<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 June 30, 2001

                         OR

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

                 COMMISSION FILE NUMBER 0-16626
                     -----------------


                          7-ELEVEN, INC.
       (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:

104,801,546 shares of common stock, $.0001 par value (the
issuer's only class of common stock), were outstanding as of
June 30, 2001.



<Page>


                          7-ELEVEN, INC.
                               INDEX


                                                                    PAGE
                                                                     NO.
                                                                    ----

Part I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS:

         Condensed Consolidated Balance Sheets -
           December 31, 2000 and June 30, 2001                        1

         Condensed Consolidated Statements of Earnings -
           Three Months and Six Months Ended June 30, 2000 and 2001   2

         Condensed Consolidated Statements of Cash Flows -
           Six Months Ended June 30, 2000 and 2001                    3

         Notes to Condensed Consolidated Financial Statements         4

         Report of Independent Accountants                            8


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS                                  9

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  19

Part II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                           19

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS         19

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                            20

SIGNATURES                                                           21

Exhibit (15)- Letter re Unaudited Interim Financial Information   Tab 1







                                  (i)

<Page>
<Table>
<Caption>
                                7-ELEVEN, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                          (DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)



                                                              DECEMBER 31,        JUNE 30,
                                                                  2000              2001
                                                              -------------    -------------
                                                                                (UNAUDITED)
<S>                                                           <C>              <C>
ASSETS
Current assets:
   Cash and cash equivalents                                  $    133,178     $     87,878
   Accounts receivable                                             187,510          215,774
   Inventories                                                     106,869          108,891
   Other current assets                                            112,795          131,414
                                                              -------------    -------------
       Total current assets                                        540,352          543,957
Property and equipment                                           1,926,795        1,956,794
Other assets                                                       275,141          262,168
                                                              -------------    -------------
       Total assets                                           $  2,742,288     $  2,762,919
                                                              =============    =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Trade accounts payable                                     $    231,384     $    247,761
   Accrued expenses and other liabilities                          445,769          403,319
   Commercial paper                                                    -             50,936
   Long-term debt due within one year                               76,156           72,830
                                                              -------------    -------------
       Total current liabilities                                   753,309          774,846
Deferred credits and other liabilities                             265,551          271,419
Long-term debt                                                   1,261,322        1,233,586
Convertible quarterly income debt securities                       380,000          380,000
Commitments and contingencies
Shareholders' equity:
   Preferred stock, $.01 par value                                     -                -
   Common stock, $.0001 par value                                       10               10
   Additional capital                                            1,166,225        1,166,530
   Accumulated deficit                                          (1,086,604)      (1,061,313)
   Accumulated other comprehensive earnings (loss)                   2,475           (2,159)
                                                              -------------    -------------
       Total shareholders' equity                                   82,106          103,068
                                                              -------------    -------------
       Total liabilities and shareholders' equity             $  2,742,288     $  2,762,919
                                                              =============    =============
</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                  SIX MONTHS
                                                                ENDED JUNE 30                 ENDED JUNE 30
                                                        ----------------------------   ---------------------------
                                                             2000           2001           2000          2001
                                                        -------------  -------------   ------------  -------------
<S>                                                     <C>            <C>             <C>           <C>
REVENUES:
  Merchandise sales (including $153,710, $159,864,
     $297,128 and $306,406 in excise taxes)             $  1,721,920   $  1,822,498    $  3,231,209   $  3,381,165
  Gasoline sales (including $171,695, $183,449,
     $328,786 and $357,553 in excise taxes)                  707,436        781,010       1,310,718      1,450,164
                                                        -------------  -------------   ------------   ------------
       Net sales                                           2,429,356      2,603,508       4,541,927      4,831,329
  Other income                                                27,272         29,532          52,045         56,876
                                                        -------------  -------------   ------------   ------------
       Total revenues                                      2,456,628      2,633,040       4,593,972      4,888,205

COSTS AND EXPENSES:
  Merchandise cost of goods sold                           1,113,447      1,196,520       2,107,945      2,230,089
  Gasoline cost of goods sold                                640,197        710,736       1,191,831      1,328,017
                                                        -------------  -------------   ------------   ------------
       Total cost of goods sold                            1,753,644      1,907,256       3,299,776      3,558,106
  Franchisee gross profit expense                            175,068        183,558         321,820        337,960
  Operating, selling, general and administrative
     expenses                                                446,760        472,639         860,451        901,572
  Interest expense, net                                       18,537         15,815          45,429         32,964
                                                        -------------  -------------   ------------   ------------
       Total costs and expenses                            2,394,009      2,579,268       4,527,476      4,830,602
                                                        -------------  -------------   ------------   ------------

EARNINGS BEFORE INCOME TAX EXPENSE AND
  CUMULATIVE EFFECT OF ACCOUNTING CHANGE                      62,619         53,772          66,496         57,603

INCOME TAX EXPENSE                                            24,235         20,971          13,276         22,465
                                                        -------------  -------------   ------------   ------------
EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE        38,384         32,801          53,220         35,138

CUMULATIVE EFFECT OF ACCOUNTING CHANGE (net of
  tax benefit of $6,295)                                          -              -               -          (9,847)
                                                        -------------  -------------   ------------   ------------
NET EARNINGS                                            $     38,384   $     32,801    $     53,220   $     25,291
                                                        =============  =============   ============   ============
NET EARNINGS PER COMMON SHARE:
  BASIC
    Earnings before cumulative effect of
      accounting change                                 $        .37   $        .31    $        .56   $       .34
    Cumulative effect of accounting change                         -              -               -          (.09)
                                                        -------------  -------------   ------------   ------------
    Net earnings                                        $        .37   $        .31    $        .56   $       .25
                                                        =============  =============   ============   ============
  DILUTED
    Earnings before cumulative effect of
      accounting change                                 $        .32   $        .28    $        .50   $       .32
    Cumulative effect of accounting change                         -              -               -          (.08)
                                                        -------------  -------------   ------------   ------------
    Net earnings                                        $        .32   $        .28    $        .50   $       .24
                                                        =============  =============   ============   ============




                                   See notes to condensed consolidated financial statements.

</Table>

                                                               2



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

                                                    (UNAUDITED)
                                                                                       SIX MONTHS ENDED
                                                                                           JUNE 30
                                                                                ------------------------------
                                                                                     2000            2001
                                                                                -------------    -------------
<S>                                                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net earnings                                                                $     53,220     $     25,291
    Adjustments to reconcile net earnings to net cash provided
        by operating activities:
        Cumulative effect of accounting change                                           -              9,847
        Depreciation and amortization of property and equipment                      105,757          119,973
        Other amortization                                                            10,020           10,033
        Deferred income taxes                                                          3,417           11,987
        Noncash interest expense                                                         833              776
        Foreign currency net conversion loss (gain)                                      750          (10,563)
        Other noncash income                                                          (1,880)            (786)
        Net gain on property and equipment                                            (1,532)            (355)
        Increase in accounts receivable                                              (14,122)         (25,163)
        Decrease (increase) in inventories                                            18,019           (2,022)
        Increase in other assets                                                      (8,803)         (29,081)
        Decrease in trade accounts payable and other liabilities                      (9,853)         (23,177)
                                                                                -------------    -------------
                  Net cash provided by operating activities                          155,826           86,760
                                                                                -------------    -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Payments for purchase of property and equipment                                 (145,159)        (150,577)
    Proceeds from sale of property and equipment                                      76,137            6,885
    Proceeds from sale of domestic securities                                          2,512            4,535
    Other                                                                             (1,482)            (209)
                                                                                -------------    -------------
                  Net cash used in investing activities                              (67,992)        (139,366)
                                                                                -------------    -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from commercial paper and revolving credit facilities                 2,054,443        2,408,759
    Payments under commercial paper and revolving credit facilities               (2,510,494)      (2,352,772)
    Principal payments under long-term debt agreements                              (158,873)         (49,482)
    Increase in outstanding checks in excess of cash in bank                          11,230            1,167
    Net proceeds from issuance of common stock                                       539,778              223
    Other                                                                                -               (589)
                                                                                -------------    -------------
                  Net cash (used in) provided by financing activities                (63,916)           7,306
                                                                                -------------    -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  23,918          (45,300)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                        76,859          133,178
                                                                                -------------    -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $    100,777     $     87,878
                                                                                =============    =============

RELATED DISCLOSURES FOR CASH FLOW REPORTING:
    Interest paid, excluding SFAS No.15 Interest                                $    (55,694)    $    (39,055)
                                                                                =============    =============
    Net income taxes (paid) refunded                                            $    (10,430)    $      1,050
                                                                                =============    =============
    Assets obtained by entering into capital leases                             $     20,364     $      9,615
                                                                                =============    =============


                                  See notes to condensed consolidated financial statements.


                                                                3
</Table>


          7-ELEVEN, INC. AND SUBSIDIARIES

   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
            Six Months Ended June 30, 2001

                    (UNAUDITED)

1.   BASIS OF PRESENTATION
     The condensed consolidated balance sheet as of June 30,
2001, and the condensed consolidated statements of earnings
for the three-month and six-month periods ended June 30, 2000
and 2001, and the condensed consolidated statements of cash
flows for the six-month periods ended June 30, 2000 and 2001,
have been prepared by 7-Eleven, Inc. (the "Company") without
audit.  In the opinion of management, all adjustments
necessary to present fairly the financial position at June
30, 2001, and the results of operations and cash flows for
all periods presented have been made.  Certain prior-period
amounts have been reclassified to conform to current-period
presentation.  The results of operations for the interim
periods are not necessarily indicative of the operating
results for the full year.

     The reported results include approximately 5,800
convenience stores that are operated or franchised in the
United States and Canada by the Company along with royalty
income from worldwide 7-Eleven area licensees.  Sales and
cost of goods sold of stores operated by franchisees are
consolidated with the results of Company-operated stores in
the condensed consolidated statements of earnings.  Gross
profit from franchise stores is split between the Company and
its franchisees pursuant to the terms of franchise
agreements.

     The condensed consolidated balance sheet as of
December 31, 2000, 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, 2000, include accounting policies and additional
information pertinent to an understanding of both the
December 31, 2000, balance sheet and the interim financial
statements.  The information has not changed except as a
result of normal transactions in the six months ended June
30, 2001, and as discussed in the following notes.


2.   ADOPTION OF NEW ACCOUNTING STANDARD

The Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," as of
January 1, 2001.  The new standard changes the accounting for
the Company's interest rate swap and nullifies the hedge
accounting treatment for its yen-denominated debt and
royalty.

     The Company uses its royalty receipts from Seven-Eleven
Japan Co., Ltd. ("SEJ") to service the monthly principal and
interest payments on its yen loans.  This arrangement
provides an "economic" hedge for the Company against
fluctuations in the Japanese yen to U.S. dollar exchange
rate.  Although SFAS No. 133 nullified the hedge accounting
treatment the Company had been using for the SEJ royalty and
yen loans, the Company's "economic" hedge against changes in
the Japanese yen to U.S. dollar exchange rate remains in
place.  Upon adoption of SFAS No. 133, the Company converted
the yen loans, related interest payable and the SEJ royalty






                           4


<Page>

receivable to reflect the Japanese yen to U.S. dollar
exchange rate quoted for January 1, 2001 (114.35 yen to one
U.S. dollar).  As a result, the Company's transitional
adjustment increased the yen loans, related interest payable
and SEJ royalty receivable by $16.1 million, with an
offsetting charge of $9.8 million (net of $6.3 million of
taxes) to Cumulative Effect of Accounting Change.

The cumulative effect charge differs from the Company's
disclosure in its December 31, 2000 Form 10-K.  Subsequent to
the filing of the Company's December 31, 2000 Form 10-K, the
Financial Accounting Standards Board (the "Board") issued a
conclusion, which was cleared by the Board during the second
quarter, that the transitional adjustment for this type of
transaction should be recorded in earnings as a cumulative
effect of accounting change.

     For the three and six month periods ended June 30, 2001,
the Company recorded ($700,000) and $10.6 million,
respectively, of net conversion (loss)/gain in Operating,
Selling, General and Administrative Expense primarily as a
result of adjusting the balance of the yen loans to reflect
the Japanese yen to U.S. dollar exchange rate.


3.   COMPREHENSIVE EARNINGS

     The components of comprehensive earnings of the Company
for the periods presented are as follows (in thousands):

<Table>
<Caption>

                                                   Three Months                Six Months
                                                   Ended June 30             Ended June 30
                                                -------------------        -------------------
                                                  2000      2001             2000      2001
                                                --------- ---------        --------- ---------
<S>                                             <C>       <C>              <C>       <C>
  Net earnings                                     $ 38,384  $ 32,801         $ 53,220  $ 25,291
Other comprehensive earnings:
   Unrealized gains (losses) on equity
     securities (net of $644, ($452), $2,014
     and ($771) deferred taxes)                   (1,008)      706           (3,150)    1,205
   Reclassification adjustments for gains
     included in net earnings (net of $396,
     $991, $1,181 and $1,774 deferred taxes)        (620)   (1,550)          (1,848)   (2,774)
   Unrealized gain (loss) related to interest
     rate swap (net of ($394) and $2,590
     deferred taxes)                                  -        407               -     (2,463)
   Foreign currency translation adjustments       (1,861)    3,717           (2,099)     (602)
                                                --------- ---------        --------- ---------
       Other comprehensive earnings (loss)        (3,489)    3,280           (7,097)   (4,634)
                                                --------- ---------        --------- ---------
Total comprehensive earnings                    $ 34,895  $ 36,081         $ 46,123  $ 20,657
                                                ========= =========        ========= =========
</Table>











                                   5

<Page>


4.   EARNINGS PER SHARE

     Computations for basic and diluted earnings per share
are presented below (in thousands, except per-share data):


<Table>
<Caption>
                                                             Three Months           Six Months
                                                             Ended June 30         Ended June 30
                                                         ---------------------  --------------------
                                                           2000        2001       2000       2001
                                                         ----------  ---------  ---------  ---------
<S>                                                      <C>         <C>        <C>        <C>
BASIC:
   Earnings before cumulative effect of accounting
     change                                              $  38,384   $ 32,801   $ 53,220   $ 35,138
   Cumulative effect of accounting change                      -          -          -       (9,847)
                                                         ----------  ---------  ---------  ---------
   Net earnings                                          $  38,384   $ 32,801   $ 53,220   $ 25,291
                                                         ==========  =========  =========  =========

   Weighted-average common shares outstanding              104,762    104,800     95,260    104,794
                                                         ==========  =========  =========  =========

  Earnings per common share before cumulative
     effect of accounting change                         $     .37   $    .31   $    .56   $    .34
  Loss per common share on cumulative effect
     of accounting change                                       -          -          -        (.09)
                                                         ----------  ---------  ---------  ---------
  Net earnings per common share                          $     .37   $    .31   $    .56   $    .25
                                                         ==========  =========  =========  =========

DILUTED:
   Earnings before cumulative effect of accounting
     change                                              $  38,384   $ 32,801   $ 53,220   $ 35,138
   Add interest on convertible quarterly
     income debt securities, net of tax                      2,630      2,651      5,259      5,302
                                                         ----------  ---------  ---------  ---------
   Earnings before cumulative effect of accounting
     change plus assumed conversions                        41,014     35,452     58,479     40,440
   Cumulative effect of accounting change                      -         -           -       (9,847)
                                                         ----------  ---------  ---------  ---------
   Net earnings plus assumed conversions                 $  41,014   $ 35,452   $ 58,479   $ 30,593
                                                         ==========  =========  =========  =========

   Weighted-average common shares outstanding (Basic)      104,762    104,800     95,260    104,794
   Add effects of assumed conversions:
      Stock options                                            828        173        705        128
      Convertible quarterly income debt securities          20,924     20,924     20,924     20,924
                                                         ----------  ---------  ---------  ---------
   Weighted-average common shares outstanding
      plus shares from assumed conversions (Diluted)       126,514    125,897    116,889    125,846
                                                         ==========  =========  =========  =========

   Earnings per common share before cumulative effect
     of accounting change                                $     .32   $    .28   $    .50   $    .32
   Loss per common share on cumulative effect
     of accounting change                                       -          -          -        (.08)
                                                         ----------  ---------  ---------  ---------
   Net earnings per common share                         $     .32   $    .28   $    .50   $    .24
                                                         ==========  ========== =========  =========



</Table>








                                            6

<Page>

5.   RECENTLY ISSUED ACCOUNTING STANDARDS

     SFAS No. 141, "Business Combinations," was issued on
July 20, 2001.  SFAS No. 141 addresses financial accounting
and reporting for business combinations.  The provisions of
SFAS No. 141 apply to all business combinations initiated
after June 30, 2001, and to all business combinations
accounted for using the purchase method for which the date
of acquisition is July 1, 2001, or later.  The Company
adopted the provisions of this statement as of July 1, 2001,
and there was no financial accounting impact associated with
its adoption.

     SFAS No. 142, "Goodwill and Other Intangible Assets,"
was issued on July 20, 2001.  SFAS No. 142 addresses
financial accounting and reporting for acquired goodwill and
other intangible assets.  Under the provisions of SFAS No.
142, there will be no amortization of goodwill or intangible
assets with indefinite lives.  Impairment of these assets
will need to be assessed annually and in certain
circumstances.  The provisions of SFAS No. 142 are required
to be applied starting with fiscal years beginning after
December 15, 2001, and must be applied at the beginning of a
fiscal year and to all goodwill and other intangible assets
recognized in the financial statements at that date. The
Company is currently reviewing SFAS No. 142 to assess its
impact on the financial statements.  The Company will adopt
the provisions of this statement on January 1, 2002.












                               7


<Page>

Report of Independent Accountants



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 June
30, 2001, and the related condensed consolidated statements
of earnings for the three-month and six-month periods ended
June 30, 2000 and 2001, and the condensed consolidated
statements of cash flows for the six-month periods ended
June 30, 2000 and 2001.  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
condensed consolidated interim financial statements for them
to be in conformity with accounting principles generally
accepted in the United States of America.

We previously audited, in accordance with auditing standards
generally accepted in the United States of America, the
consolidated balance sheet as of December 31, 2000, 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 1, 2001,
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, 2000, is fairly stated in all
material respects in relation to the consolidated balance
sheet from which it has been derived.



PRICEWATERHOUSECOOPERS LLP

Dallas, Texas
July 26, 2001





                                    8




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

     THIS REPORT INCLUDES CERTAIN STATEMENTS THAT ARE "FORWARD-
LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.  ANY STATEMENT IN
THIS REPORT THAT IS NOT A STATEMENT OF HISTORICAL FACT MAY BE
DEEMED TO BE A FORWARD-LOOKING STATEMENT.  WE OFTEN USE THESE
TYPES OF STATEMENTS WHEN DISCUSSING OUR PLANS AND STRATEGIES,
OUR ANTICIPATION OF REVENUES FROM DESIGNATED MARKETS AND
STATEMENTS REGARDING THE DEVELOPMENT OF OUR BUSINESSES, THE
MARKETS FOR OUR SERVICES AND PRODUCTS, OUR ANTICIPATED CAPITAL
EXPENDITURES, OPERATIONS, SUPPORT SYSTEMS, CHANGES IN
REGULATORY REQUIREMENTS AND OTHER STATEMENTS CONTAINED IN THIS
REPORT REGARDING MATTERS THAT ARE NOT HISTORICAL FACTS.  WHEN
USED IN THIS REPORT, THE WORDS "EXPECT," "ANTICIPATE,"
"INTEND," "PLAN," "BELIEVE," "SEEK," "ESTIMATE," AND OTHER
SIMILAR EXPRESSIONS ARE GENERALLY INTENDED TO IDENTIFY FORWARD-
LOOKING STATEMENTS.  BECAUSE THESE FORWARD-LOOKING STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES, ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-
LOOKING STATEMENTS.  THERE CAN BE NO ASSURANCE THAT: (I) WE
HAVE CORRECTLY MEASURED OR IDENTIFIED ALL OF THE FACTORS
AFFECTING THESE MARKETS OR THE EXTENT OF THEIR LIKELY IMPACT;
(II) THE PUBLICLY AVAILABLE INFORMATION WITH RESPECT TO THESE
FACTORS ON WHICH OUR ANALYSIS IS BASED IS COMPLETE OR ACCURATE;
(III) OUR ANALYSIS IS CORRECT OR (IV) OUR STRATEGY, WHICH IS
BASED IN PART ON THIS ANALYSIS, WILL BE SUCCESSFUL.  WE DO NOT
ASSUME ANY OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING
STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

GENERAL

     7-Eleven is the world's largest operator, franchisor and
licensor of convenience stores and the largest convenience
retailer in North America.  Over the last several years we
have refined our business strategy to take advantage of our
scale, retailer initiative and infrastructure.

     Our revenue principally consists of merchandise and
gasoline sales and to a lesser extent royalty income from
licensees.  Our primary expenses consist of cost of goods
sold, operating expenses, interest expense and taxes.  The
following discussion and analysis provides information that
management believes to be relevant to understanding 7-
Eleven's financial condition and results of operations.

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

COMPARISON OF THREE MONTHS ENDED JUNE 30, 2001,
TO THREE MONTHS ENDED JUNE 30, 2000

     NET SALES

<Table>
<Caption>

                                          Three Months Ended June 30
                                         --------------------------
                                              2000          2001
                                             ------        ------
<S>                                       <C>             <C>
Net Sales: (in millions)
   Merchandise sales                         $1,721.9     $1,822.5
   Gasoline sales                               707.4        781.0
                                             --------      --------
Total net sales                              $2,429.3      $2,603.5
Merchandise sales growth-U.S. same store         7.6%          4.8%
Gasoline gallon sales change-per store           3.9%          0.9%
Average retail price of gasoline per gallon  $   1.55      $   1.65

</Table>

                           9

<Page>

     Merchandise sales for the three months ended June 30,
2001 were $1,822.5 million, an increase of $100.6 million, or
5.8%, from $1,721.9 million for the three months ended June
30, 2000.  We attribute this increase primarily to U.S. same-
store merchandise sales growth of 4.8% and our operating an
average of 60 additional stores.  Wholesale cigarette cost
increases, which were reflected in higher retail prices,
accounted for approximately one percentage point of the
increase in U.S. same-store merchandise sales.  Categories
having the largest impact on merchandise sales growth were
cigarettes, non-carbonated beverages, beer/wine, prepaid
phone cards, fresh foods and Slurpee(R).  Category growth was
primarily fueled by new items and improved product
merchandising.  These increases were partially offset by
decreased sales of frozen non-carbonated beverages (Cafe
Cooler(R) and Frut Cooler(R)).

     Gasoline sales for the three months ended June 30, 2001
were $781.0 million, an increase of $73.6 million, or 10.4%,
from $707.4 million for the three months ended June 30, 2000.
We attribute this increase primarily to a combination of a 6.1%
increase in the average retail price of gasoline, operating an
average of 74 additional stores that sell gasoline and a 0.9%
increase in gallons sold per store.  The average retail price
of gasoline was $1.65 per gallon during the quarter, a $0.10
increase over the comparable quarter.  The increase in average
gallons sold per store was primarily the result of adding new
stores, which generally sell higher volumes of gasoline.  We
sold 474.8 million gallons in the three months ended June 30,
2001, an increase of 18.6 million gallons, or 4.1%, from
456.1 million gallons for the same period in 2000.

     GROSS PROFIT

<Table>
<Caption>

                                              Three Months Ended June 30
                                             --------------------------
                                                  2000          2001
                                                 ------        ------
<S>                                           <C>             <C>
Gross Profit (in millions)
   Merchandise gross profit                     $ 608.5       $ 626.0
   Gasoline gross profit                           67.2          70.3
                                                --------      --------
Total gross profit                              $ 675.7       $ 696.3
Merchandise gross profit margin                   35.34%        34.35%
Merchandise gross profit growth-per store           8.8%          1.8%
Gasoline gross profit margin-cents per gallon     14.74         14.80
Gasoline gross profit change-per store              7.1%          1.3%

</Table>

     Merchandise gross profit for the three months ended June
30, 2001 was $626.0 million, an increase of $17.5 million, or
2.9%, from $608.5 million for the three months ended June 30,
2000. This equates to merchandise gross profit growth of 1.8%
per store.  We attribute this increase primarily to higher
U.S. same-store merchandise sales and operating additional
stores.

     Merchandise gross profit margin decreased from 35.34% to
34.35% for the three months ended June 30, 2001, compared to
the same period in 2000.  We attribute most of the decline in
overall margin to changes in product mix, wholesale cost
increases and aggressive retail pricing tactics by
competitors.  Changes in product mix, particularly lower
margin



                         10


<Page>

products within the prepaid phone card and non-carbonated
beverage categories, has effectively reduced margin, while
adding gross profit dollars.  Our strategy of maintaining
competitive everyday fair prices in the face of increasing
wholesale costs has resulted in lower margins for such items
as cigarettes, milk and hot dogs.  Aggressive pricing by
competitors for such items as bread, milk and soft drinks
also has decreased our margin.

     While we expect pressure on merchandise gross profit
margin to continue for the remainder of the year, we are
taking steps to reduce the impact, including aggressive
negotiation to reduce product and distribution costs.  We are
also focusing on increasing sales of higher margin products
and looking at other pricing opportunities.  As a result, we
expect year-over-year margin comparisons to be somewhat more
favorable for the remainder of 2001 than they were during the
three months ended June 30, 2001.

     Gasoline gross profit for the three months ended June
30, 2001 was $70.3 million, an increase of $3.1 million, or
4.5%, from $67.2 million for the three months ended June 30,
2000.  Gasoline gross profit improved during the quarter due
to a combination of operating an average of 74 more stores
that sell gasoline and increased gallons sold per store.
Gasoline margins were above average for both years, with the
2001 margin at 14.80 cents per gallon, compared to 14.74
cents per gallon in 2000.  These margin results occurred when
wholesale costs declined more quickly than retail prices
during a portion of the quarter in each year.  In total,
gasoline gross profit per store increased 1.3% for the three
months ended June 30, 2001 as compared to the same period in
2000.  Based on current levels of industry inventories,
refinery production and demand, the outlook for gasoline
market conditions appears to be more stable for the short
term.

     FRANCHISEE GROSS PROFIT EXPENSE

     We report all sales and gross profit from domestic
franchised stores in our consolidated results and record as
an expense a percentage of the gross profits generated by
those same franchised stores.  Franchisee gross profit expense
for the three months ended June 30, 2001 was $183.6 million, an
increase of $8.5 million, or 4.8%, from $175.1 million for the
three months ended June 30, 2000.  We attribute the increase
primarily to an increase in the number of stores operated by
franchisees and higher per store gross profits at franchised
stores.

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

     OSG&A for the three months ended June 30, 2001 was $472.6
million, an increase of $25.8 million, or 5.8%, from $446.8
million for the three months ended June 30, 2000.  The increase
in OSG&A costs was primarily due to costs associated with
operating 123 new stores opened since July 1, 2000, combined
with increased labor costs and higher credit card processing
costs.  The ratio of OSG&A to net sales decreased to 18.2% for
the three months ended June 30, 2001 from 18.4% for the three
months ended June 30, 2000.   We expect to continue our
investment in new stores, technology and store image.  To
mitigate this impact, we have accelerated our expense reduction
efforts, focusing on procurement and distribution expenses.

     INTEREST EXPENSE, NET

     Net interest expense for the three months ended June 30,
2001 was $15.8 million, a decrease of $2.7 million, or 14.7%,
from $18.5 million for the three months ended June 30, 2000.
The decline in interest expense was due to both lower levels of
borrowing and lower interest rates. We expect net interest
expense for the remainder of the year to decrease slightly,
compared to 2000, based on anticipated levels of debt and
interest rate projections.


                                 11

<Page>

     In accordance with Statement of Financial Accounting
Standards No. 15, we do not recognize interest expense on our
debentures in our statement of earnings.  We recorded these
debentures at an amount equal to the future undiscounted cash
payments, both principal and interest.  Accordingly, we
charge the cash interest payments against the recorded amount
of the debentures and not as interest expense.

     INCOME TAX EXPENSE

     Income tax expense for the three months ended June 30,
2001 was $21.0 million, a decrease of $3.2 million, or 13.5%,
from $24.2 million for the three months ended June 30, 2000.
Our effective tax rate was 39.0% for the three months ended
June 30, 2001 compared to 38.7% for the same period in 2000.

     NET EARNINGS

     Net earnings for the three months ended June 30, 2001
were $32.8 million ($0.28 per diluted share), a decrease of
$5.6 million, or 14.5%, from net earnings of $38.4 million
($0.32 per diluted share) for the three months ended June 30,
2000.  We attribute this decline to our continued strategic
investments in new store growth and technology.  These
investments resulted in increased depreciation and
amortization expense that more than offset the benefits of
higher merchandise sales and gross profits.


COMPARISON OF SIX MONTHS ENDED JUNE 30, 2001,
TO SIX MONTHS ENDED JUNE 30, 2000

     NET SALES

<Table>
<Caption>

                                           Six Months Ended June 30
                                         --------------------------
                                              2000          2001
                                             ------        ------
<S>                                         <C>           <C>
Net Sales: (in millions)
   Merchandise sales                         $3,231.2      $3,381.2
   Gasoline sales                             1,310.7       1,450.2
                                             --------      --------
Total net sales                              $4,541.9      $4,831.4
Merchandise sales growth-U.S. same store          8.3%          3.6%
Gasoline gallon sales change-per store            1.7%          2.3%
Average retail price of gasoline per gallon  $   1.50      $   1.57

</Table>

     Merchandise sales for the six months ended June 30, 2001
were $3,381.2 million, an increase of $150.0 million, or
4.6%, from $3,231.2 million for the six months ended June 30,
2000.  We attribute this increase primarily to U.S. same-
store merchandise sales growth of 3.6% and our operating an
average of 62 additional stores.  Wholesale cigarette cost
increases, which were reflected in higher retail prices,
accounted for approximately one percentage point of the
increase in U.S. same-store merchandise sales.  Categories
having the largest impact on merchandise sales growth were
cigarettes/tobacco, non-carbonated beverages, prepaid phone
cards and beer/wine.  Category growth was primarily fueled by
new items and improved merchandising of product through
assortment.  These category increases were partially offset
by decreases in sales of frozen non-carbonated beverages
(Cafe and Frut Coolers(R)) and novelty cards.



                          12


<Page>

     Gasoline sales for the six months ended June 30, 2001 were
$1,450.2 million, an increase of $139.5 million, or 10.6%, from
$1,310.7 million for the six months ended June 30, 2000.  We
attribute this increase primarily to a higher average retail
price, operating an average of 79 additional stores that sell
gasoline and per-store gallon growth of 2.3% compared to the
prior-year period.  The average retail price of gasoline was
$1.57 per gallon during the first six months of 2001, a $0.07
increase from the comparable period in 2000.  The increase in
average gallons sold per store was primarily the result of
adding new stores, which generally sell higher volumes of
gasoline.  We sold 925.6 million gallons in the six months
ended June 30, 2001, an increase of 50.4 million gallons, or
5.8%, from 875.2 million gallons for the same period in 2000.

     GROSS PROFIT

<Table>
<Caption>

                                               Six Months Ended June 30
                                             --------------------------
                                                  2000          2001
                                                 ------        ------
<S>                                           <C>             <C>
Gross Profit (in millions)
   Merchandise gross profit                   $1,123.3        $1,151.1
   Gasoline gross profit                         118.9           122.1
                                              ---------       ---------
Total gross profit                            $1,242.2        $1,273.2
Merchandise gross profit margin                  34.76%          34.04%
Merchandise gross profit growth-per store         10.5%            1.4%
Gasoline gross profit margin-cents per gallon    13.58           13.20
Gasoline gross profit change-per store            (0.2)%          (0.7)%

</Table>

     Merchandise gross profit for the six months ended June
30, 2001 was $1,151.1 million, an increase of $27.8 million,
or 2.5%, from $1,123.3 million for the six months ended June
30, 2000.  This equates to merchandise gross profit growth of
1.4% per store.  We attribute this increase primarily to
higher U.S. same-store merchandise sales and operating more
stores.

     Merchandise gross profit margin decreased to 34.04% for
the six months ended June 30, 2001 from 34.76% for the same
period in 2000.  We attribute most of the decline in overall
margin to change in product mix, wholesale cost increases and
aggressive retail pricing tactics by competitors.

     Gasoline gross profit for the six months ended June 30,
2001 was $122.1 million, an increase of $3.2 million, or
2.7%, from $118.9 million for the six months ended June 30,
2000.  Gasoline gross profit improved due to a combination of
operating an average of 79 more stores that sell gasoline and
increased gallons sold per store.  Gasoline margin was 13.20
cents per gallon, compared to 13.58 cents last year.
Gasoline market conditions have fluctuated significantly
throughout the first six months of 2001 due to a prolonged
period of high and increasing wholesale costs, which outpaced
retail price increases through May.  These conditions lowered
demand and prompted customers to switch to cheaper grades of
gasoline.  During June, wholesale costs have declined faster
than retail prices, creating stronger margins.  As a result
of the difficult conditions during the first six months of
2001, gasoline gross profit per store decreased 0.7% for the
six months ended June 30, 2001 as compared to the same period
in 2000.




                             13


<Page>


     FRANCHISEE GROSS PROFIT EXPENSE

     Franchisee gross profit expense for the six months ended
June 30, 2001 was $338.0 million, an increase of $16.2 million,
or 5.0%, from $321.8 million for the six months ended June 30,
2000.  We attribute the increase primarily to an increase in the
number of stores operated by franchisees and higher per store
gross profits at franchised stores.

     OPERATING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

     OSG&A for the six months ended June 30, 2001 was $901.6
million, an increase of $41.1 million, or 4.8%, from $860.5
million for the six months ended June 30, 2000.  The increase in
OSG&A costs was primarily due to costs associated with operating
123 new stores opened since July 1, 2000, combined with
increased labor costs and higher utility costs, mostly due to
increased rates in California.  These incremental costs were
partially offset by a net increase in conversion gains of $11.3
million primarily related to our yen-denominated loan (see OTHER
ISSUES - Adoption of SFAS No. 133).  The ratio of OSG&A to net
sales decreased to 18.7% for the six months ended June 30, 2001
from 18.9% for the six months ended June 30, 2000.

     INTEREST EXPENSE, NET

     Net interest expense for the six months ended June 30,
2001 was $33.0 million, a decrease of $12.4 million, or 27.4%,
from $45.4 million for the six months ended June 30, 2000. This
decrease was primarily due to the repayment of borrowings with
proceeds from our sale of common stock to IYG Holding Company
on March 16, 2000, and to a lesser extent lower interest rates.

     INCOME TAX EXPENSE

     Income tax expense for the six months ended June 30, 2001
was $22.5 million, an increase of $9.2 million from the prior-
year expense of $13.3 million. We attribute this increase
primarily to a non-recurring benefit of $12.5 million recorded
in the six months ended June 30, 2000, which resulted from a
settlement with the Internal Revenue Service related to audits
of our federal income taxes for the tax years 1992 through
1995.  Excluding the income tax credit, our effective tax rate
was 39.0% for the six months ended June 30, 2001 compared to
38.8% for the same period in 2000.

     CUMULATIVE EFFECT OF ACCOUNTING CHANGE

     On January 1, 2001 we adopted "Accounting for Derivative
Instruments and Hedging Activities," ("SFAS No. 133"), which
resulted in a one-time charge of $9.8 million, net of taxes,
related to a cumulative effect of accounting change (see OTHER
ISSUES - Adoption of SFAS No. 133).

     NET EARNINGS

     Net earnings for the six months ended June 30, 2001 were
$25.3 million ($0.24 per diluted share), a decrease of
$27.9 million, from net earnings of $53.2 million ($0.50 per
diluted share) for the six months ended June 30, 2000.  Net
earnings before the cumulative effect of accounting change
were $35.1 million ($0.32 per diluted share) for the six
months ended June 30, 2001, while net earnings for the six
months ended June 30, 2000 were $40.7 million ($0.39 per
diluted share), excluding the non-recurring tax benefit.


                      14


<Page>


LIQUIDITY AND CAPITAL RESOURCES

     We obtain the majority of our working capital from three
sources:
       *  cash flows generated from our operating activities;
       *  a $650 million commercial paper facility guaranteed
by Ito-Yokado Co., Ltd.; and
       *  seasonal borrowings of up to $200 million under our
revolving credit facility.

     We believe that operating activities, coupled with
available working capital facilities, will provide sufficient
liquidity to fund operating and capital expenditure programs,
as well as to service debt requirements.  The outstanding
balance at June 30, 2001 for commercial paper was $450.9
million, with no amounts outstanding under the revolver.  We
expect capital expenditures for 2001, excluding lease
commitments, to be in excess of $300 million, which includes
capital associated with opening or acquiring 150 to 200 new
stores.

     On January 25, 2001, we entered into a new unsecured
bank credit agreement, refinancing the old credit agreement,
which was scheduled to mature on February 27, 2002, with a
new $200 million revolving credit facility.  The new
revolving credit facility contains a sub-limit of
$150 million for letters of credit.  As of June 30, 2001,
outstanding letters of credit issued pursuant to the credit
agreement totaled $52.3 million.

     On January 25, 2001, we entered into a new lease
facility that will provide up to $100 million of off-balance-
sheet financing to be used for the construction of new
stores.  Funding under this facility is available through
January 2003, with a final maturity of the leases in July
2006.

     On March 16, 2000, IYG Holding Company purchased
22,736,842 newly issued shares of our common stock for
$540.0 million, or $23.75 per share, in a private placement
transaction.  We used the net proceeds from this transaction
to repay the outstanding balance on our bank term loan, to
repay the outstanding balance of our bank revolver and to
reduce indebtedness under our commercial paper facility,
which resulted in an upgrade of our rating.

     CASH FROM OPERATING ACTIVITIES

     Net cash provided by operating activities was
$86.8 million for the six months ended June 30, 2001,
compared to $155.8 million for the six months ended June 30,
2000, a decrease of $69.0 million.  We attribute this
decrease to changes in balance sheet items, the most
significant of which were the timing of money order funding
pursuant to a new money order agreement and payment of a
legal settlement (see OTHER ISSUES - Litigation).


                           15


<Page>



     CASH FROM INVESTING ACTIVITIES

     Net cash used in investing activities was $139.4 million
for the six months ended June 30, 2001, compared to net used
of $68.0 million for the six months ended June 30, 2000.
Payments for capital expenditures were $150.6 million for the
six months ended June 30, 2001, compared to $145.2 million
for the same period in 2000.  In addition, we received
$71.9 million of net proceeds from a sale-leaseback
transaction during the six months ended June 30, 2000.

     Capital expenditures for each of the periods were used for
new store development; continued enhancements to our retail
information system; new equipment to support merchandising
initiatives; maintaining, remodeling and upgrading store and
gasoline facilities' image and equipment; and compliance with
environmental regulations.

     CASH FROM FINANCING ACTIVITIES

     Net cash provided by financing activities was $7.3
million for the six months ended June 30, 2001, compared to
net cash used in financing activities of $63.9 million for
the six months ended June 30, 2000.

     Net borrowings under commercial paper and revolving credit
facilities totaled $56.0 million for the six months ended June
30, 2001, compared to net repayments of $456.1 million for the
same period in 2000.  Net long-term debt repayments for the six
months ended June 30, 2001 were $49.5 million, compared to
$158.9 million for the same period in 2000.  Cash from
financing activities for the six months ended June 30, 2000
also included $539.8 million in net proceeds from issuance of
common stock that we used to pay down debt.


OTHER ISSUES

     ENVIRONMENTAL

     In December 1988, we closed our chemical manufacturing
facility in New Jersey.  We are required to conduct
environmental remediation at the facility, including
groundwater monitoring and treatment for a projected 15-year
period, which commenced in 1998.  We have recorded
undiscounted liabilities, representing our best estimates of
the clean-up costs, of $6.1 million at June 30, 2001.  In
1991, we entered into a settlement agreement with the former
owner of the facility 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, we have recorded a
receivable of $3.5 million at June 30, 2001.

     Additionally, we accrue for the anticipated future costs
and the related probable state reimbursement amounts for
remediation activities at our existing and previously operated
gasoline sites where releases of regulated substances have been
detected.  At June 30, 2001, our estimated undiscounted
liability for these sites was $25.1 million.  This estimate is
based on our prior experience with gasoline sites and
contractors who perform environmental assessment and
remediation work as well as other factors such as the age of
the tanks and the location of tank sites.  We anticipate that
substantially all of the future remediation costs for detected
releases of regulated substances at those remediation sites of
which we are aware, as of June 30, 2001, will be incurred
within the next four to five years.


                       16


<Page>

     Under state reimbursement programs, we are eligible to
receive reimbursement for a portion of future remediation
costs, as well as a portion of remediation costs previously
paid.  Accordingly, at June 30, 2001, we had recorded a net
receivable of $49.6 million based on the estimated state
reimbursements.  In assessing the probability of state
reimbursements, we take 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 can be no assurance of the timing of the
receipt of state reimbursement funds, based on our experience
we expect to receive the majority of state reimbursement
funds, except from California, within one to three years
after our payment of eligible remediation expenses.  This
time period assumes that the state administrative procedures
for processing such reimbursements have been fully developed.
We estimate that we will receive State of California
reimbursement funds within one to ten years after our payment
of eligible remediation expenses.  As a result of the timing
for reimbursements, we have present-valued the portion of the
recorded receivable amount that relates to remediation
activities that have already been completed at a discount
rate of approximately 4.6%.  Thus, the recorded receivable
amount is also net of a discount of $12.6 million.

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

     LITIGATION

     We were a defendant in two legal actions, referred to as
the 7-Eleven Owners for Fair Franchising and the Valente cases,
filed by franchisees in 1993 and 1996, respectively.  In
connection with a nationwide settlement, these two cases were
combined on behalf of a class of all persons who franchised 7-
Eleven(R) stores from us in the United States at any time
between January 1, 1987 and July 31, 1997.  Pursuant to the
settlement, which became final on June 7, 2001, (i) we made a
lump-sum payment into a settlement fund that will be
distributed to class members who are former franchisees and
used to pay certain attorneys' fees; and (ii) we agreed to make
certain changes to the franchise agreement of class members who
are current franchisees.
The total settlement costs were recorded in prior years, and
there was no material impact on current year earnings.

ADOPTION OF SFAS NO. 133

     As of January 1, 2001 we adopted the provisions of SFAS
No. 133, which changes the accounting for our interest rate
swap and nullifies the hedge accounting treatment of our yen-
denominated debt and royalty income stream.

     Under SFAS No. 133, the $250 million interest rate swap is
being treated as a cash flow hedge of the interest rate
exposure in connection with our commercial paper program.  The
transitional adjustment as of January 1, 2001 was not material.
Fair value is used to account for this derivative going
forward.  We adjusted the carrying value of the interest rate
swap to fair value at June 30, 2001, which was a liability of
$6.9 million.




                            17


<Page>


     We use the royalty receipts collected pursuant to our
license agreement with Seven-Eleven Japan to service the
monthly principal and interest payments on our yen loans.
This arrangement provides an "economic" hedge against
fluctuations in the Japanese yen to U.S. dollar exchange
rate.  Although SFAS No. 133 nullified the hedge accounting
treatment we were applying to the SEJ royalty and yen loans,
our "economic" hedge against changes in the Japanese yen to
U.S. dollar exchange rate remains in place.  Upon adoption of
SFAS No. 133, we converted the yen loans, related interest
payable and the SEJ royalty receivable to reflect the
Japanese yen to U.S. dollar exchange rate quoted for January
1, 2001 (114.35 yen to one U.S. dollar).  As a result, the
transitional adjustment increased the yen loans, related
interest payable and SEJ royalty receivable by $16.1 million,
with an offsetting charge of $9.8 million (net of $6.3
million of taxes) to Cumulative Effect of Accounting Change.

     The cumulative effect charge differs from the disclosures
in our Form 10-K for the year ended December 31, 2000.  After
we filed  our Form 10-K,, the Financial Accounting Standards
Board decided that the transitional adjustment for this type of
transaction should be recorded in earnings as a cumulative
effect of accounting change.

     During the first six months of 2001, we recorded in
Operating, Selling, General and Administrative Expense a
$10.6 million net conversion gain, primarily as a result of
adjusting the balance of the yen loans to reflect the
Japanese yen to U.S. dollar exchange rate quoted for June 30,
2001 (124.72 yen to one U.S. dollar).  We have recorded the
SEJ royalty income and interest expense on the yen loans at
the monthly average Japanese yen to U.S. dollar exchange
rate.

     ADDITIONAL NEW ACCOUNTING STANDARDS

     SFAS No. 141, "Business Combinations," was issued on July
20, 2001.  This new standard addresses financial accounting and
reporting for business combinations.  Its provisions apply to
all business combinations initiated after June 30, 2001, and to
all business combinations accounted for using the purchase
method for which the date of acquisition is July 1, 2001, or
later.  We adopted the provisions of this statement as of July
1, 2001, and there was no financial accounting impact
associated with its adoption.

     SFAS No. 142, "Goodwill and Other Intangible Assets," was
issued on July 20, 2001.  This new standard addresses financial
accounting and reporting for acquired goodwill and other
intangible assets.  Under the provisions of SFAS No. 142, there
will be no amortization of goodwill or intangible assets with
indefinite lives.  Impairment of these assets will need to be
assessed annually and in certain circumstances.  The provisions
of SFAS No. 142 are required to be applied starting with fiscal
years beginning after December 15, 2001, and must be applied at
the beginning of a fiscal year and to all goodwill and other
intangible assets recognized in the financial statements at
that date.  We are currently reviewing SFAS No. 142 to assess
its impact on the financial statements and will adopt the
provisions of this statement on January 1, 2002.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.

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


                             18



<Page>


PART II.

OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

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

     For an update on a matter we have previously reported,
the 7-Eleven Owners for Fair Franchising case, we hereby
incorporate by reference the discussion contained on page 17_
of this report (Management's Discussion and Analysis of
Financial Condition and Results of Operation - Other Issues -
Litigation).

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     On April 25, 2001, the Company held its annual meeting
of shareholders.  Each of the twelve nominated directors was
elected without contest.  In addition, the shareholders
ratified the approval of PricewaterhouseCoopers LLP to be the
Company's independent accountants for 2001.

     (a)   The votes for and the votes withheld for each of
the nominees for director were as follows:

 NOMINEE                      FOR               WITHHELD
 Masatoshi Ito             88,929,597            174,289
 Toshifumi Suzuki          87,828,387          1,275,499
 Clark J. Matthews, II     88,928,340            175,546
 Yoshitami Arai            88,929,893            173,993
 Masaaki Asakura           87,826,124          1,277,762
 Timothy N. Ashida         88,927,403            176,483
 Jay W. Chai               88,925,763            178,123
 Gary J. Fernandes         88,930,774            173,112
 Masaaki Kamata            87,828,916          1,274,970
 James W. Keyes            87,821,857          1,282,029
 Kazuo Otsuka              87,828,854          1,275,032
 Nobutake Sato             87,828,476          1,275,410

     (b)   The votes for, against, abstaining and broker non-
votes in connection with the ratification of the appointment
of PricewaterhouseCoopers LLP to be the independent
accountants of the Company for 2001 were as follows:

89,064,358 shares were voted for; 27,466 shares were
voted against; 12,062 shares abstained from voting;
and no broker non-votes were received.


                                 19


<Page>


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

      (a)   Exhibits:

1.  Exhibit (15) - Letter re Unaudited Interim
Financial Information.  Letter of
PricewaterhouseCoopers LLP.

      (b)   8-K Reports:

During the second quarter of 2001, the Company filed no
reports on Form 8-K.







                                    20



<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.
                                         (Registrant)




Date:  August 3, 2001               /s/  James W. Keyes
                                    ---------------------------

                                   (Officer)
                                   James W. Keyes
                                   President and Chief
                                      Executive Officer

Date:  August 3, 2001               /s/  Donald E. Thomas
                                    ---------------------------

                                   (Principal Accounting Officer)
                                   Donald E. Thomas
                                   Vice President, Chief Accounting
                                      Officer and Controller






                            21