $ (32,194)        $(15,900)       $ (14,344)       $ (20,534) 
                                    ========        ========      =========         ========        =========        =========  
Loss per common share:                                                                                                          
Net loss per common share           $    .09        $     -       $      -          $     -         $      -         $      -   
                                    ========        ========      =========         ========        =========        =========  
Weighted average common                                                                                                         
   shares outstanding                  5,077              -              -                -                -                -   
                                    ========        ========      =========         ========        =========        =========  
Balance Sheet Data:                                                                                                             
Working capital, as defined  /(e)/  $  8,153              -       $  16,054         $ 36,238        $  34,858        $  38,489  

Property, plant and                                                                                                             
 equipment, net                       56,790              -          79,945           87,388           83,447           87,496  
Total assets                         121,370              -         192,133          243,834          210,198          212,407  
Total long-term debt (less                                                                                                      
 current portion) /(f)/               21,983              -              -           189,442          173,883          168,873  
Stockholders' equity  (deficit)       52,663              -         (61,333)         (29,139)         (13,239)           1,105  

Other Data:                                                                                                                     
Capital expenditures                $  3,356        $  5,228      $   5,208         $  5,138        $   5,446        $   4,742  

-17-

10-K405
19th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 19th
(a)  On May 13, 1996, Seven-Up/RC and its immediate holding company parent,     
Beverage Group Acquisition Corporation, filed voluntary petitions for 
reorganization relief under Chapter 11 of the Bankruptcy Code in U.S. 
 Bankruptcy Court for the District of Delaware.  On August 15, 1996, the
Plan of Reorganization was consummated and Seven-Up/RC emerged as a   
reorganized company from Chapter 11.  Due to the reorganization and   
implementation of fresh start reporting, the Consolidated Financial   
Statements for the new reorganized company (period starting August 16,
1996) are not comparable to those of the predecessor company.  The    
   predecessor company included Seven-Up/RC and Puerto Rico through the date
of disposition, June 30, 1996.                                        

(b)  For the period January 1, 1996 through August 15, 1996, the amount consists
     of five elements:  1) $31,715,000 related to the gain on the sale of Puerto
 Rico; 2) $1,200,000 from Quaker Oats relating to the termination of the
Snapple contract manufacturing agreement; 3) $686,000 from the Plastic
    Recycling Corporation of California for prior year overcharges relating to
plastic containers produced in California but shipped out-of-state; 4)
$597,000 gain on the property exchange of the Las Vegas distribution  
  facility with the Rio Hotel; and 5) $161,000 of income associated with a
Puerto Rican joint venture and gain on sale of fixed assets.          

(c)  The 1996 reorganization expense consists of three elements:  1) $7,207,000 
 write-down of goodwill associated with fixed life franchise agreements,
  other intangibles, pallets and shells;  2) $4,904,000 of legal and other
    professional fees incurred in implementing the Plan of Reorganization; and
  3) $900,000 of other reorganization expense including employee severance
and relocation expense of the Carson distribution facility due to the 
reorganization related termination of the facility lease.             

(d)  The 1996 extraordinary gain of $54,577,000 consists of two items:  1)      
$55,087,000 of extraordinary gain resulting from the discharge of     
  indebtedness relating to the old Senior Secured Notes ($140,000,000) and
   accrued interest ($24,756,000) offset by the securities principal payment
    from the sale of Puerto Rico ($55,000,000), the market value of the Common
 Stock exchanged for the old debt ($52,062,000) and the write-off of old
     debt issuance costs ($2,607,000); and 2) $510,000 relating to the write-off
of old revolver debt issuance and collateral fees.                    

   The 1993 extraordinary items consist of accrued expenses for a prepayment
premium and the write-off of deferred financing charges related to the
revolving credit facilities replaced in February 1994.  The 1992      
extraordinary items consist of two transactions in connection with the
 recapitalization on August 11, 1992:  1) the write-off of $7,762,000 of
     debt issuance costs which was associated with debt which was retired early;
and 2) a prepayment premium to the holder of Seven-Up/RC's senior     
subordinated notes of $3,461,000.                                     

(e)  Working capital, as defined, represents current assets (excluding cash and 
  cash equivalents) less current liabilities (excluding current portion of
long-term debt).                                                      

(f)  All debt of Seven-Up/RC was classified as current at December 31, 1995, the
amount of long-term debt reclassified to the current portion was      
$187,445,000.                                                         

-18-

10-K405
20th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 20th
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND       
RESULTS OF OPERATIONS                                       

  Seven-Up/RC's primary measurement of unit volume is DSD cases.  DSD case
volume is defined as physical cases of beverage sold, including both ready-to-  
serve premix and postmix fountain products that are sold in bulk containers.    
Liquitrend's case volume is not combined in Seven-Up/RC's DSD case volume, but  
is included in net sales, cost of goods sold, and operating income.             
Liquitrend's net sales fluctuate from year to year based on the nature of the   
typical contract manufacturing contract which is negotiated on a month-to-month 
or quarter-to-quarter basis.  Liquitrend's gross margins are significantly less 
than the gross margins for DSD because Liquitrend revenue is based solely on a  
contract manufacturing fee that is slightly more than the actual cost incurred  
for direct labor and indirect plant costs associated with the incremental       
Liquitrend case volume.  The Liquitrend business is important to Seven-Up/RC's  
operating income because the incremental revenue offsets a significant portion  
of the fixed costs associated with the excess production capacity that exists   
during the non-summer months with cyclically lower DSD case volume.             

COMPARISON OF SEVEN-UP/RC'S 1996 RESULTS OF OPERATIONS WITH SEVEN-UP/RC'S 1995  
RESULTS OF OPERATIONS                                                           

The following table set forth consolidated sales, cost of goods sold, 
administrative, marketing and general expenses, interest expense and net income 
for the twelve months ended December 31, 1996 and 1995.  To facilitate a        
meaningful comparison of Seven-Up/RC's operating performance for these periods, 
the operations of the predecessor company and the reorganized company have been 
combined.  Additionally, the Company's Reorganization and recent restructuring  
resulted in the elimination and/or downsizing of several product lines,         
including the operations of Puerto Rico, Avalon, Snapple DSD, Snapple Liquitrend
and Cott Liquitrend.  For purposes of analysis, these product lines have been   
eliminated in the following tables to arrive at comparable sales, cost of goods 
sold and administrative, marketing and general expenses.                        

                                                        [Enlarge/Download Table]

                            Predecessor      Reorganized                              
                          --------------  ----------------                            
                           1/1 - 8/15       8/16 - 12/31         Combined             
                             1996             1996                 1996       1995    
                          --------------  ----------------      ----------  --------- 
                                          (Dollar amounts in thousands)               
                                                                                      
Consolidated net sales      $202,844           $91,647           $ 294,491    $396,725
Less:                                                                                 
   Puerto Rico                                                      37,935      82,256
   Avalon                                                            1,542      24,485
   Hot-Fill Liquitrend                                               9,665      25,700
   Cott Liquitrend                                                   1,067       4,784
   Snapple DSD                                                          -       15,620
                                                                 ---------    --------
        Comparable sales                                         $ 244,282    $243,880
                                                                 =========    ========

    Consolidated net sales decreased to $294,491,000 in 1996 from $396,725,000
in 1995, or (26%).  This decrease of $102,234,000 was due primarily to the      
implementation of Seven-Up/RC's Plan of Reorganization which included the       
disposition of its Puerto Rico subsidiary ($44,321,000) and the elimination of  
the unprofitable businesses of Avalon warehouse distribution ($22,943,000), Hot-
Fill Liquitrend ($16,035,000) and Cott Liquitrend ($3,717,000).  Additionally,  
Southern California's core DSD net sales were impacted $15,620,000 due to the   
termination of the Snapple distribution agreement with the Quaker Oats Company  
for the Southern California counties of Orange and San Bernardino during the    
fourth quarter of 1995.                                                         

-19-

10-K405
21st Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 21st
     Comparable net sales increased to $244,282,000 in 1996 from $243,880,000 in
1995.  DSD case volume increased 3% (when adjusted to exclude the loss of       
Snapple DSD volume) due to the Company's philosophy to become more price        
competitive in the major grocery chain segment and the addition of the Mistic   
trademark (natural teas and juices) which is owned by Triarc (owner of the Royal
Crown trademark).  The higher selling price associated with the Mistic trademark
offset the costs associated with increased promotional activity in the major    
grocery chain segment, resulting in net sales increasing slightly in 1996 as    
compared to 1995.                                                               

                                                        [Enlarge/Download Table]

                                      Predecessor      Reorganized                             
                                    --------------  ----------------                           
                                     1/1 - 8/15       8/16 - 12/31         Combined            
                                       1996             1996                 1996       1995   
                                    --------------  ----------------      ----------  ---------
                                                      (Dollar amounts in thousands)            
                                                                                               

Consolidated cost of goods sold       $74,058          $164,320            $238,378    $334,942
Less:                                                                                          
  Puerto Rico                                                                30,857      65,925
  Avalon                                                                      1,511      22,511
  Hot-Fill Liquitrend                                                        10,400      27,654
  Cott Liquitrend                                                               984       4,051
  Snapple DSD                                                                    -       14,480
                                                                           --------    --------
     Comparable cost of goods sold                                         $194,626    $200,321
                                                                           ========    ========

Consolidated cost of goods sold decreased to $238,378,000 in 1996 from
$334,942,000 in 1995, or (29%).  This decrease of $96,564,000 was due primarily 
to the implementation of Seven-Up/RC's Plan of Reorganization which included the
disposition of its Puerto Rico subsidiary ($35,068,000) and the elimination of  
the unprofitable businesses of Avalon warehouse distribution ($21,000,000), Hot-
Fill Liquitrend ($17,254,000) and Cott Liquitrend ($3,067,000).  Additionally,  
Southern California's DSD cost of goods sold were impacted $14,480,000 due to   
the termination of the Snapple distribution agreement with the Quaker Oats      
Company for the Southern California counties of Orange and San Bernardino during
the fourth quarter of 1995.                                                     

Comparable cost of goods sold decreased to $194,626,000 in 1996 from  
$200,321,000 in 1995.  This decrease of $5,695,000 reflects the efficiencies    
that were realized in the core DSD business from the successful implementation  
of the Plan of Reorganization and its direct impact on reducing both direct and 
indirect operating expenses.                                                    

                                                        [Enlarge/Download Table]

                                      Predecessor      Reorganized                             
                                    --------------  ----------------                           
                                     1/1 - 8/15       8/16 - 12/31         Combined            
                                       1996             1996                 1996       1995   
                                    --------------  ----------------      ----------  ---------
                                                      (Dollar amounts in thousands)            
                                                                                               

Consolidated administrative,                                                                   
  marketing and general expenses     $13,575            $ 27,841            $ 41,416   $ 47,935
Less:                                                                                          
  Puerto Rico                                                                  2,687      6,312
  Avalon                                                                         134      1,851
  Hot-Fill Liquitrend                                                             -          - 
  Cott Liquitrend                                                                 -         273
  Snapple DSD                                                                     -         120
                                                                            --------   --------
        Comparable administrative,                                                             
          marketing and general                                                                
          expenses                                                          $ 38,595   $ 39,379
                                                                            ========   ========

-20-

10-K405
22nd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 22nd
  Consolidated administrative, marketing and general expenses decreased to
$41,416,000 in 1996 from $47,935,000 in 1995, or (14%).  This decrease of       
$6,519,000 was due primarily to the implementation of Seven-Up/RC's Plan of     
Reorganization which included the disposition of its Puerto Rico facility       
($3,625,000) and the elimination of the unprofitable businesses of Avalon       
warehouse distribution ($1,717,000) and Cott Liquitrend ($273,000).             
Additionally, Southern California's DSD administrative, marketing and general   
expenses were impacted $120,000 due to the termination of the Snapple           
distribution agreement with the Quaker Oats Company for the Southern California 
counties of Orange and San Bernardino during the fourth quarter of 1995.        

Comparable administrative, marketing and general expense decreased to 
$38,595,000 in 1996 from $39,379,000 in 1995.  This decrease of $784,000        
represents primarily the reduction of administrative support employees that were
eliminated as part of the downsizing segment of the Plan of Reorganization.     

                                                        [Enlarge/Download Table]

                                 Predecessor      Reorganized                             
                               --------------  ----------------                           
                                1/1 - 8/15       8/16 - 12/31         Combined            
                                  1996             1996                 1996       1995   
                               --------------  ----------------      ----------  ---------
                                                 (Dollar amounts in thousands)            
                                                                                          
Consolidated interest expense   $ 838            $ 12,871             $13,709     $23,057 

Consolidated interest expense decreased to $13,709,000 in 1996 from   
$23,057,000 in 1995.  This reduction of $9,348,000 was due primarily to the     
cancellation of the Senior Secured Notes pursuant to the Reorganization.        

                                                        [Enlarge/Download Table]

                             Predecessor      Reorganized                             
                           --------------  ----------------                           
                            1/1 - 8/15       8/16 - 12/31         Combined            
                              1996             1996                 1996       1995   
                           --------------  ----------------      ----------  ---------
                                             (Dollar amounts in thousands)            
                                                                                      
Consolidated other income                                                             
 (expense)                  $34,309         $ 50                  $ 34,359    $ 210   

     Consolidated other income increased to $34,359,000 in 1996 from $210,000 in
1995.  This increase of $34,149,000 consists of the following five elements:  1)
$31,715,000 related to the gain on the sale of Puerto Rico; 2) $1,200,000       
received from Quaker Oats relating to the termination of the Snapple contract   
manufacturing agreement; 3) $686,000 from the Plastic Recycling Corporation of  
California for prior year overcharges relating to plastic containers produced in
California but shipped out-of-state; 4) $597,000 gain realized on the property  
exchange of the Las Vegas distribution facility with the Rio Hotel; and 5)      
$49,000 of decreased other income relating to a Puerto Rican joint venture.     

    Reorganization expense of $13,011,000 represents those costs incurred with
the implementation of the Plan of Reorganization and consists of the following  
three elements:  1) $7,207,000 write-down of goodwill associated with fixed life
franchise agreements, other intangibles, pallets and shells; 2) $4,904,000 of   
legal and professional fees incurred in implementing the Plan of Reorganization;
3) $900,000 of other reorganization expense including employee severance and    
relocation expense of the Carson distribution branch due to the reorganization  
related termination of the facility lease.                                      

    Extraordinary gain of $54,577,000 represents the net recognition of income
associated with the cancellation of indebtedness relating to the implementation 
of the Plan of Reorganization and consists of the following: $140,000,000 gain  
resulting from discharge of indebtedness relating to the Senior                 

-21-

10-K405
23rd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 23rd
Secured Notes and a $24,756,000 gain resulting from the forgiveness of the      
accrued interest on the Senior Secured Notes, offset by the $55,000,000         
securities principal payment from the sale of Puerto Rico, the $52,062,000      
market value of  Common Stock exchanged for the Senior Secured Notes, the       
$2,607,000 write-off of old deferred financing costs and. a $510,000 write-off  
of the old revolver debt issuance and collateral fees.                          

                                                                [Download Table]

                           Predecessor      Reorganized                             
                         --------------  ----------------                           
                          1/1 - 8/15       8/16 - 12/31         Combined            
                            1996             1996                 1996       1995   
                         --------------  ----------------      ----------  ---------
                                           (Dollar amounts in thousands)            
                                                                                    
Consolidated net income                                                             
 (loss)                    $   (432)        $ 62,396            $ 61,934   $(32,194)

 Consolidated net income increased to $61,934,000 in 1996 from a loss of
$32,194,000 in 1995.  This variance of $94,128,000 consists primarily of the    
following six elements, as set forth above:  1) $9,410,000 increase in operating
income which includes a $4,468,000 reduction in restructuring expense; 2)       
$9,348,000 reduction in interest expense; 3) other income of $34,149,000 which  
includes a $31,715,000 gain on the sale of Puerto Rico; 4) reorganization       
expense of $13,011,000 relating to the implementation of the Plan of            
Reorganization; 5) provision for income taxes of $345,000; and 6) extraordinary 
gain of $54,577,000 which represents the net recognition of income associated   
with the cancellation of indebtedness relating to the implementation of the Plan
of Reorganization.                                                              

COMPARISON OF THE COMPANY'S 1995 RESULTS OF OPERATIONS WITH THE COMPANY'S 1994  
RESULTS OF OPERATIONS                                                           

Total net sales decreased to $396,725,000 in 1995 from $413,840,000 in
1994, or 4.1%.  This decrease was due to a net sales decrease of $29,163,000 at 
Southern California that was partially offset by a $12,048,000 net sales        
increase at Puerto Rico.  Southern California's performance in 1995 was         
negatively impacted by a reduction in DSD case volume, reduced hot-fill contract
packing sales and reduced sales of private label products.  Puerto Rico's net   
sales increase was primarily the result of increased Snapple beverage sales.    

Net sales of Southern California's DSD product line decreased to      
$235,466,000 in 1995 from $252,961,000 in 1994, or 6.9%, due to a case sales    
decrease of 13.0%, which was greater than the market-wide reduction of measured 
carbonated soft drink (CSD) sales.  This decrease was primarily the result of   
(i) Southern California's decision to increase its pricing during 1995 to offset
raw material price increases, (ii) reduced levels of franchisor-supported price 
promotions, and (iii) aggressive competitive CSD pricing and promotional        
activity in this market.  DSD net sales at Puerto Rico increased to $80,625,000 
in 1995 from $69,768,000 in 1994, or 15.6%.  This net sales increase was        
primarily the result of an approximate $12,500,000 increase in New Age and malta
beverage sales, offset by a carbonated DSD soft drink sales decrease of         
approximately $1,643,000.                                                       

     Liquitrend's net sales increased to $56,149,000 in 1995 from $54,075,000 in
1994, or 3.8%.  Restated to reflect approximately $13,683,000 of contractual raw
material purchase increases, which had no impact on operating results as cost of
goods sold was increased by a like amount, net sales decreased to $42,466,000 or
21.5%.  As part of Seven-Up/RC's restructuring effort, hot-filled products will 
be downsized which will reflect lower sales in the future.                      

 Avalon's net sales decreased to $24,485,000 in 1995 from $37,036,000 in
1994, or 33.9%.  This decrease was due to Southern California's decision to     
discontinue Avalon's DSD operation during the second quarter of 1995 and        
significantly lower sales of Southern California's value-priced Royal Island and
Nehi products.                                                                  

    Management believes that the factors that caused Southern California's net
sales to decrease in 1995 are likely to continue in the foreseeable future.     

-22-

10-K405
24th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 24th
   Cost of goods sold decreased to $334,942,000 in 1995 from $342,336,000 in
1994, or 2.2%.  This decrease was primarily the result of lower direct material 
costs, variable transportation and production expenses associated with the net  
sales reduction in Southern California's operations, and the fourth quarter     
impact of Southern California's permanent work force reduction announced        
September 11, 1995.  Offsetting this decrease were significant direct material  
increases related to Puerto Rico's net sales increase and Liquitrend's          
$13,683,000 contractual raw material cost increase offset by its corresponding  
sales increase.                                                                 

    Administrative, marketing and general expenses decreased to $47,935,000 in
1995 from $48,437,000 in 1994, or 1.0%.  This decrease was primarily the result 
of the fourth quarter impact of Southern California's permanent 205 employee    
work force reduction announced September 11, 1995.  Partially offsetting this   
decrease were increased legal and litigation expenses, higher worker's          
compensation expense and increased expenses related to customer required        
implementation of delivery and invoicing information systems in Southern        
California.  Puerto Rico's administrative, marketing and general expenses       
increased, primarily the result of variable marketing expenses related to its   
New Age and malta product sales increase.                                       

     Interest expense increased to $23,057,000 in 1995 from $21,626,000 in 1994,
or 6.6%, the result of higher interest rates on Seven-Up/RC's revolving credit  
facilities and an increase in the average borrowings outstanding.               

For the reasons set forth above, Seven-Up/RC's net loss before        
restructuring charges of $5,015,000, increased to $27,179,000 in 1995 from      
$15,900,000 in 1994, or 70.9%.                                                  

  The $5,015,000 restructuring charge includes approximately $2,459,000 of
professional fees and expenses, $906,000 of charges in connection with severance
costs associated with a work force reduction and $1,660,000 of costs related to 
certain equipment and real estate lease terminations.                           

    On September 11, 1995, Southern California announced a permanent reduction
in its work force of 205 employees, divided almost equally between salary and   
hourly.                                                                         

-23-

10-K405
25th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 25th
LIQUIDITY AND CAPITAL RESOURCES                                                 

   The table below sets forth a consolidated statement of cash flows for the
twelve months ended December 31, 1996 and 1995.  To facilitate a meaningful     
comparison of Seven-Up/RC's liquidity and capital resources for these periods,  
the cash flow for operating activities, investing activities and financing      
activities for the predecessor company and reorganized company for 1996 have    
been combined.                                                                  

                                                        [Enlarge/Download Table]

                               Predecessor      Reorganized                               
                             --------------  ----------------                             
                              1/1 - 8/15       8/16 - 12/31         Combined              
                                1996             1996                 1996       1995     
                             --------------  ----------------      ----------  ---------  
                                               (Dollar amounts in thousands)              
                                                                                          
Net cash (used in) provided                                                               
 by operating activities     $  36,398          $(14,553)           $ 21,845      $ 5,767 
Net cash (used in) provided                                                               
 by investing activities        64,354            (3,316)             61,038       (5,091)
Net cash (used in) provided                                                               
 financing activities         (103,825)           18,806             (85,019)      (1,709)
                             ---------          --------            --------     -------- 
NET INCREASE (DECREASE) IN                                                                
 CASH                        $  (3,073)         $    937            $ (2,136)    $ (1,033)
                             =========          ========            ========     ======== 

     Seven-Up/RC's operating activities provided $21,845,000 of net cash in 1996
as compared to $5,767,000 in 1995.  This change of $16,078,000 was due primarily
to $9,348,000 of lower interest expense, resulting from the suspension of       
interest accruals following the Company's filing for reorganization relief under
Chapter 11 of the bankruptcy code on May 13, 1996, and non-recurring other      
income of $2,483,000 which was due to $1,200,000 from the termination of the    
Snapple contract manufacturing agreement, $686,000 from the prior year refund of
plastic recycling fees and $597,000 from the property exchange of the Las Vegas 
distribution branch with the Rio Hotel.  Additionally, Seven-Up/RC generated a  
significant contribution from working capital with the implementation of its    
Plan of Reorganization to reduce inventory SKU's and to improve its accounts    
receivable days outstanding by changing the timing of its major chain           
promotional programs.                                                           

     Seven-Up/RC's investing activities provided $61,038,000 of net cash in 1996
as compared to a $5,091,000 use of net cash in 1995.  This change of $66,129,000
was due primarily to net proceeds of $69,456,000 resulting from the sale of the 
Puerto Rico franchise territory as part of the Plan of Reorganization to provide
a payment of principal to the holders of the  Senior Secured Notes.  Seven-     
Up/RC's investing activities in 1996 included $8,584,000 in purchases of        
property, plant and equipment as compared to $5,208,000 in 1995.                

    Seven-Up/RC's financing activities used $85,019,000 of net cash in 1996 as
compared to $1,709,000 of net cash used in 1995.  This change of $83,310,000 was
primarily due to the use of proceeds from the sale of the Puerto Rico franchise 
territory to pay $55,000,000 to the holders of the  Senior Secured Notes,       
$8,686,000 to pay down the Southern California revolving loan as an offset to   
restructuring and reorganization expenses incurred in 1996 and 1995, and the    
$8,563,000 pay off of the Puerto Rico revolving line of credit.  Additionally,  
net cash provided by operating activities enabled the repayment of $3,793,000 of
the term loan, capital leases and debt issuance costs, and a decrease in its net
borrowings under the revolving credit facilities by $8,977,000.  Seven-Up/RC's  
unused revolving credit facility was $8,797,000 at December 31, 1996.     As of 
March 28, 1997, and the printing of this document, Seven-Up/RC's unused         
revolving credit facility was $5,998,000.  Seven-Up/RC believes that the        
continued implementation of its five-year reorganization plan will provide ample
borrowing availability through its revolving credit facility.                   

-24-

10-K405
26th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 26th
RECENT ACCOUNTING PRONOUNCEMENTS                                                

 In March 1995, the Financial Accounting Standards Board issued SFAS No.
121.  The Statement requires that long-lived assets and certain identifiable    
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.  The Company adopted SFAS No. 121 in the first quarter  
of 1996.  The adoption did not have an impact on the Company's financial        
position or its results of operations.                                          

    In November 1995, the Financial Accounting Standards Board issued SFAS No.
123 "Accounting for Stock-Based Compensation."  This new standard encourages,   
but does not require, companies to recognize compensation expense for grants of 
stock, stock options, and other equity instruments based on a fair-value method 
of accounting.  Companies that do not choose to adopt the new expense           
recognition rules of SFAS No. 123 will continue to apply the existing accounting
rules contained in Accounting Principles Board Opinion (APBO) No. 25, but will  
be required to provide pro forma disclosures of the compensation expense        
determined under the fair-value provisions of SFAS No. 123, if material.  The   
Company adopted SFAS No. 123 in the first quarter of 1996 electing to follow the
accounting provisions of APBO No. 25 for stock-based compensation and to furnish
the pro forma disclosures required under SFAS No. 123, if material.             

  In March, 1997, the Financial Accounting Standards Board issued SFAS No.
128 "Earnings per Share" and SFAS No. 129 "Disclosure of Information about      
Capital Structure."  SFAS No. 128 eliminates several requirements of APBO No.   
15, simplifying earnings per share calculations.  The Company is required to    
adopt SFAS No. 128 in the first quarter of 1997.  As of December 31, 1996, the  
adoption of SFAS No. 128 would not have a material impact on the Company's      
financial position or its results of operations.                                

SUBSEQUENT EVENTS                                                               

 On February 28, 1997, Seven-Up/RC entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Dr Pepper Bottling Company of Texas ("Dr   
Pepper Bottling") whereby DPB Acquisition Corp., a wholly-owned subsidiary of Dr
Pepper Bottling (the "Purchaser") has made an offer to purchase all the issued  
and outstanding shares of the Company for $12.00 per share (the "Offer").  The  
Offer is conditioned upon, among other things, (i) there being validly tendered 
and not withdrawn prior to the expiration date for the Offer that number of     
shares of Common Stock which would represent, on a fully-diluted basis, at least
65% of the outstanding Common Stock, (ii) receipt by the Purchaser of sufficient
funds from its financing sources, and (iii) the receipt of certain identified   
consents.                                                                       

-25-

10-K405
27th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 27th
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                           

     The response to this item is submitted as a separate section of this report
on page F-1.                                                                    

-26-

10-K405
28th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 28th
ITEM 9.   CHANGES OF AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND       
FINANCIAL DISCLOSURE                                        

  There were no changes of or disagreements with Seven-Up/RC's accountants
during 1996.                                                                    

-27-

10-K405
29th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 29th
PART III                                                                        

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    

Set forth below are the names, positions and ages of the directors,   
executive officers and key employees of Seven-Up/RC as of December 31, 1996.    

                                                                [Download Table]


                                     Age                                   
                                 December 31,                              
Name                                 1996               Position(s)        
---------------------------------------------------------------------------
                                                                           
Barton S. Brodkin                  55            Chairman of the Board,    
                                                 Chief Executive Officer   
                                                 and President             
Richard D. Ferguson                40            Executive Vice            
                                                 President/Chief Financial 
                                                 Officer                   
Roy S. Breneman                    55            Executive Vice            
                                                 President/Chief Sales and 
                                                 Marketing Officer         
Louis Janicich                     59            Senior Vice President of  
                                                 Administration/Legal      
                                                 Services, Chief Human     
                                                 Resources Officer         
F. L. Joseph Chalmers                            Senior Vice President of  
                                                 Operations                
Jack R. Attwood                    67            Director                  
William C. Langley                 58            Director                  
M. L. Lowenkron                    65            Director                  
Daniel D. Villanueva               58            Director                  

    Barton S. Brodkin began his career in the soft drink industry in 1967 with
the Pepsi-Cola Bottling Company, where he held various sales and marketing      
positions, ultimately becoming Group Marketing Manager.  He joined              
Westinghouse's Beverage Group in 1973 as Vice President of the Western Division 
and in 1980 was promoted to Business Unit President and General Manager.  He is 
a director of and has served as President of the Seven-Up Bottlers Association  
and is current Treasurer of the National Soft Drink Association and a director  
of the RC Bottlers Association.                                                 

Richard D. Ferguson has been with the Company since 1979 and has held 
various positions of increasing importance in accounting and finance.  He has   
held the position of Executive Vice President, Chief Financial Officer since    
October 1996 and was previously the Vice President of Financial and Business    
Planning.                                                                       

  Roy S. Breneman began his career in the soft drink industry in 1968 as a
merchandising manager with the Pepsi-Cola Company.  He served as Vice President,
General Manager for the Dr Pepper bottler in Dallas and was National Sales      
Manager for the Country Time ready-to-drink division of General Foods           
Corporation.  He joined Westinghouse's Beverage Group as Vice President of      
Marketing Services and became Senior Vice President of Sales and Marketing in   
1986.                                                                           

Louis Janicich has been involved in human resources in the soft drink 
industry since 1967 as Director of Industrial Relations with the Pepsi-Cola     
Bottling Company of Los Angeles.  He joined Westinghouse's Beverage Group as    
Director of Industrial Relations in 1970 and in 1987 assumed his current        
position of Senior Vice President of Human Resources.                           

     F.L. Joseph Chalmers joined Westinghouse in 1969 and held various positions
in purchasing and operations.  He joined Westinghouse's Beverage Group in 1976  
and has held various positions of increasing importance in purchasing, sales and
operations.  He assumed his current position as Senior Vice President of        
Operations in June 1996.                                                        

-28-

10-K405
30th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 30th
     Jack R. Attwood, a director of the Company since 1990, joined the Coca-Cola
Bottling Company of Los Angeles in 1953 and served in various positions until   
his retirement in 1986.  From 1966 to 1970 he was Vice President of Advertising 
and from 1970 to 1971 he was Vice President of Marketing.  In 1971, he was named
Senior Vice President and General Manager of the soft drink division.  In 1976, 
he was appointed Executive Vice President, and in 1981 was appointed President  
and Chief Operating Officer.  In 1984, he was appointed Corporate Senior Vice   
President of the Beverage Group, US Food Segment of Beatrice Companies, Inc. and
became Chairman of the Board of the Coca-Cola Bottling Company of Los Angeles.  
He is a director of Sports Chalet, Inc. and several private companies.          

   William C. Langley became a director of the Company in August 1996.  From
1991 to 1996, Mr. Langley was Executive Vice President, Chief Credit and Risk   
Policy Officer, Chemical Bank and Chemical Banking Corporation and Executive    
Vice President of Chase Manhattan Corporation from April to July 1996.  Mr.     
Langley is a director of the Chase Preferred Capital Corporation and Morrison   
Knudsen Corporation.                                                            

     M. L. Lowenkron became a director of the Company in August 1996.  From 1980
to 1993 Mr. Lowenkron was President and Chief Executive Officer of A&W Brands,  
Inc. and from 1995 to June 1996, President and Chief Executive Officer of       
Heileman Brewing Co. Inc.  Mr. Lowenkron is a director for Hat Brands, Inc.,    
Triarc Companies and DePux, Inc.                                                

Daniel D. Villanueva became a director of the Company in August 1996. 
Since 1990 Mr. Villanueva has been Chairman and managing Director of Bastion    
Capital Corporation and from 1988 to 1990 was General manager of a Los Angeles  
Univison affiliate, KMEX-TV.                                                    

   At present, all Directors are elected and serve until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal.
There are no family relationships between any of the Directors or executive     
officers of the Company.                                                        

ITEM 11.  EXECUTIVE COMPENSATION                                                

                                                        [Enlarge/Download Table]

                                                      Annual Compensation                                  
                                        ------------------------------------------                         
Name and                                                                                All other          
Principal Position                         Year          Salary           Bonus     Compensation/(1)/      
--------------------------------------  ---------     -----------       ----------  -----------------      
                                                                                                           
Barton S. Brodkin                        1996         $  316,098        $  667,083         $    9,091      
     Chairman of the Board               1995            300,000            54,000              7,933      
        President and Chief              1994            275,580            53,573             12,120      
         Executive Officer                                                                                 

Roy S. Breneman                          1996         $  127,824        $  115,325         $    5,400      
     Chief Sales and Marketing           1995            138,960                 -             14,785      
      Officer, and Executive Vice        1994            133,920                 -             17,740      
       President                                                                                           

Louis Janicich                           1996         $  129,600        $  116,856         $   16,880      
     Senior Vice President of Human      1995            128,295                 -            165,413 /(2)/
        Resources and Secretary          1994            123,660                 -             22,421      

Richard Ferguson                         1996         $   94,271        $   78,333         $    6,000      
     Chief Financial Officer and         1995             77,100                 -                  -      
         Executive Vice President        1994             75,120                 -                  -      

F.L. Joseph Chalmers                     1996         $  117,060        $   83,465         $    3,720      
     Senior Vice President of            1995            110,685                 -              3,720      
      Operations                         1994            106,680                 -              3,720      

-29-

10-K405
31st Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 31st
(1)  Represents amounts paid by the Company for life insurance premiums,        
  automobile reimbursement and employer matched 401(k) payments.  Includes
contributions by the Company to the Company's target benefit defined  
  contribution plan on behalf of each of the named executives for 1994 and
1995.  Contributions by the Company under this plan were suspended for
1996.                                                                 

(2)  Includes funds received from termination of the 401-E program that was     
previously reported as bonus for this employee.                       

DIRECTOR COMPENSATION                                                           

     Directors who are not employees of Seven-Up/RC receive an annual director's
fee of $20,000 in addition to $1,000 per meeting attended and are reimbursed for
meeting related expenses.                                                       

EMPLOYMENT AGREEMENT                                                            

At a meeting held on October 31, 1996 of the Personnel & Compensation 
Committee of the Board of Directors (the "Compensation Committee"), which       
committee is comprised of Jack Attwood and Monroe L. Lowenkron, the Compensation
Committee recommended that the Board of Directors review and evaluate the       
employment agreement between the Company and Bart S. Brodkin, the Chief         
Executive Officer of the Company.  After a series of negotiations between the   
Compensation Committee and Mr. Brodkin, on January 22, 1997, the Company entered
into a Second Amended and Restated Management Agreement with Mr. Brodkin (the   
"Brodkin Agreement").  The annual compensation payable by the Company to Mr.    
Brodkin under the Brodkin Agreement is $400,000.  The Brodkin Agreement expires 
on December 31, 1999, subject to automatic one-year renewals unless terminated  
upon written notice by either party at least 90 days prior to the end of the    
year or earlier upon Mr. Brodkin's death, Disability, resignation, retirement,  
or removal for Cause (as such capitalized terms are defined in the Brodkin      
Agreement).  In addition, the Brodkin Agreement provides for severance benefits 
to be paid in a lump sum by the Company to Mr. Brodkin upon a Change of Control 
(as defined in the Brodkin Agreement).                                          

The Brodkin Agreement was amended by a First Amendment to Management  
Agreement, dated as of February 28, 1997 (the "First Amendment").  The First    
Amendment shall only become effective immediately prior to the purchase of      
Common Stock by the Purchaser in the Offer and shall be of no further force or  
effect if the Merger Agreement is terminated.  The execution and delivery of the
First Amendment was a condition to the execution and delivery of the Merger     
Agreement by Dr Pepper Bottling.  The First Amendment, will, among other things,
significantly amend certain of the provisions regarding severance payments to,  
and continued fringe benefits for, Mr. Brodkin following the termination of his 
employment.  In this regard, the special provisions requiring the Company to pay
to Mr. Brodkin an amount equal to three times his base salary and bonus and to  
maintain certain benefits for him for 36 months if his employment is terminated 
under certain circumstances following a Change of Control (as defined in the    
Brodkin Agreement) will be eliminated.  In addition, under the First Amendment, 
the circumstances constituting Good Reason (as defined in the Brodkin Agreement)
under which Mr. Brodkin may resign and obtain severance benefits will be        
significantly narrowed and certain procedural requirements for the benefit of   
Mr. Brodkin that would have been applicable if he had been terminated under     
certain circumstances constituting Cause (as defined in the Brodkin Agreement)  
will be terminated.  The First Amendment will also eliminate Mr. Brodkin's right
to receive certain severance payments in the event that he resigns other than   
for Good Reason (as defined in the Brodkin Agreement).  Pursuant to the First   
Amendment, the automatic extension under the Brodkin Agreement is limited to one
additional year, such extension still being subject to neither party giving     
contrary notice.  The First Amendment will not alter the base salary provided   
under the Brodkin Agreement or Mr. Brodkin's rights to participate in the       
Company's annual bonus program.                                                 

The foregoing is a summary of the Brodkin Agreement and the First     
Amendment.  Such Summary is qualified in its entirety by reference to the text  
of the Brodkin Agreement and the First Amendment, copies of which are filed as  
exhibits to this Annual Report on Form 10-K.                                    

-30-

10-K405
32nd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 32nd
   On February 10, 1997, the Company entered into Management Agreements with
each of Rick Ferguson and Roy Breneman (the "Ferguson Agreement" and the        
"Breneman Agreement", respectively).  Each of  the Ferguson Agreement and the   
Breneman Agreement provides for severance benefits to be paid by the Company in 
a lump sum to Messrs. Ferguson and Breneman, respectively, upon a Change of     
Control (as defined in each of the Ferguson Agreement and the Breneman          
Agreement).  The Ferguson Agreement was amended by a Termination Agreement dated
as of February 28, 1997 (the "Ferguson Contract Termination Agreement").  The   
execution and delivery of the Ferguson Contract Termination Agreement was a     
condition to the execution and delivery of the Merger Agreement by Dr Pepper    
Bottling.  The Ferguson Contract Termination Agreement shall only become        
effective immediately prior to the purchase of Shares by the Purchaser in the   
Offer and shall be of no further force or effect if the Merger Agreement is     
terminated.  In the event that the provisions of the Ferguson Contract          
Termination Agreement become effective, the Ferguson Agreement will be          
terminated and will cease to be of any further force and effect.  The foregoing 
is a summary of the Ferguson Agreement, as amended by the Ferguson Contract     
Termination Agreement, and the Breneman Agreement.  Such summary is qualified in
its entirety by reference to the text of the Ferguson Agreement, as amended by  
the Ferguson Contract Termination Agreement, and the Breneman Agreement, copies 
of which are filed as exhibits to this Annual Report on Form 10-K, and are each 
incorporated herein by reference.                                               

STOCK OPTION PLANS                                                              

Pursuant to the terms and conditions of the Reorganization Plan, the
Company granted, on February 3, 1997, options to purchase Shares at an exercise 
price of $7.30 per Share, to its executive officers (collectively, the          
"Management options") as follows:  Rick Ferguson, options to purchase 32,000    
Shares; Joe Chalmers, options to purchase 22,000 Shares; Lou Janicich, options  
to purchase 22,000 Shares; Roy Breneman, options to purchase 22,000 Shares; Tom 
Theriault, options to purchase 22,00 Shares; Derrick Snider, options to purchase
13,800 Shares; Tom Holborow, options to Purchase 13,800 Shares; Jose Mejia,     
options to purchase 5,500 Shares; Steve Walb, options to purchase 5,500 Shares; 
and Bart Brodkin, options to purchase 160,549 Shares.                           

Upon the exercise of the stock purchase warrant held by WB Bottling   
Corporation and pursuant to anti-dilution provisions contained in such stock    
purchase warrant, the holders of Management Options shall receive additional    
options pursuant to anti-dilution provisions contained in the Management        
Options.  Such additional options shall be granted as follows:  Rick Ferguson,  
options to purchase 1,800 Shares; Joe Chalmers, options to purchase 1,250       
Shares; Lou Janicich, options to purchase 1,250 Shares; Roy Breneman, options to
purchase 1,250 Shares; Tom Theriault, options to purchase 1,250 Shares; Derrick 
Snider, options to purchase 775 Shares; Tom Holborow, options to purchase 775   
Shares; Jose Mejia, options to purchase 300 Shares; Steve Walb options to       
purchase 300 Shares; and Bart Brodkin, options to purchase 8,980 Shares.  The   
foregoing is a summary of the Management Options.  Such summary is qualified in 
its entirety by reference to the text of each Management Option, the form of    
which is filed as an exhibit to this Annual report on Form 10-K, and is         
incorporated herein by reference.                                               

  At a meeting of the Compensation Committee held on October 31, 1996, the
Compensation Committee resolved to recommend to the Board of Directors that a   
stock option plan be approved for certain managers and directors of the Company.
On January 30, 1997, the Compensation Committee made their recommendations to   
the Board of Directors and the Board of Directors authorized, approved, and     
adopted the terms and conditions of the 1996-1997 Stock Option Plan (the "Stock 
Option Plan").  Pursuant to the terms and conditions of the Stock Option Plan,  
on February 4, 1997, the Company granted options to purchase Shares, at an      
exercise price of $8.00 per Share, to its executive officers and directors      
(collectively, the "Employee/Director Options" and, together with the Management
Options, the "Options") as follows:  Rick Ferguson, options to purchase 13,900  
Shares; Joe Chalmers, options to purchase 10,250 Shares; Lou Janicich, options  
to purchase 10,250 Shares; Roy Breneman, options to purchase 6,850 Shares; Tom  
Theriault, options to purchase 10,250 Shares; Derrick Snider, options to        
purchase 8,300 Shares; Tom Holborow, options to purchase 8,300 Shares; Jose     
Mejia, options to purchase 2,150 Shares; Steve Walb, options to purchase 2,150  
Shares; Bart Brodkin, options to purchase 225,622 Shares; Jack Attwood, options 
to purchase 21,000 Shares; Monroe Lowenkron, options to purchase 21,000 Shares; 
William                                                                         

-31-

10-K405
33rd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 33rd
Langley, options to purchase 21,000 Shares; and Daniel Villanueva, options to   
purchase 21,000 Shares. The foregoing is a summary of the Stock Option Plan and 
the Employee/Director Options. Such summary is qualified in its entirety by     
reference to the text of the Stock Option Plan, and the Employee/Director       
Options, copies of which are filed as exhibits to this Annual Report on Form    
10-K, and are each incorporated herein by reference.                            

-32-

10-K405
34th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 34th
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT        

The following table sets forth certain information, as of February 28,
1997, with respect to the beneficial ownership of Shares by (i) all persons     
known by the Company to be the beneficial owners of more than 5% of the         
outstanding Shares (as derived solely from the Company's review of Schedules B, 
D, and 13G on file with the Securities and Exchange Commission and from         
correspondence received from certain stockholders of the Company), (ii) each    
director of the Company, (iii) the Chief Financial Officer and the four other   
most highly compensated executive officers of the Company as of February 28,    
1997, whose total annual compensation for the year ended December 31, 1996,     
exceeded $100,000, and (iv) all executive officers and directors of the Company 
as a group.                                                                     

                                                                [Download Table]

                                               Amount and                      
                                               Nature of                       
                                               Beneficial                      
                                               Ownership               Percent 
Name and Address of                            of Common               of Class
 Beneficial Owner                                Stock                  /(1)/  
------------------------------------       ---------------         ------------
                                                                               
Dean Witter Intercapital Inc. /(2)/           1,854,805                30.91%  
 2 World Trade Center                                                          
 New York, NY  10048                                                           
Merrill Lynch & Co., Inc. /(3)/                 763,000                12.71%  
  World Financial Center,                                                      
  North Tower                                                                  
  250 Vesey Street                                                             
  New York, NY  10281                                                          
Metropolitan Life Insurance                     605,500                10.09%  
  Company /(4)/                                                                
  One Madison Avenue                                                           
  New York, NY  10010                                                          
Barton S. Brodkin /(5)/                         395,151 /(6)/           6.58%  
Richard D. Ferguson /(5)/                        47,700 /(7)/            *     
Louis Janicich /(5)/                             33,500 /(8)/            *     
F.L. Joseph Chalmers /(5)/                       33,500 /(9)/            *     
Roy S. Breneman /(5)/                            30,100 /(10)/           *     
Jack Attwood /(5)/                               21,000 /(11)/           *     
William C. Langley /(5)/                         21,000 /(11)/           *     
M.L. Lowenkron /(5)/                             21,000 /(11)/           *     
Daniel D. Villanueva /(5)/                       21,000 /(11)/           *     
All executive officers and                      719,101 /(12)/         11.98%  
 directors as a group (14                                                      
 Persons)                                                                      

----------------                                                                
*    Less than 1%.                                                              

(1)  Except as indicated in the footnotes to this table, the persons named in   
    the table have sole voting and investment power with respect to all Shares
   shown and beneficially owned by them, subject to community property laws,
where applicable.                                                     

-33-

10-K405
35th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 35th
(2)  All Shares are owned by the following funds for which Dean Witter          
Intercapital Inc. acts as investment advisor:  Dean Witter High Yield 
  Securities (456,055 Shares); Dean Witter High Income Securities (490,000
Shares);  High Income Advantage Trust (140,000 Shares); High Income   
Advantage Trust II (175,000 Shares); High Income Advantage Trust III  
  (70,000 Shares);  Dean Witter Diversified Income Trust (322,675 Shares);
and Variable Investment Series -- High Yield (201,075 Shares).        

(3)  All Shares may also be deemed to be beneficially owned by Merrill Lynch    
Group, Inc., a wholly-owned subsidiary of Merrill Lynch & Co., Inc.,  
     Princeton Services, Inc., a wholly-owned subsidiary of Merrill Lynch Group,
Inc., Fund Asset Management, L.P., a limited partnership of Princeton 
     Services, Inc. is a general partner, and Merrill Lynch Corporate Bond Fund,
  Inc. (High Income Portfolio), a registered investment company advised by
Fund Asset Management, L.P.                                           

(4)  All Shares may also be deemed to be beneficially owned by State Street     
  Research & Management Company, a wholly-owned subsidiary of Metropolitan
Life Insurance Company and a registered investment advisor.           

(5)  The business address of such person is c/o Seven-Up/RC Bottling Company of 
    Southern California, Inc. 3220 East 26th Street, Vernon, California 90023.

(6)  Represents Shares subject to non-qualified options and includes 8,980      
 Shares subject to non-qualified options exercisable pursuant to certain
     anti-dilution provisions contained in the stock purchase warrant held by WB
Bottling Corporation and pursuant to certain anti-dilution provisions 
contained in the letter agreement evidencing the grant of such non-   
qualified options to executive.                                       

(7)  Represents Shares subject to non-qualified options and includes 1,800      
 Shares subject to non-qualified options exercisable pursuant to certain
     anti-dilution provisions contained in the stock purchase warrant held by WB
Bottling Corporation and pursuant to certain anti-dilution provisions 
contained in the letter agreement evidencing the grant of such non-   
qualified options to executive.                                       

(8)  Represents Shares subject to non-qualified options and includes 1,250      
 Shares subject to non-qualified options exercisable pursuant to certain
     anti-dilution provisions contained in the stock purchase warrant held by WB
Bottling Corporation and pursuant to certain anti-dilution provisions 
contained in the letter agreement evidencing the grant of such non-   
qualified options to executive.                                       

(9)  Represents Shares subject to non-qualified options and includes 1,250      
 Shares subject to non-qualified options exercisable pursuant to certain
     anti-dilution provisions contained in the stock purchase warrant held by WB
Bottling Corporation and pursuant to certain anti-dilution provisions 
contained in the letter agreement evidencing the grant of such non-   
qualified options to executive.                                       

(10) Represents Shares subject to non-qualified options and includes 1,250      
 Shares subject to non-qualified options exercisable pursuant to certain
     anti-dilution provisions contained in the stock purchase warrant held by WB
Bottling Corporation and pursuant to certain anti-dilution provisions 
contained in the letter agreement evidencing the grant of such non-   
qualified options to executive.                                       

(11) Represents Shares subject to non-qualified options.                        

(12) Represents Shares subject to non-qualified options and includes 17,930     
 Shares subject to non-qualified options exercisable pursuant to certain
     anti-dilution provisions contained in the stock purchase warrant held by WB
Bottling Corporation and pursuant to certain anti-dilution provisions 
contained in the letter agreement evidencing the grant of such non-   
qualified options to executive.                                       

-34-

10-K405
36th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 36th
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

Monroe L. Lowenkron, a director of the Company, serves on the Board of
Directors of the Triarc Companies, the parent company of Royal Crown Cola Co.   
and Mistic Brands, Inc.  The Company purchases extracts and concentrates (and   
finished products) from both such companies pursuant to the franchise           
agreements.  In 1996, purchases from both such companies totaled approximately  
$8,844,000.  The Company from time to time incurs trade debt in the ordinary    
course of business for purchases of extracts and concentrates (and finished     
products) from such companies.  Management believes that the terms of such trade
debt are no less favorable to the Company than the terms of trade debt granted  
by such companies to other of their respective franchisee companies.            

-35-

10-K405
37th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 37th
PART IV                                                                         

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

(a)       The following documents are filed as a part of this report:           

      1.   The financial statements and schedule listed in the "Index to
Financial Statements."                            

                                                                [Download Table]


Number                Description                                               
------                -----------                                               
                                                                                
   2.1  First Amended Joint Plan of Reorganization of Seven-Up/RC Bottling      
        Company of Southern California, Inc. and Beverage Group Acquisition     
        Corporation, dated as of June 19, 1996.*                                

   3.1  Amended and Restated Certificate of Incorporation of Seven-Up/RC        
        Bottling Company of Southern California, Inc.*                          

   3.2  By-Laws of Seven-Up/RC Bottling Company of Southern California, Inc.*   

  10.1  Stock Purchase and Sale Agreement among Seven-Up/RC Acquisition         
        Corporation, Seven-Up/RC Bottling Company of Southern California, Inc.  
        and Seven-Up/RC Bottling Company of Puerto Rico, Inc., dated as of May  
        3, 1996.**                                                              

  10.2  Agreement and Plan of Merger, dated as of February 28, 1997, by and     
        among Seven-Up/RC Bottling Company of Southern California, Inc., Dr     
        Pepper Bottling Company of Texas, and DPB Acquisition Corp.***          

  10.3  Second Amended and Restated Management Agreement, dated as of January   
        22, 1997, by and between Seven-Up/RC Bottling Company of Southern       
        California, Inc. and Bart S. Brodkin, as amended by the First Amendment 
        to Management Agreement, dated as of February 28, 1997.***              

  10.4  Management Agreement, dated as of February 10, 1997, by and between     
        Seven-Up/RC Bottling Company of Southern California, Inc. and Rick      
        Ferguson, as amended by the Termination Agreement, dated as of February 
        28, 1997.***                                                            

  10.5  Management Agreement, dated as of February 10, 1997, by and between     
        Seven-Up/RC Bottling Company of Southern California, Inc. and Roy       
        Breneman.***                                                            

  10.6  Form of Option Agreement, dated as of February 3, 1997, by and between  
        Seven-Up/RC Bottling company of Southern California, Inc. and certain   
        executive officers of the Company.***                                   

  10.7  1996-1997 Stock Option Plan.***                                         

  10.8  Form of Option Agreement, dated as of February 4, 1997, by and between  
        Seven-Up/RC Bottling Company of Southern California, Inc. and certain   
        executive officers and directors of the Company.***                     

  10.9  Confidentiality Agreement, dated as of February 26, 1997, by and        
        between Seven-Up/RC Bottling Company of Southern California, Inc. and   
        Dr Pepper Bottling Company of Texas.***                                 

 10.10  Registration Rights Agreement, dated as of August 15, 1996, among Seven-
        Up/RC Bottling Company of Southern California, Inc. and certain holders 
        of Common Stock.*                                                       

 10.11  Credit Agreement, dated as of August 2, 1996, among Seven-Up/RC         
        Bottling Company of Southern California, Inc., General Electric Capital 
        Corporation, and certain other lenders party thereto.*                  

 27     Financial Data Schedule                                                 


*    Incorporated by reference to the Company's Form S-1, as filed on November  
22, 1996.                                                             
**   Incorporated by reference to the Company's Form 10-Q for the period ended  
June 30, 1996.                                                        
***  Incorporated by reference to the Company's Schedule 14D-9, dated March 7,  
1997.                                                                 

(b)  Reports on Form 8-K:                                                       

None.                                                                 

-36-

10-K405
38th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 38th
SIGNATURES

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

                            SEVEN-UP/RC BOTTLING COMPANY
                            OF SOUTHERN CALIFORNIA, INC.
            (Registrant)

                  By /s/ Barton S. Brodkin
                                       ---------------------------------------
                 Barton S. Brodkin
                     Chairman of the Board
                                     President and Chief Executive Officer

              Date   April 1, 1997
                                         -------------------------------------

  Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the          
registrant and in the capacities on the dates indicated.                        

                                                                [Download Table]

                                                                     
By      /s/ Barton S. Brodkin                    Date   April 1, 1997
     ----------------------------------------       ---------------- 
        Barton S. Brodkin                                            
        Chairman of the Board                                        
        President and Chief Executive Officer                        

By      /s/ Richard D. Ferguson                 Date   April 1, 1997 
     ----------------------------------------       ---------------- 
        Richard D. Ferguson                                          
        Executive Vice President,                                    
        Chief Financial Officer                                      

By      /s/ Jack R. Attwood                     Date   April 1, 1997 
     ----------------------------------------       ---------------- 
        Jack R. Attwood                                              
        Director                                                     

By      /s/ William C. Langley                  Date   April 1, 1997 
     ----------------------------------------       ---------------- 
        William C. Langley                                           
        Director                                                     

By      /s/ M. L. Lowenkron                     Date   April 1, 1997 
     ----------------------------------------       ---------------- 
        M. L. Lowenkron                                              
        Director                                                     

By      /s/ Daniel D. Villanueva                Date   April 1, 1997 
     ----------------------------------------       ---------------- 
        Daniel D. Villanueva                                         
        Director                                                     

-37-

10-K405
39th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 39th
INDEX TO FINANCIAL STATEMENTS 

                                                        [Enlarge/Download Table]


                                                                                          Page 
                                                                                         ------
                                                                                               
Report of Independent Public Accountants                                                   F-2 

Consolidated Balance Sheets as of December 31, 1996 and 1995                               F-3 

Consolidated Statements of Operations for the period from January 1, to August 15, 1996,       
 the period from August 16, to December 31, 1996, and for the years ended December 31,         
 1995 and 1994                                                                             F-4 

Consolidated Statements of Cash Flows for the period from January 1, to August 15, 1996,       
 the period from August 16, to December 31, 1996, and for the years ended December 31,         
 1995 and 1994                                                                             F-5 

Consolidated Statements of Stockholders' Equity (Deficit) for the period from January 1,       
 to August 15, 1996, the period from August 16, to December 31, 1996, and for the years        
 ended December 31, 1995 and 1994                                                          F-6 

Notes to Consolidated Financial Statements                                                 F-7 

Schedule supporting the financial statements for the period from January 1, to                 
 August 15, 1996, the period from August 16, to December 31, 1996 and for the                  
 years ended December 31, 1995 and 1994                                                        

Schedule II  -  Valuation and Qualifying Accounts                                          F-22

F-1 

10-K405
40th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 40th
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of                                   
Seven-Up/RC Bottling Company of Southern California, Inc.:                  

    We have audited the accompanying consolidated balance sheets of Seven-
Up/RC Bottling Company of Southern California, Inc. (a Delaware corporation) and
its subsidiary (collectively, the Company) as of December 31, 1996 and 1995, and
the related consolidated statements of operations, stockholders' equity         
(deficit) and cash flows for the period from January 1, to August 15, 1996, the 
period from August 16, to December 31, 1996, and for the years ended December   
31, 1995 and 1994. These consolidated financial statements are the              
responsibility of the management of the Company. Our responsibility is to       
express an opinion on these consolidated financial statements based on our      
audits.                                                                         

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

      As more fully described in Notes 1 and 3 to the financial statements, on
August 15, 1996, the Company emerged from protection under Chapter 11 of the    
U.S. Bankruptcy Code pursuant to a Reorganization Plan which was confirmed by   
the Bankruptcy Court on August 12, 1996.  In accordance with AICPA Statement of 
Position 90-7, the Company adopted "Fresh Start Reporting" whereby its assets,  
liabilities and new capital structure were adjusted to reflect estimated fair   
values as of August 15, 1996.  As a result, the financial statements for the    
period subsequent to August 15, 1996, reflect the Reorganized Company's new     
basis of accounting and are not comparable to the Predecessor Company's pre-    
reorganization consolidated financial statements.                               

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Seven-Up/RC 
Bottling Company of Southern California, Inc. and its subsidiary as of December 
31, 1996 and 1995, and the results of their operations and their cash flows for 
the period from January 1, to August 15, 1996, the period from August 16, to    
December 31, 1996, and for the years ended December 31, 1995 and 1994, in       
conformity with generally accepted accounting principles.                       

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The schedule listed in the index to     
financial statements is presented for purposes of complying with the Security   
and Exchange Commission's rules and is not part of the basic financial          
statements.  This schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, fairly      
states in all material respects the financial data required to be set forth     
therein in relation to the basic financial statements taken as a whole.         

               ARTHUR ANDERSEN LLP

Los Angeles, California                                                         
March 31, 1997                                                                  

F-2 

10-K405
41st Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 41st
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC. 

Consolidated Balance Sheets 
(Dollar amounts in thousands, except per share amounts) 

                                                        [Enlarge/Download Table]

                                                                    Reorganized    Predecessor
                                                                      Company        Company  
                                                                    -----------    ---------- 
                                                                       as of December 31,     
                                                                        1996         1995     
                                                                    ----------     ---------- 
                                                                                              
                           ASSETS                                                             
Current assets:                                                                               
    Cash                                                             $  3,813       $  5,949  
    Accounts receivable:                                                                      
           Trade, net                                                  25,604         42,261  
           Other                                                        7,692          9,450  
    Inventories                                                        19,144         24,947  
    Prepaid expenses                                                    1,875          2,908  
                                                                     --------       --------  
           Total current assets                                        58,128         85,515  
                                                                     --------       --------  
Property, plant and equipment, net                                     56,790         79,945  
Other assets:                                                                                 
    Intangible and other assets                                         6,323         22,844  
    Debt issuance costs                                                   129          3,829  
                                                                     --------       --------  
           Total assets                                              $121,370       $192,133  
                                                                     ========       ========  

                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                            

Current liabilities:                                                                          
    Accounts payable                                                 $ 18,358       $ 26,568  
    Accrued expenses                                                   27,804         36,944  
    Current portion of long-term debt and                                                     
      capital lease obligations                                           562        189,954  
                                                                     --------       --------  
           Total current liabilities                                   46,724        253,466  
                                                                     --------       --------  
Long-term debt:                                                                               
    Revolving credit facilities                                        19,021              -  
    Term loan                                                             506              -  
    Capital lease obligations                                           2,456              -  
                                                                     --------       --------  
           Total long-term debt                                        21,983              -  
                                                                     --------       --------  

Stockholders' equity (deficit):                                                               
Capital stock par value $0.01 a share; authorized 6,000,000                                   
 and 1,000 shares, and issued and outstanding 5,000,000 and                                   
 1,000 shares, in 1996 and 1995, respectively                              50              -  
    Additional capital                                                 53,075         42,557  
    Retained deficit                                                     (462)      (103,890) 
                                                                     --------       --------  
           Total stockholders' equity (deficit)                        52,663        (61,333) 
                                                                     --------       --------  
           Total liabilities and stockholders' equity (deficit)      $121,370       $192,133  
                                                                     ========       ========  

The accompanying notes are an integral part of these consolidated balance       
sheets.                                                                         

F-3 

10-K405
42nd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 42nd
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC. 

Consolidated Statements of Operations 
(Dollar amounts in thousands, except per share amounts) 

                                                        [Enlarge/Download Table]


                                     Reorganized                                                     
                                       Company              Predecessor Company                      
                                     ------------  ------------------------------------------------- 
                                     8/16 - 12/31   1/1 - 8/15             Years ended December 31,  
                                         1996          1996                 1995             1994    
                                     ------------  ------------         ------------      ---------- 
                                                                                                     
Net sales                              $  91,647     $202,844             $396,725          $413,840 
Cost of goods sold                        74,058      164,320              334,942           342,336 
                                       ---------     --------            ---------         --------- 
   Gross profit                           17,589       38,524               61,783            71,504 

Administrative, marketing                 13,575       27,841               47,935            48,437 
 and general expenses                                                                                

 Depreciation and amortization             3,688       10,399               18,180            17,251 

 Restructure charges                           -          547                5,015                 - 
                                       ---------     --------            ---------         --------- 
     Operating income (loss)                 326         (263)              (9,347)            5,816 

Interest expense                             838       12,871               23,057            21,626 

Other income, net                             50       34,309                  210                95 
                                       ---------     --------            ---------         --------- 
   Loss before provision for income                                                                  
     taxes, reorganization expense                                                                   
     and extraordinary items                (462)      21,175              (32,194)          (15,715)

   Reorganization expense                      -       13,011                    -                 - 

Provision for income taxes                     -          345                    -               185 
                                       ---------     --------            ---------         --------- 
   (Loss) income before                                                                              
     extraordinary items                    (462)       7,819              (32,194)          (15,900)

 Extraordinary items - gain                    -      (54,577)                   -                 - 
                                       ---------     --------            ---------         --------- 
   Net (loss) income                   $    (462)    $ 62,396            $ (32,194)        $ (15,900)
                                       =========     ========            =========         ========= 

Loss per common share:                                                                               
   Net loss per common share           $     .09     $      -            $       -         $       - 
                                       =========     ========            =========         ========= 
Weighted average common shares                                                                       
 outstanding                               5,077            -                    -                 - 
                                       =========     ========            =========         ========= 

The accompanying notes are an integral part of these consolidated financial 
statements.                                                                 

F-4 

10-K405
43rd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 43rd
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC. 

Consolidated Statements of Cash Flows 
(Dollar amounts in thousands) 

                                                        [Enlarge/Download Table]


                                                      Reorganized                                                     
                                                        Company                       Predecessor Company             
                                                      ------------  --------------------------------------------------
                                                      8/16 - 12/31  1/1 - 8/15                Years ended December 31,
                                                      ------------  ----------             ---------------------------
                                                          1996         1996                   1995             1994   
                                                      ------------  ----------             -----------      ----------
                                                                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                 
Income (loss) before extraordinary items              $   (462)     $   7,819               $(32,194)        $(15,900)
Adjustments to reconcile income (loss) before                                                                         
   extraordinary items to net cash provided by                                                                        
   (used in) operating activities:                                                                                    
     Depreciation and amortization                       3,688         10,997                 20,048           19,209 
     Equity in earnings of joint venture                     -             (5)                  (103)             (42)
     (Gain) loss on sales of fixed assets                  (50)          (764)                    (8)             117 
     Non cash reorganization expense                         -          7,207                      -                - 
     Disposition of capital lease                            -            548                      -                - 
     Provision for doubtful accounts                       206            836                    715            1,025 
     Cash dividend from investment in joint venture          -              -                      -              225 
     Gain on sale of Puerto Rico                             -        (31,715)                     -                - 
     Changes in assets and liabilities:                                                                               
        Accounts receivable                              2,197         (1,928)                18,542          (16,616)
        Inventories                                     (2,763)           419                 19,471          (17,737)
        Prepaids and other                                 286          4,356                 (2,904)            (370)
        Accounts payable                               (20,114)        20,769                (24,247)          24,345 
        Accrued expenses                                 2,459         17,859                  6,447            7,414 
                                                      --------       --------               --------         -------- 
          Net cash (used in) provided by                                                                              
           operating activities                        (14,553)        36,398                  5,767            1,670 
                                                      --------       --------               --------         -------- 

CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                 
Proceeds from sale of Puerto Rico                            -         69,456                      -                - 
Proceeds from sales of property, plant and equipment        40            126                    117               48 
Additions to property, plant and equipment              (3,356)        (5,228)                (5,208)          (5,138)
                                                      --------       --------               --------         -------- 
          Net cash provided by (used in)                                                                              
            investing activities                        (3,316)        64,354                 (5,091)          (5,090)
                                                      --------       --------               --------         -------- 

CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                 
(Repayments) borrowings of revolving loans, net         19,021        (45,247)                  (616)           3,687 
Payment to Senior Secured Noteholders                        -        (55,000)                     -                - 
(Repayments of) proceeds from term loan                    (25)        (2,852)                   (90)           4,286 
Payments of debt issuance costs                            (41)           (88)                     -                - 
Repayments of capital leases                              (149)          (638)                (1,003)          (1,317)
                                                      --------       --------               --------         -------- 
          Net cash provided by (used in)                                                                              
           financing activities                         18,806       (103,825)                (1,709)           6,656 
                                                      --------       --------               --------         -------- 
NET INCREASE (DECREASE) IN CASH                            937         (3,073)                (1,033)           3,236 
CASH, beginning of year                                  2,876          5,949                  6,982            3,746 
                                                      --------       --------               --------         -------- 
CASH, end of year                                     $  3,813       $  2,876               $  5,949         $  6,982 
                                                      ========       ========               ========         ======== 
SUPPLEMENTAL DISCLOSURE OF CASH                                                                                       
  FLOW INFORMATION:                                                                                                   
   Cash interest paid                                 $    616       $  2,080               $ 13,342         $ 19,811 
                                                      ========       ========               ========         ======== 
   Purchases of property, plant and equipment                                                                         
    through issuance of capital lease obligation      $      -       $      -               $    555         $ 10,229 
                                                      ========       ========               ========         ======== 

The accompanying notes are an integral part of these consolidated financial 
statements.                                                                 

F-5 

10-K405
44th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 44th
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC. 

Consolidated Statements of Stockholders' Equity (Deficit) 
(Dollar amounts in thousands) 

                                                        [Enlarge/Download Table]

                                                                                     Total     
                                    Capital Stock                                 Stockholders'
                                ----------------------  Additional   Retained       Equity     
                                 Shares        Amount    Capital     (Deficit)     (Deficit)   
                                --------      --------  ----------   ---------    ------------ 
                                                                                               
REORGANIZED (Notes 1 & 3)                                                                      
August 16 to December 31, 1996                                                                 
  Balance, August 16, 1996        5,000        $   50     $ 53,125    $       -     $ 53,125   
  Net loss for the period             -             -            -         (462)        (462)  
                                -------        ------     --------    ---------     --------   
  Balance, December 31, 1996      5,000        $   50     $ 53,125    $    (462)    $ 52,663   
                                =======        ======     ========    =========     ========   

PREDECESSOR                                                                                    
January 1 to August 15, 1996                                                                   
  Balance December 31, 1995           1        $    -     $ 42,557    $(103,890)    $(61,333)  
  Reorganization (Notes 1 & 3)       99             1      (41,494)      41,494            -   
  New Issue                       4,900            49       52,062            -       52,062   
  Net income for the period           -             -            -       62,396       62,396   
                                -------        ------     --------    ---------     --------   
  Balance, August 15, 1996        5,000        $   50     $ 53,125    $       -     $ 53,125   
                                =======        ======     ========    =========     ========   

PREDECESSOR                                                                                    
January 1 to December 31, 1995                                                                 
  Balance, December 31, 1994          1        $    -     $ 42,557    $ (71,696)    $(29,139)  
  Net loss for the period             -             -            -      (32,194)     (32,194)  
                                -------        ------     --------    ---------     --------   
  Balance, December 31, 1995          1        $    -     $ 42,557    $(103,890)    $(61,333)  
                                =======        ======     ========    =========     ========   

PREDECESSOR                                                                                    
January 1 to December 31, 1994                                                                 
  Balance, December 31, 1993          1        $    -     $ 42,557    $ (55,796)    $(13,239)  
  Net loss for the period             -             -            -      (15,900)     (15,900)  
                                -------        ------     --------    ---------     --------   
  Balance, December 31, 1994          1        $    -     $ 42,557    $ (71,696)    $(29,139)  
                                =======        ======     ========    =========     ========   

The accompanying notes are an integral part of these consolidated financial 
statements.                                                                 

F-6 

10-K405
45th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 45th
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  NATURE OF BUSINESS AND PRESENTATION OF FINANCIAL INFORMATION               
------------------------------------------------------------          

GENERAL                                                               
-------                                                               

Seven-Up/RC Bottling Company of Southern California, Inc., a Delaware 
    corporation ("Seven-Up/RC"), is among the largest beverage distributors in
 the United States, and is the largest bottler of Seven-Up in the United
    States.  Southern California manufactures and distributes a broad range of
   beverage products in Southern California, Central California, portions of
     Nevada and New Mexico, and, through its wholly-owned subsidiary Seven-Up/RC
    Bottling Company of Puerto Rico, Inc. ("Puerto Rico"), Puerto Rico and the
     Virgin Islands.  Except as otherwise indicated, Seven-Up/RC and Puerto Rico
are collectively referred to as the "Company".  The Company has the   
 exclusive right within its territories to manufacture and/or distribute
    Seven-Up (lemon-lime), Royal Crown (cola), A&W (root beer and cream soda),
Sunkist (orange and citrus), Hawaiian Punch (fruit punch), Schweppes  
  (ginger-ale and mixers), Evian (imported still water), Perrier (imported
     mineral water), Welch's (grape, strawberry and pineapple), Mistic (teas and
juices), Yoo-Hoo (chocolate drink) and Snapple (teas and juices).     

The Company's business strategy is to manufacture and distribute a    
franchised portfolio of leading trademarked beverages in each beverage
flavor category and to create additional sources of revenue through   
   contract manufacturing.  The Company's Liquitrend division ("Liquitrend")
engages in contract manufacturing, which utilizes the Company's excess
   production capacity by manufacturing carbonated soft drink products for a
 variety of small, independent franchisors and retailers selling private
label products.                                                       

PRESENTATION OF FINANCIAL INFORMATION                                 
-------------------------------------                                 

On May 13, 1996, Seven-Up/RC and its immediate holding company parent,
Beverage Group Acquisition Corporation, filed voluntary petitions for 
   reorganization relief under Chapter 11 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Delaware.  On August 15, 1996, a 
 reorganization was consummated and Seven-Up/RC emerged as a reorganized
     company from Chapter 11.  Due to the reorganization plan and implementation
     of fresh start reporting (See Note 3), the financial statements for the new
     company ("Reorganized Company") for the period starting August 16, 1996 are
not comparable to that of the Company prior to August 16 1996,        
("Predecessor Company").  Predecessor Company included Seven-Up/RC and
    Puerto Rico through June 30, 1996, the date of disposition of Puerto Rico.
  Reorganized Company includes the operations of Seven-Up/RC subsequent to
the consummation date.                                                

   Certain reclassifications have been made to the 1995 financial statements
to conform to the 1996 presentation.                                  

BANKRUPTCY FILINGS                                                    
------------------                                                    

 As a result of severe liquidity problems, on July 31, 1995, Seven-Up/RC
  suspended payments of interest on its $140,000,000, 11.5% Senior Secured
Notes due 1999 (the "Senior Secured Notes").  At the end of the second
quarter of 1995 through the first quarter of 1996, Seven-Up/RC was in 
    violation of certain of its revolving credit facility covenants, including
  tangible net-worth, interest coverage and fixed charge coverage.  At the
  request of Seven-Up/RC, the revolving credit lender executed forbearance
agreements extending through May 15, 1996.                            

F-7 

10-K405
46th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 46th
     On November 9, 1995, Seven-Up/RC announced that it had reached an agreement
  in principle on the terms of a restructuring of the Senior Secured Notes
with an unofficial committee of holders of such notes. The agreement  
  contemplated, among other things, (i) the exchange of the Senior Secured
   Notes for approximately 98 percent of the equity of Seven-Up/RC, and (ii)
the sale of Puerto Rico and the payment to the holders of the Senior  
Secured Notes of the net proceeds, as defined, from such sale.        

On May 13, 1996, Seven-Up/RC and its immediate holding company parent,
    Beverage Group Acquisition Corporation ("BGAC"), filed voluntary petitions
for reorganization relief under Chapter 11 of the Bankruptcy Code to  
 implement the terms of the restructuring agreement with the committee .

     On July 1, 1996, Seven-Up/RC sold its wholly owned subsidiary, Puerto Rico,
     for approximately $74 million which resulted in a net gain of approximately
$32 million included in Other Income in the accompanying Statement of 
  Operations.  The proceeds from this sale were subsequently used to repay
holders of the Senior Secured Notes and reduce Seven-Up/RC's revolving
credit facility.                                                      

   On August 2, 1996, the U.S. Bankruptcy Court of the District of Delaware,
 confirmed the Company's First Amended Joint Plan of Reorganization (the
"Reorganization"), and on August 15, 1996, the Company emerged from   
bankruptcy.  Pursuant to the Reorganization, on such date the Senior  
  Secured Notes were canceled in exchange for approximately $55 million in
     cash and equity securities consisting of 4,900,000 million shares of common
stock in Seven-Up/RC.  In addition, 100,000 shares of common stock and
warrants to purchase an additional 263,158 shares of common stock were
issued to the prior owner of BGAC.                                    

     In the period ended August 15, 1996, Seven-Up/RC wrote off $510,000 of debt
issuance costs related to its previous working capital facility and   
realized a gain of $55 million relating to the discharge of the Senior
Secured Notes and related accrued interest in accordance with the     
   Reorganization, the net of which, are reflected as extraordinary items in
the accompanying financial statements.                                

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                 
------------------------------------------                            

PRINCIPLES OF CONSOLIDATION                                           
---------------------------                                           

The financial statements of the Predecessor Company reflect the       
consolidated financial statements of Seven-Up/RC Bottling Company of  
  Southern California, Inc. and, through the date of its disposition (June
 30, 1996), its wholly-owned subsidiary, Seven-Up/RC Bottling Company of
Puerto Rico, Inc.  The financial statements of the Reorganized Company
include only the financial statements of Seven-Up/RC.                 

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS               
-------------------------------------------------------               

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

CASH                                                                  
----                                                                  

Included in accounts payable are $3,958,000 and $9,459,000 of checks  
outstanding in excess of cash balances at December 31, 1996 and 1995, 
respectively.                                                         

    For purposes of the statement of cash flows, cash and cash equivalents are
 defined as cash deposits with original maturities of less than 90 days.

 F-8

10-K405
47th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 47th
TRADE RECEIVABLES, NET                                                
----------------------                                                

Trade receivables, net, include allowances for doubtful accounts of   
$1,937,000 and $1,814,000 at December 31, 1996 and 1995, respectively.

OTHER RECEIVABLES                                                     
-----------------                                                     

     Other receivables consist principally of amounts due from franchisors under
the terms of marketing and/or purchasing contracts.                   

INVENTORIES                                                           
-----------                                                           

 Inventories are recorded at cost, determined on the first-in, first-out
method.  Elements of cost include direct materials, direct labor and  
bottling overhead.                                                    

PROPERTY, PLANT AND EQUIPMENT, NET                                    
----------------------------------                                    

    Property, plant and equipment is stated at cost.  Depreciation is provided
for under the straight-line method using the following lives:         

Building and improvements                 31.5 years                  
Machinery and equipment                 7 to 8 years                  
Equipment held under capital leases     6 to 7 years                  

    Expenditures for additions and improvements are capitalized, and costs for
     repairs and maintenance are charged to operations as incurred. The cost and
accumulated depreciation of property, plant and equipment retired or  
otherwise disposed of are eliminated and any resulting gain or loss   
recognized at the time of disposal.                                   

OTHER ASSETS                                                          
------------                                                          

     Intangible assets include the appraised value of specific intangible assets
 acquired, primarily, beverage franchises and trademarks. The intangible
   assets are amortized over their useful lives, not to exceed 40 years. The
  net balance recorded at December 31, 1996 and 1995, includes accumulated
amortization of $233,000 and $14,820,000, respectively.               

     In March 1995, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standard (SFAS) No. 121 "Accounting for the Impairment
  of Long-Lived Assets to be Disposed of."  (See Note 2 "Recent Accounting
 Pronouncements".)  The Company continually evaluates whether events and
  circumstances have occurred that indicate the remaining estimated useful
 life of its intangible assets my warrant revision or that the remaining
    balance of intangible assets may not be recoverable  When factors indicate
 that intangible assets should be evaluated for possible impairment, the
Company uses an estimate of the its undiscounted cash flows over the  
    remaining life of the intangible asset in measuring whether the intangible
asset is recoverable.                                                 

     Additionally, other assets are comprised of debt issuance costs incurred in
connection with the arrangement of various long-term debt facilities. 
 These costs are amortized over the individual lives of the various debt
   facilities using the effective interest method.  The net balance includes
accumulated amortization of  $3,493,000 at December 31, 1995.         

F-9 

10-K405
48th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 48th
INCOME TAXES                                                          
------------                                                          

The Company accounted for income taxes using the method prescribed by 
  Statement of Financial Accounting Standard No. 109 (SFAS 109). Under the
     asset and liability method of SFAS 109, deferred tax assets and liabilities
    are recognized for the future tax consequences attributable to differences
 between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and   
liabilities are measured using enacted tax rates expected to apply to 
taxable income in the years in which those temporary differences are  
     expected to be recovered or settled. Under SFAS 109, the effect on deferred
     tax assets and liabilities of a change in tax rates is recognized in income
     in the period that includes the enactment date. The measurement of deferred
     income tax assets is adjusted by a valuation reserve, if necessary, so that
   the net tax assets are recognized only to the extent they are expected to
be realized. The adoption of SFAS 109 had no effect on the Company's  
financial position.                                                   

RESTRUCTURING CHARGES                                                 
---------------------                                                 

During 1995, Seven-Up/RC discontinued the operations of its Avalon    
  division, which distributed lower-volume beverage products and downsized
     the hot-fill operations of its Liquitrend division, which primarily bottled
 products for companies who did not distribute their products throughout
    Seven-Up/RC's distribution system. As a result, Seven-Up/RC terminated 205
employees in September, 1995; a reserve of $906,000 was set up for    
severance pay, of which $56,000 and $850,000 was paid during the years
     ended December 31, 1996 and 1995, respectively. Also Seven-Up/RC determined
  that certain leased facilities and equipment were no longer needed and a
reserve of $1,660,000 was established to reflect the projected cost of
    terminating these leases, of which $324,000 was paid by December 31, 1995.
   The termination of leases in 1996 resulted in an additional restructuring
     charge of $547,000 in the period ended August 15, 1996. All amounts accrued
 in connection with lease terminations had been paid by August 15, 1996.

    Additionally in 1995, Seven-Up/RC incurred costs of $2,449,000 in relation
   to the negotiation of the restructuring of Seven-Up/RC's obligation under
   the Senior Secured Notes and the revolving credit facilities; these costs
are included in the restructuring charge in the accompanying 1995     
consolidated statement of operations.                                 

NET LOSS PER COMMON SHARE                                             
-------------------------                                             

    Net loss per common share is computed on the basis of the weighted average
    number of common shares outstanding, plus common stock equivalents related
   to dilutive stock warrants.  The number of shares used in the computation
of per share data was 5,076,811 in 1996.                              

RECENT ACCOUNTING PRONOUNCEMENTS                                      
--------------------------------                                      

 In March 1995, the Financial Accounting Standards Board issued SFAS No.
     121. The Statement requires that long-lived assets and certain identifiable
 intangibles to be held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
     amount of an asset may not be recoverable. The Company adopted SFAS No. 121
  in the first quarter of 1996. The adoption did not have an impact on the
Company's financial position or its results of operations.            

    In November 1995, the Financial Accounting Standards Board issued SFAS No.
123 "Accounting for Stock-Based Compensation." This new standard      
encourages, but does not require, companies to recognize compensation 
  expense for grants of stock, stock options, and other equity instruments
based on a fair-value method of accounting.                           

F-10  

10-K405
49th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 49th
Companies that do not choose to adopt the new expense recognition     
   provisions of SFAS No. 123 will continue to apply the existing accounting
    provisions contained in Accounting Principles Board Opinion (APBO) No. 25,
   but will be required to provide pro forma disclosures of the compensation
expense determined under the fair-value provisions of SFAS No. 123, if
material.                                                             

   The Company adopted SFAS No. 123 in the first quarter of 1996 electing to
follow the accounting provisions of APBO No. 25 for stock-based       
   compensation and to furnish the pro forma disclosures required under SFAS
No. 123, if material.                                                 

  In March, 1997, the Financial Accounting Standards Board issued SFAS No.
    128 "Earnings per Share" and SFAS No. 129 "Disclosure of Information about
  Capital Structure." SFAS No. 128 eliminates several requirements of APBO
No. 15, simplifying earnings per share calculations. The Company is   
     required to adopt SFAS No. 128 in the first quarter of 1997. As of December
    31, 1996, the adoption of SFAS No. 128 would not have a material impact on
the Company's financial position or its results of operations.        

(3)  FRESH START ACCOUNTING                                                     
----------------------                                                

As of August 15, 1996, the Company adopted Fresh Start Reporting in   
 accordance with the American Institute of Certified Public Accountants'
Statement of Position 90-7 "Financial Reporting by Entities in        
Reorganization under the Bankruptcy Code," ("SOP 90-7"). Fresh Start  
   Reporting resulted in material changes to the Consolidated Balance Sheet,
    including valuation of real, intangible and other assets and the valuation
of equity based on the appraised reorganization value of the ongoing  
business.                                                             

  The final reorganization equity value was determined to be approximately
   $53 million (the approximate fair value) which was established based upon
   analysis by an independent valuation firm and considered many factors and
various valuation methods, including discounted cash flows, selected  
  comparable company multiples, selected acquisition transaction multiples
     and other applicable ratios and valuation techniques believed by management
   and its financial advisors to be representative of the Company's business
and industry. The Company obtained an independent appraisal of certain
property to support the fair values of such assets.                   

  The Reorganization and adoption of Fresh Start Reporting resulted in the
   following adjustments to the Company's Consolidated Balance Sheet for the
period ending August 15, 1996.                                        

                                                        [Enlarge/Download Table]


                                    Predecessor                                    Reorganized
                                      Company                                        Company  
                                    -----------                                    -----------
                                         at          Reorganization and                at     
                                     August 15,    Fresh Start Adjustments          August 15,
                                    -----------  ---------------------------       -----------
                                        1996       Debit            Credit             1996   
                                    -----------  ---------        ----------       -----------
                                                                                              
ASSETS                                                                                        
(Dollar amounts in thousands)                                                                 
Total current assets                  $120,644    $     -           $63,836 /(f)/    $ 56,808 
Property, plant and equipment, net      56,914          -               196 /(a)/      56,718 
Other assets:                                                                                 
   Intangible and other assets          14,038          -             7,011 /(b)/       7,027 
   Debt issuance costs                   2,695          -             2,607 /(c)/          88 
                                      --------    -------           -------          -------- 
        Total assets                  $194,291    $     -           $73,650          $120,641 
                                      ========    =======           =======          ======== 

F-11  

10-K405
50th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 50th
                                                        [Enlarge/Download Table]

                                                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                                                              
(DEFICIT)                                                                                         
Current liabilities:                                                                              
   Accounts payable                      $ 39,486   $      -              $      -        $ 39,486
   Accrued expenses                        49,087     24,756 /(d)/               -          24,331
   Current portion of long-term debt          544          -                     -             544
                                         --------   --------              --------        --------
           Total current liabilities       89,117     24,756                     -          64,361
                                         --------   --------              --------        --------

Long-term debt                            151,991    148,836 /(e)/,/(f)/         -           3,155
                                         --------   --------              --------        --------
Stockholders' (deficit) equity:                                                                   
   Additional paid-in capital              42,557     41,494 /(g)/          52,062 /(g)/    53,125
   Retained deficit                       (89,374)         -                55,087 /(h)/         -
                                                                            34,287 /(i)/          
                                         --------   --------              --------        --------
          Total stockholders' (deficit)                                                           
           equity                         (46,817)    41,494               141,436          53,125
                                         --------   --------              --------        --------
          Total liabilities and                                                                   
           stockholders' equity          $194,291   $215,086              $141,436        $120,641
                                         ========   ========              ========        ========

Explanations of adjustment columns of the balance sheet are as follows:         

(a)   To adjust property, plant and equipment to estimated current market value.
The market value of property, plant and equipment has been primarily
determined by independent third party appraisal.                    

(b)   To primarily reflect the write-off of intangibles and adjust other assets 
to current market value.                                            

(c)   To write-off remaining debt issuance costs for the Senior Secured Notes.  

(d)   To reflect the cancellation of accrued interest related to the Senior     
Secured Notes.                                                      

(e)   To reflect the cancellation of the Senior Secured Notes ($140,000,000).   

(f)   To reflect the paydown of the debtor-in-possession revolving credit       
facility ($8,836).                                                  

(g)   To reflect the issuance of 5,000,000 shares of new common stock (par value
$0.01).                                                             

(h)   To reflect the extraordinary gain resulting from the discharge of         
indebtedness. This extraordinary gain is calculated below:          

         Historical carrying value of old debt securities           $140,000

         Historical carrying value of related accrued interest        24,756

          Unamortized old debt issuance costs                          (2,607)

Market Value of consideration exchanged for old debt:     

             Plan securities (face value $52,062)                     (52,062)

             Senior securities principal payment                      (55,000)
                                                                    --------
                                       Extraordinary gain           $ 55,087
                                                                    ========

(i)   To reflect the elimination of stockholders' equity of the Predecessor     
Company.                                                            

F-12  

10-K405
51st Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 51st
 In accordance with SOP 90-7, expenses resulting from the Reorganization
should be reported separately as reorganization items in the Condensed
Consolidated Statements of Operations, and are summarized below:      

                                                                [Download Table]

                                           January 1,  
                                              to       
                                        August 15, 1996
                                        ---------------
                                                       
 Adjustment of assets to fair                          
 market value                               $ 7,207    
 Financial restructuring costs                5,804    
                                            -------    
 Total                                      $13,011    
                                            =======    

   The following Unaudited Pro Forma Condensed Financial Information for the
     years ended December 31, 1996 and 1995, have been prepared giving effect to
the sale of Puerto Rico and the consummation of the Reorganization    
including adjustments to interest, depreciation expense and asset     
  amortization. The Pro Forma financial information was prepared as if the
   transactions had occurred on January 1, 1996 and 1995, respectively. This
  information does not purport to be indicative of the results which would
  have been obtained had such transaction in fact been completed as of the
  date hereof and for the periods presented or that may be obtained in the
future.                                                               

  Unaudited Pro Forma Financial Information (dollar amounts in thousands):

                                                        [Enlarge/Download Table]


                                                                  Pro Forma for the Years Ended
                                                                  -----------------------------
                                                                    December 31,   December 31,
                                                                        1996           1995    
                                                                  -----------------------------
                                                                                               
Total revenue                                                         $256,556       $314,469  
Operating costs and expenses                                           257,266        323,019  
                                                                      --------       --------  
Loss before interest, other income, reorganization                                             
 expenses and income taxes                                                 710          8,550  

Interest, other income, income taxes and reorganization expenses           756          5,463  
                                                                      --------       --------  
     Net loss                                                         $  1,466       $ 14,013  
                                                                      ========       ========  

(4)  INVENTORIES                                                                
-----------                                                           

   Inventories at December 31, 1996 and 1995, consisted of the following (in
thousands):                                                           

                                                                [Download Table]


                          Reorganized   Predecessor
                            Company       Company  
                       ----------------------------
                             1996          1995    
                          -----------   -----------
                                                   
 Raw materials              $ 5,034       $ 6,198  
 Finished goods              14,110        18,749  
                            -------       -------  
                            $19,144       $24,947  
                            =======       =======  

F-13  

10-K405
52nd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 52nd
(5)  PROPERTY, PLANT AND EQUIPMENT, NET                                         
----------------------------------                                    

Property, plant and equipment, net, at December 31, 1996 and 1995,    
consisted of the following (in thousands):                            

                                                                [Download Table]

                                     Reorganized  Predecessor
                                       Company      Company  
                                     -----------  -----------
                                        1996         1995    
                                     -----------  -----------
                                                             
Land                                   $21,762     $ 22,477  
Buildings and improvements              12,194       23,994  
Machinery and equipment                 22,586       71,911  
Equipment held under capital leases      2,709       12,816  
Construction in progress                   860          480  
                                       -------     --------  
                                        60,111      131,678  
Accumulated depreciation                (3,101)     (49,246) 
Capital lease depreciation                (220)      (2,487) 
                                       -------     --------  
                                       $56,790     $ 79,945  
                                       =======     ========  

(6)  ACCRUED EXPENSES                                                           
----------------                                                      

    Accrued expenses at December 31, 1996 and 1995, consisted of the following
(in thousands):                                                         

                                                                [Download Table]

                            Reorganized  Predecessor
                              Company      Company  
                            -----------  -----------
                               1996         1995    
                            -----------  -----------
                                                    
Accrued marketing programs    $ 9,001      $ 4,496  
Accrued interest                  146       14,994  
Other accruals                 18,657       17,454  
                              -------      -------  
                              $27,804      $36,944  
                              =======      =======  

(7)  LONG-TERM DEBT                                                             
--------------                                                        

  At December 31, 1996 and 1995, the components of long-term debt were (in
thousands):                                                           

                                                                [Download Table]

                             Reorganized  Predecessor
                               Company      Company  
                             -----------  -----------
                                1996         1995    
                             -----------  -----------
                                                     
Revolving credit facilities    $19,021     $  37,847 
Senior Secured Notes                 -       140,000 
Term loan                          589         3,571 
Capital lease obligations        2,935         8,536 
                               -------     --------- 
                                22,545       189,954 
Less: current portion             (562)     (189,954)
                               -------     --------- 
Long term debt, net            $21,983     $       - 
                               =======     ========= 

F-14  

10-K405
53rd Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 53rd
REVOLVING CREDIT FACILITIES                                           
---------------------------                                           

    Upon consummation of the Reorganization on August 15, 1996, the debtor-in-
  position facility was canceled and the Company entered into a new credit
   facility (the "Facility") with GE Capital providing for up to $35 million
    in working capital and letter of credit commitments.  Available borrowings
  on this facility are based on a percentage of certain eligible trade and
    franchisor receivables and inventory.  Interest on the Facility is charged
   monthly at the GE Capital commercial paper rate (5.28 percent at December
    31, 1996) plus 3 percent.  Seven-Up/RC is charged a commitment fee for the
  unused portion of the revolving loan commitments, as well as a letter of
  credit fee of 2 percent on the face amount of all outstanding letters of
     credit.  There were $3,057,000 in outstanding letters of credit at December
     31, 1996.  Seven-Up/RC also pays a $50,000 annual collateral monitoring fee
on the Facility.  In addition, the Facility is also subject to a      
termination fee of $750,000 if the Facility is terminated prior to the
  first anniversary of the Closing Date, as defined in the agreement, or a
  $350,000 fee if terminated prior to the second anniversary of that date.
Seven-Up/RC has a lockbox agreement with GE Capital whereby all cash  
   receipts are used to pay down the revolving loans.  Borrowings under this
 are secured by substantially all the Company's assets.  At December 31,
1996, the Company was in violation of certain of its revolving credit 
    facility covenants, including interest coverage, fixed charge coverage and
   capital expenditures.  The Company subsequently received a waiver from GE
Capital related to the covenant violations.                           

The revolving loans at December 31, 1995, consisted of a $45.0 million
    revolving loan commitment for Seven-Up/RC; ($29.2 million outstanding) and
 a $10.0 million revolving loan commitment for Puerto Rico ($8.6 million
    outstanding).  Interest on these revolving loans is charged monthly at the
   GE Capital Commercial Paper rate (5.68 percent at December 31, 1995) plus
    3.5 percent.  The average interest rate on the revolving loans in 1995 was
9.34 percent.  The Company was charged a commitment fee for the unused
     portion of the revolving loan commitments plus an annual administration fee
   and other facility fees.  Borrowings under the revolving loan commitments
were based on a percentage of certain eligible trade and franchisor   
receivables and inventory.  At December 31, 1995, the Company was in  
    violation of certain of its revolving credit facility covenants, including
tangible net worth, interest coverage and fixed-charge coverage.  This
facility was replaced by the Company with a $54 million debtor-in-    
possession revolving credit facility upon entering bankruptcy.        

SENIOR SECURED NOTES                                                  
--------------------                                                  

     On August 11, 1992, Seven-Up/RC issued its $140,000,000 aggregate principal
     amount of 11.5% Senior Secured Notes Due 1999 (the "Senior Secured Notes").
   Pursuant to the Reorganization, these notes were canceled in exchange for
   approximately $55 million in cash and 4,900,000 shares of common stock of
the Reorganized Company (see Note 1).                                 

TERM LOAN                                                             
---------                                                             

 Seven-Up/RC's secured amortizing term loan is collateralized by certain
    specified equipment.  The term loan calls for monthly payments of $11,536,
    including interest, through July, 2002.  Interest on this loan is computed
at 10.14%.                                                            

FAIR VALUE OF LONG-TERM DEBT                                          
----------------------------                                          

   The fair value of amounts outstanding under the revolving credit facility
at December 31, 1996 approximates the carry amount due to the variable
nature of the interest rates.  In addition, there was no material     
difference between the fair market value and the carry amount of the  
remaining long-term debt at December 31, 1996.                        

F-15  

10-K405
54th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 54th
(8)  EMPLOYEE BENEFIT PLANS                                                     
----------------------                                                

     The Company sponsors two defined contribution plans for all employees other
     than union members, unless specifically negotiated. The Target Benefit Plan
  was created effective September 1, 1990, and allows participants to make
    contributions of 2 percent of their eligible compensation, as defined. The
Company's annual contribution is determined by an actuary based upon  
     assumptions of the participant's highest five year average pay, their years
    of eligible service with the Company, and their vesting status as of their
   termination date. The 401(k) Plan entitles all employees other than union
members, unless specifically negotiated, to participate. The Company  
matches one-quarter of each participant's contribution up to 6% of the
participant's eligible compensation. In September of 1995, the Company
suspended its contributions related to the Target Benefit Plan and the
401(k) Plan. In April of 1996, Seven-Up/RC resumed its contributions  
related to the 401(k) Plan. The following table summarizes the 1996   
  estimated contributions, and 1995 and 1994 actual contributions for each
plan for the applicable periods (in thousands):                       

                                                                [Download Table]

                                                        Target    401(k) 
                                                        Benefit    Plan  
                                                     --------------------
                                                                         
     Period from January 1, 1996 to August 15, 1996      $  204    $   72
     Period from August 16, 1996 to December 31, 1996    $    -    $   59
     Year ended December 31, 1995                        $  306    $  160
     Year ended December 31, 1994                        $  380    $  210
                                                                               
Under labor contracts between the Company and certain of its employee 
     unions, the Company contributes to multi-employer union benefit plans which
    are administered by the applicable unions. The Company has no liability to
     these plans in excess of the contractually agreed to contribution, which is
 usually equal to a set charge per hour of eligible service by the union
  members to the Company. The Company contributed the following amounts to
unions on behalf of its employees during the applicable periods (in   
thousands):                                                           

                                                                [Download Table]


                                                            
 Period from January 1, 1996 to August 15, 1996      $   635
 Period from August 16, 1996 to December 31, 1996    $   282
 Year ended December 31, 1995                        $   972
 Year ended December 31, 1994                        $ 1,017

PUERTO RICO PENSION PLAN                                              
------------------------                                              

Prior to the sale of Puerto Rico, effective June 30, 1996, the Company
 sponsored the Seven-Up/RC Bottling Company of Puerto Rico, Inc. Pension
    Plan (the "Puerto Rico Plan"), a contributory defined benefit pension plan
    for union employees of Puerto Rico. Employees were eligible to participate
    in the Puerto Rico Plan the first year of the Plan year following the date
of employment. Participating employees were required to contribute 3  
     percent of their compensation in excess of $9,000 in a given calendar year.
     The following table indicates the actual net pension expense components for
  the years ended December 31, 1995 and 1994, respectively (in thousands):

                                                                [Download Table]

                                    1995       1994  
                                  -------------------
                                                     
 Service cost component             $   48   $   85  
 Interest cost component               248      268  
 Expected return on plan assets       (184)      82  
 Net amortization and deferral          34     (226) 
                                    ------   ------  
    Net pension expense             $  146   $  209  
                                    ======   ======  

F-16  

10-K405
55th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 55th
     The assumptions used to develop the components of the above amounts were as
follows:                                                              

                                                                [Download Table]

                                                       1995       1994  
                                                     --------   --------
                                                                        
Discount rate                                          7.50%      8.50% 
Rate of increase in compensation levels                4.00%      4.00% 
Expected long-term rate of return on plan assets       9.00%      9.00% 

  The funded status of the Puerto Rico Plan as of January 1, 1995 and 1994
was as follows (in thousands):                                        

                                                                [Download Table]

                                                      1995        1994   
                                                    --------    -------- 
                                                                         
Accumulated benefit obligation:                                          
  Vested                                             $ 2,952     $ 2,504 
  Non-vested                                             133           5 
                                                     -------     ------- 
                                                     $ 3,085     $ 2,509 
                                                     =======     ======= 

Present value of projected benefit obligation        $(3,739)    $(2,830)
Fair value of plan assets                              2,472       2,012 
                                                     -------     ------- 

Present value of projected benefit obligation                            
 in excess of plan assets                             (1,267)       (818)
Remaining unrecognized net obligation                    271         305 
Unrecognized net gain                                    439          74 
                                                     -------     ------- 
Accrued pension costs                                $  (557)    $  (439)
                                                     =======     ======= 

The Company contributed approximately $25,000 to the Puerto Rico Plan 
during 1995 and $23,000 during 1994.                                  

(9)  COMMITMENTS                                                                
-----------                                                           

The Company leases certain office and warehouse facilities, machinery,
    vehicles and computer equipment under renewable operating leases, expiring
 from 1997 to 2003.  Rental expense under operating lease agreements was
 approximately $4,434,000, $6,312,000 and $5,027,000 for the years ended
  December 31, 1996, 1995 and 1994, respectively.  The Company also leases
  certain machinery and equipment under capital leases.  Following are the
    future minimum lease payments under operating and capital leases that have
   initial or remaining noncancelable lease terms in excess of one year from
December 31, 1996 (in thousands):                                     

                                                                [Download Table]

                                                    Capital    Operating
                                                     Leases     Leases  
                                                    --------   ---------
                                                                        
1997                                                 $  734     $2,638  
1998                                                    734      2,432  
1999                                                    734      1,752  
2000                                                    734        820  
2001                                                    735        681  
Thereafter                                                -        643  
                                                     ------     ------  
                                                                $8,966  
                                                                ======  
Less -- Amount representing interest                   (736)            
                                                     ------             
Present value of minimum lease payments              $2,935             
                                                     ======             

F-17  

10-K405
56th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 56th
(10) LITIGATION                                                                 
----------                                                            

  The Company is involved in various lawsuits and claims incidental to its
    business.  Management believes that any potential liabilities arising from
    these matters will not have a material effect on its financial position or
future results of operations.                                         

(11) INCOME TAXES                                                               
------------                                                          

   The Company was included in the consolidated federal and state income tax
returns of WB Bottling through August 15, 1996, the date of bankruptcy
     reorganization, when Seven-Up/RC deconsolidated from the WB Bottling group.
     Effective September 1, 1990, the Company and WB Bottling entered into a tax
  sharing agreement, whereby the Company calculated its tax provision on a
separate member basis through the date of deconsolidation.  Effective 
     August 16, 1996, Seven-Up/RC began filing separate federal and state income
tax returns.                                                          

  The components of income (loss) from operations before the provision for
income taxes and extraordinary items were as follows (in thousands):  

                                                                [Download Table]

                  Reorganized                                               
                    Company                   Predecessor Company           
                  -----------        ---------------------------------------
                   8/16-12/31        1/1-8/15    December 31,   December 31,
                      1996             1996         1995           1994     
                  -----------        --------    ------------   ------------
                                                                            
Domestic             $(462)           $8,780       $(32,566)      $(15,975) 
Foreign                  -              (616)           372            260  
                     -----            ------       --------       --------  
Total                $(462)           $8,164       $(32,194)      $(15,715) 
                     =====            ======       ========       ========  

 The components of income tax expense after utilization of net operating
loss carryforwards are summarized below (in thousands):               

                                                                [Download Table]

                                 8/16-12/31        1/1-8/15
                                    1996             1996  
                                 ----------        --------
                                                           
Provision for income taxes:                                
Taxes currently payable                                    
-----------------------                                    
       Federal                      $   -            $  95 
       State                            -               25 
       Foreign                          -               45 
                                    -----            ----- 
       Total                        $   -            $ 165 
                                    -----            ----- 

Deferred taxes                                             
--------------                                             
       Federal                      $   -            $ 180 
       State                            -                - 
                                    -----            ----- 
       Total                        $   -            $ 180 
                                    -----            ----- 

 Total provision                    $   -            $ 345 
                                    =====            ===== 

F-18  

10-K405
57th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 57th
    The following is a reconciliation of income taxes calculated at the United
 States statutory federal income tax rate to the Company's provision for
income taxes before extraordinary items (in thousands):               

                                                        [Enlarge/Download Table]

                                       Reorganized                                                        
                                         Company                    Predecessor Company                   
                                       -----------  ------------------------------------------------------
                                       8/16-12/31    1/1-8/15           December 31,          December 31,
                                          1996         1996                1995                  1994     
                                       -----------  ---------           ------------          ------------
                                                                                                          
U.S. federal income tax provision                                                                         
 (benefit) at statutory rate on                                                                           
 income (loss) from operations            $(157)     $ 2,776             $(11,072)             $(3,765)   
Foreign income tax provision                  -           45                    -                  185    
Nondeductible reorganization expenses         -        1,414                    -                    -    
Sale of Puerto Rico subsidiary                -       (5,742)                   -                    -    
Increase (decrease) in deferred                                                                           
 tax asset valuation allowance              144        1,663               11,072                3,765    
Other, net                                   13          189                    -                    -    
                                          -----      -------             --------              -------    
Provision (benefit) for income taxes      $   -      $   345             $      -              $   185    
                                          =====      =======             ========              =======    

At December 31, 1996 and December 31, 1995, the approximate amounts of
   deferred tax assets and deferred tax liabilities resulting from temporary
differences and carryforwards were as follows (in thousands):         

                                                                [Download Table]

                                                         Reorganized   Predecessor 
                                                           Company       Company   
                                                            as of        as of     
                                                         December 31,  December 31,
                                                            1996          1995     
                                                         ------------  ------------
                                                                                   
Current deferred tax assets and (liabilities):                                     
  Difference in inventory basis                            $ 1,001       $    880  
  Deferred compensation, pension and other arrangements         61            169  
  Accrued vacation and sick pay                                759            814  
  Accrued expenses                                             788            811  
  Reserve for Workers' Compensation                          1,362          1,729  
  Coupon reserve                                             1,149            221  
  Capital lease expense                                       (202)          (829) 
  Restructuring charges                                        363            548  
  Other                                                        181            579  
                                                           -------       --------  
                                                           $ 5,462       $  4,922  
Less: Valuation allowance                                   (5,462)        (4,922) 
                                                           -------       --------  
Net current deferred tax assets and (liabilities)          $     -       $      -  
                                                           =======       ========  
Non-current deferred tax assets and (liabilities):                                 
  Net operating loss carryforward                          $ 4,756       $ 28,415  
  Accelerated depreciation and amortization                  4,378           (410) 
  Other (including AMT credit carryforwards)                   133           (212) 
                                                           -------       --------  
                                                           $ 9,267       $ 27,793  
Less: Valuation allowance                                   (9,267)       (27,793) 
                                                           -------       --------  
Net non-current deferred tax assets and (liabilities)      $     -       $      -  
                                                           =======       ========  

F-19  

10-K405
58th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 58th
During 1996, the deferred tax asset decreased by $17,986 resulting    
    primarily from the tax effect of a reduction in the domestic tax operating
   loss carryforwards due to cancellation of indebtedness in connection with
   the bankruptcy reorganization and the taxable income for the period ended
  August 15, 1996. This decrease was partially offset by the tax effect of
the write-down of property, equipment, intangibles and other assets to
     current market value pursuant to SOP 90-7. Due to the uncertainty as to the
realizability of the deferred tax assets, the Company has established 
valuation allowances in accordance with SFAS 109 to reduce the asset. 

     Internal Revenue Code Sections 382 and 383 impose a limitation on the usage
of pre-reorganization domestic tax return net operating loss (NOL)    
     carryforwards and other tax attributes when there is a change of ownership.
     A change of ownership resulted from the bankruptcy reorganization on August
15, 1996. At December 31, 1996, the Company had a pre-reorganization  
federal tax return NOL carryforward of approximately $13.5 million    
available to offset future taxable income. The usage of this pre-     
   reorganization NOL carryforward is limited to $3.1 million a year because
     of the change of ownership. In addition, the Company had a NOL carryforward
of approximately $0.6 million attributable to the post-reorganization 
     period that is not subject to limitation. The NOL carryforwards will expire
    from 2010 to 2011. The alternative minimum tax credit, although subject to
the change of ownership limitation, has no expiration date.           

To the extent the Company realizes a tax benefit as a result of future
  reductions in the valuation allowance related to the utilization of pre-
     reorganization deferred tax assets, the fresh start accounting rules of SOP
90-7 provide for the reporting of such benefits first by reducing     
    identifiable intangible assets existing at the date of the fresh start and
   then, once those assets are reduced to zero, by increasing equity.  These
     tax benefits will not reduce income tax expense.  However, the Company will
realize a cash benefit from utilization of the "pre-reorganization    
benefits" against any future tax liabilities.                         

(12) CAPITAL STOCK                                                              
-------------                                                         

     The certificate of incorporation in Delaware authorizes 6,000,000 shares of
$.01 per value common stock.                                          

  Upon Consummation of the Plan, WB Bottling Corporation, a privately held
Delaware corporation and previously the sole shareholder of BGAC, was 
 granted the right to purchase from the Company (the "Warrant"), 263,158
    shares of common stock subject to adjustment as defined, exercisable at an
amount per share based upon a formula, as defined.  The Warrants are  
exercisable until December 31, 2001.                                  

(13) STOCK COMPENSATION PLANS                                                   
------------------------                                              

     As part of the Reorganization, options to purchase 319,149 shares of common
   stock, subject to adjustment as defined, were authorized to be granted to
    certain members of management of the Company. The purchase price per share
is determined based upon a formula defined in the Management Option   
   Agreement. The non-qualified options expire December 31, 2001. On January
30, 1997, the authorized options were granted to certain members of   
management.                                                           

On January 30, 1997, the Board of Directors of the Company adopted the
Stock Option Plan (the "Plan"). In January 1997, options to purchase  
417,693 shares of common stock were granted under the Option Plan. The
option exercise price per share of common stock is $8.00.             

F-20  

10-K405
59th Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 59th
(14) SEGMENT DATA                                                               
------------                                                          

The Company's subsidiaries operate in the beverage production and     
 distribution business in two separate geographic segments.  Information
about the Company's operations in these two geographic segments is    
summarized below (in thousands):                                      

                                                                [Download Table]

                     Reorganized                                           
                       Company              Predecessor Company            
                      ----------  -----------------------------------------
                      8/16-12/31  1/1-8/15      December 31,   December 31,
                        1996        1996           1995            1994    
                      ----------  ---------     ------------   ------------
                                                                           
Net Sales                                                                  
   United States       $ 91,647    $164,909       $314,469        $343,632 
   Puerto Rico                -      37,935         82,256          70,208 
                       --------    --------       --------        -------- 
                       $ 91,647    $202,844       $396,725        $413,840 
                       ========    ========       ========        ======== 

Operating Profit                                                           
   United States       $    326    $ (2,051)      $(14,339)       $  1,290 
   Puerto Rico                -       1,788          4,992           4,526 
                       --------    --------       --------        -------- 
                       $    326    $   (263)      $ (9,347)       $  5,816 
                       ========    ========       ========        ======== 

Identifiable Assets                                                        
   United States       $121,370    $120,641       $140,931        $194,545 
   Puerto Rico                -           -         51,202          49,289 
                       --------    --------       --------        -------- 
                       $121,370    $120,641       $192,133        $243,834 
                       ========    ========       ========        ======== 

(15) SUBSEQUENT EVENT                                                           
----------------                                                      

 On February 28, 1997, Seven-Up/RC entered into an Agreement and Plan of
  Merger (the "Merger Agreement") with Dr Pepper Bottling Company of Texas
("Dr Pepper Bottling") whereby DPB Acquisition Corp., a wholly-owned  
 subsidiary of Dr Pepper Bottling (the "Purchaser") has made an offer to
  purchase all the issued and outstanding shares of the Company for $12.00
     per share (the "Offer"). The Offer is conditioned upon, among other things,
    (i) there being validly tendered and not withdrawn prior to the expiration
date for the Offer that number of shares of Common Stock which would  
     represent, on a fully-diluted basis, at least 65% of the outstanding Common
     Stock, (ii) receipt by the Purchaser of sufficient funds from its financing
sources, and (iii) the receipt of certain identified consents.        

F-21  

10-K405
Last Page of 60
TOC
1st
Previous
Next
↓Bottom
Just 60th
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC. 

Schedule II - Valuation and Qualifying Accounts 
(Dollar amounts in thousands) 

                                                        [Enlarge/Download Table]

                                         Balance at                         Balance at
                                         Beginning                            End of  
                                         of Period   Additions  Deductions    Period  
                                         ---------   ---------  ----------  ----------
                                                                                      
Allowance for doubtful accounts                                                       
   For the period August 16, through                                                  
     December 31, 1996                    $2,070       $  245     $  (378)    $1,937  
                                          ======       ======     =======     ======  

Allowance for doubtful accounts                                                       
   For the period January 1, through                                                  
     August 15, 1996                      $1,814       $1,299     $(1,043)    $2,070  
                                          ======       ======     =======     ======  

Allowance for doubtful accounts                                                       
   For the year ended December 31, 1995   $1,428       $  715     $  (329)    $1,814  
                                          ======       ======     =======     ======  

Allowance for doubtful accounts                                                       
   For the year ended December 31, 1994   $1,192       $1,025     $  (789)    $1,428  
                                          ======       ======     =======     ======  

F-22  

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K405’ Filing		Date		First		Last			Other Filings
		12/31/01		58
		12/31/99		31
Filed on:		4/7/97							SC 14D1/A
		4/1/97		38
		3/31/97		1		40			NT 10-K
		3/28/97		25
		3/7/97		37					SC 14D1,  SC 14D9
		2/28/97		26		59
		2/26/97		37
		2/13/97		12
		2/10/97		32		37
		2/4/97		32		37
		2/3/97		32		37
		1/30/97		32		58
		1/22/97		31		37
For Period End:		12/31/96		1		60			NT 10-K
		11/22/96		37					S-1
		10/31/96		31		32
		9/6/96		17
		8/16/96		18		56
		8/15/96		3		60			8-K
		8/12/96		40					8-A12G/A
		8/2/96		37		46
		7/1/96		46
		6/30/96		19		54			10-Q
		6/19/96		3		37
		5/16/96		3					NT 10-Q
		5/15/96		45
		5/13/96		3		46			8-K
		5/3/96		37
		1/12/96		7
		1/1/96		18		54
		12/31/95		18		60
		11/9/95		46
		9/11/95		24
		7/31/95		45
		7/28/95		7
		1/1/95		51		55
		12/31/94		18		60
		1/1/94		55
		8/11/92		19		53
									List all Filings