UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549-1004

                                    FORM 10-Q

(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, 2002

                                       OR

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

     For the transition period from ________________ to _________________

                      Commission file number: 333-53603-03

                        GRAHAM PACKAGING HOLDINGS COMPANY
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Pennsylvania                           23-2553000
-------------------------------           ------------------------------------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)

                           2401 Pleasant Valley Road
                               York, Pennsylvania
                    ----------------------------------------
                    (Address of principal executive offices)

                                      17402
                                   ----------
                                   (zip code)

                                 (717) 849-8500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

     Indicate  by  checkmark  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),  Yes [X] No[ ];
and (2) has been subject to such filing requirements for the past 90 days,
Yes [ ] No [X].


                                       1
<PAGE>



                        GRAHAM PACKAGING HOLDINGS COMPANY
                                      INDEX


                          PART I. FINANCIAL INFORMATION


                                                                    Page Number
Item  1: Condensed Consolidated Financial Statements:

         CONDENSED CONSOLIDATED BALANCE SHEETS -
            At June 30, 2002 and December 31, 2001.........................  3

         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - For the
            Three and Six Months ended June 30, 2002 and July 1, 2001......  4

         CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
            (DEFICIT) - For the Year Ended December 31, 2001 and Six
            Months ended June 30, 2002.....................................  5

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - For the
            Six Months ended June 30, 2002 and July 1, 2001................  6

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS..............  7

Item  2: Management's Discussion and Analysis of Financial Condition and
         Results of Operations............................................. 15

Item  3. Quantitative and Qualitative Disclosures About Market Risk........ 23

                           PART II. OTHER INFORMATION

Item  6: Exhibits and Reports on Form 8-K.................................. 24

Signature:................................................................. 25


                                       2
<PAGE>




PART I.  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements


                        GRAHAM PACKAGING HOLDINGS COMPANY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)


                                                      June 30,     December 31,
                                                        2002           2001
                                                    -----------    ------------
                                                           (In thousands)
ASSETS
Current assets:
   Cash and cash equivalents ...................... $     6,131    $     9,032
   Accounts receivable, net .......................     107,516         90,182
   Inventories ....................................      58,584         60,476
   Prepaid expenses and other current assets ......      13,893         14,054
                                                    -----------    -----------
Total current assets ..............................     186,124        173,744
Property, plant and equipment, net ................     567,170        549,585
Goodwill ..........................................       5,743          6,400
Other non-current assets ..........................      29,944         28,832
                                                    -----------    -----------
Total assets ...................................... $   788,981    $   758,561
                                                    ===========    ===========

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:
   Accounts payable and accrued expenses .......... $   160,852    $   175,130
   Current portion of long-term debt ..............      34,941         30,585
                                                    -----------    -----------
Total current liabilities .........................     195,793        205,715
Long-term debt ....................................   1,032,435      1,021,806
Other non-current liabilities .....................      12,054         13,582
Minority interest .................................       3,167          2,512
Commitments and contingent liabilities (see Note 8)        --             --
Partners' capital (deficit) .......................    (454,468)      (485,054)
                                                    -----------    -----------
Total liabilities and partners' capital (deficit).. $   788,981    $   758,561
                                                    ===========    ===========





                 See accompanying notes to financial statements.


                                       3
<PAGE>



                        GRAHAM PACKAGING HOLDINGS COMPANY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Three Months Ended       Six Months Ended
                                              ---------------------   ---------------------
                                               June 30,     July 1,    June 30,     July 1,
                                                 2002        2001        2002        2001
                                              ---------   ---------   ---------   ---------
                                                             (In thousands)

<S>                                           <C>         <C>         <C>         <C>
Net sales ................................... $ 236,389   $ 246,729   $ 467,908   $ 482,698
Cost of goods sold ..........................   187,072     204,518     378,539     406,089
                                              ---------   ---------   ---------   ---------
Gross profit ................................    49,317      42,211      89,369      76,609
Selling, general, and administrative expenses    14,506      14,584      28,948      28,475
Impairment charges ..........................      --         3,696        --         3,696
Special charges and unusual items ...........      --          --          --           147
                                              ---------   ---------   ---------   ---------
Operating income ............................    34,811      23,931      60,421      44,291
Interest expense, net .......................    19,705      25,199      41,678      51,206
Other expense (income) ......................        57        (115)        (45)        436
Minority interest ...........................       382          57         655          57
                                              ---------   ---------   ---------   ---------
Income (loss) before income taxes ...........    14,667      (1,210)     18,133      (7,408)
Income tax provision (benefit) ..............       690         (36)        914         (22)
                                              ---------   ---------   ---------   ---------
Net income (loss) ........................... $  13,977   $  (1,174)  $  17,219   $  (7,386)
                                              =========   =========   =========   =========
</TABLE>






                 See accompanying notes to financial statements.



                                       4
<PAGE>



                        GRAHAM PACKAGING HOLDINGS COMPANY
        CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                         Notes and
                                                                          Interest      Accumulated
                                                             Partners'  Receivable for     Other
                                                              Capital     Ownership     Comprehensive
                                                             (Deficit)    Interests     Income (Loss)       Total
                                                            ----------  -------------- ---------------  ------------
                                                                              (In thousands)
<S>                                                         <C>          <C>             <C>             <C>
Balance at January 1, 2001 ................................ $(433,997)   $  (1,147)      $ (29,235)      $(464,379)
  Net loss for the year ...................................   (43,970)        --              --           (43,970)
  Cumulative effect of change in accounting for derivatives      --           --               392             392
  Changes in fair value of derivatives ....................      --           --           (13,537)        (13,537)
  Additional minimum pension liability ....................      --           --            (1,937)         (1,937)
  Cumulative translation adjustment .......................      --           --           (10,383)        (10,383)
                                                                                                         ---------
  Comprehensive income (loss) .............................                                                (69,435)
  Capital contribution ....................................    50,000       (1,296)           --            48,704
  Recapitalization (unearned compensation expense) ........        56         --              --                56
                                                            ---------    ---------       ---------       ---------
Balance at December 31, 2001 ..............................  (427,911)      (2,443)        (54,700)       (485,054)
  Net income for the period ...............................    17,219         --              --            17,219
  Changes in fair value of derivatives ....................      --           --             4,195           4,195
  Additional minimum pension liability ....................      --           --               (35)            (35)
  Cumulative translation adjustment .......................      --           --             9,282           9,282
                                                                                                         ---------
  Comprehensive income ....................................                                                 30,661
  Interest on notes receivable for ownership interests.....      --            (75)           --               (75)
                                                            ---------    ---------       ---------       ---------
Balance at June 30, 2002 .................................. $(410,692)   $  (2,518)      $ (41,258)      $(454,468)
                                                            =========    =========       =========       =========
</TABLE>












                 See accompanying notes to financial statements.


                                       5
<PAGE>




                        GRAHAM PACKAGING HOLDINGS COMPANY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                      Six Months Ended
                                                                                   ---------------------
                                                                                    June 30,    July 1,
                                                                                      2002        2001
                                                                                   ---------   ---------
                                                                                      (In thousands)
<S>                                                                                <C>         <C>
Operating activities:
  Net income (loss) ............................................................   $ 17,219    $ (7,386)
  Adjustments to reconcile net income (loss) to net cash provided by (used in)
    operating activities:
    Depreciation and amortization ..............................................     34,972      35,985
    Impairment charges .........................................................       --         3,696
    Amortization of debt issuance fees .........................................      2,285       2,331
    Accretion of Senior Discount Notes .........................................      8,151       7,265
    Minority interest ..........................................................        656          57
    Equity in loss of joint venture ............................................       --           246
    Foreign currency transaction (gain) loss ...................................       (261)        110
    Interest receivable for ownership interests ................................        (75)       --
    Other non-cash Recapitalization expense ....................................       --            56
    Changes in operating assets and liabilities, net of acquisition of business:
      Accounts receivable ......................................................    (15,134)    (10,847)
      Inventories ..............................................................      2,106      (1,887)
      Prepaid expenses and other current assets ................................        993         846
      Other non-current assets and liabilities .................................     (1,553)       (413)
      Accounts payable and accrued expenses ....................................    (15,258)    (34,248)
                                                                                   --------    --------
Net cash provided by (used in) operating activities.............................     34,101      (4,189)
Investing activities:
      Net purchases of property, plant and equipment ...........................    (44,538)    (47,980)
      Loan to affiliate ........................................................       --        (2,606)
      Acquisition of/investment in business, net of cash acquired ..............       --           453
      Proceeds from sale of business ...........................................        307        --
      Other ....................................................................       --           (44)
                                                                                   --------    --------
Net cash used in investing activities ..........................................    (44,231)    (50,177)
Financing activities:
      Net proceeds from issuance of long-term debt .............................      6,824       1,334
      Notes receivable for ownership interests .................................       --        (1,146)
      Capital contributions ....................................................       --        50,000
                                                                                   --------    --------
Net cash provided by financing activities ......................................      6,824      50,188
Effect of exchange rate changes ................................................        405        (521)
                                                                                   --------    --------
Decrease in cash and cash equivalents ..........................................     (2,901)     (4,699)
Cash and cash equivalents at beginning of period ...............................      9,032       9,844
                                                                                   --------    --------
Cash and cash equivalents at end of period .....................................   $  6,131    $  5,145
                                                                                   ========    ========
</TABLE>

                See accompanying notes to financial statements.


                                       6
<PAGE>
                       GRAHAM PACKAGING HOLDINGS COMPANY
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.  Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements
of Graham Packaging Holdings Company ("Holdings"), a Pennsylvania limited
partnership, have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X and therefore do not include all of the
information and footnotes required by generally accepted accounting principles
for complete annual financial statements. In the opinion of management, all
adjustments (consisting only of usual recurring adjustments considered necessary
for a fair presentation) are reflected in the condensed consolidated financial
statements. The condensed consolidated balance sheet as of December 31, 2001 is
derived from audited financial statements. The condensed consolidated financial
statements and notes thereto should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended December 31, 2001. The
results of operations for the six months ended June 30, 2002 are not necessarily
indicative of the results to be expected for the full year ending December 31,
2002.

     All  entities  and assets  owned by  Holdings  are  referred  to
collectively  as the  "Company."  Graham Packaging Company, L.P. is referred to
as the "Operating Company."

Derivatives

     On January 1, 2001, in connection with the adoption of Statement of
Financial Accounting Standards ("SFAS") 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS 138, the Company
recorded $0.4 million in other comprehensive income ("OCI") as a cumulative
transition adjustment for derivatives designated as cash flow hedges prior to
adopting SFAS 133. The Company enters into interest rate swap agreements to
hedge the exposure to increasing rates with respect to its Senior Credit
Agreement (as hereinafter defined). Upon adoption of SFAS 133, these interest
rate swaps have been properly designated, documented and accounted for as cash
flow hedges. The effective portion of the change in the fair value of the
interest rate swaps is recorded in OCI and was an unrealized gain of $4.2
million for the six months ended June 30, 2002. Approximately 89% of the amount
recorded within OCI is expected to be recognized as interest expense in the next
twelve months. Failure to properly document the Company's interest rate swaps as
cash flow hedges would result in income statement recognition of all or part of
the cumulative $8.9 million unrealized loss recorded in OCI as of June 30, 2002.

Goodwill and Other Intangible Assets

     On January 1, 2002, the Company adopted SFAS 142, "Goodwill and Other
Intangible Assets." SFAS 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, ceased upon adoption
of this statement. The Company has completed the transitional goodwill
impairment test as of January 1, 2002 and determined that there was no
impairment loss to be recognized upon adoption of SFAS 142. See Note 12.

Long-Lived Assets

     On January 1, 2002, SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," was adopted by the Company. SFAS 144 addresses
the financial accounting and reporting for the impairment or disposal of
long-lived assets. The Company has determined that there was no impact on the
consolidated financial position or results of operations as a result of the
adoption of SFAS 144.

Reclassifications

     Certain reclassifications have been made to the 2001 financial
statements to conform to the 2002 presentation.

New Accounting Pronouncements Not Yet Adopted

     On April 30, 2002, SFAS 145, "Rescission of FASB Statements No. 4, 44
and 64, Amendment of FASB Statement No. 13, and Technical Corrections" was
approved by the FASB. As a result, gains and losses from extinguishment of debt
should be classified as extraordinary items only if they meet the criteria in
Accounting Principles Board Opinion 30. The Company is required to implement
SFAS 145 on January 1, 2003 and does not believe that adoption of SFAS 145 will
have a significant impact on its results of operations or financial position.


                                       7
<PAGE>

     On July 30, 2002, SFAS 146, "Accounting for Costs Associated with Exit
or Disposal Activities" was issued by the FASB. This standard requires companies
to recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
SFAS 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002.


2.  Debt Arrangements

         Long-term debt consisted of the following:

                                          June 30,    December 31,
                                            2002         2001
                                         ----------   -----------
                                              (In thousands)
    Term loans........................   $  514,475   $   526,950
    Revolving loans ..................      146,000       125,000
    Revolving credit facilities ......        4,902         5,111
    Senior Subordinated Notes ........      225,000       225,000
    Senior Discount Notes ............      159,789       151,638
    Capital leases ...................       15,144        16,041
    Other                                     2,066         2,651
                                         ----------   -----------
                                          1,067,376     1,052,391
    Less amounts classified as current       34,941        30,585
                                         ----------   -----------
                                         $1,032,435   $ 1,021,806
                                         ==========   ===========

     On February 2, 1998 the Company refinanced the majority of its existing
credit facilities in connection with the Recapitalization and entered into a
senior credit agreement (the "Senior Credit Agreement") with a consortium of
banks. The Senior Credit Agreement was amended on August 13, 1998 to provide for
an additional term loan borrowing of an additional $175 million and on March 30,
2000 as described below (the "Amendments"). The Senior Credit Agreement and the
Amendments consist of four term loans to the Operating Company with initial term
loan commitments totaling $570 million (the "Term Loans" or "Term Loan
Facilities"), a $155 million revolving credit facility (the "Revolving Credit
Facility") and a $100 million growth capital revolving credit facility (the
"Growth Capital Revolving Credit Facility" and, together with the Revolving
Credit Facility, the "Revolving Credit Loans"). The unused availability of the
revolving credit facilities under the Senior Credit Agreement and the Amendments
at June 30, 2002 was $104.5 million. The Senior Credit Agreement and Amendments
contain certain affirmative and negative covenants as to the operations and
financial condition of the Company, as well as certain restrictions on the
payment of dividends and other distributions to Holdings. On June 30, 2002 the
Company was in compliance with all covenants.

     Interest paid during the six months ended June 30, 2002 and July 1,
2001, net of amounts capitalized, totaled $32.7 million and $43.0 million,
respectively.


3.  Inventories

     Inventories consisted of the following:

                                           June 30,   December 31,
                                             2002        2001
                                         ----------   -----------
                                              (In thousands)
     Finished goods....................  $   39,265   $    43,403
     Raw materials and parts...........      19,319        17,073
                                         ----------   -----------
                                         $   58,584   $    60,476
                                         ==========   ===========


                                       8
<PAGE>


4.  Accounts Payable and Accrued Expenses

     Accounts payable and accrued expenses included the following:

                                                      June 30,    December 31,
                                                        2002         2001
                                                      ---------   -----------
                                                            (In thousands)
     Accounts payable...........................      $  83,726   $   95,749
     Accrued employee compensation and benefits.         21,850       23,930
     Accrued interest...........................         11,027       12,361
     Other......................................         44,249       43,090
                                                      ---------   ---------
                                                      $ 160,852   $  175,130
                                                      =========   ==========

     For the year ended December 31, 2000, the Company  incurred  reorganization
costs in North  America and Europe of $4.5  million,  which  included  the legal
liability of severing 53 employees,  all of which were terminated as of December
31, 2000. For the year ended  December 31, 2001,  the Company  incurred costs of
employee  termination  benefits in  Burlington,  Canada of $0.9  million,  which
included the legal  liability of severing 139  employees,  and in Bad  Bevensen,
Germany of $0.6  million,  which  included  the legal  liability  of severing 22
employees.  The Company terminated 9 of these employees as of December 31, 2001.
An additional 151 of these employees were terminated during the six months ended
June 30,  2002.  For the six months ended June 30,  2002,  the Company  incurred
costs of employee  termination  benefits in the United  Kingdom of $1.7 million,
which  included  the legal  liability  of severing 67  employees,  and in Blyes,
France of $1.2  million,  which  included  the legal  liability  of  severing 20
employees.  65 of these  employees were  terminated  during the six months ended
June 30, 2002.  Substantially  all of the cash  payments  for these  termination
benefits  are  expected to be made by December 31,  2002.  The  following  table
reflects a  rollforward  of the  reorganization  costs,  primarily  included  in
accrued employee compensation and benefits (in thousands):

<TABLE>
<CAPTION>
                                  Europe &
                                   North
                                  America   Burlington,  United    Germany    France
                                 Reduction    Canada     Kingdom  Reduction  Reduction
                                  in Force   Shutdown    Shutdown  in Force   in Force     Total
                                 ---------  ----------   -------- ---------  ---------   --------
<S>                               <C>        <C>          <C>      <C>        <C>        <C>
Reserves at December 31, 2001.... $   407    $    895     $  --    $  564     $  --      $  1,866
(Decrease)/increase in reserves..    (140)         29      1,706      --        1,211       2,806
Cash payments....................     (89)       (649)    (1,630)    (518)       --        (2,886)
                                  -------    --------     ------   ------     -------    --------                                ---
Reserves at June 30, 2002........ $   178    $    275     $   76   $   46     $ 1,211    $  1,786
                                  =======    ========     ======   ======     =======    ========
</TABLE>


5.  Income Taxes

     The Company does not pay United States federal income taxes under the
provisions of the Internal Revenue Code, as the applicable income or loss is
included in the tax returns of the partners. For the Company's foreign
operations subject to tax in their local jurisdictions, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and are measured
using enacted tax rates expected to apply to taxable income in the years in
which the temporary differences are expected to reverse. During 2002 and 2001,
some of the Company's various taxable entities incurred additional net operating
losses for which no carryforward benefit has been recognized.


6.  Acquisitions

Investment in Limited Partnership of PlasPET Florida, Ltd.

     On April 26, 1999 the Company acquired 51% of the operating assets of
PlasPET Florida, Ltd., while becoming the general partner on July 6, 1999, and
on October 9, 2001 acquired the remaining 49%, for a total purchase price
(including acquisition-related costs) of $3.3 million, net of liabilities
assumed. The investment was accounted for under the equity method of accounting
prior to July 6, 1999. The original acquisition was recorded on July 6, 1999
under the purchase method of accounting and, accordingly, the results of
operations of the acquired operations are consolidated in the financial
statements of the Company beginning on July 6, 1999. The purchase price has been
allocated to assets acquired and liabilities assumed based on fair values. The
allocated fair value of assets acquired and liabilities assumed is summarized as
follows (in thousands):

                                       9
<PAGE>


     Current assets................   $   479
     Property, plant and equipment.     4,689
     Other assets..................     1,052
     Goodwill .....................     4,032
                                      -------
     Total ........................    10,252
     Less liabilities assumed .....     6,906
                                      -------
     Net cost of acquisition ......   $ 3,346
                                      =======


Purchase of additional 1% interest in Masko Graham Joint Venture

     On March 30, 2001 the Company acquired an additional 1% interest in
Masko Graham Joint Venture ("Masko Graham") for a total interest of 51%. The
total purchase price (including acquisition-related costs) for the entire 51%
interest in the operating assets was $1.4 million, net of liabilities assumed.
The investment was accounted for under the equity method of accounting prior to
March 30, 2001. The acquisition was recorded on March 30, 2001 under the
purchase method of accounting and, accordingly, the results of operations of
Masko Graham are consolidated in the financial statements of the Company
beginning on March 30, 2001. The purchase price has been allocated to assets
acquired and liabilities assumed based on fair values. The allocated fair value
of assets acquired and liabilities assumed is summarized as follows (in
thousands):

     Current assets ..............    $ 3,743
     Property, plant and equipment      8,210
     Goodwill ....................        954
                                      -------
     Total .......................     12,907
     Less liabilities assumed ....     11,474
                                      -------
     Net cost of acquisition .....    $ 1,433
                                      =======


Pro Forma Information

     The following table sets forth unaudited pro forma results of
operations, assuming that all of the above acquisitions had taken place on
January 1, 2001.

                   Three Months Ended   Six Months Ended
                      July 1, 2001        July 1, 2001
                   ------------------   ----------------
                               (In thousands)
     Net sales....     $ 246,729           $ 485,412
     Net (loss)...        (1,217)             (7,469)

     These unaudited pro forma results have been prepared for comparative
purposes only and include certain adjustments, such as additional depreciation
expense as a result of a step-up in the basis of fixed assets and increased
interest expense on acquisition debt. They do not purport to be indicative of
the results of operations which actually would have resulted had the
combinations been in effect on January 1, 2001, or of future results of
operations of the combined entities.


7.  Rent Expense

     The Company was a party to various leases involving real property and
equipment during the six months ended June 30, 2002 and July 1, 2001. Total rent
expense for operating leases amounted to $5.7 million and $11.3 million for the
three and six months ended June 30, 2002, respectively, and $5.3 million and
$10.7 million for the three and six months ended July 1, 2001, respectively.


                                       10
<PAGE>


8.  Contingencies

     The Company is party to various litigation matters arising in the
ordinary course of business. The ultimate legal and financial liability of the
Company with respect to such litigation cannot be estimated with certainty, but
management believes, based on its examination of such matters, experience to
date and discussions with counsel, that such ultimate liability will not be
material to the business, financial condition or results of operations of the
Company.

     On July 9, 2002, the Company and Graham Engineering amended its
Equipment Sales, Services and License Agreement to, among other things, (i)
limit the Company's existing rights in exchange for a perpetual license in the
event Graham Engineering proposes to sell its rotary extrusion blow molding
equipment business or assets to certain of the Company's significant
competitors; (ii) clarify that the Company's exclusivity rights under the
Equipment Sales, Services and License Agreement do not apply to certain new
generations of Graham Engineering equipment; (iii) provide Graham Engineering
certain recourse in the event the Company decides to buy certain high output
extrusion blow molding equipment from any supplier other than Graham
Engineering; and (iv) obligate the Company retroactive to January 1, 2002 and
subject to certain credits and carry-forwards, to make payments for products and
services to Graham Engineering in the amount of at least $12 million per
calendar year, or else to pay to Graham Engineering a shortfall payment.


9.  Condensed Operating Company Data

     Condensed financial data for the Operating Company as of June 30, 2002
and December 31, 2001 was as follows:

                                    June 30,    December 31,
                                      2002         2001
                                   ---------    -----------
                                       (In thousands)
     Current assets ............   $ 193,117     $ 180,737
     Non-current assets ........     599,026       580,749
     Total assets ..............     792,143       761,486
     Current liabilities .......     195,793       205,715
     Non-current liabilities ...     887,867       886,261
     Partners'capital (deficit).    (291,517)     (330,490)

     Condensed financial data for the Operating Company for the three and
six months ended June 30, 2002 and July 1, 2001 was as follows:

                         Three Months Ended     Six Months Ended
                         -------------------   -------------------
                         June 30,    July 1,   June 30,    July 1,
                           2002       2001       2002       2001
                         --------   --------   --------   --------
                                      (In thousands)
     Net sales .......   $236,389   $246,729   $467,908   $482,698
     Gross profit.....     49,317     42,211     89,369     76,609
     Net income.......     18,231      2,657     25,606         93

     Full separate financial statements and other disclosures of the
Operating Company have not been presented. Management has determined that such
financial information is not material to investors.


                                       11
<PAGE>


10.  Comprehensive Income (Loss)

     Comprehensive income (loss) for the three and six months ended June 30,
2002 and July 1, 2001 was as follows:

<TABLE>
<CAPTION>
                                                             Three Months Ended     Six Months Ended
                                                             ------------------    -------------------
                                                             June 30,    July 1,   June 30,    July 1,
                                                               2002        2001      2002        2001
                                                             --------   --------   --------    -------
                                                                          (In thousands)
<S>                                                          <C>        <C>        <C>        <C>
Net income (loss)........................................... $ 13,977   $ (1,174)  $ 17,219   $ (7,386)
Cumulative effect of change in accounting for derivatives...     --          --        --          392
Changes in fair value of derivatives........................   (1,943)      (599)     4,195     (6,420)
Additional minimum pension liability........................      (36)       --         (35)       --
Foreign currency............................................    9,539     (3,462)     9,282    (13,410)
                                                             --------   --------   --------   --------
Comprehensive income (loss)................................. $ 21,537   $ (5,235)  $ 30,661   $(26,824)
                                                             ========   ========   ========   ========
</TABLE>


                                       12
<PAGE>



11.  Segment Information

     The Company is organized and managed on a geographical basis in three
operating segments: North America, which includes the United States and Canada,
Europe and Latin America. Segment information for the three and six months ended
June 30, 2002 and July 1, 2001 was as follows (in thousands):

<TABLE>
<CAPTION>
                                                            North                      Latin
                                                           America        Europe      America    Eliminations     Total
                                                          ----------     --------    ---------   ------------   ----------
                                                                                                     (b)
<S>                    <C>                                <C>           <C>          <C>          <C>           <C>
Net sales (a)          Three Months Ended June 30, 2002   $ 194,332     $ 33,991     $  8,066                   $  236,389
                       Three Months Ended July 1, 2001      199,966       40,557        6,206                      246,729

                       Six Months Ended June 30, 2002       379,287       73,033       15,588                      467,908
                       Six Months Ended July 1, 2001        388,672       80,984       13,042                      482,698

Special Charges and    Three Months Ended June 30, 2002         --           --           --                           --
   unusual items       Three Months Ended July 1, 2001          --           --           --                           --

                       Six Months Ended June 30, 2002           --           --           --                           --
                       Six Months Ended July 1, 2001            147          --           --                          147

Operating income       Three Months Ended June 30, 2002      35,139       (1,106)         778                       34,811
   (loss)              Three Months Ended July 1, 2001       30,549       (2,902)      (3,716)                      23,931

                       Six Months Ended June 30, 2002        60,639       (1,432)       1,214                       60,421
                       Six Months Ended July 1, 2001         52,447       (4,628)      (3,528)                      44,291

Depreciation and       Three Months Ended June 30, 2002      15,655        2,406          582                       18,643
   amortization        Three Months Ended July 1, 2001       14,418        3,627          732                       18,777

                       Six Months Ended June 30, 2002        32,762        3,261        1,234                       37,257
                       Six Months Ended July 1, 2001         30,348        6,388        1,580                       38,316

Impairment charges     Three Months Ended June 30, 2002         --           --           --                           --
                       Three Months Ended July 1, 2001          --           --        3,696                        3,696

                       Six Months Ended June 30, 2002           --           --           --                           --
                       Six Months Ended July 1, 2001            --           --        3,696                        3,696

Interest expense,      Three Months Ended June 30, 2002      19,281          320         104                        19,705
    net                Three Months Ended July 1, 2001       24,625          305         269                        25,199

                       Six Months Ended June 30, 2002        40,546          983         149                        41,678
                       Six Months Ended July 1, 2001         50,421          498         287                        51,206

Income tax (benefit)   Three Months Ended June 30, 2002        (200)         653         237                           690
   provision           Three Months Ended July 1, 2001           99           41        (176)                          (36)

                       Six Months Ended June 30, 2002          (443)         904         453                           914
                       Six Months Ended July 1, 2001           (116)          41          53                           (22)

Identifiable assets    As of June 30, 2002                  876,256      150,323      27,584      (265,182)         788,981
   (a)                 As of December 31, 2001              842,888      144,106      27,935      (256,368)         758,561

Capital expenditures,  Six Months Ended June 30, 2002        35,153        4,979       4,406                         44,538
   excluding           Six Months Ended July 1, 2001         33,760       13,717         503                         47,980
   acquisitions
</TABLE>


                                       13
<PAGE>


(a)  The Company's net sales for Europe include sales in France which totaled
     approximately $19.0 million and $25.3 million for the three months ended
     June 30, 2002 and July 1, 2001, respectively, and $39.5 million and $53.1
     million for the six months ended June 30, 2002 and July 1, 2001,
     respectively. Identifiable assets in France totaled approximately $88.6
     million and $82.8 million as of June 30, 2002 and December 31, 2001,
     respectively.

(b)  To  eliminate   intercompany   balances,   which  include   investments
     in  the  operating  segments  and inter-segment receivables and payables.

Product Net Sales Information

     The following is supplemental information on net sales by product
category (in millions):

                               Three Months Ended        Six Months Ended
                               -------------------      -------------------
                               June 30,    July 1,      June 30,    July 1,
                                 2002        2001         2002        2001
                               --------    -------      --------   --------

Food and Beverage............. $  136.9   $  140.4      $  269.4   $  270.0
Household and Personal Care...     44.7       52.5          95.8      106.7
Automotive Lubricants.........     54.8       53.8         102.7      106.0
                               --------   --------      --------   --------
Total Net Sales                $  236.4   $  246.7      $  467.9   $  482.7
                               ========   ========      ========   ========


12.  Goodwill

     Effective January 1, 2002 the Company adopted SFAS 142. Therefore, the
Company has ceased to amortize goodwill beginning January 1, 2002.

     SFAS 142 provides that prior year's results should not be restated. The
following table presents the Company's operating results for the three and six
months ended July 1, 2001 reflecting the exclusion of goodwill amortization
expense in fiscal 2001.

                                 Three Months Ended    Six Months Ended
                                   July 1, 2001         July 1, 2001
                                   ------------         ------------
                                             (In thousands)

     Net (loss) as reported.....    $  (1,174)           $  (7,386)
     Goodwill amortization......          278                  559
                                    ---------            ---------
     As adjusted................    $    (896)           $  (6,827)
                                    =========            =========


13. Subsequent Events - Equity Offering and Concurrent Transactions

     During the three months ended June 30, 2002, the Company announced that
it was pursuing an initial public offering. In connection with the offering, the
Company planned to effect an internal reorganization in which GPC Capital Corp.
II, a wholly-owned subsidiary of Holdings, would change its name to Graham
Packaging Company Inc., exchange shares of newly-issued common stock for all of
the partnership interests of Holdings and exchange options to purchase
partnership interests in Holdings for options to purchase shares of Graham
Packaging Company, Inc. In connection with the proposed offering, Graham
Packaging Company, L.P. and GPC Capital Corp. I, subsidiaries of Holdings,
announced their proposed offering of $100 million aggregate principal amount of
8 3/4% senior subordinated notes due 2008, and GPC Capital Corp. II commenced a
tender offer and consent solicitation for all $169 million aggregate principal
amount of Senior Discount Notes due 2009 co-issued by it and Holdings. On July
23, 2002 the Company announced that it had postponed its plans for the initial
public offering due to the recent adverse conditions in the stock market. In
connection with the postponement of the initial public offering, the Company
also postponed the proposed senior subordinated notes offering and GPC Capital
Corp. II terminated its tender offer and consent solicitation.


14. Subsequent Events - Sale of Blyes Plant

     During the third quarter of 2002, the Company completed the disposal of
its operation located in Blyes, France through a transfer to ARCC Holdings BV.
The Company expects to incur a loss of approximately $4.0 million related to the
transfer of this operation. Additionally, as of June 30, 2002, $1.2 million has
been accrued for the legal liability of severing employees at this location and
the Company expects to accrue an additional $0.5 million during the third
quarter of 2002 related to a negotiated settlement of severing employees.


                                       14
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operation

         CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

     All statements other than statements of historical facts included in
this Report on Form 10-Q, including statements regarding the Company's future
financial position, economic performance and results of operations, as well as
the Company's business strategy, budgets and projected costs and plans and
objectives of management for future operations, and the information referred to
under "Quantitative and Qualitative Disclosures About Market Risk" (Part I, Item
3), are forward-looking statements. In addition, forward-looking statements
generally can be identified by the use of forward-looking terminology such as
"may," "will," "expect," "intend," "estimate," "anticipate," "believe," or
"continue" or the negative thereof or variations thereon or similar terminology.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, the Company can give no assurance
that such expectations will prove to have been correct. Important factors that
could cause actual results to differ materially from the Company's expectations
include, without limitation, the Company's exposure to fluctuations in resin
prices and its dependence on resin supplies, competition in the Company's
markets, including the impact of possible new technologies, the high degree of
leverage and substantial debt service obligations of the Operating Company and
Holdings, the restrictive covenants contained in instruments governing
indebtedness of the Company, a decline in the domestic motor oil business, risks
associated with the Company's international operations, the Company's dependence
on significant customers and the risk that customers will not purchase the
Company's products in the amounts expected by the Company under their
requirements contracts, the Company's dependence on key management and its labor
force and the material adverse effect that could result from the loss of their
services, risks associated with environmental regulation, risks associated with
possible future acquisitions and the possibility that the Company may not be
able to achieve success in developing and expanding its business, including its
hot-fill PET (as hereinafter defined) plastic container business. See "Business
- Certain Risks of the Business" in Holdings' Annual Report on Form 10-K for the
fiscal year ended December 31, 2001. All forward-looking statements attributable
to the Company, or persons acting on its behalf, are expressly qualified in
their entirety by the cautionary statements set forth in this paragraph.


Overview

     The Company is a worldwide leader in the design, manufacture and sale
of customized blow molded plastic containers for the branded food and beverage,
household and personal care and automotive lubricants markets and currently
operates 56 plants throughout North America, Europe and Latin America. The
Company's primary strategy is to operate in select markets that will position it
to benefit from the growing conversion to high performance plastic packaging
from more commodity packaging.

     Management believes that critical success factors to the Company's
business are its ability to:

o    serve the complex  packaging demands of its customers which include some of
     the world's largest branded consumer products companies;

o    forecast  trends  in  the  packaging  industry  across  product  lines  and
     geographic territories (including those specific to the rapid conversion of
     packaging products from glass, metal and paper to plastic); and

o    make the correct  investments in plant and technology  necessary to satisfy
     the two factors mentioned above.

     Management believes that the area with the greatest opportunity for
growth continues to be in producing containers for the food and beverage market
because of the continued conversion to plastic packaging, including the demand
for containers for juices, juice drinks, nutritional beverages, sport drinks,
teas, yogurt drinks, snacks and other food products. Since the beginning of
1997, the Company has invested over $260.0 million in capital expenditures to
expand its technology, machinery and plant structure to prepare for what it
believed would be the growth in the hot-fill PET area. For the year ended
December 31, 2001 the Company's sales of hot-fill PET containers grew to $328.2
million from $70.2 million in 1996. More recently, the Company has been a
leading participant in the rapid growth of the yogurt drinks market where the
Company manufactures containers using polyolefin. Since the beginning of 1999,
the Company has invested over $100 million in capital expenditures in the
polyolefin area of the food and beverage market. For the year ended December 31,
2001, the Company's sales of polyolefin containers grew to $160.5 million from
$117.7 million in 1999.

                                       15
<PAGE>


     The Company's household and personal care container business continues
to grow, as package conversion trends continue from other packaging forms in
some of its product lines. The Company continues to benefit as liquid fabric
care detergents, which are packaged in plastic containers, capture an increased
share from powdered detergents, which are predominantly packaged in paper-based
containers. The Company has upgraded its machinery to new larger, more
productive blow molders to standardize production lines, improve flexibility and
reduce manufacturing costs.

     The Company's North American one quart motor oil container business is
in a mature industry. The Company has been able to partially offset pricing
pressures by renewing or extending contracts, improving manufacturing
efficiencies, line speeds, labor efficiency and inventory management and
reducing container weight and material spoilage. Unit volume in the one quart
motor oil industry decreased 3% in 2001 as compared to 2000; annual volumes
declined an average of 1% to 2% in prior years. Management believes that a 1% to
2% annual decline in the domestic one quart motor oil container business will
continue for the next several years but believes there are significant volume
opportunities for automotive lubricants business in foreign countries,
particularly in Latin America. The Company was recently awarded 100% of
Pennzoil-Quaker State's United States one quart volume requirements. This award
includes supplying from a facility on-site with Pennzoil-Quaker State in Newell,
West Virginia. ExxonMobil also awarded the Company 100% of its one quart volume
requirements for one of its United States filling plants, located in Port Allen,
Louisiana. ExxonMobil was not a United States customer prior to this award.

     Following its strategy to expand and restructure the business in
selected international areas, the Company currently operates 21 facilities,
either on its own or through joint ventures, in Argentina, Belgium, Brazil,
Canada, France, Germany, Hungary, Mexico, Poland, Spain and Turkey.

     For the six months ended June 30, 2002, 82% of the Company's net sales
were generated by the top twenty customers, the majority of which are under
long-term contracts with terms up to ten years; the remainder of which are
customers with whom the Company has been doing business for over 16 years on
average. Prices under these arrangements are typically tied to market standards
and, therefore, vary with market conditions. In general, the contracts are
requirements contracts that do not obligate the customer to purchase any given
amount of product from the Company.

     Based on industry data, the following table summarizes average market
prices per pound of polyethylene terephthalate, or PET, and high-density
polyethylene, or HDPE, resins in North America over the three and six months
ended June 30, 2002 and 2001:

                     Three Months Ended June 30,     Six Months Ended June 30,
                     ---------------------------     -------------------------
                        2002         2001               2002           2001
                        ----         ----               ----           ----
PET ...............  $   0.61      $   0.70          $   0.58      $   0.67
HDPE ..............      0.41          0.47              0.38          0.47

     In general, the Company's dollar gross profit is substantially
unaffected by fluctuations in the prices of PET and HDPE resins, the primary raw
materials for the Company's products, because industry practice and the
Company's agreements with its customers permit substantially all resin price
changes to be passed through to customers by means of corresponding changes in
product pricing. Consequently, the Company believes that cost of goods sold, as
well as certain other expense items, should not be analyzed solely on a
percentage of net sales basis. A sustained increase in resin prices, to the
extent that those costs are not passed on to the end-consumer, would make
plastic containers less economical for the Company's customers, and could result
in a slower pace of conversions to plastic containers.

     The Company does not pay United States federal income taxes under the
provisions of the Internal Revenue Code, as the distributive share of the
applicable income or loss is included in the tax returns of its partners. The
Company may make tax distributions to its partners to reimburse them for such
tax obligations, if any. The Company's foreign operations are subject to tax in
their local jurisdictions. Most of these entities have historically incurred net
operating losses.

                                       16
<PAGE>


Results of Operations

     The following tables set forth the major components of the Company's
net sales (in millions) and such net sales expressed as a percentage of total
revenues:

<TABLE>
<CAPTION>
                                          Three Months Ended                      Six Months Ended
                                          ------------------                      ----------------
                                      June 30,          July 1,              June 30,           July 1,
                                        2002             2001                  2002               2001
                                        ----             ----                  ----               ----
<S>                             <C>        <C>     <C>        <C>       <C>        <C>      <C>       <C>
North America................   $  194.3    82.2%  $  200.0    81.1%    $  379.3    81.1%   $ 388.7    80.5%
Europe.......................       34.0    14.4       40.5    16.4         73.0    15.6       81.0    16.8
Latin America................        8.1     3.4        6.2     2.5         15.6     3.3       13.0     2.7
                                --------   -----   --------   -----     --------   -------  -------   -----
Total Net Sales..............   $  236.4   100.0%  $  246.7   100.0%    $  467.9   100.0%   $ 482.7   100.0%
                                ========   =====   ========   =====     ========   =====    =======   =====
</TABLE>

<TABLE>
<CAPTION>
                                          Three Months Ended                      Six Months Ended
                                          ------------------                      ----------------
                                      June 30,          July 1,              June 30,           July 1,
                                        2002             2001                  2002               2001
                                        ----             ----                  ----               ----
<S>                             <C>        <C>     <C>        <C>       <C>        <C>      <C>       <C>
Food and Beverage............   $  136.9    57.9%  $  140.4    56.9%    $  269.4    57.6%   $ 270.0    55.9%
Household and Personal Care..       44.7    18.9       52.5    21.3         95.8    20.5      106.7    22.1
Automotive Lubricants........       54.8    23.2       53.8    21.8        102.7    21.9      106.0    22.0
                                --------   -----   --------   -----     --------   -----    -------   -----
Total Net Sales..............   $  236.4   100.0%  $  246.7   100.0%    $  467.9   100.0%   $ 482.7   100.0%
                                ========   =====   ========   =====     ========   =====    =======   =====
</TABLE>


Three Months Ended June 30, 2002 Compared to Three Months Ended July 1, 2001

Net Sales. Net sales for the three months ended June 30, 2002 decreased $10.3
million or 4.2% to $236.4 million from $246.7 million for the three months ended
July 1, 2001. The decrease in sales was primarily due to a decrease in resin
pricing combined with the Company's restructuring process in Europe, which
includes the sale or closing of six non-strategic locations, partially offset by
a 4.1% increase in units sold, principally due to additional food and beverage
container business where units increased by 6.6%. Excluding business impacted by
the European restructuring, sales for the three months ended June 30, 2002 would
have been approximately equal to the sales for the three months ended July 1,
2001 and unit volume would have increased approximately 11%. On a geographic
basis, sales for the three months ended June 30, 2002 in North America decreased
$5.7 million or 2.9% from the three months ended July 1, 2001 but included
higher units sold of 4.5%. North American sales in the food and beverage
business and the household and personal care business contributed $4.4 million
and $2.1 million, respectively, to the decrease, while sales in the automotive
lubricants business increased $0.8 million. Units sold in North America
increased by 2.7% in the food and beverage business, 4.9% in the household and
personal care business and 7.9% in the automotive lubricants business. Sales for
the three months ended June 30, 2002 in Europe decreased $6.5 million or 16.0%
from the three months ended July 1, 2001. Overall, the European sales reflected
a 0.6% decrease in units sold. Exchange rate changes increased sales by
approximately $1.5 million. Excluding business impacted by the European
restructuring, sales in Europe for the three months ended June 30, 2002 would
have increased $3.7 million compared to sales for the three months ended July 1,
2001 and unit volume in Europe would have increased approximately 20% compared
to the same period last year. Sales in Latin America for the three months ended
June 30, 2002 increased $1.9 million or 30.6% from the three months ended July
1, 2001, primarily due to an increase in units sold of 71.1%, offset by exchange
rate changes of approximately $2.0 million.

Gross Profit. Gross profit for the three months ended June 30, 2002 increased
$7.1 million to $49.3 million from $42.2 million for the three months ended July
1, 2001. Gross profit for the three months ended June 30, 2002 increased $5.5
million in North America, $1.2 million in Europe and $0.4 million in Latin
America, when compared to the three months ended July 1, 2001. The increase in
gross profit resulted primarily from the higher unit volume and operating
performance in North America and Latin America, combined with the restructuring
process in Europe, as compared to the prior year.


                                       17
<PAGE>

Selling, General & Administrative Expenses. Selling, general and administrative
expenses for the three months ended June 30, 2002 decreased $0.1 million to
$14.5 million from $14.6 million for the three months ended July 1, 2001.
Selling, general and administrative expenses include certain non-recurring
charges of $0.9 million and $0.6 million for the three months ended June 30,
2002 and July 1, 2001, respectively, comprised primarily in both periods of
global reorganization costs. As a percent of sales, selling, general and
administrative expenses increased to 5.8% of sales for the three months ended
June 30, 2002 from 5.7% for the three months ended July 1, 2001, excluding
non-recurring charges, and increased to 6.1% of sales for the three months ended
June 30, 2002 from 5.9% for the three months ended July 1, 2001, including
non-recurring charges.

Impairment Charges. Due to operating losses and cash flow deficits experienced
in the Company's Argentine operations and the loss or reduction of business in
Argentina for the three months ended July 1, 2001, the Company evaluated the
recoverability of its long-lived assets in this location. The Company determined
that the expected future undiscounted cash flows were below the carrying value
of its long-lived assets. Accordingly, the Company adjusted the carrying values
of these long-lived assets to their estimated fair values, resulting in an
impairment charge of $3.7 million for the three months ended July 1, 2001, which
includes $3.1 million of goodwill associated with these assets.

Interest Expense, Net. Interest expense, net decreased $5.5 million to $19.7
million for the three months ended June 30, 2002 from $25.2 million for the
three months ended July 1, 2001. The decrease was primarily related to lower
interest rates for the three months ended June 30, 2002 as compared to the three
months ended July 1, 2001. Interest expense, net includes $4.1 million and $3.7
million of interest on the Senior Discount Notes for the three months ended June
30, 2002 and July 1, 2001, respectively.

Other Expense (Income). Other expense was $0.1 million for the three months
ended June 30, 2002 as compared to other income of $0.1 million for the three
months ended July 1, 2001. The higher expense was primarily due to a higher
foreign exchange loss in the three months ended June 30, 2002 as compared to the
three months ended July 1, 2001.

Net Income (Loss). Primarily as a result of factors discussed above, net income
was $14.0 million for the three months ended June 30, 2002 compared to a net
loss of $1.2 million for the three months ended July 1, 2001.

Adjusted EBITDA. Primarily as a result of factors discussed above, Adjusted
EBITDA (as hereinafter defined) increased $8.5 million or 18.0% to $55.6 million
for the three months ended June 30, 2002 from $47.1 million for the three months
ended July 1, 2001.


Six Months Ended June 30, 2002 Compared to Six Months Ended July 1, 2001

Net Sales. Net sales for the six months ended June 30, 2002 decreased $14.8
million or 3.1% to $467.9 million from $482.7 million for the six months ended
July 1, 2001. The decrease in sales was primarily due to a decrease in resin
pricing combined with the Company's restructuring process in Europe, which
includes the sale or closing of six non-strategic locations, partially offset by
a 7.3% increase in units sold, principally due to additional food and beverage
container business where units increased by 10.6%. Excluding business impacted
by the European restructuring, sales for the six months ended June 30, 2002
would have increased approximately 1% compared to the sales for the six months
ended July 1, 2001 and unit volume would have increased approximately 14%. On a
geographic basis, sales for the six months ended June 30, 2002 in North America
decreased $9.4 million or 2.4% from the six months ended July 1, 2001 but
included higher units sold of 5.6%. North American sales in the food and
beverage business, the household and personal care business and the automotive
lubricants business contributed $1.9 million, $4.5 million and $3.0 million,
respectively, to the decrease. Units sold in North America increased by 6.7% in
the food and beverage business, 3.7% in the household and personal care business
and 4.6% in the automotive lubricants business. Sales for the six months ended
June 30, 2002 in Europe decreased $8.0 million or 9.9% from the six months ended
July 1, 2001. Overall, the European sales reflected a 7.9% increase in units
sold. Excluding business impacted by the European restructuring, sales in Europe
for the six months ended June 30, 2002 would have increased approximately $8.7
million compared to sales for the six months ended July 1, 2001 and unit volume
in Europe would have increased approximately 29% compared to the same period
last year. Sales in Latin America for the six months ended June 30, 2002
increased $2.6 million or 20.0% from the six months ended July 1, 2001,
primarily due to an increase in units sold of 47.6%, offset by exchange rate
changes of approximately $3.6 million.


                                       18
<PAGE>


Gross Profit. Gross profit for the six months ended June 30, 2002 increased
$12.8 million to $89.4 million from $76.6 million for the six months ended July
1, 2001. Gross profit for the six months ended June 30, 2002 increased $9.4
million in North America, $3.0 million in Europe and $0.4 million in Latin
America, when compared to the six months ended July 1, 2001. The increase in
gross profit resulted primarily from the higher unit volume and improved
operating performance in each of the Company's operating segments, combined
with the restructuring process in Europe.

Selling, General & Administrative Expenses. Selling, general and administrative
expenses for the six months ended June 30, 2002 increased $0.4 million to $28.9
million from $28.5 million for the six months ended July 1, 2001. The increase
in 2002 selling, general and administrative expenses was primarily due to an
increase in certain non-recurring charges, which were $1.1 million and $0.7
million for the six months ended June 30, 2002 and July 1, 2001, respectively,
comprised primarily in both periods of global reorganization costs. As a percent
of sales, selling, general and administrative expenses increased to 5.9% of
sales for the six months ended June 30, 2002 from 5.7% for the six months ended
July 1, 2001, excluding non-recurring charges, and increased to 6.2% of sales
for the six months ended June 30, 2002 from 5.9% for the six months ended July
1, 2001, including non-recurring charges.

Impairment Charges. Due to operating losses and cash flow deficits experienced
in the Company's Argentine operations and the loss or reduction of business in
Argentina for the six months ended July 1, 2001, the Company evaluated the
recoverability of its long-lived assets in this location. The Company determined
that the expected future undiscounted cash flows were below the carrying value
of its long-lived assets. Accordingly, the Company adjusted the carrying values
of these long-lived assets to their estimated fair values, resulting in an
impairment charge of $3.7 million for the six months ended July 1, 2001, which
includes $3.1 million of goodwill associated with these assets.

Interest Expense, Net. Interest expense, net decreased $9.5 million to $41.7
million for the six months ended June 30, 2002 from $51.2 million for the six
months ended July 1, 2001. The decrease was primarily related to lower interest
rates for the six months ended June 30, 2002 as compared to the six months ended
July 1, 2001. Interest expense, net includes $8.2 million and $7.3 million of
interest on the Senior Discount Notes for the six months ended June 30, 2002 and
July 1, 2001, respectively.

Other Expense (Income). Other income was $0.0 million for the six months ended
June 30, 2002 as compared to other expense of $0.4 million for the six months
ended July 1, 2001. The lower expense was primarily due to a lower equity loss
and a lower foreign exchange loss in the six months ended June 30, 2002 as
compared to the six months ended July 1, 2001.

Net Income (Loss). Primarily as a result of factors discussed above, net income
was $17.2 million for the six months ended June 30, 2002 compared to a net loss
of $7.4 million for the six months ended July 1, 2001.

Adjusted EBITDA. Primarily as a result of factors discussed above, Adjusted
EBITDA (as hereinafter defined) increased $16.0 million or 18.5% to $102.4
million for the six months ended June 30, 2002 from $86.4 million for the six
months ended July 1, 2001.


Effect of Changes in Exchange Rates

     In general, the Company's results of operations are affected by changes
in foreign exchange rates. Subject to market conditions, the Company prices its
products in its foreign operations in local currencies. As a result, a decline
in the value of the United States dollar relative to these other currencies can
have a favorable effect on the profitability of the Company, and an increase in
the value of the United States dollar relative to these other currencies can
have a negative effect on the profitability of the Company. Exchange rate
fluctuations increased comprehensive income (loss) by $9.5 million and decreased
comprehensive income (loss) by $3.5 million for the three months ended June 30,
2002 and July 1, 2001, respectively, and increased comprehensive income
(loss) by $9.3 million and decreased comprehensive income (loss) by $13.4
million for the six months ended June 30, 2002 and July 1, 2001, respectively.


                                       19
<PAGE>


Derivatives

     On January 1, 2001, in connection with the adoption of Statement of
Financial Accounting Standards ("SFAS") 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS 138, the Company
recorded $0.4 million in other comprehensive income ("OCI") as a cumulative
transition adjustment for derivatives designated as cash flow hedges prior to
adopting SFAS 133. The Company enters into interest rate swap agreements to
hedge the exposure to increasing rates with respect to its Senior Credit
Agreement (as hereinafter defined). Upon adoption of SFAS 133, these interest
rate swaps have been properly designated, documented and accounted for as cash
flow hedges. The effective portion of the change in the fair value of the
interest rate swaps is recorded in OCI and was an unrealized gain of $4.2
million for the six months ended June 30, 2002. Approximately 89% of the amount
recorded within OCI is expected to be recognized as interest expense in the next
twelve months. Failure to properly document the Company's interest rate swaps as
cash flow hedges would result in income statement recognition of all or part of
the cumulative $8.9 million unrealized loss recorded in OCI as of June 30, 2002.


Liquidity and Capital Resources

     In the six months ended June 30, 2002, the Company funded, through its
various borrowing arrangements and operating activities, $44.2 million of
investing activities, consisting of $44.5 million of capital expenditures,
offset by $0.3 million of proceeds from the sale of the Italian operations.

     The Company's Senior Credit Agreement, entered into as part of the
Company's 1998 Recapitalization, currently consists of four term loans to the
Operating Company with initial term loan commitments totaling $570 million and
two revolving loan facilities to the Operating Company totaling $255 million.
Unused availability of the revolving credit facilities under the Senior Credit
Agreement at June 30, 2002 is $104.5 million, $79.5 million of which is under
the Revolving Credit Facility and $25.0 million of which is under the Growth
Capital Revolving Credit Facility. The obligations of the Operating Company
under the Senior Credit Agreement are guaranteed by Holdings and certain other
subsidiaries of Holdings. The term loans are payable in quarterly installments
through January 31, 2007, and require payments of $25.0 million in 2002, $27.5
million in 2003, $93.0 million in 2004, $64.9 million in 2005 and $242.7 million
in 2006. The Company expects to fund scheduled debt repayments from cash from
operations and unused lines of credit. The revolving loan facilities expire on
January 31, 2004.

     The Senior Credit Agreement contains certain affirmative and negative
covenants as to the operations and financial condition of the Company, as well
as certain restrictions on the payment of dividends and other distributions to
Holdings. Substantially all domestic tangible and intangible assets of the
Company are pledged as collateral pursuant to the terms of the Senior Credit
Agreement.

     The Recapitalization also included the issuance of $225 million of
Senior Subordinated Notes due 2008 and the issuance of $169 million aggregate
principal amount at maturity of Senior Discount Notes due 2009 which yielded
gross proceeds of $100.6 million. At June 30, 2002, the aggregate accreted value
of the Senior Discount Notes was $159.8 million. The Senior Subordinated Notes
are unconditionally guaranteed on a senior subordinated basis by Holdings and
mature on January 15, 2008, with interest payable on $150 million at a fixed
rate of 8.75% and with interest payable on $75 million at LIBOR plus 3.625%. The
Senior Discount Notes mature on January 15, 2009, with cash interest payable
semi-annually beginning July 15, 2003 at 10.75%. The effective interest rate to
maturity on the Senior Discount Notes is 10.75%. At June 30, 2002, the Company's
total indebtedness was $1,067.4 million.

     An equity contribution of $50.0 million was made by the Company's
owners to the Company on September 29, 2000, satisfying Blackstone's first
capital call obligation under the Senior Credit Agreement and Capital Call
Agreement. As part of the second amendment to the Senior Credit Agreement, if
certain events of default were to occur, or if the Company's Net Leverage Ratio
were above certain levels for test periods beginning June 30, 2001, Blackstone
agreed to make an additional equity contribution to the Company through the
administrative agent of up to $50.0 million. An additional equity contribution
of $50.0 million was made by the Company's owners on March 29, 2001, fully
satisfying Blackstone's final obligation under the Capital Call Agreement dated
as of August 13, 1998, as amended on March 29, 2000. The Company used the
proceeds of the Capital Calls to reduce its outstanding Revolving Credit Loans.


                                       20
<PAGE>


     As market conditions warrant, the Company and its major equityholders,
including Blackstone Capital Partners III Merchant Banking Fund L.P. and its
affiliates, may from time to time repurchase debt securities issued by the
Company, in privately negotiated or open market transactions, by tender offer or
otherwise.

     Adjusted EBITDA is not intended to represent cash flow from operations
as defined by generally accepted accounting principles and should not be used as
an alternative to net income as an indicator of operating performance or to cash
flow as a measure of liquidity. Adjusted EBITDA is defined in the Company's
Senior Credit Agreement and Indentures as earnings before minority interest,
extraordinary items, interest expense, interest income, income taxes,
depreciation and amortization expense, impairment charges, the ongoing $1
million per year fee paid pursuant to the Blackstone monitoring agreement,
non-cash equity income in earnings of joint ventures, other non-cash charges,
Recapitalization expenses, special charges and unusual items and certain
non-recurring charges. Adjusted EBITDA is included because covenants in the
Company's debt agreements are tied to ratios based on that measure. While
Adjusted EBITDA and similar measures are frequently used as measures of
operations and the ability to meet debt service requirements, these terms are
not necessarily comparable to other similarly titled captions of other companies
due to the potential inconsistencies in the method of calculation. Adjusted
EBITDA is calculated as follows:

<TABLE>
<CAPTION>
                                                                           Three Months Ended         Six Months Ended
                                                                           ------------------         ----------------
                                                                           June 30,   July 1,       June 30,   July 1,
                                                                             2002       2001          2002       2001
                                                                             ----       ----          ----       ----
                                                                                            (In millions)
                                                                                            -------------
<S>                                                                      <C>          <C>         <C>          <C>
Net income (loss)....................................................... $   14.0     $  (1.2)    $   17.2     $  (7.4)
Interest expense, net...................................................     19.7        25.2         41.7        51.2
Income tax expense......................................................      0.7         --           0.9         --
Depreciation and amortization...........................................     17.5        17.6         35.0        36.0
Impairment charges......................................................      --          3.7          --          3.7
Fees paid pursuant to the Blackstone monitoring agreement                     0.2         0.2          0.5         0.5
Equity in loss of joint venture.........................................      --          --           --          0.2
Minority interest.......................................................      0.4         0.1          0.7         0.1
Special charges and unusual items/certain non-recurring charges (1)(2)..      3.1         1.5          6.4         2.1
                                                                         --------     -------     --------     -------
Adjusted EBITDA ........................................................ $   55.6     $  47.1     $  102.4     $  86.4
                                                                         ========     =======     ========     =======
</TABLE>

  (1)   The three and six months ended June 30, 2002 include global
        reorganization costs ($3.1 million and $6.3 million, respectively) and
        other costs ($0.0 million and $0.1 million, respectively). The three
        and six months ended July 1, 2001 include special charges and unusual
        items related to compensation costs incurred in connection with the
        Recapitalization ($0.0 million and $0.1 million, respectively), global
        reorganization costs ($1.4 million and $1.8 million, respectively) and
        other costs ($0.1 million and $0.2 million, respectively). For the
        fiscal year 2002, the Company expects to incur approximately $20.0
        million of global reorganization costs.
  (2)   Does not include project startup costs, which are treated as
        non-recurring in accordance with the definition of EBITDA under the
        Senior Credit Agreement. These startup costs were $0.9 million and $0.1
        million for the three months ended June 30, 2002 and July 1, 2001,
        respectively, and $2.0 million and $2.9 million for the six months
        ended June 30, 2002 and July 1, 2001, respectively.

     Management believes that capital investment to maintain and upgrade
property, plant and equipment is important to remain competitive. Management
estimates that the annual capital expenditures required to maintain the
Company's current facilities are currently approximately $30 million per year.
Additional capital expenditures beyond this amount will be required to expand
capacity. Capital expenditures for the six months ended June 30, 2002 were $44.5
million. For the fiscal year 2002, the Company expects to incur approximately
$110 million of capital expenditures. However, total capital expenditures will
depend on the size and timing of growth related opportunities. The Company's
principal sources of cash to fund capital requirements will be net cash provided
by operating activities and borrowings under the Senior Credit Agreement.


                                       21
<PAGE>

     On July 9, 2002, the Company and Graham Engineering amended its
Equipment Sales, Services and License Agreement to, among other things, (i)
limit the Company's existing rights in exchange for a perpetual license in the
event Graham Engineering proposes to sell its rotary extrusion blow molding
equipment business or assets to certain of the Company's significant
competitors; (ii) clarify that the Company's exclusivity rights under the
Equipment Sales, Services and License Agreement do not apply to certain new
generations of Graham Engineering equipment; (iii) provide Graham Engineering
certain recourse in the event the Company decides to buy certain high output
extrusion blow molding equipment from any supplier other than Graham
Engineering; and (iv) obligate the Company retroactive to January 1, 2002 and
subject to certain credits and carry-forwards, to make payments for products and
services to Graham Engineering in the amount of at least $12 million per
calendar year, or else to pay to Graham Engineering a shortfall payment.

     Under the Senior Credit Agreement, the Operating Company is subject to
restrictions on the payment of dividends or other distributions to Holdings;
provided that, subject to certain limitations, the Operating Company may pay
dividends or other distributions to Holdings:

o    in  respect of  overhead,  tax  liabilities,  legal,  accounting  and other
     professional fees and expenses;

o    to fund  purchases  and  redemptions  of equity  interests  of  Holdings or
     BMP/Graham Holdings  Corporation held by then present or former officers or
     employees of Holdings,  the Operating  Company or their  subsidiaries or by
     any employee  stock  ownership plan upon that person's  death,  disability,
     retirement or termination of employment or other  circumstances with annual
     dollar  limitations;  and

o    to  finance,  starting  on July 15,  2003,  the  payment  of cash  interest
     payments on the Senior Discount Notes.


New Accounting Pronouncements

     On January 1, 2002, the Company adopted SFAS 142, "Goodwill and Other
Intangible Assets." SFAS 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, ceased upon adoption
of this statement. The Company has completed the transitional goodwill
impairment test as of January 1, 2002 and determined that there was no
impairment loss to be recognized upon adoption of SFAS 142.

     On January 1, 2002, SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," was adopted by the Company. SFAS 144 addresses
the financial accounting and reporting for the impairment or disposal of
long-lived assets. The Company has determined that there was no impact on the
consolidated financial position or results of operations as a result of the
adoption of SFAS 144.

     On April 30, 2002, SFAS 145, "Rescission of FASB Statements No. 4, 44
and 64, Amendment of FASB Statement No. 13, and Technical Corrections" was
approved by the FASB. As a result, gains and losses from extinguishment of debt
should be classified as extraordinary items only if they meet the criteria in
Accounting Principles Board Opinion 30. The Company is required to implement
SFAS 145 on January 1, 2003 and does not believe that adoption of SFAS 145 will
have a significant impact on its results of operations or financial position.

     On July 30, 2002, SFAS 146, "Accounting for Costs Associated with Exit
or Disposal Activities" was issued by the FASB. This standard requires companies
to recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
SFAS 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002.


                                       22
<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risk


     See the information set forth in Item 7A of Holdings' Annual Report on
Form 10-K for the fiscal year ended December 31, 2001 for complete quantitative
and qualitative disclosures about market risk. The following table provides
disclosure as of June 30, 2002 for financial instruments that have experienced
material changes in fair value since December 31, 2001.


<TABLE>
<CAPTION>
                        Expected Maturity Date of Interest Rate Swap Agreements at June 30, 2002   Fair Value
                                                       (In thousands)                               June 30,
                        ------------------------------------------------------------------------
                         2002      2003      2004      2005      2006     Thereafter     Total        2002
                         ----      ----      ----      ----      ----     ----------     -----        ----
<S>                      <C>     <C>         <C>       <C>       <C>      <C>           <C>         <C>
Derivatives matched
  against liabilities:    --     $300,000     --        --        --          --        $300,000    $ (8,950)
Pay fixed swaps
  Pay rate                --       5.25%      --        --        --          --          5.25%
  Receive rate            --       2.29%      --        --        --          --          2.29%
</TABLE>



                                       23
<PAGE>




PART II           OTHER INFORMATION


Item 6.     Exhibits and Reports on Form 8-K

        (a)      Exhibits

                 none


        (b)      Reports on Form 8-K

                 No reports on Form 8-K were required to be filed during the
                 quarter ended June 30, 2002.




                                       24
<PAGE>




                                    SIGNATURE



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


     Dated:   August 13, 2002


                               GRAHAM PACKAGING HOLDINGS COMPANY
                               (Registrant)

                               By: BCP/Graham Holdings L.L.C.,
                                     its General Partner


                               By:   /s/  John E. Hamilton
                                     -----------------------------------
                                     John E. Hamilton
                                     Vice President, Finance and Administration
                                     (chief accounting officer and duly
                                     authorized officer)




                                       25
<PAGE>





                                  CERTIFICATION

     Each of the undersigned  hereby  certifies in his capacity as an officer of
the Operating  Company that the Quarterly Report of the Company on Form 10-Q for
the quarterly period ended June 30, 2002 fully complies with the requirements of
Section 13(a) of the  Securities  Exchange Act of 1934 and that the  information
contained  in  such  report  fairly  presents,  in all  material  respects,  the
financial  condition of the Company at the end of such period and the results of
operations of the Company for such period.


     Dated:   August 13, 2002


                               By:   /s/  Philip R. Yates
                                     -----------------------------------
                                     Philip R. Yates
                                     Chief Executive Officer

                               By:   /s/  John E. Hamilton
                                     -----------------------------------
                                     John E. Hamilton
                                     Chief Financial Officer


                                       26
<PAGE>