<PAGE>

                                 FORM 10-Q


                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                ----------------

(MARK ONE)

     [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended March 31, 1999

                                      OR

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

                 COMMISSION FILE NUMBERS 0-676 AND 0-16626
                           -----------------


                          7-ELEVEN, INC.
                 (formerly The Southland Corporation)
          (Exact name of registrant as specified in its charter)

                      TEXAS                                  75-1085131
       (State or other jurisdiction of                    (I.R.S. Employer
         incorporation or organization)                 Identification No.)

     2711 NORTH HASKELL AVE., DALLAS, TEXAS                   75204-2906
     (Address of principal executive offices)                 (Zip code)

         Registrant's telephone number, including area code, 214/828-7011
                               --------------

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

                    APPLICABLE ONLY TO CORPORATE ISSUERS:

     409,941,168 shares of common stock, $.0001 par value (the issuer's 
only class of common stock), were outstanding as of March 31, 1999.




<PAGE>


                          7-ELEVEN, INC.
                  (FORMERLY THE SOUTHLAND CORPORATION)
                               INDEX


                                                                        Page
                                                                         No.
                                                                        ----

Part I.  FINANCIAL INFORMATION

   ITEM 1.  FINANCIAL STATEMENTS:

     Condensed Consolidated Balance Sheets -
       March 31, 1999 and December 31, 1998                               1

     Condensed Consolidated Statements of Earnings -
       Three Months Ended March 31, 1999 and 1998                         2

     Condensed Consolidated Statements of Cash Flows -
       Three Months Ended March 31, 1999 and 1998                         3

     Notes to Condensed Consolidated Financial Statements                 4

     Independent Auditors' Report                                         7


   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS                                       8

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   16

Part II.  OTHER INFORMATION

   ITEM 1.  LEGAL PROCEEDINGS                                            17

   ITEM 5.  OTHER INFORMATION                                            17

   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                             17

SIGNATURES                                                               18

Exhibit (3)  - Copy of Articles of Amendment to Second Restated
                 Articles of Incorporation                            Tab 1

Exhibit (15) - Letter re Unaudited Interim Financial Information      Tab 2

Exhibit (27) - Financial Data Schedule                                   *

*Submitted in electronic format only


                                    (i)


<PAGE>
<TABLE>
<CAPTION>
                        7-ELEVEN, INC. AND SUBSIDIARIES 
                      CONDENSED CONSOLIDATED BALANCE SHEETS 
                   (DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA) 

                                       ASSETS 

                                                           MARCH 31,      DECEMBER 31, 
                                                             1999            1998
                                                        -------------    ------------- 
                                                        (UNAUDITED) 
<S>                                                     <C>              <C> 
CURRENT ASSETS: 
   Cash and cash equivalents                            $     33,159     $     26,880 
   Accounts receivable                                       160,258          148,046 
   Inventories                                               102,263          101,045 
   Other current assets                                      151,450          162,631
                                                        -------------    ------------- 
       TOTAL CURRENT ASSETS                                  447,130          438,602 
PROPERTY AND EQUIPMENT                                     1,732,073        1,652,932 
OTHER ASSETS                                                 321,895          324,310
                                                        -------------    ------------- 
                                                        $  2,501,098     $  2,415,844
                                                        =============    ============= 

                    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES: 
   Trade accounts payable                               $    146,193     $    136,059 
   Accrued expenses and other liabilities                    321,668          362,398 
   Commercial paper                                           25,584           18,348 
   Long-term debt due within one year                        191,431          151,754
                                                        -------------    ------------- 
       TOTAL CURRENT LIABILITIES                             684,876          668,559 
DEFERRED CREDITS AND OTHER LIABILITIES                       217,534          220,653 
LONG-TERM DEBT                                             1,853,096        1,788,843 
CONVERTIBLE QUARTERLY INCOME DEBT SECURITIES                 380,000          380,000 
COMMITMENTS AND CONTINGENCIES 
SHAREHOLDERS' EQUITY (DEFICIT): 
   Common stock, $.0001 par value                                 41               41 
   Additional capital                                        625,610          625,574 
   Accumulated deficit                                    (1,271,837)      (1,278,009)
   Accumulated other comprehensive earnings                   11,778           10,183
                                                        -------------    ------------- 
       TOTAL SHAREHOLDERS' EQUITY (DEFICIT )                (634,408)        (642,211)
                                                        -------------    ------------- 
                                                        $  2,501,098     $  2,415,844 
                                                        =============    ============= 
</TABLE> 



              See notes to condensed consolidated financial statements.


                                          1

<PAGE>
<TABLE>
<CAPTION>
                                  7-ELEVEN, INC. AND SUBSIDIARIES
                            CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                            (DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)

                                            (UNAUDITED)

                                                                                    THREE MONTHS
                                                                                   ENDED MARCH 31
                                                                          ------------------------------
                                                                               1999             1998
                                                                          -------------    -------------
<S>                                                                       <C>              <C>
REVENUES:
     Merchandise sales (Including $118,806 and $101,042 in excise taxes)   $  1,361,750     $  1,204,364
     Gasoline sales (Including $151,426 and $128,200 in excise taxes)           408,345          390,594
                                                                          -------------     -------------
          Net sales                                                           1,770,095        1,594,958
     Other income                                                                22,127           20,443
                                                                           -------------    -------------
                                                                              1,792,222        1,615,401

COSTS AND EXPENSES:
     Merchandise cost of goods sold                                             909,980          793,450
     Gasoline cost of goods sold                                                354,565          347,089
                                                                           ------------    --------------
          Total cost of goods sold                                            1,264,545        1,140,539
     Operating, selling, general and administrative expenses                    500,478          471,716
     Interest expense, net                                                       24,083           22,573
                                                                           -------------    -------------
                                                                              1,789,106        1,634,828
                                                                           -------------    -------------

EARNINGS (LOSS) BEFORE INCOME TAXES (BENEFIT) AND EXTRAORDINARY GAIN             3,116           (19,427)
INCOME TAXES (BENEFIT)                                                           1,233            (7,322)
                                                                           -------------     -------------
EARNINGS (LOSS) BEFORE EXTRAORDINARY GAIN                                        1,883           (12,105)
                                                                                                  
EXTRAORDINARY GAIN ON DEBT REDEMPTION (net of tax effect                                           
          Of $2,743 and $11,425)                                                 4,290            17,871 
                                                                            ------------     -------------
NET EARNINGS                                                              $      6,173      $      5,766
                                                                            ============     =============
EARNINGS (LOSS) BEFORE EXTRAORDINARY GAIN PER COMMON SHARE:
     Basic                                                                       $.01             $(.03)
     Diluted                                                                      .01              (.03)
EXTRAORDINARY GAIN ON DEBT REDEMPTION PER COMMON SHARE:
     Basic                                                                       $.01              $.04
     Diluted                                                                      .01               .04
NET EARNINGS PER COMMON SHARE: 
     Basic                                                                       $.02              $.01
     Diluted                                                                      .02               .01
                                                                                                  
</TABLE>



                   See notes to condensed consolidated financial statements.

                                                2

<Page
<TABLE>
<CAPTION>
                                        7-ELEVEN, INC. AND SUBSIDIARIES
                                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (DOLLARS IN THOUSANDS)

                                                    (UNAUDITED)
                                                                                         THREE MONTHS
                                                                                        ENDED MARCH 31,
                                                                                -------------------------------
                                                                                     1999              1998
                                                                                -------------    --------------
<S>                                                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net earnings                                                                $      6,173     $      5,766
    Adjustments to reconcile net earnings to net cash (used in)
        provided by operating activities:
        Extraordinary gain on debt redemption                                         (4,290)         (17,871)
        Depreciation and amortization of property and equipment                       45,157           42,623
        Other amortization                                                             5,042            4,757
        Deferred income taxes                                                          5,327           (5,838)
        Noncash interest expense                                                         459              138
        Other noncash income                                                          (2,051)          (2,396)
        Net loss on property and equipment                                               823               55
        (Increase) decrease in accounts receivable                                   (11,283)             292
        (Increase) decrease in inventories                                            (1,218)          21,955
        Increase in other assets                                                     (21,602)          (2,662)
        Decrease in trade accounts payable and other liabilities                     (30,095)         (17,433)
                                                                                -------------    -------------
                  NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                 (7,558)          29,386
                                                                                -------------    -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Payments for purchase of property and equipment                                 (110,697)         (80,501)
    Proceeds from sale of property and equipment                                       1,056            1,384
    Other                                                                              5,470              123 
                                                                                -------------    -------------
                  NET CASH USED IN INVESTING ACTIVITIES                             (104,171)         (78,994)
                                                                                -------------    -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from commercial paper and revolving credit facilities                 1,231,245        1,488,195
    Payments under commercial paper and revolving credit facilities               (1,080,599)      (1,459,140)
    Principal payments under long-term debt agreements                               (31,809)         (29,436)
    Proceeds from issuance of convertible quarterly income debt securities              -              15,000 
    Other                                                                               (829)            (561)
                                                                                -------------    -------------
                  NET CASH PROVIDED BY FINANCING ACTIVITIES                          118,008           14,058
                                                                                -------------    -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   6,279          (35,550)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                        26,880           38,605
                                                                                -------------    -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $     33,159     $      3,055
                                                                                =============    =============

RELATED DISCLOSURES FOR CASH FLOW REPORTING:
    Interest paid, excluding SFAS No.15 Interest                                $    (36,760)    $    (24,724)
                                                                                =============    =============
    Net income taxes (paid) refunded                                            $     (2,970)    $        859
                                                                                =============    =============
    Assets obtained by entering into capital leases                             $     14,259     $      8,949 
                                                                                =============    =============


                                  See notes to condensed consolidated financial statements.


                                                                3
</TABLE>


<PAGE>
                      7-ELEVEN, INC. AND SUBSIDIARIES
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                Three Months Ended March 31, 1999
            (Dollars in thousands, except per-share data)
                           (UNAUDITED)

1.  Basis of Presentation:

The condensed consolidated balance sheet as of March 31, 1999, and the 
condensed consolidated statements of earnings and cash flows for the 
three-month periods ended March 31, 1999 and 1998, have been prepared by 
the Company without audit.  In the opinion of management, all adjustments 
(which included only normal, recurring adjustments) necessary to present 
fairly the financial position at March 31, 1999, and the results of 
operations and cash flows for all periods presented have been made.  The 
results of operations for the interim periods are not necessarily 
indicative of the operating results for the full year.

The condensed consolidated balance sheet as of December 31, 1998, is 
derived from the audited financial statements but does not include all 
disclosures required by generally accepted accounting principles. The 
notes accompanying the consolidated financial statements in the Company's 
Annual Report on Form 10-K for the year ended December 31 1998, include 
accounting policies and additional information pertinent to an 
understanding of both the December 31, 1998, balance sheet and the 
interim financial statements.  The information has not changed except as 
a result of normal transactions in the three months ended March 31, 1999, 
and as discussed in the following notes.

2.  Comprehensive Earnings:

In January 1998, the Company adopted the provisions of Statement of 
Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive 
Income," which establishes standards for reporting comprehensive earnings 
and its components in a full set of general-purpose financial statements. 
The components of comprehensive earnings of the Company for the periods 
presented are as follows: 

<TABLE>
<CAPTION>
                                                                 Three Months
                                                                Ended March 31
                                                               -----------------
                                                                 1999      1998
                                                               ------    --------
<S>                                                            <C>       <C>
Net earnings                                                   $  6,173  $  5,766
Other comprehensive earnings (loss), net of tax:
   Unrealized gains on equity securities                            549     6,151 
   Foreign currency translation adjustments                       1,046       (29)
                                                                --------  --------
         Other comprehensive earnings                             1,595     6,122 
                                                                --------  --------
Total comprehensive earnings                                   $  7,768  $ 11,888   
                                                               ========= =========
</TABLE>
                                      4



<PAGE>


3.  Earnings per Share:

In December 1997, the Company adopted the provisions of SFAS No. 128, 
"Earnings per Share," which requires the following reconciliation of the 
numerators and the denominators of the basic and diluted per-share 
computations for net earnings for the periods presented: 

<TABLE>
<CAPTION>
                                                                                           Three Months
                                                                                          Ended March 31
                                                                                       --------------------
                                                                                           1999      1998
                                                                                       --------    --------
<S>                                                                                  <C>           <C>       
BASIC EPS COMPUTATION:
  Earnings (Numerator):
    Earnings (loss) before extraordinary gain available to common shareholders        $    1,883   $ (12,105)
    Earnings on extraordinary gain available to common shareholders                        4,290       17,871
                                                                                      -----------   ---------
    Net earnings available to common shareholders                                     $    6,173    $   5,766
                                                                                       ==========   =========
  Shares (Denominator):
    Weighted-average number of common shares outstanding                                 409,940 (A)  409,923
                                                                                       ==========    =========
BASIC EPS:
  Earnings (loss) per common share before extraordinary gain                          $    .01       $ (.03)
  Earnings per common share on extraordinary gain                                          .01          .04
                                                                                       ----------    ---------
  Net earnings per common share                                                       $    .02       $  .01
                                                                                       ==========    =========

DILUTED EPS COMPUTATION:
  Earnings (Numerator):
    Earnings (loss) before extraordinary gain available to common shareholders        $   1,883    $ (12,105)
    Add interest on convertible quarterly income debt securities, net of tax                 -  (B)       -  (B)
                                                                                       ---------      --------
    Earnings (loss) before extraordinary gain available to common shareholders
          plus assumed conversions                                                         1,883      (12,105)

    Earnings on extraordinary gain available to common shareholders                        4,290       17,871
                                                                                       ---------      --------
    Net earnings available to common shareholders plus assumed
          conversions                                                                 $    6,173     $  5,766
                                                                                       ==========     ========
  Shares (Denominator):
    Weighted-average number of common shares outstanding                                409,940       409,923
    Add effects of assumed conversions:
          Exercise of stock options                                                          -  (C)       -  (C)
          Conversion of convertible quarterly income debt securities                         -  (B)       -  (B)
                                                                                       ----------     ---------
    Weighted-average number of common shares outstanding plus shares
          from assumed conversions                                                       409,940      409,923
                                                                                        =========    ==========
DILUTED EPS :
    Earnings (loss) per common share before extraordinary gain                          $    .01       $ (.03)   
    Earnings per common share on extraordinary gain                                          .01          .04
                                                                                         ---------    ---------
    Net earnings per common share                                                       $    .02       $  .01
                                                                                         =========    ==========


(A)  The increase in the number of common shares outstanding is due to issuing stock
to the board of directors in lieu of cash compensation.

(B)  The convertible quarterly income debt securities are not assumed  converted
     for the three months ended March 31, 1999 and 1998, because they have an
     antidilutive effect on EPS.

(C)  The weighted-average shares for the three months ended March 31,1999 and 1998,
     do not assume exercise of the stock options since the average market price of 
     shares for both periods is below the options' exercise prices.
</TABLE>

                                     5

<PAGE>

4.  Gain on Purchase of Debentures:

The Company purchased $15,000 principal amount of its 5% First Priority 
Senior Subordinated Debentures due 2003 in January 1999 and $4,418 
principal amount of its 4-1/2% Second Priority Senior Subordinated 
Debentures (Series A) due 2004 in February 1999.  These partial purchases 
utilized a portion of the proceeds from the issuance in February 1998 of 
$80 million principal amount of Convertible Quarterly Income Debt 
Securities due 2013 to Ito-Yokado Co., Ltd., and to Seven-Eleven Japan 
Co., Ltd.  As a result of the discounted purchase price and the inclusion 
of SFAS No. 15 interest in the carrying amount of the debt, the Company 
recorded an extraordinary gain of $4,290 (net of current tax effect of 
$2,743) in the first quarter of 1999. 

5.  SFAS No. 133:

The Company is currently reviewing SFAS No. 133, "Accounting for 
Derivative Instruments and Hedging Activities."  The statement 
establishes accounting and reporting standards for derivative 
instruments, including certain derivative instruments embedded in other 
contracts, and for hedging activities.  SFAS No. 133 becomes effective 
for all fiscal quarters of fiscal years beginning after June 15, 1999, 
and earlier application is permitted as of the beginning of any fiscal 
quarter subsequent to June 15, 1998.  The Company intends to adopt the 
provisions of this statement as of January 1, 2000.  The impact of the 
adoption of SFAS No. 133 has not been determined at this time due to the 
Company's continuing investigation of its financial instruments and the 
applicability of SFAS No. 133 to them.

6.  Default Interest:

On March 29, 1999, the Company paid $12,262 to a former group of senior 
lenders under the Credit Agreement that related to a settlement of a 
default interest claim, which was made subsequent to the Company's 
bankruptcy filing in 1990.  The amount of the settlement was not 
materially different from the amount that had been accrued.


                              6

<PAGE>

                    INDEPENDENT AUDITORS' REPORT


April 27, 1999

To the Board of Directors and Shareholders of
   7-Eleven, Inc.


We have reviewed the accompanying condensed consolidated balance sheet of 
7-Eleven, Inc. and Subsidiaries as of March 31, 1999, and the related 
condensed consolidated statements of earnings and cash flows for the three-
month periods ended March 31, 1999 and 1998.  These financial statements 
are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants  A review of interim 
financial information consists principally of applying analytical 
procedures to financial data and making inquiries of persons responsible 
for financial and accounting matters. It is substantially less in scope 
than an audit conducted in accordance with generally accepted auditing 
standards, the objective of which is the expression of an opinion regarding 
the financial statements taken as a whole.  Accordingly, we do not express 
such an opinion.

Based on our review, we are not aware of any material modifications that 
should be made to the accompanying financial statements of 7-Eleven, Inc. 
and Subsidiaries for them to be in conformity with generally accepted 
accounting principles.

We have previously audited, in accordance with generally accepted auditing 
standards, the consolidated balance sheet as of December 31, 1998, and the 
related consolidated statements of earnings, shareholders' equity 
(deficit), and cash flows for the year then ended (not presented herein); 
and in our report dated February 4, 1999, we expressed an unqualified 
opinion on those consolidated financial statements.  In our opinion, the 
information set forth in the accompanying condensed consolidated balance 
sheet as of December 31, 1998, is fairly stated, in all material respects, 
in relation to the consolidated balance sheet from which it has been 
derived.



                   PRICEWATERHOUSECOOPERS LLP




                                       7

<PAGE>

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

     Some of the matters discussed in this quarterly report contain 
forward-looking statements regarding the Company's future business which 
are subject to certain risks and uncertainties, including competitive 
pressures, adverse economic conditions and government regulations. These 
issues, and other factors, which may be identified from time to time in the 
Company's reports filed with the SEC, could cause actual results to differ 
materially from those indicated in the forward-looking statements.


RESULTS OF OPERATIONS

SUMMARY OF RESULTS OF OPERATIONS

     The Company's reported net earnings were $6.2 million for the first 
quarter of 1999, compared to net earnings of $5.8 million for the first 
quarter of 1998.  Merchandise and gasoline gross profits contributed to the 
improved results with per store increases of 6% and 14.7%, respectively.

     Included in the first quarter 1999 results was a $4.3 million after 
tax extraordinary gain on the partial redemption of the Company's 5% First 
Priority and 4.5% Series A Debentures ("5% and 4.5% Debentures").  The 
first quarter of 1998 included a $17.9 million (after tax) extraordinary 
gain from the redemption of the Company's 12% Senior Subordinated 
Debentures ("12% Debentures"), which was offset by $14.9 million (after 
tax) of costs associated with a lease termination, severance and write-off 
of slow-moving inventory. 

MANAGEMENT STRATEGIES

     Since 1992, the Company has been committed to several key strategies 
that it believes, over the long term, will provide further differentiation 
from competitors and allow 7-Eleven to maintain its position as the premier 
convenience retailer.  These strategies include:

*  Upgrading the Company's store base through developing or acquiring new     
stores, continuing the upgrading of existing stores and closing 
underachieving stores. In 1999, new store openings are once again expected 
to significantly outpace closings, with the expansion occurring in existing 
markets to support the Company's fresh food and combined-distribution 
initiatives.

*  A customer-driven approach to merchandising, which focuses on providing 
the customer a selection of quality products at a good value.
An everyday-fair-pricing strategy which provides consistent, reasonable 
prices on all items.

*  Daily delivery of high-quality ready-to-eat foods, along with other 
time-sensitive or perishable items, through the use of combined 
distribution centers, fresh-food commissaries and bakery facilities.  These 
facilities, which are generally third party operated, are designed to 
provide fresher products, improve in-stock conditions and lower product 
costs.

*  The development of a retail information system which initially has 
automated accounting and other store-level tasks. The current phase 
involves the installation of point-of-sale registers with scanning 
capabilities, as well as tools on the in-store processor to assist with 
ordering and product assortment, and a hand-held unit for ordering product 
from the sales floor. At the end of March 1999, point-of-sale registers had 
been installed in nearly 3,500 stores in either a live or training mode. 


                                    8

<PAGE>

(EXCEPT WHERE NOTED, ALL PER-STORE NUMBERS REFER TO AN AVERAGE OF ALL 
STORES RATHER THAN ONLY STORES OPEN MORE THAN ONE YEAR.)


SALES

     The Company recorded net sales of $1.77 billion for the three months 
ended March 31, 1999, compared to sales of $1.59 billion during the same 
period in 1998.  The sales increase is due to a combination of increased 
per-store sales and more stores.  The first quarter of 1999 produced a U.S. 
same-store (stores open more than one year) merchandise sales increase of 
9.8%. 

      Regionally, per-store merchandise sales growth was fairly consistent, 
with the Texas and Florida divisions leading the country.  Categories 
contributing the most to growth were cigarettes, prepaid phone cards, food 
service offerings, ready-to-drink beverages, coffee and frozen non-
carbonated beverages.  Although a significant portion of the improvement 
was the result of the introduction of new products, manufacturer cost 
increases on cigarettes contributed an estimated 4% to sales growth for the 
quarter.  As a direct result of new product offerings or changing customer 
preferences, certain categories have had slight declines in per-store 
sales.  These categories include fountain drinks, packaged bakery/bread and 
deli products.  

     Gasoline sales dollars increased 4.5% for the first quarter, due to an 
increase in gallons sold per store and more stores. Average per-store 
gallonage increased 6.8% when compared to 1998.  During the first quarter 
of 1999, the average retail price of gasoline was 10 cents per gallon lower 
than in the first quarter of 1998.

<TABLE>
<CAPTION>

GROSS PROFITS
                                                                  THREE MONTHS ENDED
                                                                    MARCH 31, 1999
                                                          -----------------------------------
                                                         
                                                              MERCHANDISE         GASOLINE  
                                                              -----------         --------  
<S>                                                          <C>                 <C>       
Gross profit - DOLLARS IN MILLIONS                             $  451.8            $  53.8   

Gross profit margin percent (gasoline in cents per gallon)        33.18              13.37 

INCREASE/(DECREASE) FROM PRIOR YEAR - ALL STORES    
------------------------------------------------
Average per-store gross profit dollar change                       6.0%              14.7%   
Margin percentage point change (gasoline in cents per gallon)    (0.94)               0.92    
Average per-store sales (gasoline in gallons)                      9.0%               6.8%   

</TABLE>


     Total merchandise gross profit dollars were $40.9 million higher in 
the first quarter of 1999 than the comparable period in 1998.  Higher 
average per-store merchandise sales were partially offset by a lower 
merchandise margin, which declined almost a full percentage point. Although 
the cigarette category contributed slightly higher gross profit dollars, 
overall merchandise gross profit margin was unfavorably impacted by the 
inflationary effects of several cigarette manufacturer cost increases and a 
excise tax increase in California since last year.  The continued 
introduction of fresh food/bakery products to new areas, which tend to have 
a lower margin and short shelf life, has also contributed to the decline in 
merchandise margin.  As a result of these events, merchandise margin is 
expected to be lower throughout 1999, when compared to 1998.


                                     9

<PAGE>

     During the first three months of 1999, gasoline gross profit increased 
$10.3 million, versus the comparable period in 1998.  This increase was due 
to higher per-store gallon sales, increased margins and a greater number of
gasoline outlets.  Market conditions during the first quarter were 
relatively stable, however late in March they became more volatile due to 
refinery problems on the U.S. West Coast coupled with OPEC's agreement to 
cut production.  It is currently unknown what impact the recent mergers of 
large oil producers will have upon the market as marketing operations are 
combined and changes in pricing policies are contemplated.  

OPERATING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("OSG&A") 

     Operating, selling, general and administrative expenses increased 
$28.8 million in the first quarter of 1999 compared to the same period in 
1998. The ratio of OSG&A expense to sales was 28.3% in the first three 
months of 1999, a decrease of 1.3 percentage points from the same period in 
1998.  OSG&A expense in 1998 included nearly $19 million of charges for a 
computer equipment lease termination and severance costs.  After adjusting 
1998's OSG&A expense for these charges, the ratio of OSG&A expense to sales 
is nearly equal to 1999's ratio. 

     Other factors impacting the increase in OSG&A expense in 1999 include 
a higher amount of gross profit earned by and shared with the franchisees, 
as well as costs associated with operating more stores.  In addition, a 
portion of the increase in OSG&A expense resulted from costs related to the 
Company's implementation of its retail information system and other 
strategic initiatives. Incremental costs of over $6 million associated with 
the Company's retail information system, were expensed in the first quarter 
of 1999.  While the ratio of OSG&A expense to sales will vary on a 
quarterly basis, management believes this ratio will not improve 
dramatically during the rollout phase of the retail information system.

     The Company is a defendant in two legal actions, which are referred to 
as the 7-Eleven OFFF and Valente cases, filed by franchisees in 1993 and 
1996, respectively, asserting various claims against the Company.  A 
nationwide settlement was negotiated and, in connection with the 
settlement, these two cases have been combined on behalf of a class of all 
persons who operated 7-Eleven convenience stores in the United States at 
any time between January 1, 1987 and July 31, 1997, under franchise 
agreements with the Company.  Class members have overwhelmingly approved 
the settlement, and the court presiding over the settlement process gave 
its final approval of the settlement on April 24, 1998.  The settlement 
provides that former franchisees will share in a settlement fund and that 
certain changes will be made to the franchise agreements with current 
franchisees.

     Notices of appeal of the order approving the settlement were filed on 
behalf of three of the attorneys who represented the class, six former 
franchisees and two current franchisees.  One of these current franchisees 
has dismissed his appeal.  The settlement agreement will not become 
effective until the appeals are resolved.  However, the settlement 
agreement provides that while the appeals are pending the Company will pay 
certain maintenance and supply expenses relating to the cash registers and 
retail information system equipment of current franchisees that are members 
of the settlement class.  If the settlement is overturned on appeal, the 
Company has the right to require franchisees to repay the amounts that the 
Company paid for these expenses while the appeals were pending.  The 
Company's payment of these expenses had no material impact on first quarter 
earnings for 1998 or 1999 and should have no material impact on future 
earnings.  The Company's accruals are sufficient to cover the total 
settlement costs, including the payment due to former franchisees when the 
settlement becomes effective.


                                      10

<PAGE>


INTEREST EXPENSE, NET

     Net interest expense increased $1.5 million in the first quarter of 
1999 compared to 1998.  The Company expects net interest expense in 1999 to 
increase approximately 10% over 1998 based on anticipated levels of debt 
and interest rate projections. Factors increasing 1999 interest expense 
include higher borrowings to finance new store development and other 
initiatives, combined with the redemption of $65 million of the Company's 
public debt securities in 1998 and early 1999, which were accounted for 
under SFAS No. 15 (see Extraordinary Gain). 

     In accordance with SFAS No. 15, no interest expense is recognized on 
the Company's public debt securities. These securities were recorded at an 
amount equal to the future undiscounted cash payments, both principal and 
interest, and accordingly, the cash interest payments are charged against 
the recorded amount of such securities and are not treated as interest 
expense. Accordingly, interest expense on debt used to redeem public debt 
securities would increase the Company's reported interest expense. 

     As of March 31, 1999, approximately 47% of the Company's debt contains 
floating rates that will be unfavorably impacted by rising interest rates.  
The Company has entered into an interest rate swap agreement, which 
effectively lowers the amount of debt exposed to floating rates from 47% to 
35% (see Interest Rate Swap Agreement).  The weighted-average interest rate 
for such debt, including the impact of the interest rate swap agreement, 
was 5.4% for 1999 versus 5.8% for the first quarter of 1998. 
     
INTEREST RATE SWAP AGREEMENT

     In June 1998, the Company entered into an interest rate swap agreement 
that fixed the interest rate on $250 million notional principal amount of 
existing floating rate debt at 5.4% through June 2003.  A major financial 
institution, as counterparty to the agreement, agreed to pay the Company a 
floating interest rate based on three-month LIBOR during the term of the 
agreement in exchange for the Company paying a fixed interest rate. The 
swap agreement granted the counterparty the option, upon expiration of the 
initial swap term, of extending the agreement for an additional five years 
at a fixed interest rate of 5.9%. 

     In February 1999, the Company amended the terms of the interest rate 
swap agreement.  The fixed rate was increased to 6.1% and the term of the 
swap was extended to February 2004; the remaining terms of the swap 
agreement were unchanged.  In exchange for the increase in the fixed rate, 
the five-year extension option held by the counterparty was terminated.

EXTRAORDINARY GAIN

     During the first quarter of 1999, the Company redeemed a portion of 
its 5% and 4.5% Debentures, resulting in an after tax gain of $4.3 million 
from the retirement of future undiscounted interest payments as recorded 
under SFAS No. 15, combined with purchasing the debentures below their face 
value. In March 1998, redemption of the Company's 12% Debentures resulted 
in a $17.9 million after-tax gain from the retirement of future 


                                     11

<PAGE>

undiscounted interest payments.  Both the 1998 and 1999 redemptions were 
financed with proceeds from the issuance of $80 million of 4-1/2% 
Convertible Quarterly Income Debt Securities due 2013, to Ito-Yokado Co., 
Ltd., and Seven-Eleven Japan Co., Ltd., the joint owners of IYG Holding 
Company, which is the Company's majority shareholder.
      
LIQUIDITY AND CAPITAL RESOURCES

     The majority of the Company's working capital is provided from three 
sources: i) cash flows generated from its operating activities; ii) a $650 
million commercial paper facility (guaranteed by Ito-Yokado Co., Ltd.); and 
iii) short-term seasonal borrowings of up to $400 million (reduced by 
outstanding letters of credit) under its revolving credit facility. The 
Company believes that operating activities, coupled with available short-
term working capital facilities, will provide sufficient liquidity to fund 
current commitments for operating and capital expenditure programs, as well 
as to service debt requirements. Actual capital expenditure funding will be 
dependent on the level of cash flow generated from operating activities and 
the funds available from financings.

     In January 1999, the Company expanded the existing commercial paper 
facility from $400 million to $650 million. The commercial paper is 
unsecured but is fully and unconditionally guaranteed by Ito-Yokado Co., 
Ltd. 

     7-Eleven's credit agreement, established in February 1997, includes a 
term loan with a balance of $155 million and a $400 million revolving 
credit facility, which has a sublimit of $150 million for letters of credit 
("Credit Agreement").  The Credit Agreement contains certain financial and 
operating covenants requiring, among other things, the maintenance of 
certain financial ratios, including interest and rent coverage, fixed-
charge coverage and senior indebtedness to net earnings before 
extraordinary items and interest, taxes, depreciation and amortization 
("EBITDA"). The covenant levels established by the Credit Agreement 
generally require continuing improvement in the Company's financial 
condition.  In March 1999, the financial covenant levels required by these 
instruments were amended prospectively in order to allow the Company 
flexibility to continue its store growth strategy.  In connection with this 
amendment, the interest rate on borrowings was changed to a reserve-
adjusted Eurodollar rate plus .475% instead of the previous increment of 
 .225%.

     For the period ended March 31, 1999, the Company was in compliance 
with all of the covenants required under the Credit Agreement, including 
compliance with the principal financial and operating covenants under the 
Credit Agreement (calculated over the latest 12-month period) as follows:

                                                       REQUIREMENTS
                                                   --------------------
   COVENANTS                        ACTUALS        MINIMUM      MAXIMUM
   ---------                        -------        -------      -------
   Interest and rent coverage *   2.07 to 1.0    1.90 to 1.0
   Fixed charge coverage          1.65 to 1.0    1.50 to 1.0
   Senior indebtedness to EBITDA  3.99 to 1.0                  4.10 to 1.0
   Capital expenditure limit 
         (tested annually)                                     $475 million

     * INCLUDES EFFECTS OF THE SFAS NO. 15 INTEREST PAYMENTS.


                                    12

<PAGE>

     During the first three months of 1999, the Company repaid $31.8 
million of debt, which included principal payments of $14.1 million for a 
quarterly installment due on the Term Loan and $10.9 million on the 
Company's yen-denominated loan (secured by the royalty income stream from 
its area licensee in Japan).  Outstanding balances at March 31, 1999 for 
commercial paper, Term Loan and Revolver, were $625.6 million, $154.7 
million and $195.0 million, respectively.  As of March 31, 1999, 
outstanding letters of credit issued pursuant to the Credit Agreement 
totaled $70.8 million.

CASH FROM OPERATING ACTIVITIES

     Net cash used in operating activities was $7.6 million for the first 
quarter of 1999, compared to net cash provided of $29.4 million during the 
same period of 1998 (see Results of Operations section).  The decline in 
cash flows between the periods relates primarily to changes in working 
capital during the first quarter of 1999 of over $32 million stemming from 
three significant items as follows: payment on a settlement of a previously 
accrued claim, an increase in advances for retail information system 
equipment awaiting quarterly funding under a master lease facility, the 
transfer of long-term disability coverage from self-insured to fully 
funded.

CAPITAL EXPENDITURES

     In the first three months of 1999, net cash used in investing 
activities consisted primarily of payments of $110.7 million for the 
purchase of property and equipment. The majority of the property and 
equipment capital was used for new store development, continued 
implementation of the Company's retail information system, remodeling 
stores, new equipment to support merchandising initiatives, upgrading 
retail gasoline facilities, replacing equipment and complying with 
environmental regulations.

     The Company expects 1999 capital expenditures, excluding lease 
commitments, to exceed $375 million. Capital expenditures are being used to 
develop or acquire new stores, upgrade store facilities, further implement 
the retail information system, replace equipment, upgrade gasoline 
facilities and comply with environmental regulations. The amount of 
expenditures during the year will be materially impacted by the proportion 
of new store development funded through capital expenditures versus leases 
and the speed at which new sites/acquisitions can be located, negotiated, 
permitted and constructed.

CAPITAL EXPENDITURES - GASOLINE EQUIPMENT

     The Company incurs ongoing costs to comply with federal, state and 
local environmental laws and regulations primarily relating to underground 
storage tank ("UST") systems. The Company anticipates it will spend nearly 
$2 million in 1999 on capital improvements required to comply with 
environmental regulations relating to USTs as well as above-ground vapor 
recovery equipment at store locations, and approximately $15-20 million on 
such capital improvements from 2000 through 2002.

ENVIRONMENTAL

     In December 1988, the Company closed its chemical manufacturing 
facility in New Jersey. The Company is required to conduct environmental 
remediation at the facility, including groundwater monitoring and treatment 
for a projected 15-year period.  This remediation program will commence in 
1999 with the performance of certain engineering and design work. The 
Company has recorded undiscounted liabilities representing its best 
estimates of the clean-up costs of $8.5 million at March 31, 1999.  In 
1991, the Company and the former owner of the facility entered into a 


                              13

<PAGE>

settlement agreement pursuant to which the former owner agreed to pay a 
substantial portion of the clean-up costs. Based on the terms of the 
settlement agreement and the financial resources of the former owner, the 
Company has a receivable recorded of $5.0 million at March 31, 1999.

     Additionally, the Company accrues for the anticipated future costs and 
the related probable state reimbursement amounts for remediation activities 
at its existing and previously operated gasoline sites where releases of 
regulated substances have been detected. At March 31, 1999, the Company's 
estimated undiscounted liability for these sites was $39.5 million. This 
estimate is based on the Company's prior experience with gasoline sites and 
its consideration of such factors as the age of the tanks, location of tank 
sites and experience with contractors who perform environmental assessment 
and remediation work. The Company anticipates that substantially all of the 
future remediation costs for detected releases at these sites, as of March 
31, 1999, will be incurred within the next four to five years.

     Under state reimbursement programs, the Company is eligible to receive 
reimbursement for a portion of future remediation costs, as well as a 
portion of remediation costs previously paid. Accordingly, at March 31, 
1999, the Company has recorded a net receivable of $46.0 million for the 
estimated probable state reimbursements. In assessing the probability of 
state reimbursements, the Company takes into consideration each state's 
fund balance, revenue sources, existing claim backlog, status of clean-up 
activity and claim ranking systems. As a result of these assessments, the 
recorded receivable amount is net of an allowance of $7.7 million. While 
there is no assurance of the timing of the receipt of state reimbursement 
funds, based on its experience, the Company expects to receive the majority 
of state reimbursement funds, except from California, within one to three 
years after payment of eligible remediation expenses, assuming that the 
state administrative procedures for processing such reimbursements have 
been fully developed. The Company estimates that it may take one to six 
years to receive reimbursement funds from California. Therefore, the 
portion of the recorded receivable amount that relates to remediation 
activities, which have already been conducted, has been discounted at 5.1% 
to reflect its present value. Thus, the recorded receivable amount is also 
net of a discount of $4.5 million. 

     The estimated future assessment and remediation expenditures and 
related state reimbursement amounts could change within the near future as 
governmental requirements and state reimbursement programs continue to be 
implemented or revised.

YEAR 2000

     The Year 2000 issue ("Y2K") is the result of computer software 
programs being coded to use two digits rather than four to define the 
applicable year. Some of the Company's older computer programs that have 
date-sensitive coding may recognize a date using "00" as the year 1900 
rather than the year 2000. This could result in system failures or 
miscalculations, causing disruptions of operations.

     The Company has approached the Y2K issue in phases. A Year 2000 
Project Office Manager, together with a strong support organization, has 
designed a Y2K work plan that is currently being implemented. The Y2K work 
plan includes:  (1) identifying and inventorying all Year 2000 tasks and 
items;  (2) assigning priorities to all tasks and items;  (3) remediation 
of information systems ("IS") applications code, testing and reintegration 
to production, as well as testing all replaced systems software and non-
remediated applications;  (4) contacting third-party vendors to verify 


                                     14

<PAGE>

their compliance and perform selected interface tests with major vendors; 
(5) determining the Company's Y2K responsibilities to its franchisees, 
subsidiaries and affiliates;  (6) establishing contingency alternatives 
assuming worst-case scenarios. 

     The Company continues to progress favorably in its completion of the 
various tasks and target dates identified in the Y2K work plan. The Company
believes it has identified and prioritized all major Y2K-related items. 
Also, numerous non-IS, merchandise, equipment, financial institution, 
insurance and public utility vendors have been contacted, inquiring as to 
their readiness and the readiness of their respective vendors.  At this 
time the Company is performing follow-up efforts with the above vendors as 
required.  Testing compliance with major vendors is now being planned and 
is scheduled to begin June 1, 1999.  In addition, the Company does not have 
any direct Y2K responsibility for operations in foreign countries (except 
Canada) and does not anticipate any material Y2K related impact from 
foreign affiliates or licensees.  Canadian operations are included in the 
general Y2K discussion. The following reflects management's assessment of 
the Company's Year 2000 state of readiness:

                      STATE OF READINESS AS OF MARCH 31, 1999
<TABLE>
<CAPTION>

                                                         ESTIMATED           ESTIMATED
PHASE                                                 PERCENT COMPLETE    COMPLETION DATE
-----                                                 ----------------    ---------------
<S>                                                   <C>                 <C>
INTERNAL IS AND NON-IS SYSTEMS AND EQUIPMENT:
  Awareness                                                 98%               Dec. 1999 *
  Assessment changes required                               95%               March 1999
  Remediation or replacement                                85%               June 1999
  Testing                                                   20%               Sept. 1999
  Contingency Planning                                      15%               June 1999 *

SUPPLIERS, CUSTOMERS AND THIRD-PARTY PROVIDERS:
  Awareness-Identify companies                              95%               April 1999
  Assessment questionnaire completed by major suppliers     60%               May 1999 *
  Assessment review with third-party providers              30%               May 1999
  Review contractual commitments                            50%               June 1999
  Risk Assessment                                           50%               May 1999
  Contingency Planning/Development                          10%               June 1999 *
  Testing as applicable                                      5%               Sept. 1999

           *  INDICATES WORK SHOULD BE SIGNIFICANTLY FINISHED AT THE ESTIMATED COMPLETION DATE,
              BUT THE COMPANY WILL CONTINUE TO REEVALUATE AWARENESS, SEND FOLLOW-UP QUESTIONNAIRES
              AND UPDATE CONTINGENCY PLANS AS NEEDED.
          
</TABLE>

     The Company estimates that the cost of the Year 2000 Project will be 
approximately $8 million, of which nearly $4 million will be capital costs. 
The costs incurred to date are $3.2 million, with the remaining cost for 
outside consultants, software and hardware applications to be funded 
through operating cash flow.  The Company anticipates that it will incur 
the majority of the remaining costs by the end of the third quarter.  This 
estimate includes costs related to the upgrade and/or replacement of 
computer software and hardware; costs of remediated code testing and test 
result verification; and the reintegration to production of all remediated 
applications. In addition, the costs include the testing of applications 
and software currently certified as Year 2000 compliant. The Company does 
not separately track the internal costs incurred for the Y2K project, which 
are primarily the related payroll costs for the IS and various user 
personnel participating in the project.


                                      15

<PAGE>

     Due to the general uncertainty inherent in the Year 2000 process, 
primarily due to issues surrounding the Y2K readiness of third-party 
suppliers and vendors, a reasonable worst-case scenario is difficult to 
determine at this time. The Company does not anticipate more than temporary
isolated disruptions attributed to Year 2000 issues to affect either the 
Company or its primary vendors. The Company is concentrating on four 
critical business areas in order to identify, evaluate and determine the 
scenarios requiring the development of contingency plans: (1) merchandise 
ordering and receipt,  (2) petroleum products ordering and receipt,  (3) 
human resource systems and (4) disbursement systems. To the extent vendors 
are unable to deliver products due to their own Year 2000 issues, the 
Company believes it will generally have alternative sources for comparable 
products and does not expect to experience any material business 
disruptions. Although considered unlikely, the failure of public utility 
companies to provide telephone and electrical service could have material 
consequences. Contingency planning efforts will escalate as the Company 
continues to receive and evaluate responses from all of its primary 
merchandise vendors and service providers. These contingency plans are 
scheduled to be complete by June 1999. 

     The costs of the Y2K project and the date on which the Company plans 
to complete the Year 2000 modifications are based on management's best 
estimates, which were derived utilizing numerous assumptions of future 
events including the continued availability of certain resources, third-
party modification plans and other factors. As a result, there can be no 
assurance that these forward-looking estimates will be achieved and the 
actual costs and vendor compliance could differ materially from the 
Company's current expectations, resulting in a material financial risk.  In 
addition, while the Company is making significant efforts in addressing all 
anticipated Year 2000 risks within its control, this event is unprecedented 
and consequently there can be no assurance that the Year 2000 issue will 
not have a material adverse impact on the Company's operating results and 
financial condition.

MARKET-SENSITIVE INSTRUMENTS AND RISK MANAGEMENT

     The Company held a number of financial and derivative instruments at 
March 31, 1999, which are sensitive to changes in interest rates, foreign 
exchange rates and equity prices. The Company uses interest-rate swaps to 
manage the primary market exposures associated with underlying liabilities 
and anticipated transactions. The Company uses these instruments to reduce 
risk by essentially creating offsetting market exposures. In addition, the 
two yen-denominated loans serve to effectively hedge the Company's exposure 
to yen-dollar currency fluctuations. The instruments held by the Company 
are not leveraged and are held for purposes other than trading. There are 
no material quantitative changes in market risk exposure at March 31, 1999, 
when compared to December 31, 1998.

     In the normal course of business, the Company also faces risks that 
are either nonfinancial or nonquantifiable. Such risks principally include 
country risk, credit risk and legal risk and are not represented in this 
discussion.

SFAS NO. 133

     The Company is currently reviewing SFAS No. 133, "Accounting for 
Derivative Instruments and Hedging Activities."  The Company intends to 
adopt the provisions of this statement as of January 1, 2000.  The impact 
of the adoption has not been determined at this time.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      See "Management's Discussion and Analysis," above.


                                 16

<PAGE>

                               PART II.
                           OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.


     As previously reported, the Company's senior lenders under the Credit 
Agreement had filed a proof of claim in the Company's bankruptcy proceeding 
alleging that the Company had failed to make an interest payment due June 
15, 1990.  On March 29, 1999, the Company paid $12.262 million in 
settlement of this claim and this matter has now been terminated.  See 
Note 6 of the Notes to Condensed Consolidated Financial Statements.

     There are no other reportable suits or proceedings pending or 
threatened against the Company other than as previously reported.


ITEM 5.  OTHER INFORMATION.

     On April 28, 1999, the Company's shareholders approved Articles of 
Amendment to the Company's Second Restated Articles of Incorporation 
effecting the change of the Company's name to "7-Eleven, Inc."  The 
amendment was effective April 30, 1999.  The trading symbol for the 
Company's common stock was changed to "SVEV."  In addition, the CUSIP 
number for the Company's common stock is now 817826 10 0.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits:

          Exhibit  (3) - Copy of Articles of Amendment to the Second
                           Restated Articles of Incorporation, as filed
                           with the Secretary of State of Texas.

          Exhibit (15) - Letter re Unaudited Interim Financial
                            Information.
                          Letter of PricewaterhouseCoopersLLP,
                            Independent Auditors.

          Exhibit (27) - Financial Data Schedule.
                            Submitted in electronic format only.

     (b)  8-K Reports:

During the first quarter of 1999, the Company filed no reports on Form 8-K.

                                 17

<PAGE>



                            SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, 
the registrant has duly caused this report to be signed on its behalf by 
the undersigned thereunto duly authorized.

                              7-ELEVEN, INC.
                              (formerly THE SOUTHLAND CORPORATION)
                              ------------------------------------
                                   (Registrant)



Date:  May 5, 1999            /s/   Clark J. Matthews, II
                              ----------------------------------
                              (Officer)
                              Clark J. Matthews, II
                              President and Chief Executive Officer


Date:  May 5, 1999           /s/   Donald E. Thomas
                             -----------------------------------
                             (Principal Accounting Officer)
                             Donald E. Thomas
                             Vice President and Controller




                               18