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SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1976 Commission File No. 0-2992 THE SEVEN-UP COMPANY (Exact name of registrant as specified in its charter) MISSOURI 43-0513480 (State of incorporation) (IRS Employer Identification No.) 121 So. Meramec, St. Louis, Missouri 63105 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 314-863-7777 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered (NOT APPLICABLE) Securities registered pursuant to Section 12(g) of the Act: Common Stock -- $1.00 Par Value (Title of class) 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, and (2) has been subject to the filing requirements for at least the past 90 days. Yes X No P. Indicate the number of shares outstanding of each of the issuer's classes off,.Common Stock, as of the close of the period covered by this report. Class Common Stock, $1.00 Par Value Outstanding at December 31, 1976 10,719,501

PART I ITEM 1., (a)-(b) Business: GENERAL The Seven-Up Company ("Company"), incorporated in 1921, is _ engaged in the manufacture and sale of soft drink extracts and the manufacture (through independent contractors) and sale of canned and bottled soft drinks to independent franchised developers (bottling companies) in the United States, Canada and 81 other countries. 7UP, the principal finished product of the Company's soft drink business, is the third largest selling soft drink in the United States and Canada and is a major factor in many foreign markets for soft drinks. The Company is also engaged in the manufacture and sale of food flavors, colors, fragrances and specialty products and in lemon processing and the manufacture and sale of lemon products. SOFT DRINK EXTRACTS, FLAVORING COMPOUNDS AND FINISHED PRODUCTS General. In the United States, the Company manufactures and sells extracts for soft drinks, principally 7UP, to 473 franchised developers (bottlers) operating approximately 410 plants in all 50 states. Through independent contractors, the Company is also engaged in the manufacture and sale of canned and bottled 7UP and Sugar Free 7UP and fountain syrup for 7UP and Sugar Free 7UP to many of its franchised bottlers and to the United States Government primarily for consumption by its foreign-based armed forces. The Company's franchised developers (bottlers) sell 7UP and Sugar Free 7UP to retailers in bottles, cans and pre-mix tanks for resale principally in food stores, drive-in and other restaurants, soda fountains, bars and other retail 10

establishments. Retail sales of 7UP and Sugar Free 7UP are also made through vending machines, some of which are owned by franchised developers (bottlers) and some of which are owned or leased by their customers. In addition, the Company's franchised developers (bottlers) sell 7UP fountain syrup to retailers for resale in soda fountains, vending machines and bulk dispensers. The only domestic manufacturing facility owned by the Company for the manufacture of bottled soft drinks for sale to retailers is in Phoenix, Arizona. In 1976, Phoenix commenced construction of a modern new bottling and canning plant in Phoenix, which will contain 80,000 square feet of production and warehouse space, four times more than its present plant. Production will commence in this new facility during March of 1977 and its present plant will be closed. The soft drink business is seasonal in character. Sales of soft drinks are higher during the warm summer months and during the Thanksgiving--New Year's holiday season. International. The Company manufactures 7UP and Sugar Free 7UP extracts in Canada for sale to 80 franchised developers (bottlers) operating approximately 42 plants and 19 warehouses in all the provinces. Sales in Canada accounted for approximately 11% and 12% of the Company's net sales in 1976 and 1975, respectively. The Company also operates one bottling plant and seven warehouses in Ontario through which it sells 7UP and Sugar Free 7UP directly to retailers. The Company sells 7UP extract to franchised developers (bottlers) operating approximately 186 plants in 81 foreign countries other than Canada. During 1976, approximately 35% of this extract was exported from the United States and substantially all of the balance was manufactured by the -3-

Company in Argentina, Brazil, Great Britain, Ireland, Japan, Mexico and the Republic of South Africa. Sales in foreign countries other than Canada (including exports from the United States) accounted for approximately 8% of the Company's net sales for 1976 and 1975. Marketing and Other Services. The Company provides a broad range of marketing services to its franchised developers (bottlers) in the United States, including advertising, sales and management training, vending machine sales and engineering assistance, special events and promotion plans and convention planning. The Company believes such services are essential to the successful merchandising of its soft drinks. The retail sale of 7UP and Sugar Free 7UP is actively promoted in the United States by the Company through national and local television, radio, billboard and newspaper advertising, promotional events, and point-of-purchase displays. Local campaigns are planned and financed cooperatively with the Company's franchised bottlers. Many of the packaging, sales promotion and point-of-purchase display graphics are designed and created by the Company. Its advertising agencies are principally responsible for television and radio advertising of 7UP and Sugar Free 7UP. Expenditures for advertising and promotional programs constituted approximately 61% and 59% of the Company's total selling, administrative and general expenses in 1976 and 1975, respectively. The Company provides specialized marketing and management services to its franchised bottlers in its international markets. The Company maintains a trained technical staff of approximately 44 persons which develops quality control and sanitary standards for the Company's franchised bottlers. Competition. The soft drink industry is highly competitive. The Company's brands compete with other extensively advertised -4-

soft drinks and also with lesser known soft drinks of regional and local bottlers, as well as private brand soft drinks. The Company's major product, 7UP, ranks third in retail sales in the United States and Canadian markets. Two of the Company's competitors have substantially greater sales and resources than the Company. In the so-called "cold drink" market, serviced by cup and bottle vending machines, fountains and other on-premise dispensers, the Company's two major competitors have accounted for a large proportion of vending machine installations. Soft drinks imitative of 7UP have been extensively marketed through vending machines. Since 1973 the Company has increased its efforts in the "cold drink" market with particular emphasis on the marketing of fountain syrup. Vending Equipment Sales. In conjunction with its soft drink business, the Company sells to its domestic and Canadian franchised developers (bottlers) vending equipment, purchased from various manufacturers, as part of a continuous program to increase distribution through coin-operated machines and soda fountain dispensers. Sales are generally made on an installment basis, with payment extending over a period of up to five years. At December 31, 1976, approximately $1,629,000 was owed to the Company by franchised bottlers in connection with such purchases as compared with approximately $1,662,000 at December 31, 1975. These sales accounted for less than 1% of the Company's net sales in both 1976 and 1975. FLAVORS, COLORS, FRAGRANCES AND OTHER SPECIALTY PRODUCTS Through its subsidiary, Warner-Jenkinson Company ("W-J"), the Company manufactures food flavors and food, drug and cosmetic dyes and pigments ("FD&C colors") for sale to various producers of foods and pharmaceuticals. W-J produces more than 1,000 different flavors by the blending of various -5-

ingredients purchased from importers and distributors or directly from domestic and foreign regional cooperatives. In 1976, approximately 75% of the lemon oil used by W-J was purchased,from one large cooperative. Food colors, which constitute substantially all the FD&C colors sold by W-J, are made from chemical processing of synthetic organic chemicals and are marketed as primary colors or 400 different blends. The FD&C colors are subject to governmental regulation in the form of certification by the Federal Food and Drug Administration. W-J markets its products to various producers of beverages, foods, and pharmaceuticals, using its own sales force of approximately 18 persons and through five distributors in Mexico. W-J has a majority ownership interest in a Mexican subsidiary engaged principally in the manufacture of FD&C colors. SV-J owns a domestic perfume and fragrance manufacturer which accounted for less than 1% of the Company's net sales for 1976 and 1975. The FD&C color and food flavor markets are highly competitive in the United States. W-J has five principal competitors in the FD&C color market. There are several hundred competitors selling food flavors. FD&C colors are produced from basic chemicals purchased from independent sources. W-J has in the past experienced, and is presently experiencing, some difficulty in acquiring certain raw materials. See "Raw Materials and Other Supplies." Because of the growth in W-J's sales, its facilities are being expanded. See "Properties."

LEMON PRODUCTS Ventura Coastal Corporation ("Ventura"), a wholly owned subsidiary, is engaged in the business of processing and packaging frozen concentrate for lemonade and the growing, processing and selling of fresh lemons and lemon products. Ventura sales accounted for approximately 12.2% and 12.6% of the Company's net sales in 1976 and 1975, respectively. Ventura sells the principal portion of its frozen concentrate to a number of large grocery chains. Ventura competes with numerous domestic processors and packers of fresh lemons and lemon products in California and Arizona, many of which are larger than Ventura and control a greater amount of lemon producing acreage. Ventura's principal competitor for the production and sale of fresh fruit sells approximately 85% of the lemons produced in the United States. Ventura, which supplies approximately 40% of the domestically produced frozen concentrate for lemonade, is in competition with numerous domestic producers of this product. RAW MATERIALS AND OTHER SUPPLIES The principal materials used by the Company in the manufacture of 7UP extract are essential oils of lemon and lime and ethyl alcohol blended in a highly concentrated form. In addition, sugar, citric acid, sodium citrate, carbonated water and packaging materials are required for the manufacture of the Company's finished soft drink products. In 1976, both the Company and its franchised bottlers, in general passed along to their customers the effect of reduced costs of raw material and packaging materials which occurred in finished soft drink products. See Government Regulation for a discussion relating to the Food and Drug Administration ca ` ~ -7- ~. -P~

announcement of March 9, 1977 on the prohibition of utilizing saccharin in foods and beverages. The principal materials used by W-J in the manufacture of food colors are benzene and naphthalene derivatives. From time to time these materials may be in short supply. However, in 1975 and 1976 supplies were adequate to meet the requirements of W-J. At times of short supply, W-J has in the past always maintained adequate inventories for continuing operations. The principal materials used by Ventura in the production of lemon products, primarily frozen concentrate for lemonade, are fresh or concentrated lemon juice, lemon oil flavor, . sugar solids or sweeteners, such as corn syrup and packaging materials. During the past year, the prices of sugar and sweeteners decreased and accordingly Ventura passed the cost savings to its customers in the form of reduced prices. Ventura's lemon source is presently California where, in 1976, supplies of fruit were affected by inclement weather and other adverse conditions. Ventura is generally dependent on other citrus growers for approximately 88% of its lemon supply. Except as otherwise indicated under Business - Flavors, Colors, Fragrances and Other Specialty Products above, the principal raw materials and other supplies used by the Company are available from a number of different sources. Fuel shortages could pose a problem in the future for the Company's franchised developers who deliver by truck. However, the Company does not know of any significant problems experienced to date by its franchised developers in obtaining adequate fuel supplies. The Company has not experienced any serious disruption of service because of insufficient fuel supplies.

EMPLOYEES The Company had at December 31, 1976, 1,622 employees, including 1,132 in the United States, 303 in Canada and 187 in other countries. Of the Company's employees, less than 5% are represented by unions. All employees of the Company and of four of its domestic subsidiaries (approximately 525 salaried and hourly employees) participate in profit-sharing plans, under which substantially all of the contributions are made by the employers. Most of the Company's employees in the United States and Canada are covered by pension plans. The Company also has a comprehensive employee security program, including life and disability insurance, major medical care and hospitalization for employees and their dependents and other employee benefits. Most of the cost of these benefits is borne by the Company. See Note E to Consolidated Financial Statements. In 1976, the Company made certain amendments in their domestic pension plans to conform to the Employee Retirement Income Security Act of 1974. These amendments did not significantly change pension costs or unfunded vested benefits. TRADEMARKS The Company's principal trademarks include 7UP, SEVEN-UP, THE UNCOLA and HOWDY, all of which are registered in the United States and Canada, and one or more of which are registered in certain other countries. The Company is the sole owner of these trademarks. See Litigation for a discussion of a suit brought by one of the Company's franchisees chal- lenging the Company's ownership of the trademarks 7UP, SEVEN-UP and the UNCOLA. cs -9- a-

GOVERNMENT REGULATION Production and distribution of a number of the Company's products are subject to the Federal Food, Drug and Cosmetic Act and to various other Federal and State statutes regulating safety and labeling of products. On March 9, 1977, the Food and Drug Administration announced that it intends to prohibit use of saccharin in foods and beverages. Saccharin is the non-nutritive sweetener used in Sugar Free 7UP and virtually all other dietary soft drinks. The action is based on adverse results of studies involving consumption of huge quantities of saccharin in laboratory animals. The FDA announced it will formalize its conclusions within 30 days and then allow 60 days for public comments and reaction. The suspension order could be final within days after that. Saccharin is the last known artificial sweetener approved for sale by the FDA following their ban of cyclamates in 1969. Thus, if the saccharin ban becomes effective, it is anticipated that it will eliminate many products used by diabetics. Although no other artificial sweetener currently has FDA approval, the Company has an alternative formulation that is reduced in calories. Until the suspension order becomes effective, Sugar Free 7UP can and is continuing to be manu- factured and sold. FDA has stated emphatically that saccharin is not an immediate hazard to public health. Substantially all of the Company's plants in the United States are subject to Federal, state or local laws or regulations regarding discharges into the environment. Compliance by the Company with these laws and regulations has not had, and is not expected to have, a direct material effect on the i -10-

Company's financial position or its results of operations. Although the Company has not been appreciably affected by the applicability of such laws and regulations to its franchised bottlers, it is impossible to ascertain any future effect on the Company, in part because of the variation in legislative proposals and actions in the different states and in the sizes and resources of the franchised bottlers. Several states and local jurisdictions have enacted laws designed to reduce litter due to discarding of bottles, cans and other packaging material, and it is likely that other jurisdictions will enact similar laws. The Company is unable at this time to determine what impact, if any, such laws will have in the future on the Company or its franchised Developers. ITEM 1., (c) (1). Information as to Lines of Business (See ITEM 1, (c)(2), below.) ITEM 1., (c)(2) Information as to Classes of Similar Products or Services: The following table sets forth the approximate percentage contributions of each of the Company's principal classes of products to its net sales and income before income taxes for the periods shown: Year Ended December 31 1972 1973 1974 1975 1976 Net Sales Soft Drink Extracts, Flavorings, Compounds, and Finished Products 82.7% 81.8% 80.6% 80.2% 78.9% Flavors, Colors, Fragrances and Other Specialty Products 6.9 7.5 8.9 6.9 8.5 Lemon Products 10.4 10.7 10.5 12.9 12.6 100.0% 100.0% 100.0% 100.0% 100.0%

Year Ended December 31 1972 1973 1974 1975 1976 Income Before Income Taxes Soft Drink Extracts, Flavorings, Compounds and Finished Products 85.5% 86.2% 84.5% 89.5% 89.5% Flavors, Colors, Fragrances and Other Specialty Products 10.7 11.0 13.5 4.9 8.0 Lemon Products 3.8 2.8 2.0 5.6 2.5 100.0% 100.0% 100.0% 100.0% 100.0% In 1976, the percentage contribution of the Company's international operations to net sales was approximately 19%. Net income was modestly less than the percentage contribution of such operations to net sales. The following table sets forth the approximate percentage contributions to the Company's net sales for each of the Company's principal classes of products, constituting the first category under "Net_Sales" in the above table: Year Ended December 31 1972 1973 1974 1975 1976 Soft Drink Extracts, Flavoring Compounds and Certian Syrups 39.6% 40.1% 33.7% 37.0% 39.4% Finished Products (Canned and Bottled Soft Drinks and Fountain Syrup)* 3.1% 1.7% 6.9% 3.2% 9.5% *Includes vending equipment sales, which constituted less than 1.0% of the Company's net sales in each year. ITEM 2. The Summary of Operations: MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE SUMMARY OF OPERATIONS Among the Company's lines of business and classes of products, the Company has experienced variations in sales trends and profit margins as well as the effect of a changing sales and profit mix during the periods shown in the Summary of Operations. -12-

i ITEM 2. The Summary of Operations: CONSOLIDATED SUMMARY OF OPERATIONS THE SEVEN-UP COMPANY AND SUBSIDIARIES YEAR ENDED DECEMBER 31 1972 1973 1974 1975 1976 Net sales $132, 519, 867 $146, 748, 362 $190, 879, 628 $213, 622, 918 $233, 282, 664 Cost of products sold 69,722,488 75,783,214 110,046,723 112,421,231 117,166,232 62, 797, 379 70, 965, 148 80, 832, 905 101, 201, 687 116, 116, 432 Selling, administrative and general expenses 40, 153, 791 45, 164, 104 51, 212, 637 61, 263, 716 71, 482, 245 22,643,588 25,801,044 29,620,268 39,937,971 44,634,187 Other income (deduction): Interest earned 1,069,297 1,844,231 2,298,505 2,025,275 2,196,870 Interest expense (293,604) (438,406) (316,243) (255,448) (289,132) Miscellaneous - net (169,496) (101,523) 474,573 (1,863,335) 603,080 606,197 1,304,302 2,456,835 (93,508) 2,510,818 Income before income taxes 23, 249, 785 27, 105, 346 32, 077, 103 39, 844, 463 47, 145, 005 Income taxes 11, 205, 265 13, 023, 000 15, 489, 000 19, 504, 000 22, 394, 000 Net income (2) 12,044,520 14,082,346 16,588,103 20,340,463 24,751,005 Preferred dividend requirements: 67c Cumulative Preferred Stock 215,280 215,280 215,280 215,280 215,280 55.71 Convertible Class A Preferred Stock 398,521 284,485 269,191 114,910 613,801 499,765 484,471 330,190 215,280 Net income applicable to Common Stock $ 11,430,719 $ 13,582,581 $ 16,103,632 $ 20 010 273 $ 24 535 725 , , ~ , , W eighted average num ber of shares of Common Stock outstanding (3) 10,378,538 10,457,812 10,467 739 636 841 10 10 741 116 , , , ~ , , Per share of Common Stock (3): Net income $ 1.10 $ 1.30 $ 1.54 $ 1.88 $ 2 28 ~ . Cash dividends declared $ $ .4325 $ .61 $ .75 $ 1.13 See notes on following page.

NOTES TO CONSOLIDATED SUMMARY OF OPERATIONS (1) This summary should be read in conjunction with the related finan- cial statement and notes thereto incorporated by reference under Item 10(a). (2) The Company values its inventory at the lower of cost or market. Effective January 1, 1974, the Company changed its method of de- termining cost of sugar inventories from the first-in, first-out (FIFO) method to the last-in, first-out (LIFO) method. The change had the effect of reducing net income by $ 582 , 000 ($ . 056 per share) for the year ended December 31, 1974. (3) Net income per share of Common Stock is based on the weighted average number of shares outstanding during each year adjusted for dilutive stock options. Dividend requirements of the Preferred Stock are deducted from net income in computing net income per share of Common Stock.

1976 Compared with 1975 Dollar sales in 1976 increased by $19.7 million or 9.2% over 1975. In 1976, dollar sales growth was influenced more by real growth in product unit sales and tonnage shipped than increased product prices. Average 1976 selling prices of finished goods, which comprise almost 50% of total sales - particularly soft drinks and frozen concentrate for lemonade, were below 1975 levels. Unit sales of regular 7UP extract were modestly ahead of year-ago levels in both U.S. and Canadian markets and at 1975 levels in the international markets. Both Sugar Free and Fountain 7UP extract sales were up sharply in both the U.S. and Canadian markets. Unit sales of lemon products, primarily frozen concentrate for lemonade and lemon oil, were up significantly for the year, sales of fresh fruit and fruit processing fees were below year-ago levels. but Combined unit sales of food flavor and color reflected a strong recovery from the depressed 1975 levels with significantly higher product tonnages shipped in 1976. Unit sales of FD&C Red #40, a food color replacing FD&C Red #2, were particularly significant during the first and second quarters, although these levels were not sustained in the second half of the year. In 1976 over 65% of the 19.7 million dollar annual sales increase occurred in the higher margin soft drink extract product classifications which equaled 39.4% of total consolidated sales in 1976 and 37.0% in 1975. Gross profit on sales in 1976 was $116,116,432 or 49.8 percent compared with $101,201,697 or 47.4% of sales in 1975.

Selling, administrative and general expenses increased $10.1 million, totaling $71.4 million in 1976 and $61.3 million in 1975. Expenditures for marketing services, which include adver- tising and promotional programs, accounted for $7.4 million dollars of the annual increase. Marketing support funds have increased over the previous year as follows: 20.7 percent 1976/1975; 26.1 percent 1975/1974; and 12.9 percent 1974/1973. The relationship of advertising and promotional expense to total selling, administrative and general expenses for the last three years has been: ear Advertising & Promotion Selling Administrative & General Advertising & Promotion As A Percentage of Total Selling, Administrative And General 1974 $28,440,023 $51,212,637 56% 1975 $35,859,917 $61,263,716 59% 1976 $43,306,814 $71,482,245 61% Total employment costs, payroll and fringe benefits, and travel increased $1.8 million in 1976 as compared with 1975, reflecting salary adjustments, increased personnel and higher travel costs. Higher warehouse charges, freight expense, local taxes and utility costs reflected the most significant remaining increased dollar expenses. Depreciation charged to operations in 1976, included in both cost of goods and selling, general and administrative expenses, was $3.3 million as compared with $2.9 million in 1975. Interest income (net of interest expense) increased to $1,907,738 from $1,769,827. Foreign source net interest income declined, with domestic income increasing over the previous year on a larger volume of dollar investments. Yields on short-term U.S. investments trended lower throughout the year, with the exception of a brief strengthening during June and July. Miscellaneous other income totaled $1,611,117 in 1976, compared with $690,961 a year ago. These amounts are principally -15-

composed of revenues from royalties, rentals, sales of assets and currency gains. Miscellaneous deductions were $1,008,037 in 1976 and $2,554,296 in 1975. These amounts include certain non recurring charges. Included in 1976, is the settlement approved by the court of the Bubble Up International suit commenced in 1968. The year 1975 included fees paid, in settle- ment of legal action with respect to the production of food color, adjustments made in connection with the Food and Drug Administration's ban on FD&C Red #2, and foreign currency losses. In 1976, net translation and currency gains net of tax increased net income for the year $297,607 or approximately 2.8 cents per share, compared with net currency losses in 1975 of $1,146,574, which reduced earnings per share 10.8 cents. In summary, net income for 1976 increased $4.4 million or 21.7% from 1975 results. Sales of higher marginal product classifica- tions with resulting improved gross profit offset increased dollar operating expense. Increased interest and miscellaneous income not impacted in 1976 by unfavorable foreign currency adjustments was up significantly from year ago levels. Net income of the Company was 10.6% of sales in 1976 compared with 9.5% in 1975. 1975 Compared with 1974. Dollar sales in 1975 increased 22.7 million or 11.9% over 1974. The 1975 net dollar sales increased at more modest rates of gains over 1974 than in the previous year as inflation rates moderated and the prices of many finished goods products manufactured by the Company were reduced below year ago levels. Modest unit growth was achieved in the sale of soft drink extracts, with unit sales of lemon products up sharply. Unit sales of food flavor and color in 1975 were significantly below peak 1974 levels.

In.1975, over 64% of the 22.7 million dollar increase in sales accrued in higher margin product classifications, with the balance of the sales increase being reflected in lower margin product classifications whose margins were improved over those experienced in 1974. See "Business-General". Gross profit on sales in 1975 was $101.2 million or 47.4% and increased 25.2% from the gross profit of 80.8 million or 42.3% of sales in 1974. Selling, administrative and general expenses increased $10.1 million in 1975 as compared with 1974, an increase of 19.6%. Of the total dollar increase of $10.1 million, consolidated expenditures for marketing services, including advertising and promotional programs, increased $7.4 million or 26.1%. The dollar expenditures for marketing programs were at significantly higher rates of increase during the last six months of the fiscal year - particularly the fourth quarter. The relationships of advertising and promotion expenses to total selling, administrative and general expenses for the last three years has been: ear Advertising & Promotion Selling Administrative & General Advertising & Promotion As a Percentage of Total Selling, Administrative And General 1973 $25,173,727 $45,164,104 56% 1974 $28,440,023 $51,212,637 56% 1975 $35,859,917 $61,263,716 59% Total employment costs, payroll and fringe benefits, and travel costs increased $1.7 million over 1974, reflecting salary adjustments and higher travel and entertainment costs. Depreciation charged to operations in 1975, included in both cost of goods and selling, general and administrative expenses, was $2,.9 million as compared with $2.3 in 1974 reflecting increased additions for plant expansion. -17-

i Short term investment income, before taxes, was $2.0 million in 1975 as compared with $2.3 million in 1974. Yields on short-term investments were significantly below the previous year, particularly in the third and fourth quarters. Interest expense was $255,448 in 1975 as compared with $316,243 in 1974, with most of the 1975 interest expense occurring outside of the United States. While the effects of foreign currency adjustments were not material in 1974, these losses were significant in 1975 and reduced net income for the year $1,146,574 or approximately 10.8 cents per share. In summary, net income for 1975 increased $3.8 million or 22.6% reflecting increased sales of higher margin product classifications and lower raw materials costs. Operating expenses and foreign currency adjustments were up significantly, with interest income below year ago levels. Net income of the Company was 9.5% of sales in 1975 as compared with 8.7% in 1974. ITEM 3. Properties. The principal United States and Canadian properties of the Company are the following: Location Facility St. Louis . . . . . . . . . . . . . World headquarters; W-J's offices; extract and color manufacturing plant; and warehouses Los Angeles . . . . . . . . . . . . Flavor manufacturing plant Ventura County, California. .... Ventura's offices; lemon groves*; and lemon product manufacturing plant Phoenix . . . . . . . . . . . . . . Offices and bottling plant Toronto . . . . . . . . . . . . . . Canadian headquarters Ontario . . . . . . . .. . . . . . . Bottling plant; and warehouses (six locations)** *Approximately 50% of Ventura's lemon groves are leased. ~Y **Two of the warehouses are leased. ~ 4* Q0 ~ r-~ -18- ~

In addition to the properties included in the above table, the Company owns extract manufacturing plants in Brazil, Ireland and Argentina, and the Company owns extract manufacturing equipment and leases offices in Japan, Mexico and the Republic of South Africa. The Company maintains offices in Great Britain, Egypt, the Netherlands and the Philippines. It is anticipated that an increasing percentage of the extract manufactured by the Company outside the United States will be manufactured at the Ireland facility in the future. The Company also owns or leases warehouse space in various locations in the United States, Canada and a number of other countries. With the exception of W-J's color manufacturing facilities, the Company's facilities are generally operated on a one- shift basis. W-J has completed expanding its color manufacturing facilities, which are presently operated in part on a two shift basis and in part on a three shift basis. The expansion, which will significantly increase the size of such facilities, was completed in April, 1976, at a total cost of approximately $1,600,000. The Company also owns a five-story commercial office building next to its World Headquarters, acquired in February 1974 for $1,550,000 in cash, which is approximately 70% leased to a number of tenants for terms of up to five years. ITEM 4. Parents and Subsidiaries The registrant is the parent company of the subsidiaries indicated below. Various descendants of C. L. Grigg, E. G. Ridgway and Frank Y. Gladney, who founded the Company and trusts in which they -19-

have interests, owned at December 31, 1976, approximately 49% of the outstanding common stock of the Company. all of these persons and Some or entities may be deemed a "parent" of the Company under the rules and regulations of the Securities and Exchange Commission. Subsidiaries of Registrant Name of Company Place of Incorporation Dev-Vend Corporation Missouri Seven-Up Canada Limited Ontario, Canada Seven-Up Bottling of Phoenix, Inc. Arizona Seven-Up International, Inc. Delaware Seven-Up Great Britain, Inc. Missouri Seven-Up Southern Hemisphere, Inc. Missouri Seven-Up Asia, Inc. Missouri Seven-Up Services, Inc. Missouri Ventura Coastal Corporation California Golden Crown Citrus Corporation Illinois Warner-Jenkinson Company Missouri Warner-Jenkinson Company of California California Warner-Jenkinson East, Inc. New York Cheer Up Company Missouri The registrant or the indicated subsidiary owns 100% of the voting securities of each of the above named subsidiaries. The names and places of incorporation of subsidiaries other than those incorporated in the United States and Canada have been omitted. The omitted subsidiaries considered in the aggregate as a single subsidiary would not constitute a significant subsidiary. All subsidiaries, including those whose names are omitted, are included in the consolidated financial statements for all periods during which they were owned by the registrant or a subsidiary of the registrant. ITEM 5. Legal Proceedin s. In 1971, the Company was served with a complaint by the Federal Trade Commission ("FTC") alleging that the Company's franchise agreements restrict 7UP franchised bottlers from selling outside of designated geographical areas and therefore have an adverse effect on competition in the soft drink industry in violation of Section 5 of the Federal Trade Commission Act. Similar complaints were issued against

seven other soft drink franchising firms. The complaints seek orders against the Company and the other soft drink franchising firms which would require them to cease and desist from maintaining restricted bottler territories. The firms, including the Company, have contested the complaints on the merits. Two of the cases have been tried before an Administrative Law Judge. The Judge ruled in favor of the franchising companies. These two cases are presently on appeal to the F.T.C. No trial date has been set in the FTC proceeding involving the Company pending the outcome of the appeals in the two foregoing cases. Based on presently available information, it is the opinion of management that, even if there is a ruling on the merits against the Company, the outcome will not materially affect the Company's financial condition and operations. As previously reported, the Food and Drug Administration ("FDA") delisted food color Red #2 in 1976. About the same time Allied Chemical Corporation ("Allied") obtained patents for FDA approved food color Red #40, which then became the only approved red food color available for general use in the United States. These patents expire in 1987. Warner- Jenkinson ("W-J"), a subsidiary of the Company, has been manufacturing food color Red #40 since 1972 and after Allied was granted its patent rights, W-J filed suit in the United States District Court for the Southern District of New York against Allied to declare the patents invalid. Allied filed a counterclaim alleging patent infringement and seeking injunctive relief and unspecified damages. The parties settled this litigation in February 1976 through the establish- ment of a manufacturing license supported by a royalty of 17.5% payable to Allied. This litigation was reinstituted in 1976 when escalating costs reduced profit margins; this refiled case was dismissed in the lower court on the licensee estoppel doctrine; and is presently being appealed. The likeli- hood of an unfavorable outcome is real, however, in the opinion of management, it would not have a material affect on the Company's financial condition and operations. -21-

On October 28, 1975 the Seven-Up Bottling Company of St. Louis instituted litigation against the Company in the U.S. District Court for the Eastern District of Missouri. The Plaintiff is seeking a court order declaring certain trademark registrations of Company invalid. The underlying purpose of the litigation is to establish an exclusive right in the Plaintiff to use the trademark SEVEN-UP (also 7UP) on finished soft drink products in the Plaintiff's franchised territory and restrict the right of Company to use of such trademark on extract and flavoring materials used in the manufacture of such finished products only. On September 20, 1976, an order was issued by Senior_Judge for the United States District Court of Missouri, dismissing the suit filed against this Company. The dismissal was based upon Plaintiff's failure to state a cause of action and its unfair competition claims cognizable under State law were dismissed for lack of said Court's jurisdiction, there being no diversity of citizenship between the litigants. The Plaintiff has filed on October 18, 1976, a notice of appeal in this case. It is the opinion of counsel that such litigation does not constitute a potential liability which may materially affect the Company's financial condition or operations. Reference is made to ITEM 1. (a)(b). Business, "Government Regulation" above. ca ,.. F~ -22- w ~

,"A ITEM 6 (a) Increases and Decreases in Outstanding Equity Securities Number of Shares Number of Shares Title of Outstanding on Date of Amount Description of Outstanding on Class January 1, 1976 Transaction Involved Transaction December 31, 1976 6% Cumulative Preferred Stock $100 Par Value (Callable at Par) 35,880 Common Stock 10,695,451 N (1) w I (1) +24.050 At various times during 1976, the registrant issued shares of common stock pursuant to the Seven-Up Qualified Stock Option Plan. The shares issued are registered under the Securities Exchange Act of 1933, on Form S-8. (2) On February 8, 1977, Registrant purchased 5,120 shares of its 6% Cumulative Preferred Stock, for $76.4333 per share, as reported on Form 8-K for the month of February 1977. Number of shares outstanding as of March 31, 1977 is 30,760. 35,880 (2) 10,719,501 TET6?i?tUZ

ITEM 7. Approximate Number of Equity Security Holders Number of Record Holders Title of Class March 1, 1977 6% Cumulative Preferred Stock, $100.00 Par Value (non-voting) 19 Common Stock, $1.00 Par Value 5,716 ITEM 8. Executive Officers of the Registrant (a) None of the following executive officers are related to each other. Each officer serves from year to year, subject to annual election by the Board of Directors in April of each year. Name Position Age* Ben H. Wells Chairman of the Board 70 William E. Winter President, Chief Executive Officer and Director 56 Paul H. Young, Jr. Executive Vice President, Treasurer and Director 52 Dr. B. C. Cole Vice President, Technical Director and Director 67 Michael Baker Vice President, Director of Marketing Development 31 J. Stewart Bakula Vice President, General Counsel and Assistant Secretary 48 William A. Fagot(l) Assistant Treasurer 33 David M. Haffner Vice President and Merchandising Director 33 William P. Hebron(2)Vice President, Director of Sales 41 John R. Kidwell Senior Vice President Director of Marketing 50 Robert A. Ridgway Vice President, Director of (3) Corporate Real Estate 36 Robert W. Simpson Vice President and Secretary 67 Mildred E. Stiebel Assistant Treasurer 53 (4) *As of March 1, 1977 (1) Appointment effective March 1, 1977. (2) Resigned effective March 7, 1977. ~ (3) Resigned effective January 3, 1977. .~ 4 ~ ( ) Resigned effective February 28, 1977. ~ ~ -a ~ ~ r; -24-

(b) The foregoing officers have been employed by the Company in various management capacities for more than five years. ITEM 9. Indemnification of Directors and Officers Section 351.355 of The General and Business Corporation Law of Missouri provides that each officer, director, employee or agent of a Missouri corporation shall be indemnified by such corporation against liabilities, expenses, counsel fees and costs reasonably incurred in connection with any claim or proceeding in which he is a party by reason of his being or having been such officer, director, employee or agent, except such as to which he is adjudged liable for negligence or misconduct in the performance of his duties. The Statute further provides that such right of indemnifica- tion is not exclusive of any other rights to which such officer or director shall be entitled. The registrant's by-laws provide for indemnification of officers and directors, to the extent not prohibited by Missouri law, for acts done in good faith for a purpose which the officer or director reasonably believes to be in the best interests of the registrant. The registrant has purchased a Directors' and Officers' Liability and Company Reimbursement Insurance Policy issued by American Home Assurance Company. ITEM 10. Financial Statements and Exhibits Filed (a) Financial Statements The response to this item is submitted as a separate section of this report. (b) Exhibits 1. Computation of Earnings Per Share. -25-

THhJ SEVtN-UP COMPANY AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (1) YEAR ENDED DECEMBER 31 1972 1973 1974 1975 1976 Primary: Average shares outstanding 10, 367, 042 10, 454, 387 10, 467, 739 10, 615, 255 10, 713,126 Dilutive stock options - based upon the treasury stock method using average market prices 11,496. 3,425 21,586 27,990 TOTALS 10, 378, 538 10, 457, 812 10, 467, 739 10, 636, 841 10,741,116 Net income applicable to Common Stock $11, 430, 719 $13, 582, 581 $16,103, 632 $20, 010, 273 $24, 535, 725 Per share amount $1.10 $1.30 $1.54 $1.88 $2.28 ~ x tr Fully diluted: Average shares outstanding after stock options from above 0, 378, 538 0,457, 812 0, 467, 739 2) 2) w rt H Assummed conversion of $5.71 Convertible Class A Preferred Stock into Common Stock 16,765 07,407 99,932 TOTALS 10, 595, 303 10, 665, 219 10, 667, 671 Net income applicable to Common Stock $11, 430, 719 $13, 582, 581 $16,103, 632 Add dividend requirements on $5.71 Convertible Class A Preferred Stock 398,521 284,485 269,191 $11, 829,240 $13, 867, 066 $16, 372, 823 Per share amount $1.12 $1.30 $1.54 (1) The number of shares and earnings per share in this exhibit have been adjusted to reflect the 2 for 1 stock split in 1972. (2) All outstanding $5. 71 Series 1 Convertible Class A Preferred Stock was converted into shares of Common Stock in 1975. See Note B to Consolidated Financial Statements incorporated herein by reference. •bEI63iRfr0Z

PART II ITEMS 11 to 15. Items 11 to 15, inclusive, are omitted because the registrant has filed with the Commission a definitive proxy statement pursuant to Regulation 14A, which involves the election of Directors and Auditors at the annual meeting of shareholders of registrant to be held on April 11, 1977. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE SEVEN-UP COMPANY (Registrant) By : Paul H. Young, Jr.N Executive Vice President, Treasurer March 25, 1977

Ernst &Ernst 10 Broadway • St. Louis, Missouri 63102 • Phone 314/231-7700 Stockholders and Board of Directors The Seven-Up Company St. Louis, Missouri We have examined the consolidated balance sheets of The Seven-Up Company and subsidiaries as of December 31, 1976 and December 31, 1975, and the related consolidated statements of income, changes in financial position and stockholders' equity for the years then ended included in the annual report to stockholders of The Seven- Up Company for the year ended December 31, 1976, and the additional notes to consolidated financial statements and the schedules listed in the index on a preceding page. Our examinations were made in ac- cordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly the consolidated financial position of The Seven-Up Company and subsidiaries at December 31, 1976, and December 31, 1975, and the consolidated results of their operations and changes in their financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. Further, it is our opinion that the additional notes to consolidated financial state- ments and schedules referred to above present fairly the information set forth therein in compliance with the applicable accounting regula- tions of the Securities and Exchange Commission. St. Louis, Missouri February 14, 1977

I-1 ITEM 10(a) FINANCIAL STATEMENTS AND SCHEDULES THE SEVEN-UP COMPANY AND SUBSIDIARIES The following consolidated financial statements of the registrant and its subsidiaries, included in the annual report of the registrant to its shareholders for the year ended December 31, 1976, are incorporated herein by reference: Consolidated Balance Sheets - December 31, 1976 and December 31, 1975 Consolidated Statements of Income - Years ended December 31, 1976 and December 31, 1975 Consolidated Statements of Changes in Financial Position - Years ended December 31, 1976 and December 31, 1975 Consolidated_Statements of Stockholders' Equity Years ended December 31, 1976 and December 31, 1975 Notes to Consolidated Financial Statement The following consolidated financial information for the years 1975 and 1974 is submitted herewith: Additional Notes to Consolidated Financial Statements Schedule I - Marketable Securities - Other Investments (1976 only) Schedule II - Amounts receivable from Underwriters, Promoters, Directors, Officers, Employees, and Principal Holders (other than Affiliates) of Equity Securities of the Person and its Affiliates Schedule V Schedule VI Schedule VII Schedule IX Schedule XII Schedule XIII - Property, Plant and Equipment Accumulated Depreciation and Amortization of Property, Plant and Equipment Intangible Assets, Deferred Research and Development Expenses, Pre-operating Expenses and Similar Deferrals Bonds, Mortgages and similar debt Valuation and Qualifying Accounts and Reserves Capital Shares (1976 only)

1-2 Schedules III, IV, VIII, X, XI, XIV, XV, XVI, XVII, XVIII, and XIX for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. With respect to Schedule XIII, the information applicable to the consolidated subsidiaries has been omitted as they are wholly-owned and the answers to Column G would be "none". Individual financial statements of the registrant have been omitted as the registrant is primarily an operating company and all subsidiaries included in the consolidated financial statements filed, in the aggregate, do not have minority equity interests and/or indebtedness to any person other than the registrant or its consolidated subsidiaries in amounts which together (excepting indebtedness incurred in the ordinary course of business which is not overdue and matures within one year from the date of its creation, whether or not evidenced by securities, and indebtedness of subsidiaries which is collateralized by the registrant by guarantee, pledge, assignment, or otherwise) exceed 5 percent of the total assets as shown by the most recent year-end consolidated balance sheet. ~ ~

1-3 ADDITIONAL NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE SEVEN-UP COMPANY AND SUBSIDIARIES December 31, 1976 and December 31, 1975 Note I - INVENTORIES Inventories used in computing cost of products sold were as follows: January 1, 1975 $22,587,118 December 31, 1975 $24,000,110 December 31, 1976 $26,053,979 Note J - SHORT-TERM FINANCING Of the total notes payable, $488,506 at December 31, 1976 and $753,433 at December 31, 1975 are loans to foreign subsidiaries from foreign banks in the countries where the subsidiaries are located (principally in two South American countries). The notes bear interest rates from 12% to 96%. There are no formal provisions for the extension of the maturities of the notes. The remainder at December 31, 1975 is principally a loan from a foreign bank in connection with the merging of the Canadian subsidiaries bearing interest at 1/2% above the Canadian prime rate. Interest expense on aggregate short-term debt was $137, 157 in 1976 and $125 , 458 in 1975 and the weighted average interest rate was 18. 4% and 10.4% respectively. The maximum outstanding balances were not significant except at December 31, 1975 when the amount outstanding was $ 7, 641 , 433 . Approximately $ 7, 000 , 000 of this amount was repaid early in January 1976. Under a revolving line of credit with two banks, the Company may borrow up to $1,500,000 in 1976 and 1975 at the banks prime interest rate. None of the line of credit was used during either year. The Company's financ- ing arrangements require maintenance of a compensating balance which is not material. Note K - INTEREST EXPENSE Interest expense on long-term debt was $151,975 and $129,990 in 1976 and 1975 respectively. Interest capitalized with regard to orchard development costs (see Note A to Consolidated Financial Statements incorporated herein by reference) was $45,000 and $62,884 in 1976 and 1975 respectively.

1-4 ADDITIONAL NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note L - ADDITIONAL STOCK OPTION INFORMATION Reference is made to Note B to Consolidated Financial Statements incorporated herein by reference. Information as of December 31, 1976 and for the two years then ended with respect to options granted under the Company's stock option plan is as follows: NUMBER OF OPTION PRICE MARKET VALUE SHARES PER SHARE TOTAL PER SHARE TOTAL Shares under option at December 31, 1976 92,550 $19. 88 to $35. 44 $2, 394, 400. $19. 88 to $35. 44(a) $2, 394, 400 Options which became ex- ercisable during year ended December 31: 1975 79,150 $19. 88 $1, 573, 502 $34. 25(b) $2, 710, 888 1976 -0- Options exercised during the year ended December 31: 1975 26,300 $19. 88 to $35. 44 $ 628,653 $28. 75 to $35. 50(c) $ 852,050 1976 24,050 $19. 88 to $35. 44 $ 627,325 $30. 38 to $41. 38(c) $ 919,720 (a) At the dates options were granted. _ (b) At the dates options became exercisable. (c) At the dates options were exercised. At December 31, 1976 and December 31, 1975, there were 137,600 shares and 137,350 shares, respectively, of Common Stock reserved for future options.

1-5 ADDITIONAL NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note M - SUPPLEMENTARY INCOME STATEMENT INFORMATION Reference is made to Note A to Consolidated Financial Statements incorpor- ated herein by reference. YEAR ENDED DECEMBER 31 1976 1975 Depreciation and amortization: Property, plant and equipment $ 3,193,303 $ 2,810,971 Amortization of intangible assets: Formulas and trademark protection expense 33,016 51,734 Cost in excess of net assets of subsidiaries acquired 36,933 36,934 69,949 88,668 $ 3,263,252 $ 2,899,639 Advertising and promotion $43,306,814 $35,859,917 Amounts for maintenance and repairs, taxes (other than income taxes), rents and royalties are not presented as such amounts are less than 1% of con- solidated net sales in each year. Note N - INCENTIVE COMPENSATION Under the Company's Challenge Fund Incentive Plan, certain executives re- ceive additional compensation upon the achievement of profit goals. The amount charged to expense is $322,500 and $325,000 for 1976 and 1975 re- spectively.

SCHEDULE I - MARKETABLE SECURITIES - OTHER SECURITY INVESTMENTS THE SE%'c.-N-~:c CC,:~irA\Y AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D Number of Shares or Units Value Based on Market NAME OF ISSUER AND TITLE OF EACH ISSUE - Principa.l Amount of Amount at Which Shown Quotations at Balance Bonds and Notes in the Balance Sheet Sheet Date Commercial Paper: I.A.C. Ltd. 8. 87c due 1 /4 /77 100,000 $ 97,987 $ 97,987 H I. A. C. Ltd. 8. 8% due 1 /4 /77 250,000 244,968 I 244,968 rn Pet Incorporated 5. 25% due 1 /7 /77 1,500,000 1,498,688 1,498,688 Special Nuclear Material 4. 757c due 1/7/77 200,000 199,815 199,815 Connecticutt Light & Power 4. 75% due 1/11/77 600,000 599,129 599,129 Chrysler Financial 4. 877c due 1 /12 /77 1,000,000 998,511 998,511 Allis Chalmers Credit Corp. 4. 757c due 1 /14 /77 200,000 199,631 199,631 Chrysler Financial Corp. 5. 007c due 1 /17/77 450, 000 448,937 448,937 Credit Lyonnaise 4. 87°/~~ due 1 /17 /77 1, 000, 000 997,845 997,845 T. I. Case Credi t Corp. 5.12°/~~ due 1/18/77 1,200,000 1,197, 096 1,197, 096 Allis Chalmers 5. 00°/~~ due 1 /19/77 800,000 798,000 798,000 Chrysler Financial Corp. 4. 875% due 1 /21 /77 250,000 249,289 249,289 Mack Financial 5. 00% due 1 /24 /77 700, 000 697,764 697,764 Electric DeFrance Service Nat'l 4. 8750% due 1 /25 /77 750, 000 747,461 747,461 General Motors Accept. Corp. 8. 75% due 1/25/77 200, 000 195,877 195,877 N) ca P.S.L. 8. 75% due 1 /25 /77 100, 000 97,938 97,938 ~ m J1. Avis Rent-a-Car System Inc. 4. 757c due 1 /26 /77 300,000 298,971 298,971 co First Pennsylvania Corp. 4.87507 due 1 /31 /77 500,000 497, 901 497,901 ~ ~ Allis Chalmers Credit Corp. 4. 80% due 1 /31 /77 600, 000 597,520 597,520 ~ ~.+ Allis Chalmers Credit Corp. 4. 8097c due 2/11/77 200,000 198,880 198,880 I. 1. Case Credit Corp. 4. 757c due 2 /16 /77 800,000 795,039 795,039

SCHEDULE I - MARKETABLE SECURITIES - OTHER SECURITY INVESTMENTS THE SEVEN-L'F CO`IPA\'Y AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D Number of Shares or Units Value Based on Market NAME OF ISSUER AND TITLE OF EACH ISSUE - Principal Amount of Amount at Which Shown Quotations at Balance Bonds and Notes in the Balance Sheet Sheet Date Tax Exempt State & Municipal Bonds: Middleton, Ohio 3.90% due 1/1/77 340,000 $ 347,395 $ 347,395 H i Middleton, Conneticutt 3. 50°/~~ due 1/20/77 500, 000 508,480 508,480 ~ Mircus County, New Tersey 3.107c due 1/31 /77 1, 000, 000 1,013,288 1,013,288 Commonwealth Edison 3.00Ic due 2/1/77 400,000 404,092 404,092 Kiningly, Conneticutt 3.70% due 2/16/77 775,000 796,182 796,182 Wallingford, Conneticutt 3.80°J~~ due 3/1/77 310,000 317,366 317,366 Missouri Housing Development 3.8017c due 4/1/77 1,000,000 1,033,463 1,033,463 Lincoln Nebraska Electric 3.7Wc due 4/15/77 500, 000 514,307 514,307 Massachusetts H: F. A. 5.247c due 4/15/77 500, 000 519,143 519,143 Norfork, Conneticutt 3.75°/~~ due 4/15/77 30, 000 30,166 30,166 Chicago Board of Education 5. 00% due 5/2/77 1, 000, 000 1, 054, 065 1, 054, 065 Cleveland, Ohio 4.68f due 5/13/77 800, 000 824,630 824,630 Cleveland, Ohio 2.957c due 5/13/77 200, 000 207,541 207,541 Cumberland, R.I. 3.50% due 5/15/77 30, 000 30,134 30,134 Dallas, Texas 2.857c due 6/1/77 500, 000 501,799 501,799 Puerto Rico 6.25% due 6/15/77 1,000,000 1,002,605 1,002,605 Massachusetts H. F. A. 6. 7597c due 6/15/77 1,000,000 1,045,842 1,045,842 New Tersey H. F. A. 5. 00°/~~ due 6/15/77 500, 000 516,988 516,988 EtaT69TRt4z

~..~,...;:x. ........p..n..~... _,_ SCHEDULE I-&IARKETr1BLE SECURITIES - OTHER SECURITY INVESTMENTS THE SEVEN-UP COMPANY AND SUBSIDIARIES December 31, 1976 COL. A NAME OF ISSUER AND TITLE OF EACH ISSUE COL. B Number of Shares or Units - Principal Amount of Bonds and Notes COL. C Amount at Which Shown in the Balance Sheet COL. D Value Based on Market Quotations at Balance Sheet Date Tax Exempt State & Municipal Bonds - cont'd: / Onondaga County 2.707c due 6/30/77 1,500,000 $ 1,500,848 $ 1,500,848 Hancock, Kentuckey 4.00% due 7/1/77 500,000 513,919 513,919 Montgomery City 3.40% due 7/15/77 425,000 431,624 431,624 Johnson County, Kansas 2.807c due 8/1/77 100,000 101,957 101,957 Hartford City 2.80% due 8/12/77 1,000,000 1,005,464 1,005,464 Branford, Conneticutt 3.00°f~~, due 8/17/77 1,289,000 1,292,620 1,292,620 Branford, Conneticutt 2.85% due 8/17/77 500, 000 501,871 501,871 Chicago, Illinois 3. 90% due 9/15/77 1,000,000 1,003,967 1,003,967 Niagra County 3.50% due 9/30/77 850,000 859,532 859,532 Cambridge, Massachusetts 3.20°J~~ due 10/15/77 55,000 55,722 55,722 Pbrtland, Maryland 2.70% due 11/29/77 1,000,000 1,005,632 1,005,632 St. Louis, Missouri Water Rev. 3.75°7c due 1/1/78 100,000 100,770 100,770 Minnesota H. F. A. 3. 747c due 5/15/78 500,000 505,795 505,795 ix-bi6R t~~4~

SCHEDULE I - MARKETABLE SECURITIES - OTHER SECURITY I\VEST`TE\TS THE SEVEN-UP CO`4PA\'Y AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D Number of Shares or Units Value Based on Market NAME OF ISSUER A11TD TITLE OF EACH ISSUE - Principal Amount of Amount at Which Shown Quotations at Balance Bonds and Notes in the Balance Sheet Sheet Date Other: Banko de Cedulas $ 2 97 $ 2 97 Mexican Telephone Company 3 400 400 H 1 ~ Government Bonds: Argentine Government External Bonds 3rd Series - 1971 250 272 272 Argentine Government External Bonds 2nd Series - 1972 2,200 2,229 2,229 Argentine Government External Bonds 8th Series - 1975 10,000 10,223 10,223 Deposit Accounts: Fuji Bank - Toranomon 7,245 7,245 7,245 Citibank - London 44,603 44,603 44,603 Citibank - Zurich 1,200,000 1,200,000 1, 200, 000 Citibank - Dublin 546,909 546,909 546,909 Financiera Comermex - Monterrey 31,000 31,000 31,000 AMRO Bank - Bussum 886,617 886,617 886,617 Citibank - Amsterdam 429,338 429,338 429,338 Prudential Bank - Manilla 27,064 27,064 27,064 Toronto Dominion Bank 198,320 198,320 198,320 Totals $ 34, 588, 971 $ 34,588,971 51r1631Vt? QZ ~: -

SCHEDULE II - AMOUNTS RECEIVABLE FROM UNDERWRITERS, PROMOTERS, DIRECTORS, OFFICERS, EMPLOYEES, AND PRINCIPAL HOLDERS (OTHER THAN AFFILIATES) OF EQUITY SECURITIES OF THE PERSON AND ITS AFFILIATES THE SEVEN-UP COMPA\'Y AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E l B i B DEDUCTIONS BALANCE AT END OF PERIOD NAME OF DEBTOR a ance at eg nning of Period Additions (1) (2) (1) (2) Amounts Collected Amounts Written Off Current Not Current Year ended December 31, 1976 Willis R. Bailard $ 79,650 Paul Hansfield and Julian Coleman 295,000 $ 374,650 Year ended December 31, 1975 Willis R. Bailard $ 94,650 $ 15, 000 - A $ 15,000 $ 15,000 $ 49,650 295,000 $ 15,000 $ 344,650 $ 15, 000 - A $ 15,000 $ 64,650 Paul Hansfield and Julian Coleman 295,000 $ 389, 650 $ 15,000 $ 15,000 9tl6Vl?la4w 295, 000 $ 359,650 A- The Company resolved in August, 1972, to pay the officer (currently a director of a subsidiary) $15, 000 per year for ten years of services to be rendered. The payments are used to offset those due the Company on indebtedness.

Y SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT THE SEVEN-UP COMP?u\Y AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E COL. F Other Charges - CLASSIFICATION Balance at Beginning Additions at Cost Retirements Add (Deduct) - Balance at End of Period Describe of Period Year ended December 31, 1976 Land $ 6,223,195 $ 303,206 $ $ $ 6,526,401 Orchards 1,439,197 -0- 80,596 630,447 - C 1,989,048 Buildings & Improvements 15,122,766 360, 225 21,352 310,282 - C 15, 739, 082 (32, 839) - A Furniture & Equipment 20, 356, 864 3,211,481 1,216,535 1,732,680 - C 23, 942,119 (142, 371) - A Orchards Under Development 489 763 1 623 401 (630, 447) - C H 1,534,665 i Construction In Progress , , 1,652,357 , 4,173,388 (2, 043, 460) - C 3,782,285 ~ ~ $ 46,557,868 $ 8,449,923 $ 1,318,483 $ (175, 708) $ 53,513,600 Year ended December 31, 1975 Land $ 6,137, 868 $ 9,632 $ 433 $ 76,128 - C $ 6,223,195 2 511 1 439 197 Orchards 1,581,708 14 , , , (22,648)- A Building & Improvements 14,127,169 547,203 17,292 - B 15,122,766 453,750 - C (72,378)- A Furniture & Equipment 17,865,673 4,276,348 1,350,624 8,851-B 20,356,864 ~ (371, 006) - C Orchards Under Development 1,256,728 506,761 1,763,489 Construction In Progress 312,291 1,499,486 (159, 420) - C 1,652,357 $ 41,281,437 $ 6,839,430 $ 1,493,568 $ (69, 431) $ 46,557,868 Lir163X8t'Q7,

SCHEDULE V - PROPERTY, PLANT AND EQUIPME1\°T THE SEVEN-UP COMPANY AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E COL. F Other Charges - CLASSIFICATION Balance at Beginning Additions at Cost Retirements Add (Deduct) - Balance at End of Period Describe of Period A- Write-off of fully-depreciated assets. B- 1975 Revenue Agent Adjustments. C - Miscellaneous reclassifications. ?tT6VT8V0Z

r SCHEDULE %'I - ACCUMULATED DEPRECIATIO\, DEPLETIO\ :~\D A~"IORTIZATION OF PROPERTY, PLANT AND EQUIPME\"I' THE SEVEN-UP COMPA\'Y AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E COL. F DESCRIPTION Balance at Beginning of Period Additions Charged to Costs and Expenses Retirements Other Changes-Add (Deduct)-Describe Balance at End of Period Year ended December 31, 1976 Orchards $ 322,030 $ 110,182 $ 45,007 $ $ 387,205 Buildings and Improvements 4,586,910 530,912 14,134 (32, 839) - A 5,070,849 (142, 371) - A Furniture and Equipment 8,909,098 2,611,153 1,051,069 189,425 - C 10, 474, 017 (42,219)- D Depreciation expense charged to amount due H I growers for fruit processed and orchards under development (58,944) 58,944 N w $ 13, 818, 038 $ 3,193, 303 $ 1,110,210 $ 30,940 $ 15, 932, 071 Year ended December 31, 1975 Orchards $ 563,603 $ 85,045 $ 67,478 $ (259,140) - C $ 322,030 (22, 648) - A Buildings and Improvements 3,933,968 515,693 4,095 2, 884 - B 4,586,910 161,108 - C (71, 422) - A Furniture and Equipment 7,682,298 2,265,377 1,065,715 2,554 - B 8,909,098 96, 006 - C Depreciation expense charged to amount due growers for fruit processed and orchards under development (55,144) 55,144 $ 12,179,869 $ 2,810,971 $ 1,137,288 $ (35,514) $ 13,818,038 0I68xMu

SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETIO\ :~ND A`iORTIZ ATIO\ OF PROPERTY, PLANT A_ND EQUIPMENT THE SEVEN-UP COMPA\`Y AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E COL. F Balance at Beginning Additions Charged to Other Changes-Add Balance at DESCRIPTION of Period Costs and Expenses Retirements (Deduct)-Describe End of Period A- Write-off of fully-depreciated assets. B- 1975 Revenue Agent Adjustment. C - Miscellaneous reclassifications. D - Charge for major repair expenditures. m6slevoz

. SCHEDULE VII - INTANGIBLE ASSETS, DEFERRED RESEARCH AND DEVELOPMENT EXPENSES, PREOPERATING EXI~:~'SES AND SIMILAR DEFERRALS THE SEVEN-UP COMPANY AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E COL. F Balance at Additions at DEDUCTIONS Other Changes DESCRIPTION Beginning Cost-- ( Add (Deduct) Balance at Close of Period Describe Charged to Costs Charged to Other (Describe) of Period and Expenses Accounts--Describe Year ended December 31, 1976 Trademarks $ 915,712 $ 1,772 - A $ 50-C $ $ 917,434 Formulas and Trademark Protection expense 602,290 166, 098 - D 403,226 Cost in excess of net assets 32, 966 - C of subsidiaries acquired 2,687,131 173,416 - B 36,933 - C 2,823,614 $ 4,205,133 $ 175,188 $ 236,047 $ 4,144,274 Year ended December 31, 1975 Trademarks $ 914,762 $ 1, 000 - A$ 50 - C $ $ 915,712 Formulas and Trademark Protection expense 653,974 51,684 - C 602,290 Cost in excess of net assets of subsidiaries acquired 2,727,100 36,934 - C (3, 035) - E 2,687,131 $ 4,295,836 $ 1,000 $ 88,668 $ (3,035) $ 4,205,133 A- Represents cost of trademark to be used in foreign country. B- Represents portion of purchase price of acquired business. C- Amortization for the year. D- Write-off of formulas no longer considered to be of value. E- Write-off of cost in excess of net assets of subsidiaries acquired no longer considered to be of value. 1ST6dT8#0;

SCHEDULE IX - BONDS, \IORTGAGES AND SIMILAR DEBT THE SEVE\T-UP COMPANY AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E COL. F COL. G COL. H AMOUNT INCLUDED IN Amount Included Amount in AMOUNT HELD Amount COLUMN C, WHICH IS in Sum Extended Sinking Amount BY AFFILIATES Amount Issued (1) (2) Under Caption and Other Pledged FOR WHICH STATEMENTS NAME OF ISSUER AND TITLE OF EACH ISSUE Authorized and Not Held by or Not Held by '.'Bonds, Mort- Special by ARE FILED HEREWITH by Indenture Retired or or Account orfor Acc- gages & Similar Funds of Issuer Persons Included Cancelled of Issuer ount of Iss- Debt" in Related Issuer Thereof in Consolidated Others Thereof uerThereof Balance Sheet Thereof Statement 6% Promissory notes, payable to 1981, unsecured $ 246,134 $ 246,134 $ 246,134 77c Mortgage notes, payable to 1983 553,800 553,800 553,800 H i ~ 14.5% Promissory notes, payable to 1978 105,044 105,044 rn 105,044 517c Loan on life insurance policy on subsidary officer 37,625 37,625 37,625 $ 942,603 ZSI6818tU;

SCHEDULE XII - VALUATION AND QUALIFYI\tG ACCOUNTS AND RESERVES THE SEVEN-UP COMPAiNY AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E ADDITIONS Balance at Beginning (1) (2) Deductions Balance at End DESCRIPTION of Period Charged to Costs Charged to Other (Describe) of Period and Expenses Accounts-Describe Year ended December 31, 1976 Reserves deducted from asset account: Allowance for doubtful accounts $ 275, 000 $ 81,282 $ 81,282 - A $ 275,000 Other Reserves: Reserve for foreign operations $ 300,000 $ 300,000 - B H $ -0- i ~ ~ Year ended December 31, 1975 Reserves deducted from asset account: Allowance for doubtful accounts $ 300, 000 $ 30,986 $ 55, 986 - A $ 275, 000 Other Reserves: Reserve for foreign operations $ 300, 000 $ 300, 000 - C A - Represents accounts written-off. B- Written-off in accordance with FASB #5. C- Included in Other Accrued Liabilities. ESI6RI8tOu

SCHEDULE XfI1'• - '-APITAL SHARES THE SEVEN-UP COMPANY AND SUBSIDIARIES December 31, 1976 COL. A COL. B COL. C COL. D COL. E COL. F COL. G Number o Shares Inc u e Shares Issued or Outstanding Number of Shares Held by Number of Shares Reserved Number of Number of in Column C Which are as Shown on or Included in Affiliates for Which State- for Options, Warrants, NAME OF ISSUER AND TITLE Shares Shares (1) (2) Related Balance Sheet Under ments are Filed Herewith Conversions & Other Ri hts Auth i d OF ISSUE or ze Issued and Held by or Not Held by or Ca tion "Ca ital Shares" (1) (1) (2) by Ch Not Retired for Account for Account 1 (2) Persons Includ- (2) Directors, arter or Cancelled of Issuer of Issuer ~~ rr Amount at ed in Consolida- Others Officers and Others Thereof Thereof Which Shown ted Statements Em lo ees The Seven-Up Company - A 6°j~ Cumulative Preferred Stock, par value $100 35,888 35,880 None 35,880 35,880 $ 3,588,000 None None ~ ~ ~ 00 Common Stock, par value $1 24, 000, 000 10, 719, 501 None 10, 719, 501 10, 719, 501 $10, 719, 501 137,600 - B None A- See Note B to Consolidated Financial Statements incorporated herein by reference. B- Reserved for issuance of stock options. V5t69xet-Uz LuA&,w__:._...,, I