SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549

                             FORM 10-Q


(Mark One)
<checked-box> QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
                                  or
<square>      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
          FOR THE TRANSITION PERIOD FROM __________ TO __________

                        COMMISSION FILE NUMBER 1-13914

                 PEPSI-COLA PUERTO RICO BOTTLING COMPANY
         (Exact name of Registrant as specified in its Charter)

                 DELAWARE                             ###-##-####
   (State or other jurisdiction of       (I.R.S. Employer Identification No.)
    incorporation or organization)

          CARRETERA #2, KM 19.4
            BARRIO CANDELARIA
          TOA BAJA, PUERTO RICO                           00949
 (Address of principal executive office)                (Zip code)

   Registrant's telephone number, including area code: (787) 251-2000





      Indicate by check mark whether the registrant:  (1) has filed all reports
required  to be filed by Section 13 or 15(d) of the Securities Exchange Act  of
1934 during  the  preceding  12  months  (or  for  such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. <square> Yes  <checked-box> No

      As  of  August  12, 1996, there were 21,500,000 shares  of  Common  Stock
issued and outstanding.   This  amount  includes  5,000,000  shares  of Class A
Common Stock and 16,500,000 shares of Class B Common Stock.






PAGE
<PAGE>

                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES

             INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                  PAGE NUMBER
<S>      <C>                                                                                             <C>
PART I   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS:
     Condensed Consolidated Balance Sheets (unaudited) at June 30, 1996 and September                  
       30, 1995                                                                                        3
     Condensed Consolidated Statements of Operations (unaudited) for the Nine Months                   
       Ended June 30, 1996 and 1995                                                                    5
     Condensed Consolidated Statements of Operations (unaudited) for the Three Months                  
       Ended June 30, 1996 and 1995                                                                    6
     Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months                   
       Ended June 30, 1996 and 1995                                                                    7
     Notes to Condensed Consolidated Financial Statements (unaudited)                                  8

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
         OPERATIONS                                                                                   14

PART II  OTHER INFORMATION

ITEM 5.  OTHER INFORMATION                                                                            20
</TABLE>



        SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
                                           2

PAGE
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                          (U.S. DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                           June 30,                   September 30, 
                                                                             1996                         1995
                                                                         ------------                 -------------
                                                                         (unaudited)
<S>                                                                      <C>                           <C>        
                              ASSETS
Cash and cash equivalents                                                $   47,781                    $   46,091
Accounts receivable:
  Trade, less allowance for doubtful accounts of $934 at
       June 30, 1996 and $1,458 at September 30, 1995                        17,096                        16,086
  Due from PepsiCo, Inc. and affiliated companies                             3,328                         2,913
  Other                                                                       2,178                           341
Inventories                                                                   3,768                         4,542
Prepaid expenses and other current assets                                     2,882                         2,516
                                                                         ----------                    ----------
          Total current assets                                               77,033                        72,489
Investment in Buenos Aires Embotelladora S.A. (BAESA)                        19,617                        74,128
Property, plant and equipment, net                                           51,303                        36,445
Intangible assets, net                                                        1,458                         2,163
Other assets                                                                    123                           441
                                                                         ----------                    ----------
          Total assets                                                   $  149,534                    $  185,666
                                                                         ==========                    ==========
</TABLE>



        SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
                                           3

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                          (U.S. DOLLARS IN THOUSANDS)

                     LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                       June 30,                    September 30,
                                                                         1996                          1995
                                                                     -----------                   -------------
<S>                                                                  (unaudited)   
                                                                     <C>                            <C>
Liabilities:
Current installments of long-term debt                               $    1,550                    $    1,550
Current installments of capital lease obligations                           228                         1,204
Short term borrowings                                                    35,916                         4,600
Accounts payable:
  Trade                                                                  17,612                        12,536
  Affiliate                                                               2,173                         1,181
Income taxes payable                                                        866                           123
Deferred income taxes                                                         -                           530
Other accrued expenses                                                    9,817                         6,477
                                                                      ----------                    ----------
    Total current liabilities                                            68,162                        28,201
Long-term debt, excluding current installments                            5,202                         6,365
Capital lease obligations, excluding current installments                   675                           848
Accrued pension cost, long-term                                           2,871                         2,871
Deferred income taxes                                                     5,278                        18,732
                                                                      ----------                   ----------
    Total liabilities                                                    82,188                        57,017
                                                                      ----------                   ----------
Shareholders' equity:
Class A common shares of $0.01 par value; authorized,                        
  issued and outstanding 5,000,000 shares                                    50                            50
Class B common shares, $0.01 par value; authorized           
  35,000,000 shares; issued and outstanding 16,500,000 shares               165                           165
Additional paid-in capital                                               90,738                        90,738
Retained earnings (deficit)                                             (21,382)                       39,472
Cumulative translation adjustment                                          (681)                         (232)
Pension liability adjustment                                             (1,544)                       (1,544)
                                                                      ----------                   ----------
          Total shareholders' equity                                     67,346                       128,649
                                                                      ----------                   ----------
          Total liabilities and shareholders' equity                 $  149,534                    $  185,666
                                                                      ==========                   ==========
</TABLE>


        SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
                                           4

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (U.S. DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                    Nine Months Ended June 30,

                                                                                  1996                    1995
                                                                              -------------          -------------
<S>                                                                           <C>                    <C>       
Net Sales                                                                     $    79,117            $   83,634
Cost of Sales                                                                      54,980                49,990
                                                                              ------------           -------------
   Gross profit                                                                    24,137                33,644

Selling and marketing expenses                                                     32,246                22,826
Administrative expenses                                                             6,065                 4,738
Restructuring charges                                                               3,785                     -
                                                                              ------------           -------------
Income (loss) from operations                                                     (17,959)                6,080
                                                                              ------------           -------------
Other income (expenses):
     Interest expense                                                                (876)                 (808)
     Interest income                                                                1,889                   158
     Other, net                                                                      (230)                  518
                                                                              ------------           -------------
          Total other income (expenses)                                               783                  (132)
                                                                              ------------           -------------
          Income (loss) before income tax expense and
equity in net earnings/(loss) of BAESA                                            (17,176)                5,948
Income tax expense                                                                    601                   134
                                                                              ------------           -------------
     Income (loss) before equity in net earnings/(loss) of BAESA                  (17,777)                5,814
                                                                              ============           =============
Equity in net earnings/(loss) of BAESA, net of income tax
     benefit/(expense) of $13,454 and $(962) in 1996
     and 1995 respectively                                                        (37,769)                5,362
                                                                              -------------          -------------
     Net income/(loss)                                                       $    (55,546)               11,176
                                                                              =============          =============
Earnings per common share:
     Income before equity in net earnings/(loss) of BAESA                    $      (0.83)        $        0.32
                                                                              =============          =============
     Net income/(loss)                                                       $      (2.58)        $        0.62
                                                                              =============          =============
Weighted average number of shares outstanding (in thousands)                       21,500                18,000
                                                                              =============          =============
</TABLE>



        SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
                                           5

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (U.S. DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                 Three Months Ended June 30,

                                                                                1996                    1995
                                                                             -----------            ------------
<S>                                                                          <C>                    <C>                        
Net Sales                                                                    $   24,615             $    30,832
Cost of Sales                                                                    19,915                  19,103
                                                                             -----------            -----------
   Gross profit                                                                   4,700                  11,729

Selling and marketing expenses                                                   11,620                   8,121
Administrative expenses                                                           2,742                   1,784
Restructuring charges                                                             3,785                       -
                                                                             -----------            -----------
Income (loss) from operations                                                   (13,447)                  1,824
                                                                             -----------            -----------
Other income (expenses):
     Interest expense                                                              (511)                    (77)
     Interest income                                                                524                      81
     Other, net                                                                    (450)                     58
                                                                             -----------            -----------
          Total other income (expenses)                                            (437)                     62
                                                                             -----------            -----------
          Income (loss) before income tax expense and
          equity in net earnings/(loss) of BAESA                                (13,884)                  1,886
Income tax benefit                                                                   90                     503
                                                                             -----------            -----------
     Income (loss) before equity in net earnings/(loss) of BAESA                (13,794)                  2,389

Equity in net earnings/(loss) of BAESA, net of income tax
     benefit/(expense) of $10,691 and $(54) in 1996
     and 1995 respectively                                                      (32,132)                     26
                                                                             -----------            -----------
     Net income/(loss)                                                       $  (45,926)             $    2,415
                                                                             ============            ===========
Earnings per common share:
     Income before equity in net earnings/(loss) of BAESA                    $    (0.64)             $     0.13
                                                                             ============            ===========
     Net income/(loss)                                                       $    (2.14)             $     0.13
                                                                             ============            ===========
Weighted average number of shares outstanding (in thousands)                     21,500                  18,000
                                                                             ============            ===========
</TABLE>



        SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
                                           6

PAGE
<PAGE>
                    PEPSI-COLA PUERTO RICO BOTTLING COMPANY
                               AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   NINE MONTHS ENDED JUNE 30, 1996 AND 1995
                          (U.S. DOLLARS IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                             1996                              1995

                                                                         ------------                     -----------
<S>                                                                      <C>                              <C>
Cash flows from operating activities:
 Net income/(loss)                                                        $ (55,546)                      $  11,176
 Adjustments to reconcile net earnings/(loss) to net cash
provided by (used in) operating activities:
   (Gain)/Loss on disposal of property, plant, and equipment                    510                            (455)
   Intangible write-off                                                         647
   Depreciation and amortization                                              3,951                           3,378
   Equity in net (earnings)/loss of BAESA                                    37,769                          (5,362)
   Changes in assets and liabilities:
      Accounts receivable                                                    (3,262)                         (3,897)
      Inventories                                                               774                           1,218
      Prepaid expenses and other current assets                                (366)                         (1,668)
      Accounts payable                                                        6,068                           1,258
      Other liabilities and accrued expenses                                  2,810                           4,519
      Income taxes payable                                                      743                             466
      Other, net                                                                308                            (694)
                                                                          ----------                      ----------
   Net cash provided by (used in) operating activities                       (5,594)                          9,939

Cash flows from investing activities:
 Proceeds from the sale of property, plant and equipment                      1,280                             483
 Purchases of property, plant and equipment                                 (20,531)                         (4,497)
 Dividends received from affiliates                                           2,839                           2,839
                                                                          ----------                      ----------
   Net cash (used in) investing activities                                  (16,412)                         (1,175)

Cash flows from financing activities:
 Proceeds from short term borrowings                                         48,316                          17,600
 Repayment of short-term borrowings                                         (17,000)                        (17,250)
 Repayment of long-term debt                                                 (1,163)                         (1,162)
 Repayment of capital lease obligations                                      (1,149)                         (1,961)
 Dividends paid                                                              (5,308)                         (4,826)
                                                                          ----------                      ----------
   Net cash provided by (used in) financing activities                       23,696                          (7,599)

Net increase in cash and cash equivalents                                     1,690                           1,165
Cash and cash equivalents at beginning of period                             46,091                           1,347
                                                                          ----------                      ----------
Cash and cash equivalents at the end of period                            $  47,781                       $   2,512
                                                                          ==========                      ==========
Supplemental disclosures:
Cash paid for:
 Interest                                                                    $1,769                       $   1,066
 Income taxes                                                                   186                             211
</TABLE>


        SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
                                           7

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (U.S. DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
                                  (UNAUDITED)

(1)  ACCOUNTING PRINCIPLES AND BASIS OF PRESENTATION

     The accompanying  condensed  consolidated financial statements, footnotes,
and discussions should be read in conjunction  with  the consolidated financial
statements,  related  footnotes,  and discussions contained  in  the  Company's
annual report on form 10-K for the  fiscal  year  ended September 30, 1995.  In
the  opinion of the Company's management, the  unaudited  consolidated  interim
financial statements reflect all adjustments necessary for a fair presentation,
including  recognition  of  certain  charges,  including  marketing  and  other
expenses  and  the  write-off of pre-paid tax and intangible items carried over
from prior periods.   Operating  results  for  the nine months and three months
ended June 30, 1996 are not necessarily indicative  of  the results that may be
expected for the fiscal year ended September 30, 1996.

(2)  INVENTORIES

     Inventories consist of the following:

<TABLE>
<CAPTION>
                                                               June 30,       September 30,  
                                                                 1996             1995
                                                               -------        -------------
<S>                                                            <C>            <C>

Raw materials                                                  $ 1,365          $ 1,247
Finished goods                                                   1,823            2,048
Other                                                              580            1,247
                                                               -------          -------
                                                               $ 3,768          $ 4,542
                                                               =======          =======
</TABLE>

(3)  PROPERTY, PLANT AND EQUIPMENT, NET

     Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                                              June 30,       September 30, 
                                                                1996             1995

                                                             ----------      -------------
<S>                                                          <C>             <C>
Land and improvements                                           $ 8,061         $ 1,159
Buildings and improvements                                       16,060           5,592
Machinery, equipment and vehicles                                45,033          36,173
Bottles, cases and shells                                         1,479           1,585
Furniture and fixtures                                            1,941           1,833
Construction in process                                             167          12,224
                                                               --------        --------
                                                                 72,741          58,566
Less accumulated depreciation and amortization                  (21,438)        (22,121)
                                                               --------        --------
 Property, plant and equipment, net                            $ 51,303        $ 36,445
                                                               ========        ======== 
</TABLE>




                                                 8

PAGE
<PAGE>
     The  Company  capitalizes  interest cost as a component  of  the  cost  of
certain building and improvements,  and  machinery.  The following is a summary
of interest cost incurred:
<TABLE>
<CAPTION>
                                                                       June 30,
                                                                 1996              1995

                                                               --------         ---------
<S>                                                            <C>              <C>
Interest cost capitalized                                      $    893         $    258
Interest cost charged to income                                     876              808
                                                               --------         ---------
                                                               $  1,769         $  1,066
                                                               ========         =========
</TABLE>


(4)  ACCOUNTING FOR LONG LIVED ASSETS

     During the period ended June 30, 1996  the  Company adopted the provisions
of  FASB  121  -  Accounting for Long Lived Assets.  The  application  of  this
accounting pronouncement resulted in the write down of long lived assets in the
amount of $1,400.




                              9

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


(5)  SHAREHOLDERS' EQUITY

     The Company declared  and  paid  cash  dividends of $5,308 during the nine
months ended June 30, 1996 and $4,826 during  the  nine  months  ended June 30,
1995.

     In  connection with the Company's September 19, 1995 public offering  (the
"Offering") of 7,000,000 Class B common shares, the Company changed its capital
structure  to  5,000,000  authorized  shares  of $0.01 par value Class A common
shares  and 35,000,000 authorized shares of $0.01  par  value  Class  B  common
shares.

     On August  14, 1995, the Company's Board of Directors declared a 24,000 to
1 stock split effective  concurrently  with the effective date of the Offering.
The par value of each share is $0.01.  A  total  of  $179 was reclassified from
the Company's additional paid-in capital account to the Company's Class A and B
common share accounts.  All share and per share amounts  have  been restated to
retroactively reflect the stock split.

     Earnings  per  common share are determined by dividing net income  by  the
weighted average number of common shares outstanding during each year.

(6)  INCOME TAX

     Income tax expense  for  the  nine  months  ended  June  30, 1996 and 1995
consisted of the following:


<TABLE>
<CAPTION>
                                                                 June 30,

                                                         1996               1995
                                                     --------           ---------
<S>                                                  <C>                <C>

        Current                                        $  601              $  134
        Deferred                                            -                   -
                                                      --------           ---------
          Income tax expense                           $   601             $  134
                                                      ========           =========
</TABLE>

     Deferred income tax benefit / (expense) of $13,454 and $(962) for the nine
month period ended June 30, 1996 and 1995, respectively, have been  provided in
connection with the Company's equity in net earnings / (loss) of BAESA.

(7)  RELATED PARTY TRANSACTIONS

     The  Company  paid approximately $1,682 and $1,917 during the nine  months
ended June 30, 1996  and  1995,  respectively,  for  advertising fees to a firm
controlled by a shareholder of the Company.

     The Company paid approximately $232 and $414 during  the nine months ended
June 30, 1996 and 1995, respectively, for consulting fees to  a shareholder and
director of BAESA.

     The Company paid approximately $151 during the nine months  ended June 30,
1996 for construction management services to a shareholder and director  of the
Company.



                              10
PAGE
<PAGE>

(8)  RESTRUCTURING CHARGES

     The  Company's  results  of  operations for the nine months ended June 30,
1996   have  been  affected  by  the  incurrance   of   several   non-recurring
restructuring  charges totalling $3.8 million.  These charges were comprised of
the following:   (1)  a  $0.5  million  expense incurred in connection with the
accelerated transition of management control  of  BAESA  to PepsiCo., effective
July 1, 1996, (2) a $1.4 million fixed asset write-down related  to the closing
of  all bottling operations in the old plant, which is now for sale,  (3)  $1.4
million  in  pension  asset  write-offs  and  costs  associated  with  employee
termination  and  (4)  $0.5 million in expenses associated with conducting  the
Company's study of expansion opportunities within Western Europe.



                              11

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(9)  INVESTMENT IN BAESA

     The following condensed  unaudited financial information relating to BAESA
as of June 30, 1996 and 1995, and  for  the  nine months then ended and audited
balance sheet financial information as of September  30, 1995 is as follows (in
thousands  of  U.S.  dollars)  has been provided to the Company  by  BAESA  for
inclusion in this report and the  Company  makes  no  representation  as to the
accuracy or completeness of such information.  At the present time, the Company
does  not  control,  or  have  significant  influence  over,  the management or
operations of BAESA.  For further information regarding BAESA, investors should
consult information made publicly available by BAESA to its shareholders.


<TABLE>
<CAPTION>

                                                                   June 30,                     September 30,
                                                                    1996                            1995
                                                                 (unaudited)                      (audited)
                                                                 ===========                    =============
<S>                                                              <C>                            <C>

                    ASSETS
Cash and cash equivalents                                       $    45,241                     $    57,617
Accounts receivable, net                                             63,580                         105,478
Inventories                                                          36,644                          56,349
Other current assets                                                 19,466                          25,933
                                                                -----------                     -----------
     Total current assets                                           164,931                         245,377

Property, plant and equipment, net                                  663,370                         655,414
Intangible assets, net                                               87,354                          88,017
Investment in joint venture                                         107,316                         107,385
Deferred income tax, net                                                  -                          10,530
Other assets                                                         12,296                          21,201
                                                                -----------                     -----------
         Total assets                                           $ 1,035,267                     $ 1,127,924
                                                                ===========                     ===========

         LIABILITIES AND SHAREHOLDERS' EQUITY
                                      
Current installments of long-term debt                          $   287,371                     $    48,457
Bank loans and overdrafts                                           359,927                         182,672
Accounts payable, income taxes payable, and accrued expenses        151,303                         114,950
                                                                -----------                     -----------
     Total current liabilities                                      789,601                         346,079

Long-term debt, excluding current installments                       98,247                         323,737
Deferred income taxes                                                 7,568                           7,625
Other long-term liabilities                                          11,176                          10,715
                                                                -----------                     -----------
         Total liabilities                                          915,592                         688,156

Total shareholders' equity                                          119,675                         439,768
                                                                -----------                     -----------
Total liabilities and shareholders' equity                      $ 1,035,267                     $ 1,127,924
                                                                ===========                     ===========
</TABLE>


                              12

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

<TABLE>
<CAPTION>
                                                      NINE MONTHS ENDED                     THREE MONTHS ENDED
                                                          June 30,                               June 30,
                                                ------------------------------        -----------------------------

        RESULTS OF OPERATIONS                      1996               1995                 1996              1995
                                                (Unaudited)        (Unaudited)         (Unaudited)       (Unaudited)
                                                -----------        -----------         -----------       -----------
<S>                                             <C>                <C>                 <C>               <C>
Net sales                                       $  545,564          $ 506,238           $ 118,093         $ 139,653
Cost and expenses:
 Cost of sales                                    (341,524)          (261,739)           (105,386)          (77,462)
 Selling and marketing expenses                   (262,178)          (117,776)           (119,361)          (37,736)
 Administrative expenses                          (146,569)           (71,984)            (87,298)          (25,112)
 Restructuring charges                             (21,071)                 -              (9,531)                -
                                                -----------         ----------          ----------        ----------
                                                  (771,342)          (451,499)           (321,576)         (140,310)
                                                -----------         ----------          ----------        ----------
   Income / (loss) from operations                (225,778)            54,739            (203,483)             (657)
                                                  
Other expenses, net                                (65,095)           (15,382)            (24,587)           (6,360)
                                                -----------         ----------          ----------        ----------
  Income / (loss) before income tax (expense) /
  benefit and equity in earnings of affiliated
  company                                         (290,873)            39,357            (228,070)           (7,017)
Income tax (expense) / benefit                     (14,560)            (3,741)            (23,554)            6,406
                                                -----------         ----------          ----------        ----------

Income / (loss) before equity in earnings of      
 affiliated company                               (305,433)            35,616             (251,624)            (611)
Equity in earnings of affiliated company             4,653              3,783                  223              809
                                                -----------         ----------          ----------        ----------
   Net income / (loss)                          $ (300,780)         $  39,399           $ (251,401)       $     198
                                                ===========         ==========          ==========        ==========
</TABLE>



                              13

PAGE
<PAGE>
                        PEPSI-COLA PUERTO RICO BOTTLING
                           COMPANY AND SUBSIDIARIES



ITEM  2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

GENERAL OVERVIEW

     The  following  discussion  of  the  financial condition  and  results  of
operations of the Company should be read in  conjunction with this overview and
the Condensed Consolidated Financial Statements  of  the  Company and the Notes
thereto,  as  of and for the nine month periods ended June 30,  1995  and  1996
(the "1995 nine month  interim period" and the "1996 nine month interim period,"
respectively) and  as of and for the three month interim periods ended June 30,
1995 and 1996 (the "1995  three month interim period" and the "1996 three month
interim period," respectively).


     PRESENTATION OF FINANCIAL INFORMATION

     In  addition  to conducting  its  own  bottling  operations,  the  Company
indirectly owns 12,345,347  shares,  or  approximately  17%  of the outstanding
capital stock, and, through June 30, 1996, exercised significant influence over
the management of BAESA, subject to the right of PepsiCo, Inc.  ("PepsiCo") and
certain of its affiliates (collectively, "Pepsi Cola International"  or  "PCI")
to  approve  certain management decisions.  As of July 1, 1996, PepsiCo assumed
operating control  of  BAESA.   See  Item 5 "Other Information."  The financial
information relating to the Company set  forth below reflects the operations of
the Company and its equity interest in the net earnings of BAESA.

     SEASONALITY

     The  historical  results  of operations  of  the  Company  have  not  been
significantly seasonal.  The Company  believes that this is partly attributable
to existing capacity constraints in recent  years  which  prevented the Company
from  meeting  increased  demand  during peak periods.   However,  the  Company
anticipates that its results of operations  in  the  future may be increasingly
seasonal in the summer and holiday seasons.




                              14
PAGE
<PAGE>
THE COMPANY

     GENERAL

     The  following  table  sets  forth  certain  financial  information  as  a
percentage of net sales for the Company for the periods indicated.

<TABLE>
<CAPTION>
                                                    Fiscal Year                   Nine Months              Three Months 
                                                                                    Interim                   Interim
<S>                                     --------------------------------        -----------------       -------------------


                                          1993         1994        1995          1995       1996          1995        1996
                                        --------     --------    -------        ------     ------       -------     -------
                                        <C>          <C>         <C>            <C>        <C>          <C>         <C>  
Net Sales                                100.0%       100.0%      100.0%        100.0%     100.0%        100.0%      100.0%
Cost of Sales                             59.8         58.2        59.4          59.8       69.5          61.9        80.9
Gross Profit                              40.2         41.8        40.6          40.2       30.5          38.1        19.1
Selling and Marketing Expenses            28.0         29.3        26.6          27.3       40.8          26.3        47.2
Administrative Expenses                   11.4         10.1         5.5           5.7        7.6           5.8        11.1
Intangibles and Fixed Asset Write-offs      -           2.8          -             -          -             -           -
Restructuring Charges                       -             -          -             -         4.8            -         15.4
Income (Loss) from Operations              0.8         (0.4)        8.5           7.2      (22.7)          6.0       (54.6)
</TABLE>


      1996 NINE MONTH INTERIM PERIOD COMPARED TO 1995 NINE MONTH INTERIM PERIOD

      NET SALES.  Net Sales for the Company decreased  $4.5  million,  or 5.4%,
for the 1996 nine month interim period from the 1995 nine month interim  period
to  $79.1  million.   This decrease was primarily the result of the significant
increase in discounts provided to customers partially offset by a 6.3% increase
in sales volume in the  1996  nine month interim period as compared to the 1995
nine month interim period.  This  increase in discounts resulted from increased
competitive activity.  The average net sales price on an eight ounce equivalent
basis decreased during the 1996 nine  month  interim  period  by  approximately
10.9% as compared to the 1995 nine month interim period.

      COST OF SALES.  Cost of sales for the Company increased $5.0  million, or
10.0%  for the 1996 nine month interim period from the 1995 nine month  interim
period to $55.0 million.  This increase resulted primarily from the increase in
sales volume, the increase in the costs of certain raw materials, and the costs
associated with the move to the new manufacturing facility in Toa Baja.

      GROSS  PROFIT.  Gross profit for the Company decreased by $9.5 million to
$24.1 million  in  the 1996 nine month interim period from $33.6 million in the
1995 nine month interim  period.   As  a  percentage of net sales, gross profit
decreased to 30.5% in the 1996 nine month interim period from 40.2% in the 1995
nine month interim period due primarily to  the  higher  discounts  provided to
customers and the lower average net sales price.

      SELLING  AND  MARKETING  EXPENSE.   The Company has a number of marketing
arrangements with PepsiCo pursuant to which  the  Company  is  required to make
certain  investments  in  marketing, new products, packaging introductions  and
certain capital goods.  The  Company receives reimbursements from PepsiCo for a
portion of such expenditures,  which  it  is  able to use to offset traditional
marketing  expenses  or to acquire fixed assets.   The  Company's  selling  and
marketing expenses are shown net of all such reimbursements from PepsiCo.

      Selling and marketing expenses for the Company increased $9.4 million, or
41.3%, to $32.2 million  for  the  1996 nine month interim period from the 1995
nine month interim period.  This increase  is  the  result of greater marketing
activities during the 1996 nine month interim period resulting primarily from a
significant increase in competition, expenses associated  with  the  launch  of
Teem,  a lemon/lime soft drink, which was launched during October 1995, as well
as  additional   marketing  activities  undertaken  to  promote  the  Company's
products.  The increase  also  resulted  from  an expensing in the 1996 interim
period of certain prepaid marketing and expense  items  carried over from prior
periods.

                              15
PAGE
<PAGE>

      ADMINISTRATIVE  EXPENSES.   Administrative  expenses  for   the   Company
increased $1.3 million or 28.0% for the 1996 nine month interim period from the
1995  nine  month  interim  period  to  $6.0  million  primarily as a result of
increased professional services provided to the Company.   As  a  percentage of
net  sales,  administrative  expenses increased to 7.6% in the 1996 nine  month
interim period from 5.7% in the 1995 nine month interim period.

      RESTRUCTURING CHARGES.   The Company's results of operations for the nine
months ended June 30, 1996 have been affected by the incurrance of several non-
recurring restructuring charges  totalling  $3.8  million.   These charges were
comprised of the following:  (1) a $0.5 million expense incurred  in connection
with  the  accelerated  transition  of management control of BAESA to PepsiCo.,
effective July 1, 1996, (2) a $1.4 million  fixed  asset  write-down related to
the  closing  of all bottling operations in the Company's old  bottling  plant,
which is now for  sale,  (3) $1.4 million in pension asset write-offs and costs
associated  with  employee  termination   and  (4)  $0.5  million  in  expenses
associated  with  conducting  the Company's study  of  expansion  opportunities
within Western Europe.

      INCOME (LOSS) FROM OPERATIONS.   Income  (loss)  from  operations for the
Company  decreased  to  $(18.0) million in the 1996 nine month interim  period,
from $6.1 million in the  1995  nine month interim period.  The decrease is the
result  of  lower  average  net  sales,  the  increased  discounts  offered  to
customers, the significant increase  in selling and marketing expenditures, the
restructuring charges recognized during  the  1996 nine month interim period of
$3.8  million and the recognition of certain charges  including  marketing  and
other expenses  and  the  write-off  of  prepaid  tax  carried  over from prior
periods.

      INCOME TAX EXPENSE.  Income tax expense for the Company increased by $0.5
million for the 1996 nine month interim period to $0.6 million.   This increase
is due primarily to interest earnings on proceeds on deposit from the Company's
September 1995 initial public offering.

      EQUITY IN NET EARNINGS (LOSS) OF BAESA, NET OF INCOME TAX.  Equity in net
earnings (loss) of BAESA, net of income tax, amounted to $(37.8) million during
the  1996 nine month interim period, compared to $5.4 million during  the  1995
nine month  interim period.  The decrease is attributable to losses incurred by
BAESA for the  1996  interim  period  resulting  from  restructuring charges in
connection  with continued depressed economic conditions  in  Argentina,  lower
sales volume  levels  in  Argentina  resulting  from  such economic conditions,
losses incurred in BAESA's Brazilian operations and substantial  write-offs and
other charges.

      NET  INCOME  (LOSS).   Net income (loss) for the 1996 nine month  interim
period for the Company was $(55.5)  million,  compared  to $11.2 million during
the 1995 nine month interim period.  Net (loss) in the 1996  nine month interim
period primarily reflects loss before equity in net earnings (loss) of BAESA of
$(17.8) million and equity in net loss of BAESA, net of income  tax  of $(37.8)
million, as compared to income before equity in net earnings of BAESA  of  $5.8
million  and  equity  in net earnings of BAESA of $5.4 million in the 1995 nine
month interim period.

    1996 THREE MONTH INTERIM PERIOD COMPARED TO 1995 THREE MONTH INTERIM PERIOD

      NET SALES.  Net Sales  for  the Company decreased $6.2 million, or 20.2%,
for the 1996 three month interim period  from  the  1995  three  month  interim
period to $24.6 million.  This decrease was primarily the result of an increase
in discounts provided to customers and a decrease in sales volume of 3% in  the
1996  three  month  interim  period as compared to the 1995 three month interim
period.   This  increase  in  discounts  resulted  from  increased  competitive
activity. The average net sales  price  on  an  eight  ounce  equivalent  basis
decreased  by  17.5%  during the 1996 three month interim period as compared to
the 1995 three month interim period.

      COST OF SALES.  Cost  of sales for the Company increased $0.8 million, or
4.2% for the 1996 three month  interim period from the 1995 three month interim
period to $19.9 million.  This increase resulted primarily from the increase in
the cost of certain raw materials and costs associated with the move to the new
manufacturing facility in Toa Baja.

      GROSS PROFIT.  Gross profit  for the Company decreased to $4.7 million in
the 1996 three month interim period  from $11.7 million in the 1995 three month

                              16

PAGE
<PAGE>
interim period.  As a percentage of net  sales, gross profit decreased to 19.1%
in the 1996 three month interim period from  38.1%  in  the  1995  three  month
interim period due primarily to the higher discounts provided to customers  and
the lower average net sales price.

      SELLING  AND  MARKETING  EXPENSE.   The Company has a number of marketing
arrangements with PepsiCo pursuant to which  the  Company  is  required to make
certain  investments  in  marketing, new products, packaging introductions  and
certain capital goods.  The  Company receives reimbursements from PepsiCo for a
portion of such expenditures,  which  it  is  able to use to offset traditional
marketing  expenses  or to acquire fixed assets.   The  Company's  selling  and
marketing expenses are shown net of all such reimbursements from PepsiCo.

      Selling and marketing expenses for the Company increased $3.5 million, or
43.1%, to $11.6 million  for  the 1996 three month interim period from the 1995
three  month interim period.  This  increase  resulted  from  the  increase  in
marketing  activities  undertaken  to promote the Company's products during the
1996 three month interim period resulting primarily from a significant increase
in competition.  The increase also resulted  from  the  expensing  in  the 1996
interim  period  certain prepaid marketing and expense items carried over  from
prior periods.

      ADMINISTRATIVE   EXPENSES.    Administrative  expenses  for  the  Company
increased $1.0 million or 53.7% for the  1996  three  month interim period from
the 1995 three month interim period to $2.7 million primarily  as  a  result of
the  increased  professional services provided to the Company.  As a percentage
of net sales, administrative  expenses  increased  to  11.1%  in the 1996 three
month interim period from 5.8% in the 1995 three month interim period.

      RESTRUCTURING CHARGES.  The Company's results of operations for the three
months ended June 30, 1996 have been affected by the incurrance of several non-
recurring  restructuring  charges totalling $3.8 million.  These  charges  were
comprised of the following:   (1) a $0.5 million expense incurred in connection
with the accelerated transition  of  management  control  of BAESA to PepsiCo.,
effective  July 1, 1996, (2) a $1.4 million fixed asset write-down  related  to
the closing of all bottling operations in the old plant, which is now for sale,
(3) $1.4 million in pension asset write-offs and costs associated with employee
termination  and  (4)  $0.5  million in expenses associated with conducting the
Company's study of expansion opportunities within Western Europe.

      INCOME (LOSS) FROM OPERATIONS.   Income  (loss)  from  operations for the
Company  decreased to $(13.4) million in the 1996 three month interim   period,
from $1.8  million in the 1995 three month interim period.  The decrease is the
result of lower  net  sales  during  the  1996  three month interim period, the
increased discounts offered to customers, the increased  selling  and marketing
expenditures,  the  increase  in administrative expenses, and the restructuring
charges  recognized  during  the  1996  three  month  interim  period  and  the
recognition of certain charges including  marketing  and other expenses and the
write-off of prepaid tax carried over from prior periods.

      INCOME TAX BENEFIT.  Income tax benefit for the Company decreased by $0.4
million  for  the  1996  three month interim period to $0.1  million  primarily
resulting from lower taxable  income earned during the 1996 three month interim
period.

      EQUITY IN NET EARNINGS (LOSS) OF BAESA, NET OF INCOME TAX.  Equity in net
earnings (loss) of BAESA, net of income tax, amounted to $(32.1) million during
the 1996 three month interim period,  compared to $0.03 million during the 1995
three month interim period.  The decrease is attributable to losses incurred by
BAESA  for  the  1996  interim period in connection  with  continued  depressed
economic  conditions in Argentina,  lower  sales  volume  levels  in  Argentina
resulting from  such  economic conditions, losses incurred in BAESA's Brazilian
operations and substantial write-offs and other charges.

      NET INCOME (LOSS).   Net  income  (loss) for the 1996 three month interim
period for the Company was $(45.9) million, compared to $2.4 million during the
1995 three month interim period.  Net (loss)  in  the  1996 three month interim
period primarily reflects loss before equity in net loss  of  BAESA  of $(13.8)
million  and  the  equity  in  net loss of BAESA, net of income tax, of $(32.1)
million as compared to income before  equity  in  net earnings of BAESA of $2.4
million and equity in net earnings of BAESA of $0.03  million in the 1995 three
month interim period.

                              17

PAGE
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

      At  June  30,  1996,  the  Company  had $47.8 million of  cash  and  cash
equivalents, of which $43.0 million represented  proceeds  from  the  Company's
initial public offering of equity securities, and the balance indebtedness  for
borrowed money.

      The  Company  has  announced  that  its  current  priority  is to restore
profitability  with  respect  to  its  Puerto  Rican operations.  The Company's
management is formulating a plan of immediate action to reduce expenditures and
improve operating efficiencies.  In that connection,  the  Company  has  made a
decision  not  to  proceed further with a possible expansion in Western Europe,
and has determined to  set  aside  its  other expansion plans temporarily while
efforts  are  taken  to restore profitability.   Also,  the  Company  has  used
approximately $13 million  of  the  approximately $43 million in cash set aside
from  its  September 1995 initial public  offering  to  support  these  efforts
through the repayment of indebtedness and by additions to the Company's working
capital.  In  addition, the Company currently is negotiating the refinancing of
its remaining debt to include a payment schedule which more closely matches the
life of its production  assets.   Banco  Popular  de Puerto Rico, holder of the
debt, is assisting the Company with this effort.

      Net cash provided by (used in) operating activities  for  the Company for
the 1996 nine month interim period was $(5.6) million compared to  $9.9 million
during the 1995 nine month interim period.   This decrease was mainly  a result
of  the  net  loss  of  $(55.5) million incurred during the 1996 interim period
compared to net income of  $11.2  million  earned  during  the  1995 nine month
interim  period.   As  of June 30, 1996, the Company had $46.5 million  in  net
operating loss carryforwards  available  to  offset  future Puerto Rican income
taxes.  The Company believes that its strong cash position  is adequate to meet
its operating requirements for the foreseeable future.

      Cash  flows  used  in  investing activities for the Company  amounted  to
$(16.4) million during the 1996  nine  month  interim  period,  as  compared to
$(1.2)  million  during  the  1995  nine  month  interim period.  Purchases  of
property, plant and equipment, net amounted to $(20.5)  million during the 1996
nine month interim period compared to $(4.5) million during the 1995 nine month
interim period.  Dividends received from BAESA amounted to $2.8 million for the
nine month interim periods 1996 and 1995.

      Cash  flows provided by (used in) financing activities  for  the  Company
during the 1996  nine month interim period was $23.7 million compared to $(7.6)
million during the  1995  nine month interim period.  The significant financing
activities for the Company  in  the  1996  nine  month  interim period were the
payment of dividends and the issuance of notes payable of  $48.3 million offset
by  the  repayment  of  debt  of  $19.3  million.   The  significant  financing
activities in the 1995 nine month interim period for the Company  included  the
payment  of dividends and the repayment of debt.  The Company paid $5.3 million
and $4.8 million in the 1996 and 1995 nine month interim periods, respectively,
in dividends.   In  the  future,  the  payment  of  dividends  will  be in part
dependent on the receipt of dividends from BAESA and in part dependent  on  the
achievement  of  adequate levels of profitability in the Company's Puerto Rican
operations, and, under certain conditions, the consent by Banco Popular.

      In November  1994, the Company and its subsidiaries entered into a Credit
Agreement with Banco  Popular.  The Credit Agreement provides for borrowings by
the Company from time to time of $5 million in revolving loans, $8.8 million in
term loans and $15 million  in  non-revolving  loans.   In December 1995, Banco
Popular increased the amount the Company may borrow under  revolving  loans  to
$10.0  million.   As  of  June  30, 1996, the Company had outstanding under the
Credit Agreement revolving loans  in  an  aggregate  principal  amount of $10.0
million, term loans in an aggregate principal amount of $6.8 million  and  non-
revolving loans in an aggregate principal amount of $15.0 million.  These loans
mature   on  March  30,  1997,  September  10,  2000  and  November  10,  1996,
respectively,  and  bear  interest  at a floating rate of 2% over and above the
cost to Banco Popular of "936 Funds"  (as  defined below) (the "936 Rate").  At
June 30, 1996, the 936 Rate was 5.1%.

      The weighted average interest rate on  such  borrowings  was  7.1% in the
first  nine  months  of  the fiscal year 1996.  "936 Funds" are defined in  the
Credit Agreement as deposits  in U.S. dollars in immediately available funds by
Section 936 Corporations on the  first day of the relevant funding period for a
period equal to such funding period and in an amount equal or comparable to the
principal amount of the relevant loan.  The Company is required to make monthly


                                        18

PAGE
<PAGE>

payments of principal in the amount of $128,205 with respect to the outstanding
term loans.  The Company may prepay  certain  of the loans subject to the terms
and conditions of the Credit Agreement.

      Under the terms of the Credit Agreement,  the  Company  is subject to the
following  financial  restrictions:  (i)  the Company must maintain  a  minimum
Operating Cash Flow to  total  Debt  Service  ratio  (as  defined in the Credit
Agreement)  of  1.50 to 1 for each fiscal year during the term  of  the  Credit
Agreement (ii) a  minimum  ratio  of  current  assets to current liabilities of
0.40, 0.60, 0.75 and 1.00 to 1, respectively, and  a  maximum  ratio  of  Total
Liabilities  to Tangible Net Worth of 4.0, 4.0, 3.0 and 2.0 to 1, respectively,
for the fiscal  years  1996  through  1998  and thereafter, and (iii) a minimum
Tangible Net Worth of $15 million through the  end  of the fiscal year 1996 and
of $18 million, $21.5 million, $25 million and $30 million  for each succeeding
fiscal  year  thereafter.   The Company is currently in compliance  with  these
financial restrictions.  The entire principal amount of loans outstanding under
the Credit Agreement becomes  immediately  due  and  payable, subject to a cure
period,   if  the  Company  violates  any  of  these  financial   restrictions.
Furthermore,  the Company may not pay dividends (other than amounts declared by
and received from  BAESA  as dividends) without the consent of Banco Popular if
an event of default under the  Credit  Agreement  (including a violation of the
financial restrictions described above) has occurred  or would occur because of
the payment of dividends.

      As a result of the Company initially providing to Banco Popular incorrect
financial statements for the first and second quarters  ended December 31, 1995
and  March  31,  1996  and  certain  other  circumstances, the Company  was  in
technical  default  of the terms of the Credit  Agreement.   The  Company  has,
however, received from  Banco  Popular  a  written waiver of such default.  The
Company believes that it is currently in full  compliance with the terms of the
Credit Agreement.

      Pursuant to the Credit Agreement, the Company has granted Banco Popular a
security  interest in all its machinery and equipment,  receivables,  inventory
and the real property on which the Company's bottling plant in Toa Baja, Puerto
Rico (the "Toa  Baja  Plant") and the Company's plant in R<i'>o Piedras, Puerto
Rico (the "R<i'>o Piedras Plant").

      The Company's franchise  arrangements  with  PepsiCo  require  it  not to
exceed a ratio of senior debt to subordinated debt to equity of 65 to 25 to 10.
The Company is currently in compliance with these covenants.

      Capital  expenditures  for  the Company totaled $20.5 million in the 1996
nine month interim period and $4.5  million  in  the  1995  nine  month interim
period.  The Company's capital expenditures have been financed by a combination
of  borrowings from third parties and internally generated funds.  The  Company
expects  to  make approximately $3.0 million in additional capital expenditures
during the fiscal  year  1996 for the completion of the construction of the Toa
Baja Plant.



                                       19
PAGE
<PAGE>
PART II - OTHER INFORMATION
ITEM 5.  OTHER INFORMATION

      The  Company recently  discovered  accounting  irregularities  that  have
required it  to restate its financial results for the first and second quarters
ended December 31, 1995 and March 31, 1996.  These irregularities resulted in a
substantial understatement  of  certain  expenses,  primarily  discounting  and
marketing  expenses,  and  a  corresponding  overstatement of operating income.
This restatement resulted in an operating loss in both quarters.

      After discovering the accounting irregularities,  the  Company's Board of
Directors  retained  Rogers  &  Wells  as  independent   counsel to conduct  an
investigation  of  the  circumstances  which  resulted  in  the irregularities.
Rogers  &  Wells,  working  with  the  independent  accounting  firm  of  Price
Waterhouse,  which was retained to assist with the investigation,  conducted  a
thorough investigation  of  these  circumstances and has made its report to the
Company's Board of Directors.  Taking  into  consideration  the findings of the
investigation  and  in consultation with the Company's independent  accountants
regarding their materiality,  the Company concluded that the irregularities did
not have a material effect on any  Company  financial  statements  prior to the
first and second quarters of fiscal 1996, and thus that no restatements for any
prior periods are required.

      In addition, in consultation with its auditors and with Price Waterhouse,
which  assisted  with the independent counsel investigation into the accounting
irregularities, the  Company has taken definitive steps to insure that internal
management controls will prevent future accounting irregularities.

      The Company has  been  named  as  a  defendant  in  several  class action
shareholder  lawsuits  alleging  violations  of  federal  securities  laws   in
connection with disclosures in its previous financial statements (now restated)
for  the  first  and  second  quarters  of  fiscal 1996, and contained in other
Company disclosure documents.  At least two of  these lawsuits also allege that
the financial statements issued in connection with the Company's September 1995
public   offering   also  misrepresented  or  omitted  to   disclose   material
information.  The Company  has  referred  these  lawsuits  to legal counsel for
appropriate action, and the Company intends to defend them vigorously.

      Additionally, in connection with its goal of restoring  the profitability
of its Puerto Rican bottling operations, the Company has reorganized its senior
management and Board of Directors.  On June 11, 1996, Rafael Nin,  one  of  the
founding  shareholders  and  a  member of the Board of Directors of the Company
replaced  Charles  H. Beach as the  Company's  President  and  Chief  Executive
Officer.  Effective August 8, 1996, Charles Beach, the Chairman of the Board of
Directors, and Michael  Gerrits,  who together are the controlling shareholders
of the Company, resigned as Board members.   The  Company  further restructured
its  Board of Directors under the leadership of a new Chairman  John  W.  Beck.
Beck is  the  retired  chairman  and  chief executive officer of First National
Bank, Orlando/Winter Park, Florida and has been a Director of the Company since
1987.  The Board also appointed Richard  Reiss,  a  certified public accountant
and  well  known  business  consultant  in  Puerto  Rico, to  chair  the  Audit
Committee.

      In connection with his continued service as President and Chief Executive
Officer,  Mr.  Nin  requested,  and  was  granted by the Company's  controlling
stockholders, a ten-year voting trust agreement which entitles him to vote, but
not own, 5 million Class A shares, a controlling  interest in the Company.  Mr.
Nin was granted a two-year option at $1 per share on  these controlling shares,
to be exercised for the exclusive benefit of the Company.  At his request, this
option  may  not be exercised for his own benefit.  All remaining  9.5  million
founding shareholder  shares,  not  subject  to  the  option, will be free from
shareholder agreement trading restrictions after September  28,  1998.  A prior
option  to purchase a substantial interest in the Company, previously  reported
as granted  to  Nin  upon his appointment as chief executive officer, was never
formalized, and has been withdrawn by mutual agreement.

      The Company does  not expect to return to profitability during the fourth
quarter primarily because  of  continuing pricing pressures in the Puerto Rican
soft  drink market, production and  volume  interruptions  and  start-up  costs
associated  with the opening of the Toa Baja plant and expected losses by BAESA
in its fourth quarter results.

      In connection  with  efforts  being  made to improve the profitability of
BAESA, in which the Company owns approximately  a 17% interest, the transfer of
voting control from the Essential Shareholders to  PepsiCo  (Phase  II  of  the


                                       20
PAGE
<PAGE>
current  agreement  with  PepsiCo relating to BAESA voting control) occurred on
July 1, 1996.  As a result  of  this  change, the Company's investment in BAESA
most  likely  will cause the Company to be  an  investment  company  under  the
Investment Company  Act of 1940, as amended (the "Investment Company Act").  In
order to avoid being  required  to register as an investment company, which the
Company believes would impose burdensome restrictions on its future operations,
the Company's Board of Directors  has  expressed its intention to take steps as
soon as is reasonably possible which are  intended to result in the Company not
being required to register as an investment company.

      In connection with the transition to  Phase  II,  BAESA agreed to use its
best efforts in the future, at the request of the Company,  but without expense
or  liability (tax or otherwise) to BAESA, to assist the Company  in  effecting
transactions  which  the  Company  considers necessary or advisable in order to
avoid the requirement that it register  as an investment company.  There can be
no assurances, however, that the Company will be successful in finding a way to
avoid registration, or that if the Company  is ultimately required to register,
it  will  not adversely effect the Company's future  business  operations.   In
addition, PepsiCo  has  pledged  support  to  work together with the Company to
advance its outstanding products in Puerto Rico and any place both parties find
mutually beneficial.



                              21
PAGE
<PAGE>
                                    SIGNATURES


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

<TABLE>
<CAPTION>
              Signatures                                  Title                                  Date
              ----------                                  -----                                  ----
<S>                                                        <C>                                    <C>


/S/ RAFAEL NIN                                  Chief Executive Officer                     October 7, 1996
-------------------------------------------
Rafael Nin


/S/ DAVID L. VIRGINIA                           Chief Financial Officer and Chief           October 7, 1996
--------------------------------------------
David L. Virginia                               Accounting Officer
</TABLE>




                                       22

<PAGE>