SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                   -------

                                  FORM 10-Q




[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 0-5485


                             VISKASE COMPANIES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware                                            95-2677354
-------------------------------                           -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)

625 Willowbrook Centre Parkway, Willowbrook, Illinois                60527
-----------------------------------------------------              ----------
(Address of principal executive offices)                           (Zip Code)

      Registrant's telephone number, including area code:  (630) 789-4900



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


     As of August 14, 2002, there were 15,316,062 shares outstanding of the
registrant's Common Stock, $.01 par value.




                         INDEX TO FINANCIAL STATEMENTS



                     VISKASE COMPANIES, INC. AND SUBSIDIARIES

               UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                                                         Page
                                                                         ----

Consolidated balance sheets at June 30, 2002 and December 31, 2001         4

Consolidated statements of operations and comprehensive
income (loss) for the
     three months ended June 30, 2002 and June 30, 2001 and for the
     six months ended June 30, 2002 and June 30, 2001                      5

Consolidated statements of cash flows for the six months ended
     June 30, 2002 and June 30, 2001                                       7

Notes to consolidated financial statements                                 8


<PAGE>
                         PART I. FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS
         --------------------


The financial information included in this quarterly report has been prepared
in conformity with the accounting principles and practices reflected in the
financial statements included in the annual report on Form 10-K filed with
the Securities and Exchange Commission for the year ended December 31, 2001
(2001 Form 10-K). These quarterly financial statements should be read in
conjunction with the financial statements and the notes thereto included in
the 2001 Form 10-K. The accompanying financial information, which is
unaudited, reflects all adjustments which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods
presented.

The consolidated balance sheet as of December 31, 2001 was derived from the
audited consolidated financial statements in the Company's annual report on
the 2001 Form 10-K.

Reported interim results of operations are based in part on estimates, which
may be subject to year-end adjustments. In addition, these quarterly results
of operations are not necessarily indicative of those expected for the year.



                    VISKASE COMPANIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<TABLE>
<CAPTION>
                                                     June 30,    December 31,
                                                       2002          2001
                                                     --------    ------------
                               (in thousands except for the number of shares)
<S>                                              <C>            <C>
ASSETS
Current assets:
  Cash and equivalents                               $ 14,261       $ 25,540
  Restricted cash                                      29,146         26,558
  Receivables, net                                     28,295         25,838
  Inventories                                          30,870         29,064
  Other current assets                                  9,901          9,691
                                                     --------       --------
    Total current assets                              112,473        116,691

Property, plant and equipment,
  including those under capital leases                237,366        233,637
  Less accumulated depreciation
    and amortization                                  140,060        127,338
                                                     --------       --------
  Property, plant and equipment, net                   97,306        106,299

Deferred financing costs, net                           2,018          2,024
Other assets                                            7,924          9,014
                                                     --------       --------
  Total assets                                       $219,721       $234,028
                                                     ========       ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Short-term debt including current portion
    of long-term debt and obligations
    under capital leases                             $227,321       $236,059
  Accounts payable                                      9,310          9,784
  Accrued liabilities                                  45,495         48,203
  Current deferred income taxes                         1,597          1,597
                                                     --------       --------
    Total current liabilities                         283,723        295,643

Long-term debt including obligations
  under capital leases                                    145            194

Accrued employee benefits                              53,532         51,116
Noncurrent deferred income taxes                       25,785         25,128

Commitments and contingencies

Stockholders' deficit:
  Preferred stock, $.01 par value;
    none outstanding
  Common stock, $.01 par value;
    issued and outstanding
    15,316,062 shares at June 30, 2002 and
    15,317,112 shares at December 31, 2001                153            153
  Paid in capital                                     138,010        138,014
  Accumulated (deficit)                              (279,326)      (272,574)
  Accumulated other comprehensive (loss)               (2,169)        (3,461)
  Unearned restricted stock issued
    for future service                                   (132)          (185)
                                                     ---------      ---------
    Total stockholders' (deficit)                    (143,464)      (138,053)
                                                     ---------      ---------
    Total liabilities and stockholders' deficit      $219,721       $234,028
                                                     =========      =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.

<PAGE>
                     VISKASE COMPANIES, INC. AND SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                        Three Months Ended             Six Months Ended
                                                      ----------------------        ----------------------
                                                       June           June           June           June
                                                     30, 2002       30, 2001       30, 2002       30, 2001
                                                     --------       --------       --------       --------
                                         (in thousands, except for number of shares and per share amounts)
<S>                                              <C>            <C>            <C>            <C>
NET SALES                                             $46,291        $46,503        $89,678        $94,543

COSTS AND EXPENSES
  Cost of sales                                        36,288         37,965         70,999         77,247
  Selling, general and administrative                   9,582         10,574         20,193         21,495
  Amortization of intangibles                             500            500          1,000          1,000
  Restructuring (income)                               (6,132)                       (6,132)
                                                      --------       --------       --------       --------

OPERATING INCOME (LOSS)                                 6,053         (2,536)         3,618         (5,199)

  Interest income                                         233            553            547          1,457
  Interest expense                                      6,141          6,387         12,268         12,887
  Other (income) expense, net                            (549)         3,377           (643)         4,462
                                                      --------       --------       --------       --------

INCOME (LOSS) FROM CONTINUING
  OPERATIONS BEFORE INCOME TAXES                          694        (11,747)        (7,460)       (21,091)

  Income tax (benefit) provision                         (437)         2,470           (708)          (904)
                                                      --------       --------       --------       --------

INCOME (LOSS) FROM CONTINUING
  OPERATIONS                                            1,131        (14,217)        (6,752)       (20,187)

DISCONTINUED OPERATIONS:

  Gain on disposal net of income taxes
    of $0                                                              3,189                         3,189
                                                      --------       --------       --------       --------

INCOME (LOSS) BEFORE
  EXTRAORDINARY ITEM                                    1,131        (11,028)        (6,752)       (16,998)

  Extraordinary gain on early extinguishment of
  debt, net of three month and six month
  income taxes of $3,152 and $0, respectively                          3,207                         8,137
                                                      --------       --------       --------       --------

NET INCOME (LOSS)                                       1,131         (7,821)        (6,752)        (8,861)

  Other comprehensive income (loss)
  Foreign currency translation adjustments              1,711           (247)         1,292         (1,269)
                                                      --------       --------       --------       --------

COMPREHENSIVE INCOME (LOSS)                            $2,842        $(8,068)       $(5,460)      $(10,130)
                                                      ========       ========       ========      =========


WEIGHTED AVERAGE COMMON SHARES
  - BASIC AND DILUTED                              15,316,358     15,304,458     15,316,734     15,301,494
                                                   ==========     ==========     ==========     ==========


PER SHARE AMOUNTS:

NET INCOME (LOSS) EARNINGS PER SHARE:
  - basic and diluted

CONTINUING OPERATIONS                                    $.07         $( .93)         $(.44)        $(1.32)

DISCONTINUED OPERATIONS:

  Gain on disposal, net of tax                                           .21                           .21
                                                         ----         -------         ------        -------

INCOME (LOSS) BEFORE
  EXTRAORDINARY ITEM                                      .07          (.72)           (.44)         (1.11)

  Extraordinary gain, net of tax                                        .21                            .53
                                                         ----         -------         ------        -------

Net Income (loss)                                        $.07         $(.51)          $(.44)         $(.58)

</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
                     VISKASE COMPANIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                              Six Months Ended
                                                                         --------------------------
                                                                         June 30,          June 30,
                                                                           2002              2001
                                                                         --------------------------
                                                                               (in thousands)
<S>                                                                  <C>              <C>

Cash flows from operating activities:

  Net (loss)                                                             $(6,752)          $(8,861)


  Adjustments to reconcile net (loss) to net cash
    provided by (used in) operating activities:

      Depreciation and amortization under capital lease                   10,455            10,874
      Amortization of intangibles                                          1,000             1,000
      Amortization of deferred financing fees                                223                60
      Increase (decrease) in deferred income taxes                           122            (1,089)
      Extraordinary (gain) on debt extinguishment                                           (8,137)
      Foreign currency transaction (gain) loss                              (252)              812
      (Gain) loss on disposition of assets                                    (7)            1,895
      Bad debt (reduction) provision                                         (61)              272
      Net property, plant and equipment write-off                          1,028

      Changes in operating assets and liabilities:
        Receivables                                                       (1,438)           (1,583)
        Inventories                                                         (867)              735
        Other current assets                                                 (64)              442
        Accounts payable and accrued liabilities                          (3,927)          (22,313)
        Other                                                              1,524              (678)
                                                                         --------          --------
      Total adjustments                                                    7,736           (17,710)
                                                                         --------          --------

        Net cash provided by (used in) operating activities                  984           (26,571)

Cash flows from investing activities:
  Capital expenditures                                                      (795)           (2,672)
  Proceeds from disposition of assets                                        548               799
  Restricted cash                                                         (2,623)           14,415
                                                                         --------          --------
        Net cash (used in) provided by investing activities               (2,870)           12,542

Cash flows from financing activities:
  Issuance of common stock                                                                     101
  Deferred financing costs                                                  (216)             (958)
  Repayment of long-term borrowings
    and capital lease obligation                                          (8,810)          (20,609)
                                                                         --------          --------
        Net cash (used in) financing activities                           (9,026)          (21,466)

Effect of currency exchange rate changes on cash                            (402)           (1,277)
                                                                         --------          --------
Net (decrease) in cash and equivalents                                   (11,314)          (36,772)
Cash and equivalents at beginning of period                               25,540            55,350
                                                                         --------          --------
Cash and equivalents at end of period                                    $14,226           $18,578
                                                                         ========          ========

Supplemental cash flow information:
  Interest paid                                                           $3,127           $11,466
  Income taxes paid                                                       $   30           $ 5,094

</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
                    VISKASE COMPANIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  GOING CONCERN PRESENTATION (dollars and shares in thousands, except per
    share amounts)

Viskase Companies, Inc. (Company) consolidated financial statements are
presented on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business.
Except for the classification of certain debt as discussed in Note 4, the
consolidated financial statements do not include any adjustment relating to
recoverability and classification of recorded asset amounts or the amount and
classification of liabilities or any other adjustments that might be
necessary should the Company be unable to continue as a going concern.

The Company's cash flows from operations were insufficient to pay the 10.25%
Senior Notes (Senior Notes) when they matured on December 1, 2001, and
accordingly the Company did not pay the $163,060 principal and $8,357
interest that became due at that time. In September 2001, certain of the
holders of the Senior Notes formed an ad hoc committee (Ad Hoc Committee) to
participate in the development of a plan to restructure the Company's capital
structure and address its future cash flow needs. On July 15, 2002, the
Company executed a restructuring agreement with the Ad Hoc Committee of the
Company's Senior Notes due December 1, 2001 for the restructuring of the
Senior Notes. Under the terms of the proposed restructuring, the Company's
wholly owned operating subsidiary, Viskase Corporation, will be merged with
and into the Company with the Company being the surviving corporation. The
outstanding Senior Notes would be exchanged for new Senior Secured Notes (New
Notes) and shares of Series A Preferred Stock (Preferred Stock) to be issued
by the Company on a basis of $367.96271 principal amount of New Notes (i.e.,
$60,000) and 126.82448 shares of Preferred Stock (i.e., 20,680 shares or 94%
of the Preferred Stock) for each one thousand dollar principal amount of
Senior Notes. The Ad Hoc Committee retained legal counsel, the fees and
expenses of which are being paid by the Company.

Under the proposed restructuring, the Company will continue to provide an
uninterrupted supply of products and services to customers worldwide. Trade
creditors and vendors will be totally unaffected and will continue to be paid
in the ordinary course of business, and the Company's employees will be paid
all wages, salaries and benefits on a timely basis.

The New Notes would bear interest at a rate of 8% per year, payable semi-
annually (except annually with respect to year four and quarterly with
respect to year five), with interest payable in the form of New Notes (pay-
in-kind) for the first three years. Interest for years four and five will be
payable in cash to the extent of available cash flow, as defined, and the
balance in the form of New Notes (pay-in-kind). Thereafter, interest will be
payable in cash. The New Notes would mature on December 1, 2008.

The New Notes would be secured by a first lien in the assets of the Company,
other than the assets subject to the GECC lease and certain real estate,
post-merger. The New Notes will be subject to subordination of up to $25,000
for a secured working capital credit facility for the Company.

The Preferred Stock will pay a 6% cumulative dividend. Its holders will vote
on an as-converted basis on all matters together with the Company's common
stockholders. The Preferred Stock will have a liquidation preference of $5.00
per share and will be convertible into common stock at any time at a price of
$.20 per share. Upon conversion, the Preferred Stock would represent about
97% of the common stock. Accrued but unpaid dividends, at time of conversion,
will be convertible into common stock upon the same basis. At the Company's
option, the Preferred Stock would be automatically converted into common
stock on the same basis in connection with a public offering of securities by
the Company of not less than $50,000. Dividends on the Preferred Stock would
be payable in cash to the extent the Company is legally, contractually and
financially able to pay dividends.

Under the proposed restructuring, 1,320 shares of Preferred Stock (or upon
the request of Company management, options to purchase 1,320 shares of
Preferred Stock), representing 6% of the Preferred Stock, will be reserved
for Company management and employees. Such shares or options will be subject
to a vesting schedule with acceleration upon the occurrence of certain
events.

The proposed exchange offer would be subject to acceptance by holders of 100%
of the outstanding Senior Notes, unless waived by the Company and approved by
the Ad Hoc Committee. The exchange offer would include a solicitation for a
prepackaged plan of reorganization for the Company. If less than 100% of the
outstanding Senior Notes accept the exchange offer but sufficient number and
aggregate number of Senior Notes vote in favor of acceptance of the
prepackaged plan of reorganization, the Company will commence a voluntary
Chapter 11 petition and seek confirmation of the prepackaged plan of
reorganization containing substantially the same terms as the exchange offer.
In the event the restructuring is consummated through a bankruptcy
proceeding, the Company's common stock will be canceled and new common stock
will be issued, 94% to the holders of Senior Notes and 6% to the Company's
management and employees. Holders of old common stock would receive warrants
to purchase shares of new common stock equal to 2.7% of the Company's common
stock. Assuming all warrants are exercised, holders of the Senior Notes would
receive approximately 91.5% of the new common stock and approximately 5.8%
would go to the Company's management and employees. Thus, the consideration
received by all noteholders would be substantially the same regardless of
whether the proposed restructuring occurs pursuant to an exchange offer or
prepackaged plan of reorganization.

Upon completion of the proposed restructuring the Board of Directors of the
Company would be reconstituted to consist of five members, including the
Company's Chief Executive Officer and four other persons designated by the Ad
Hoc Committee.

The Ad Hoc Committee members, holding in the aggregate approximately 54% of
the Senior Notes, have agreed to accept the proposed exchange offer and vote
in favor of the prepackaged plan of reorganization. The members of the Ad Hoc
Committee have also agreed to take such other reasonable actions as necessary
to consummate the proposed restructuring. In addition, the members of the Ad
Hoc Committee have agreed not to transfer (other than to another member of
the Ad Hoc Committee or an affiliate of a member) their shares of Preferred
Stock (or common stock upon conversion) for a period of two years after the
exchange offer is completed. For a period of one year thereafter, the Company
would have a right of first refusal to either purchase or designate a
purchaser for shares of Preferred Stock (or common stock upon conversion) to
be transferred by a member of the Ad Hoc Committee to a person other
than another member of the Ad Hoc Committee or their affiliates.

The Company expects to complete the restructuring (either the exchange
restructuring or the prepackaged) agreed to by the Ad Hoc Committee pursuant
to the restructuring agreement, but can provide no assurances that any
restructuring will be completed on the terms indicated in the restructuring
agreement.

The Company intends to mail both the Offer to Exchange and solicitation of
the prepackaged plan of reorganization to holders of Senior Notes on or about
August 21, 2002. Accordingly, the Company expects the restructuring to be
completed sometime between November 4, 2002 and February 2, 2003.

General Electric Capital Corporation (GECC), Viskase's equipment lessor, has
agreed, subject to certain conditions, not to accelerate payment of amounts
due because of any default or event of default under any of the lease
documents arising from (i) Viskase's failure to meet the Fixed Charge
Coverage Ratio for the fiscal quarters ending on March 31, 2002, June 30,
2002 and September 30, 2002, (ii) the Company becoming a debtor under Chapter
11 of the Bankruptcy Code; provided, however, that the waiver granted
pursuant to the foregoing clause shall be rescinded if the Company shall be a
debtor under Chapter 11 of the Bankruptcy Code on or after November 30, 2002.
There is no agreement with GECC to extend the forbearance beyond November 30,
2002, and the Company can make no assurance that any extension would be
received.

2.  CASH AND CASH EQUIVALENTS (dollars in thousands)

<TABLE>
<CAPTION>
                                              June                December
                                            30, 2002              31, 2001
<S>                                     <C>                   <C>
Cash and cash equivalents                    $14,261               $25,540
Restricted cash                               29,146                26,558
                                             -------               -------

                                             $43,407               $52,098
                                             =======               =======
</TABLE>

As of June 30, 2002, cash and cash equivalents of $8,057 and restricted cash
of $29,146 are invested in short term investments.

The 2002 restricted cash is principally cash held as collateral for
outstanding letters of credit with commercial banks. Included within
restricted cash is a letter of credit of $2,109 which F. Edward Gustafson,
Chairman of the Board, President and Chief Executive Officer, is the
beneficiary. The letter of credit supports amounts payable under his
Employment Agreements.


3.  INVENTORIES (dollars in thousands)

Inventories consisted of:
<TABLE>
<CAPTION>
                                              June                December
                                            30, 2002              31, 2001
                                            --------              --------
<S>                                     <C>                   <C>
Raw materials                                $ 3,476               $ 3,173
Work in process                               14,032                13,131
Finished products                             13,362                12,760
                                             -------               -------

                                             $30,870               $29,064
                                             =======               =======
</TABLE>

Approximately 49.9% of the inventories at June 30, 2002 were valued at Last-
In, First-Out (LIFO). These LIFO values exceeded current manufacturing cost
by approximately $1,686 at June 30, 2002.

4.  DEBT OBLIGATIONS (dollars and shares in thousands, except per share
    amounts)

Outstanding short-term and long-term debt consisted of:

<TABLE>
<CAPTION>
                                                        June                December
                                                      30, 2002              31, 2001
                                                      --------              --------
<S>                                              <C>                  <C>
Short-term debt, current maturity of long-term
  debt, and capital lease obligation:

  Viskase Capital Lease Obligation                    $ 64,106              $ 72,855
  10.25% Senior Notes due 2001                         163,060               163,060
  Other                                                    155                   144
                                                      --------              --------

    Total short-term debt                             $227,321              $236,059

Long-term debt:

  Other                                                    145                   194
                                                      --------              --------

    Total long-term debt                              $    145              $    194
                                                      ========              ========
</TABLE>

10.25% Senior Notes
-------------------

The Company's cash flows from operations were insufficient to pay the Senior
Notes when they matured on December 1, 2001, and accordingly the Company did
not pay the $163,060 principal and $8,357 interest that became due at that
time. In September 2001, certain of the holders of the Senior Notes formed
the Ad Hoc Committee to participate in the development of a plan to
restructure the Company's capital structure and address its future cash flow
needs. On July 15, 2002, the Company executed a restructuring agreement with
the Ad Hoc Committee of the Company's Senior Notes due December 1, 2001 for
the restructuring of the Senior Notes. Under the terms of the proposed
restructuring, the Company's wholly owned operating subsidiary, Viskase
Corporation, will be merged with and into the Company with the Company being
the surviving corporation. The outstanding Senior Notes would be exchanged
for New Notes and shares of Preferred Stock to be issued by the Company on a
basis of $367.96271 principal amount of New Notes (i.e., $60,000) and
126.82448 shares of Preferred Stock (i.e., 20,680 shares or 94% of the
Preferred Stock) for each one thousand dollar principal amount of Senior
Notes. The Ad Hoc Committee retained legal counsel, the fees and expenses of
which are being paid by the Company.

Under the proposed restructuring, the Company will continue to provide an
uninterrupted supply of products and services to customers worldwide. Trade
creditors and vendors will be totally unaffected and will continue to be paid
in the ordinary course of business, and the Company's employees will be paid
all wages, salaries and benefits on a timely basis.

The New Notes would bear interest at a rate of 8% per year, payable semi-
annually (except annually with respect to year four and quarterly with
respect to year five), with interest payable in principal amount of New Notes
(pay-in-kind) for the first three years. Interest for years four and five
will be payable in cash to the extent of available cash flow, as defined, and
the balance in principal amount of New Notes (pay-in-kind). Thereafter,
interest will be payable in cash. The New Notes would mature on December 1,
2008.

The New Notes would be secured by a first lien in the assets of the Company,
other than the assets subject to the GECC lease and certain real estate,
post-merger. The New Notes will be subject to subordination of up to $25,000
for a secured working capital credit facility for the Company.

The Preferred Stock will pay a 6% cumulative dividend. Its holders will vote
on an as-converted basis on all matters together with the Company's common
stockholders. The Preferred Stock will have a liquidation preference of $5.00
per share and will be convertible into common stock at any time at a price of
$.20 per share. Upon conversion, the Preferred Stock would represent about
97% of the common stock. Accrued but unpaid dividends, at time of conversion,
will be convertible into common stock upon the same basis. At the Company's
option, the Preferred Stock would be automatically converted into common
stock on the same basis in connection with a public offering of securities by
the Company of not less than $50,000. Dividends on the Preferred Stock would
be payable in cash to the extent the Company is legally, contractually and
financially able to pay dividends.

Under the proposed restructuring, 1,320 shares of Preferred Stock (or upon
the request of Company management, options to purchase 1,320 shares of
Preferred Stock), representing 6% of the Preferred Stock, will be reserved
for Company management and employees. Such shares or options will be subject
to a vesting schedule with acceleration upon the occurrence of certain
events.

The proposed exchange offer would be subject to acceptance by holders of 100%
of the outstanding Senior Notes, unless waived by the Company and approved by
the Ad Hoc Committee. The exchange offer would include a solicitation for a
prepackaged plan of reorganization for the Company. If less than 100% of the
outstanding Senior Notes accept the exchange offer but sufficient number and
aggregate number of Senior Notes vote in favor of acceptance of the
prepackaged plan of reorganization, the Company will commence a voluntary
Chapter 11 petition and seek confirmation of the prepackaged plan of
reorganization containing substantially the same terms as the exchange offer.
In the event the restructuring is consummated through a bankruptcy
proceeding, the Company's common stock will be canceled and new common stock
will be issued, 94% to the holders of Senior Notes and 6% to the Company's
management and employees. Holders of old common stock would receive warrants
to purchase shares of new common stock equal to 2.7% of the Company's common
stock. Assuming all warrants are exercised, holders of the Senior Notes would
receive approximately 91.5% of the new common stock and approximately 5.8%
would go to the Company's management and employees. Thus, the consideration
received by all noteholders would be substantially the same regardless of
whether the proposed restructuring occurs pursuant to an exchange offer or
prepackaged plan of reorganization.

Upon completion of the proposed restructuring the Board of Directors of the
Company would be reconstituted to consist of five members, including the
Company's Chief Executive Officer and four other persons designated by the Ad
Hoc Committee.

The Ad Hoc Committee members, holding in the aggregate approximately 54% of
the Senior Notes, have agreed to accept the proposed exchange offer and vote
in favor of the prepackaged plan of reorganization. The members of the Ad Hoc
Committee have also agreed to take such other reasonable actions as necessary
to consummate the proposed restructuring. In addition, the members of the Ad
Hoc Committee have agreed not to transfer (other than to another member of
the Ad Hoc Committee or an affiliate of a member) their shares of Preferred
Stock (or common stock upon conversion) for a period of two years after the
exchange offer is completed. For a period of one year thereafter, the Company
would have a right of first refusal to either purchase or designate a
purchaser for shares of Preferred Stock (or common stock upon conversion) to
be transferred by a member of the Ad Hoc Committee to a person other
than another member of the Ad Hoc Committee or their affiliates.

The Company expects to complete the restructuring (either the exchange
restructuring or the prepackaged) agreed to by the Ad Hoc Committee pursuant
to the restructuring agreement, but can provide no assurances that any
restructuring will be completed on the terms indicated in the restructuring
agreement.

The Company intends to mail both the Offer to Exchange and solicitation of
the prepackaged plan of reorganization to holders of Senior Notes on or about
August 21, 2002. Accordingly, the Company expects the restructuring to be
completed sometime between November 4, 2002 and February 2, 2003.

The Senior Note Indenture contains covenants with respect to Viskase
Companies, Inc. and its subsidiaries limiting (subject to a number of
important qualifications), among other things, (i) the ability to pay
dividends on or redeem or repurchase capital stock, (ii) the incurrence of
indebtedness, (iii) certain affiliate transactions and (iv) the ability of
the Company to consolidate with or merge with or into another entity or to
dispose of substantially all its assets.

The Company has from time to time purchased Senior Notes in open market or
privately negotiated transactions, with the effect that as of June 30, 2002
there was $163,060 principal amount of Senior Notes outstanding, net of
repurchase. During the year-to-date period ended June 30, 2001, the Company
recognized an $8,137 gain on the repurchase of the Senior Notes.

GECC
----

The GECC capital lease obligations were classified as current in the
financial statements due to covenant restrictions. The following lease
payment maturities conform to contractual payments under the lease.

     February 28, 2003     $23,499
     February 28, 2004     $23,499
     February 28, 2005     $23,500

GECC, Viskase's equipment lessor, has agreed, subject to certain conditions,
not to accelerate payment of amounts due because of any default or event of
default under any of the lease documents arising from (i) Viskase's failure
to meet the Fixed Charge Coverage Ratio for the fiscal quarters ending on
March 31, 2002, June 30, 2002 and September 30, 2002, (ii) the Company
becoming a debtor under Chapter 11 of the Bankruptcy Code; provided, however,
that the waiver granted pursuant to the foregoing clause shall be rescinded
if the Company shall be a debtor under Chapter 11 of the Bankruptcy Code on
or after November 30, 2002. There is no agreement with GECC to extend the
forbearance beyond November 30, 2002, and the Company can make no assurance
that any extension would be received.

Letter of Credit Facility
-------------------------

Letters of credit in the amount of $28,354 were outstanding under a letter of
credit facility with commercial banks, and were cash collateralized at June
30, 2002.

The Company finances its working capital needs through a combination of
internally generated cash from operations and cash on hand.

The Company anticipates that it will enter into a new revolving credit
facility to meet its working capital and letter of credit requirements during
2002.

5.  CONTINGENCIES (dollars in thousands)

In 1988, Viskase Canada Inc. (Viskase Canada), a subsidiary of the Company,
commenced a lawsuit against Union Carbide Canada Limited and Union Carbide
Corporation in the Ontario Superior Court of Justice, Court File No.:
292270188 seeking damages resulting from Union Carbide's breach of
environmental representations and warranties under the Amended and Restated
Purchase and Sale Agreement, dated January 31, 1986 (Agreement). Pursuant to
the Agreement, Viskase Corporation and various affiliates (including Viskase
Canada) purchased from Union Carbide and Union Carbide Films Packaging, Inc.,
its cellulosic casings business and plastic barrier films business
(Business), which purchase included a facility in Lindsay, Ontario, Canada
(Site). Viskase Canada claimed that Union Carbide breached several
representations and warranties and deliberately failed to disclose to Viskase
Canada the existence of contamination on the Site. In 1992, Union Carbide and
Viskase Canada jointly put in place a continuous pumping program at the Site.

In October 2001, the Canadian Ministry of the Environment (MOE) notified
Viskase Canada that it had evidence to suggest that the Site was a source of
polychlorinated biphenyl (PCB) contamination. Viskase Canada is working with
the MOE in investigating the alleged PCB contamination and developing and
implementing, if appropriate, a remedial plan for the Site. Viskase Canada
has been granted leave to amend its lawsuit against Union Carbide to allege
that any PCB contamination at or around the Site was generated from Union
Carbide's plastics extrusion business, which was operated at the Site by
Union Carbide prior to the purchase of the Business. Union Carbide's plastics
extrusion business was not part of the Business purchased by Viskase
Corporation and its affiliates. Viskase Canada will be asking the court to
require Union Carbide to repurchase the Site from Viskase Canada and award
Viskase Canada damages in excess of $2,000 (Canadian dollars). The lawsuit is
still pending and is expected to proceed to trial sometime during the second
half of 2003.

In March 1997, Viskase received a subpoena from the Antitrust Division of the
United States Department of Justice relating to a grand jury investigation of
the sausage casings industry. In September 1999, Viskase received a subpoena
from the Antitrust Division of the United States Department of Justice
relating to the expansion of the grand jury investigation into the specialty
films industry. Viskase is cooperating fully with the investigations.

During 1999 and 2000, the Company and certain of its subsidiaries and one
other sausage casings manufacturer were named in ten virtually identical
civil complaints filed in the United States District Court for the District
of New Jersey by the following plaintiffs:  Smith Provision Co., Inc.; Parks
LLC (d/b/a Parks Sausage Company); Real Kosher Sausage Company, Inc.; Sahlen
Packing Co., Inc.; Marathon Enterprises, Inc.; Ventures East, Inc.;
Keniston's, Inc.; Smithfield Foods, Inc.; Clougherty Packing Co.; and Klement
Sausage Co. The District Circuit ordered all of these cases consolidated in
Civil Action No. 99-5195-MLC (D.N.J.). Each complaint brought on behalf of a
purported class of sausage casings customers alleges that the defendants
unlawfully conspired to fix prices and allocate business in the sausage
casings industry. The Company and its subsidiaries have filed answers to each
of these complaints denying liability. In 2001, all of the consolidated cases
were transferred to the United States District Court for the Northern
District of Illinois, Eastern Division.

The Company and its subsidiaries are involved in these and various other
legal proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect upon
results of operations, cash flows or financial position.

6.  RESTRUCTURING (INCOME) CHARGE (dollars in millions)

During the second quarter of 2002, the Company committed to a restructuring
plan to address the industry's competitive environment. The plan resulted in
a before tax charge of $3.2 million. Approximately 2% of the Company's
worldwide workforce was laid off due to the 2002 restructuring plan. The
Company also reversed an excess reserve of $9.3 million for Nucel(r)
technology third party license fees that have been negotiated to a lower
amount. The Nucel(r) technology license fees were originally reflected in the
2000 Restructuring Reserve.

<TABLE>
<CAPTION>
                                                                           Restructuring
                                      2002                                 Reserve as of
                                     Charge     Payments     Writedown     June 30, 2002
                                     ------     --------     ---------     -------------
<S>                              <C>         <C>          <C>           <C>

  Employee costs                      $1.4        $(.3)           .0            $1.1
  Nucel(r) equipment                   1.0          .0          (1.0)             .0
  Decommissioning                       .8          .0            .0              .8
                                     ------       -----        ------           ----
  Total restructuring                $ 3.2        $(.3)        $(1.0)           $1.9
                                                  =====        ======           ====
  Reversal of 2000 excess reserve     (9.3)
                                     ------
  Restructuring (income)             $(6.1)
                                     ======
</TABLE>

The following table provides details of the 2000 restructuring reserve for
the period ended June 30, 2002:

<TABLE>
<CAPTION>
                                    Restructuring                                    Restructuring
                                    Reserve as of                       Other        Reserve as of
                                  December 31, 2001     Payments     Adjustments     June 30, 2002
                                  -----------------     --------     -----------     -------------
<S>                            <C>                  <C>          <C>              <C>
  Employee costs                        $ 1.0            $ (.6)         $                 $ .4
  Nucel(r) license fees                  13.8             (1.1)          (9.3)             3.4
  Decommissioning                          .3              (.3)
                                        -----            ------         ------            ----
  Total restructuring reserve           $15.1            $(2.0)         $(9.3)            $3.8
                                        =====            ======         ======            ====
</TABLE>

In the second quarter of 2002 and the year-to-date period, the Company paid
third party license fees of approximately $.6 million and $1.1 million,
respectively. The renegotiated Nucel(r) technology third party license fee
payments remaining are estimated at $1.1 million, $.9 million, $.4 million,
$.3 million, $.2 million and $.5 million for the year periods 2002 to 2007
and are included in the 2000 restructuring reserve.

7.  DISCONTINUED OPERATIONS (dollars in millions)

On January 17, 2000, the Company's Board of Directors announced its intent to
sell the Company's plastic barrier and non-barrier shrink Films Business. The
sale of the Films Business was completed on August 31, 2000. The aggregate
proceeds of $255 million, including a Working Capital Adjustment of $10.3
million, were used to retire debt, including the Senior Secured Credit
Facility and Junior Term Loans, pay GECC per the amended amortization
schedule, and for general corporate purposes. The Company recognized a net
gain in the amount of $8.1 million in the June year-to-date period of 2001
due to the finalization of a working capital adjustment.

8.  EARNINGS PER SHARE (EPS)

Following are the reconciliations of the numerators and denominators of the
basic and diluted EPS.

<TABLE>
<CAPTION>
                                           Three Months     Three Months     Six Months     Six Months
                                            Ended June       Ended June      Ended June     Ended June
                                             30, 2002         30, 2001        30, 2002       30, 2001
                                           ------------     ------------     ----------     ----------
                                        (in thousands, except for weighted average shares outstanding)
<S>                                     <C>            <C>            <C>             <C>
NUMERATOR:

Net income (loss) available to common
  stockholders:

CONTINUING OPERATIONS:                          $1,131       $(14,217)       $(6,752)      $(20,187)

DISCONTINUED OPERATIONS:

  Gain on disposal, net of tax                                  3,189                         3,189
                                                ------       ---------       --------      ---------

INCOME (LOSS) BEFORE
  EXTRAORDINARY ITEM                             1,131        (11,028)        (6,752)       (16,998)

  Extraordinary gain, net of tax                                3,207                         8,137
                                                ------       ---------       --------      ---------

Net income (loss) available to common
  stockholders for basic and
  diluted EPS                                   $1,131       $( 7,821)       $(6,752)      $( 8,861)
                                                ======       =========       ========      =========

DENOMINATOR:

Weighted average shares
  outstanding
  for basic EPS                             15,316,358     15,304,458     15,316,734     15,301,494

Effect of dilutive securities                        0              0              0              0
                                            ----------     ----------     ----------     ----------

Weighted average shares
  outstanding
  for diluted EPS                           15,316,358     15,304,458     15,316,734     15,301,494
                                            ==========     ==========     ==========     ==========
</TABLE>

Common stock equivalents are excluded from the calculations as the result is
antidilutive. Options to purchase 871,930 shares of common stock at a range
of $1.78 to $7.25 per share were outstanding during the first half of 2002
but were not included in the computation of diluted EPS because the options'
exercise prices were greater than the average market price of the common
shares for the first half of 2002. The options, which expire in 2005 through
2010, were still outstanding at the end of June 30, 2002. These options will
be canceled under the restructuring.


9.  ACCOUNTING STANDARDS

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations." The statement applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset, except for certain obligations of lessees.
The provisions of this statement are required to be applied for fiscal years
beginning after June 15, 2002. The Company is considering the Standard and
its effect on the Company's financial statements.

In April 2002, the FASB issued Statement of Financial Accounting Standards
No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections." The statement updates,
clarifies and simplifies existing accounting pronouncements. The provisions
of this statement related to rescission of Statement 4 shall be applied in
fiscal years beginning after May 15, 2002. The provisions in paragraphs 8 and
9(c) of the statement related to Statement 13 shall be effective for
transactions occurring after May 15, 2002. The Company is considering the
Standard and its effect on the Company's financial statements.

In July 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities." The
statement 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. This statement replaces previous
accounting guidance provided by EITF (Emerging Issues Task Force) Issue No.
94-3. Statement 146 is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. The Company is considering the
Standard and its effect on the Company's financial statements.


<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
         ----------------------------------------------------------------

Results of Operations
---------------------

The Company's net sales from operations for the first six months and second
quarter of 2002 were $89.7 million and $46.3 million, respectively, which
represents a decrease of 5.1% and .5% from comparable periods of 2001. The
decline in sales reflects the continuing effect of reduced selling prices in
the casings industry offset by an increase in volume during the second
quarter.

Operating income for the first six months and second quarter of 2002 were
$3.6 million and $6.1 million, respectively. The operating income includes a
net restructuring income of $6.1 million recognized in the second quarter of
2002. The restructuring income is the result of a reversal of $9.3 million of
excess reserve from the year 2000 for the reduction of the Nucel(r)
technology third party license fees, offset by a year 2002 restructuring
charge of $3.2 million (see Note 6). Operating income (loss), excluding the
net restructuring income of $6.1 million for the first six months and second
quarter of 2002 is $(2.5) million and $(.1) million, respectively. This
compares favorably to operating loss from the comparable prior year periods
of $(5.2) million and $(2.5) million, respectively. The improvement in the
operating loss results primarily from operating efficiencies from previous
cost saving measures, reduced raw material and energy costs.

Net interest expense for the six month period in 2002 totaled $11.7 million
representing an increase of $.3 million from the comparable period of 2001.
The increase is primarily due to reduced interest income resulting from lower
investment balances and lower interest rates.

Other (income) expense is approximately $(.6) million and $4.5 million for
the first six months of 2002 and 2001, respectively. The 2002 income consists
principally of foreign exchange gains, and during 2001, includes foreign
exchange losses and a write down of $1.6 million for land and buildings to
net realizable value.

The tax benefit for the first six months of 2002 resulted primarily from the
benefit of an anticipated U.S. income tax refund resulting from the Job
Creation Act enacted in March 2002, partially offset by the tax provision
related to income from foreign subsidiaries. An income tax benefit of $.7
million was provided on a pre-tax loss of $(7.5) million for the six month
period of 2002.

DISCONTINUED OPERATIONS
-----------------------

On January 17, 2000, the Company's Board of Directors announced its intent to
sell the Company's plastic barrier and non-barrier shrink Films Business. The
sale of the Films Business was completed on August 31, 2000. The aggregate
proceeds of $255 million, including a Working Capital Adjustment of $10.3
million, were used to retire debt, including the Senior Secured Credit
Facility and Junior Term Loans, pay GECC per the amended amortization
schedule, and for general corporate purposes. The Company recognized a net
gain in the amount of $8.1 million in the June year to date period of 2001
due to the finalization of a working capital adjustment.

Liquidity and Capital Resources
-------------------------------

Cash and equivalents decreased by $11.3 million during the year to date
period ended June 30, 2002. Cash flows provided by operating activities were
$1.0 million, used in investing activities were $2.9 million, and used in
financing activities were $9.0 million. Cash flows provided by operating
activities were principally attributable to the Company's loss from
operations and seasonal working capital requirements, offset by the effect of
depreciation and amortization. Cash flows used in investing activities were
principally attributable to an increase in restricted cash and by capital
expenditures for property, plant and equipment. Cash flows used in financing
activities were principally due to the payment of the scheduled GECC Capital
Lease obligation.

The Company's cash flows from operations were insufficient to pay the Senior
Notes when they matured on December 1, 2001, and accordingly the Company did
not pay the $163.1 million principal and $8.4 million interest that became
due at that time. In September 2001, certain of the holders of the Senior
Notes formed the Ad Hoc Committee to participate in the development of a plan
to restructure the Company's capital structure and address its future cash
flow needs. On July 15, 2002, the Company executed a restructuring agreement
with the Ad Hoc Committee of the Company's Senior Notes due December 1, 2001
for the restructuring of the Senior Notes. Under the terms of the proposed
restructuring, the Company's wholly owned operating subsidiary, Viskase
Corporation, will be merged with and into the Company with the Company being
the surviving corporation. The outstanding Senior Notes would be exchanged
for New Notes and shares of Preferred Stock to be issued by the Company on a
basis of $367.96271 principal amount of New Notes (i.e., $60 million) and
126.82448 shares of Preferred Stock (i.e., 20.68 million shares or 94% of the
Preferred Stock) for each one thousand dollar principal amount of Senior
Notes. The Ad Hoc Committee retained legal counsel, the fees and expenses of
which are being paid by the Company.

Under the proposed restructuring, the Company will continue to provide an
uninterrupted supply of products and services to customers worldwide. Trade
creditors and vendors will be totally unaffected and will continue to be paid
in the ordinary course of business, and the Company's employees will be paid
all wages, salaries and benefits on a timely basis.

The New Notes would bear interest at a rate of 8% per year, payable semi-
annually (except annually with respect to year four and quarterly with
respect to year five), with interest payable in the form of New Notes (pay-
in-kind) for the first three years. Interest for years four and five will be
payable in cash to the extent of available cash flow, as defined, and the
balance in the form of New Notes (pay-in-kind). Thereafter, interest will be
payable in cash. The New Notes would mature on December 1, 2008.

The New Notes would be secured by a first lien in the assets of the Company,
other than the assets subject to the GECC lease and certain real estate,
post-merger. The New Notes will be subject to subordination of up to $25,000
for a secured working capital credit facility for the Company.

The Preferred Stock will pay a 6% cumulative dividend. Its holders will vote
on an as-converted basis on all matters together with the Company's common
stockholders. The Preferred Stock will have a liquidation preference of $5.00
per share and will be convertible into common stock at any time at a price of
$.20 per share. Upon conversion, the Preferred Stock would represent about
97% of the common stock. Accrued but unpaid dividends, at time of conversion,
will be convertible into common stock upon the same basis. At the Company's
option, the Preferred Stock would be automatically converted into common
stock on the same basis in connection with a public offering of securities by
the Company of not less than $50 million. Dividends on the Preferred Stock
would be payable in cash to the extent the Company is legally, contractually
and financially able to pay dividends.

Under the proposed restructuring, 1.32 million shares of Preferred Stock (or
upon the request of Company management, options to purchase 1.32 million
shares of Preferred Stock), representing 6% of the Preferred Stock, will be
reserved for Company management and employees. Such shares or options will be
subject to a vesting schedule with acceleration upon the occurrence of
certain events.

The proposed exchange offer would be subject to acceptance by holders of 100%
of the outstanding Senior Notes, unless waived by the Company and approved by
the Ad Hoc Committee. The exchange offer would include a solicitation for a
prepackaged plan of reorganization for the Company. If less than 100% of the
outstanding Senior Notes accept the exchange offer but sufficient number and
aggregate number of Senior Notes vote in favor of acceptance of the
prepackaged plan of reorganization, the Company will commence a voluntary
Chapter 11 petition and seek confirmation of the prepackaged plan of
reorganization containing substantially the same terms as the exchange offer.
In the event the restructuring is consummated through a bankruptcy
proceeding, the Company's common stock will be canceled and new common stock
will be issued, 94% to the holders of Senior Notes and 6% to the Company's
management and employees. Holders of old common stock would receive warrants
to purchase shares of new common stock equal to 2.7% of the Company's common
stock. Assuming all warrants are exercised, holders of the Senior Notes would
receive approximately 91.5% of the new common stock and approximately 5.8%
would go to the Company's management and employees. Thus, the consideration
received by all noteholders would be substantially the same regardless of
whether the proposed restructuring occurs pursuant to an exchange offer or
prepackaged plan of reorganization.

Upon completion of the proposed restructuring the Board of Directors of the
Company would be reconstituted to consist of five members, including the
Company's Chief Executive Officer and four other persons designated by the Ad
Hoc Committee.

The Ad Hoc Committee members, holding in the aggregate approximately 54% of
the Senior Notes, have agreed to accept the proposed exchange offer and vote
in favor of the prepackaged plan of reorganization. The members of the Ad Hoc
Committee have also agreed to take such other reasonable actions as necessary
to consummate the proposed restructuring. In addition, the members of the Ad
Hoc Committee have agreed not to transfer (other than to another member of
the Ad Hoc Committee or an affiliate of a member) their shares of Preferred
Stock (or common stock upon conversion) for a period of two years after the
exchange offer is completed. For a period of one year thereafter, the Company
would have a right of first refusal to either purchase or designate a
purchaser for shares of Preferred Stock (or common stock upon conversion) to
be transferred by a member of the Ad Hoc Committee to a person other
than another member of the Ad Hoc Committee or their affiliates.

The Company expects to complete the restructuring (either the exchange
restructuring or the prepackaged) agreed to by the Ad Hoc Committee pursuant
to the restructuring agreement, but can provide no assurances that any
restructuring will be completed on the terms indicated in the restructuring
agreement.

The Company intends to mail both the Offer to Exchange and solicitation of
the prepackaged plan of reorganization to holders of Senior Notes on or about
August 21, 2002. Accordingly, the Company expects the restructuring to be
completed sometime between November 4, 2002 and February 2, 2003.

The Company has from time to time purchased Senior Notes in open market or
privately negotiated transactions, with the effect that as of June 30, 2002
there was $163.1 million principal amount of Senior Notes outstanding, net of
repurchased notes. During the year-to-date period ended June 30, 2001, the
Company recognized an $8.1 million gain on the repurchase of the Senior
Notes.

Letters of credit in the amount of $28.4 million were outstanding under a
letter of credit facility with commercial banks, and were cash collateralized
at June 30, 2002.

The Company finances its working capital needs through a combination of
internally generated cash from operations and cash on hand.

The Company anticipates that it will enter into a new revolving credit
facility to meet its working capital and letter of credit requirements during
2002.

The GECC capital lease obligations were classified as current in the
financial statements due to covenant restrictions. The following lease
payment maturities conform to contractual payments under the lease.

     February 28, 2003     $23.5 million
     February 28, 2004     $23.5 million
     February 28, 2005     $23.5 million

GECC, Viskase's equipment lessor, has agreed, subject to certain conditions,
not to accelerate payment of amounts due because of any default or event of
default under any of the lease documents arising from (i) Viskase's failure
to meet the Fixed Charge Coverage Ratio for the fiscal quarters ending on
March 31, 2002, June 30, 2002 and September 30, 2002, (ii) the Company
becoming a debtor under Chapter 11 of the Bankruptcy Code; provided, however,
that the waiver granted pursuant to the foregoing clause shall be rescinded
if the Company shall be a debtor under Chapter 11 of the Bankruptcy Code on
or after November 30, 2002. There is no agreement with GECC to extend the
forbearance beyond November 30, 2002, and the Company can make no assurance
that any extension would be received.

Capital expenditures for the first six months of 2002 and 2001 totaled $.8
million and $2.7 million, respectively. Significant capital expenditures
during 2002 and 2001 included costs associated with the Viskase Food Science
Quality Institute (FSQI) and the Visflex(tm) plastic casing line,
respectively. Capital expenditures for 2002 are expected to be approximately
$5 million.

In 2001, the Company spent approximately $5 million on research and
development programs, including product and process development, and on new
technology development. Prior to 2001, the Company was spending approximately
$8 million on research and development programs. The decrease is due to the
sale of the Films Business. The 2002 research and development and product
introduction expenses are expected to be in the $4 million range. The current
research and development efforts are directed toward the application of
certain patents and process technology to improve the manufacture of
cellulosic casings.


Contingencies
-------------

In 1988, Viskase Canada Inc. (Viskase Canada), a subsidiary of the Company,
commenced a lawsuit against Union Carbide Canada Limited and Union Carbide
Corporation in the Ontario Superior Court of Justice, Court File No.:
292270188 seeking damages resulting from Union Carbide's breach of
environmental representations and warranties under the Amended and Restated
Purchase and Sale Agreement, dated January 31, 1986 (Agreement). Pursuant to
the Agreement, Viskase Corporation and various affiliates (including Viskase
Canada) purchased from Union Carbide and Union Carbide Films Packaging, Inc.,
its cellulosic casings business and plastic barrier films business
(Business), which purchase included a facility in Lindsay, Ontario, Canada
(Site). Viskase Canada claimed that Union Carbide breached several
representations and warranties and deliberately failed to disclose to Viskase
Canada the existence of contamination on the Site. In 1992, Union Carbide and
Viskase Canada jointly put in place a continuous pumping program at the Site.

In October 2001, the Canadian Ministry of the Environment (MOE) notified
Viskase Canada that it had evidence to suggest that the Site was a source of
polychlorinated biphenyl (PCB) contamination. Viskase Canada is working with
the MOE in investigating the alleged PCB contamination and developing and
implementing, if appropriate, a remedial plan for the Site. Viskase Canada
has been granted leave to amend its lawsuit against Union Carbide to allege
that any PCB contamination at or around the Site was generated from Union
Carbide's plastics extrusion business, which was operated at the Site by
Union Carbide prior to the purchase of the Business. Union Carbide's plastics
extrusion business was not part of the Business purchased by Viskase
Corporation and its affiliates. Viskase Canada will be asking the court to
require Union Carbide to repurchase the Site from Viskase Canada and award
Viskase Canada damages in excess of $2.0 million (Canadian dollars). The
lawsuit is still pending and is expected to proceed to trial sometime during
the second half of 2003.

In March 1997, Viskase received a subpoena from the Antitrust Division of the
United States Department of Justice relating to a grand jury investigation of
the sausage casings industry. In September 1999, Viskase received a subpoena
from the Antitrust Division of the United States Department of Justice
relating to the expansion of the grand jury investigation into the specialty
films industry. Viskase is cooperating fully with the investigations.

During 1999 and 2000, the Company and certain of its subsidiaries and one
other sausage casings manufacturer were named in ten virtually identical
civil complaints filed in the United States District Court for the District
of New Jersey by the following plaintiffs:  Smith Provision Co., Inc.; Parks
LLC (d/b/a Parks Sausage Company); Real Kosher Sausage Company, Inc.; Sahlen
Packing Co., Inc.; Marathon Enterprises, Inc.; Ventures East, Inc.;
Keniston's, Inc.; Smithfield Foods, Inc.; Clougherty Packing Co.; and Klement
Sausage Co. The District Circuit ordered all of these cases consolidated in
Civil Action No. 99-5195-MLC (D.N.J.). Each complaint brought on behalf of a
purported class of sausage casings customers alleges that the defendants
unlawfully conspired to fix prices and allocate business in the sausage
casings industry. The Company and its subsidiaries have filed answers to each
of these complaints denying liability. In 2001, all of the consolidated cases
were transferred to the United States District Court for the Northern
District of Illinois, Eastern Division.

The Company and its subsidiaries are involved in these and various other
legal proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect upon
results of operations, cash flows or financial position.

Other
-----

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations." The statement applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset, except for certain obligations of lessees.
The provisions of this statement are required to be applied for fiscal years
beginning after June 15, 2002. The Company is considering the Standard and
its effect on the Company's financial statements.

In April 2002, the FASB issued Statement of Financial Accounting Standards
No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections." The statement updates,
clarifies and simplifies existing accounting pronouncements. The provisions
of this statement related to rescission of Statement 4 shall be applied in
fiscal years beginning after May 15, 2002. The provisions in paragraphs 8 and
9(c) of the statement related to Statement 13 shall be effective for
transactions occurring after May 15, 2002. The Company is considering the
Standard and its effect on the Company's financial statements.

In July 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities." The
statement 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. This statement replaces previous
accounting guidance provided by EITF (Emerging Issues Task Force) Issue No.
94-3. Statement 146 is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. The Company is considering the
Standard and its effects on the Company's financial statements.

Forward-looking Statements
--------------------------

Forward-looking statements in this report are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are not guarantees of future performance and
are subject to risks and uncertainties that could cause actual results and
Company plans and objectives to differ materially from those projected. Such
risks and uncertainties include, but are not limited to, general business and
economic conditions; the Company's ability to effectuate a restructuring of
the Senior Notes and other effects of the restructuring on the Company;
competitive pricing pressures for the Company's products; changes in other
costs; opportunities that may be presented to and pursued by the Company;
determinations by regulatory and governmental authorities; and the ability to
achieve synergistic and other cost reductions and efficiencies.


<PAGE>
ITEM 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
          ----------------------------------------------------------

The Company is exposed to certain market risks related to foreign currency
exchange rates. In order to manage the risk associated with this exposure to
such fluctuations, the Company occasionally uses derivative financial
instruments. The Company does not enter into derivatives for trading
purposes.

The Company also prepared sensitivity analyses to determine the impact of a
hypothetical 10% devaluation of the U.S. dollar relative to the European
receivables and payables denominated in U.S. dollars. Based on its
sensitivity analyses at June 30, 2002, a 10% devaluation of the U.S. dollar
would affect the Company's annual consolidated operating results, financial
position and cash flows by a minimal amount.

<PAGE>
                             PART II. OTHER INFORMATION

Item 1 - Legal Proceedings
         -----------------

For a description of pending litigation and other contingencies, see Part 1,
Note 5, Contingencies in Notes to Consolidated Financial Statements for
Viskase Companies, Inc. and Subsidiaries.

Item 2 - Changes in Securities
         ---------------------

No reportable events occurred during the quarter ended June 30, 2002.

Item 3 - Defaults Upon Senior Securities
         -------------------------------

The Company did not pay the $163.1 million principal and $8.4 million
interest on the 10.25% Senior Notes that became due on December 1, 2001.

Item 4 - Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

None.

Item 5 - Other Information
         -----------------

None.

Item 6 - Exhibits and Reports on Form 8-K
         --------------------------------

(a)  Exhibits

10.35  Amendment No. 3 to the Rights Agreement dated June 26, 1996 between
Envirodyne Industries, Inc. (now known as Viskase Companies, Inc.) and Harris
Trust and Savings Bank, an Illinois banking corporation (incorporated herein
by reference to Exhibit 4 to Form 8-K filed June 27, 2002).

10.36  Forbearance and Consent Agreement, dated as of June 28, 2002, between
Viskase Corporation, as Lessee, and State Street Bank and Trust Company, as
successor Owner Trustee, and General Electric Capital Corporation, as Owner
Participant, relating to Lease Agreement dated as of December 19, 1990
(incorporated herein by reference to Exhibit 10 to Form 8-K filed June 28,
2002).

99.1  Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Section 1350

99.2  Certification of Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350

(b)  Reports on Form 8-K

Form 8-K dated June 27, 2002 to report the execution of Amendment No. 3
to the Rights Agreement dated June 26, 1996 between Envirodyne Industries,
Inc. (now known as Viskase Companies, Inc.) and Harris Trust and Savings
Bank, an Illinois banking corporation.

Form 8-K dated June 28, 2002 to report the execution of the Forbearance
and Consent Agreement, dated as of June 28, 2002, between Viskase
Corporation, as Lessee, and State Street Bank and Trust Company, as successor
Owner Trustee, and General Electric Capital Corporation, as Owner
Participant, relating to Lease Agreement dated as of December 19, 1990.



<PAGE>
                             SIGNATURES



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



                                 VISKASE COMPANIES, INC.
                                 Registrant




                                 By:  /s/
                                      -------------------------------
                                      Gordon S. Donovan
                                      Vice President, Chief Financial
                                        Officer and Treasurer
                                        (Duly authorized officer
                                        and principal financial
                                        officer of the registrant)







Date: August 14, 2002