FORM 10-Q
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)
 X  QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--- ACT OF 1934

For the quarterly period ended June 16, 2001 (24-weeks)
                               ------------------------

                                       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 1-14893
                       -------




                         THE PEPSI BOTTLING GROUP, INC.
             (Exact name of registrant as specified in its charter)

              Delaware                                           13-4038356
              --------                                           ----------
(State or other jurisdiction of                                    (I.R.S.
Employer incorporate or organization)                        Identification No.)

     One Pepsi Way, Somers, New York                                10589
     -------------------------------                                -----
(Address of principal executive offices)                          (Zip Code)

                                  914-767-6000
                                  ------------
              (Registrant's telephone number, including area code)

                                      N/A
                                      ---
     (Former name,  former address and former fiscal year, if changed since last
report.)

     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
     ---     ---

Number of shares of Capital Stock outstanding as of July 13, 2001:
142,647,513




                         The Pepsi Bottling Group, Inc.
                         ------------------------------
                                      Index
<TABLE>
<CAPTION>

                                                                                         Page No.
                                                                                         --------

<S>                                                                                       <C>
Part I                Financial Information

        Item 1.       Financial Statements

                      Condensed Consolidated Statements of Operations -
                           12 and 24-weeks ended June 16, 2001 and June 10, 2000            2

                      Condensed Consolidated Statements of Cash Flows -
                           24-weeks ended June 16, 2001 and June 10, 2000                   3

                      Condensed Consolidated Balance Sheets -
                           June 16, 2001 and December 30, 2000                              4

                      Notes to Condensed Consolidated Financial Statements                5-8

        Item 2.       Management's Discussion and Analysis of Results of
                           Operations and Financial Condition                            9-11

        Item 3.       Quantitative and Qualitative Disclosures About
                           Market Risk                                                     12

        Item 4.       Submission of Matters to a Vote of Security Holders                  12

                      Independent Accountants' Review Report                               13

Part II               Other Information and Signatures


        Item 6.       Exhibits                                                             14


</TABLE>




                                       -1-


<TABLE>
<CAPTION>


                         PART I - FINANCIAL INFORMATION
     Item 1.
                         The Pepsi Bottling Group, Inc.
                 Condensed Consolidated Statements of Operations
                 in millions except per share amounts, unaudited

                                                                           12-weeks Ended               24-weeks Ended
                                                                           --------------               --------------
                                                                       June 16,       June 10,      June 16,       June 10,
                                                                         2001           2000          2001           2000
                                                                         ----           ----          ----           ----

<S>                                                                      <C>            <C>           <C>            <C>
     Net Revenues....................................................   $2,060         $1,913        $3,707         $3,458
     Cost of sales...................................................    1,108          1,033         1,990          1,878
                                                                        ------         ------        ------         ------

     Gross Profit....................................................      952            880         1,717          1,580
     Selling, delivery and administrative expenses...................      735            689         1,410          1,314
                                                                        ------         ------        ------         ------

     Operating Income................................................      217            191           307            266
     Interest expense, net...........................................       46             44            90             89
     Minority interest...............................................       14             12            19             15
                                                                        ------         ------        ------         ------

     Income before income taxes......................................      157            135           198            162
     Income tax expense before rate change...........................       57             50            72             60
     Income tax rate change benefit..................................      (16)             -           (16)             -
                                                                        ------         ------        ------         ------
     Net Income......................................................   $  116         $   85        $  142         $  102
                                                                        ======         ======        ======         ======

     Basic Earnings Per Share........................................   $ 0.81         $ 0.58        $ 0.98         $ 0.69
     Weighted-Average Shares Outstanding.............................      143            148           144            148

     Diluted Earnings Per Share......................................   $ 0.78         $ 0.58        $ 0.95         $ 0.69
     Weighted-Average Shares Outstanding.............................      148            148           149            148

                        See accompanying notes to Condensed Consolidated Financial Statements.


</TABLE>



                                       -2-




                         The Pepsi Bottling Group, Inc.
                 Condensed Consolidated Statements of Cash Flows
                             in millions, unaudited
<TABLE>
<CAPTION>
                                                                                       24-weeks Ended
                                                                                       --------------
                                                                                   June 16,        June 10,
                                                                                     2001           2000
                                                                                     ----           ----
    Cash Flows - Operations
<S>                                                                                  <C>            <C>
      Net income...............................................................      $142           $102
      Adjustments to reconcile net income to net cash provided by operations:
            Depreciation.......................................................       167            153
            Amortization.......................................................        62             61
            Deferred income taxes..............................................        (7)           (14)
            Other non-cash charges and credits, net............................        86             78
            Changes in operating working capital:
              Accounts receivable..............................................      (222)          (177)
              Inventories......................................................       (87)           (49)
              Prepaid expenses and other current assets........................         4            (10)
              Accounts payable and other current liabilities...................        34            104
                                                                                   ------         ------
            Net change in operating working capital ...........................      (271)          (132)
                                                                                   ------         ------
    Net Cash Provided by Operations............................................       179            248
                                                                                   ------         ------
    Cash Flows - Investments
       Capital expenditures....................................................      (255)          (224)
       Acquisitions of bottlers................................................       (68)            (2)
       Other, net..............................................................       (12)            (4)
                                                                                   ------         ------
    Net Cash Used for Investments..............................................      (335)          (230)
                                                                                   ------         ------
    Cash Flows - Financing
       Short-term borrowings - three months or less............................       149              7
       Payments of third-party debt............................................         -             (8)
       Dividends paid..........................................................        (6)            (6)
       Proceeds from exercise of stock options.................................         7              -
       Purchases of treasury stock.............................................      (117)           (58)
                                                                                   ------         ------
    Net Cash Provided by (Used for) Financing..................................        33            (65)
                                                                                   ------         ------
    Effect of Exchange Rate Changes on Cash and Cash Equivalents...............        (4)            (3)
                                                                                   ------         ------
    Net Decrease in Cash and Cash Equivalents..................................      (127)           (50)
    Cash and Cash Equivalents - Beginning of Period............................       318            190
                                                                                   ------         ------
    Cash and Cash Equivalents - End of Period..................................    $  191         $  140
                                                                                   ======         ======
    Supplemental Cash Flow Information
    Third-party interest and income taxes paid.................................    $  143         $  164
                                                                                   ======         ======

                      See accompanying notes to Condensed Consolidated Financial Statements.

</TABLE>


                                       -3-




                         The Pepsi Bottling Group, Inc.
                      Condensed Consolidated Balance Sheets
                      in millions, except per share amounts
<TABLE>
<CAPTION>
                                                                                   (Unaudited)
                                                                                     June 16,     December 30,
                                                                                       2001           2000
                                                                                       ----           ----
Assets
Current Assets
<S>                                                                                   <C>            <C>
  Cash and cash equivalents................................................          $  191         $  318
  Accounts receivable, less allowance of $42 at
        June 16, 2001 and December 30, 2000, respectively..................           1,013            796
  Inventories..............................................................             367            281
  Prepaid expenses and other current assets................................             159            189
                                                                                     ------         ------
          Total Current Assets.............................................           1,730          1,584

Property, plant and equipment, net.........................................           2,432          2,358
Intangible assets, net.....................................................           3,689          3,694
Other assets...............................................................             102            100
                                                                                     ------         ------
             Total Assets..................................................          $7,953         $7,736
                                                                                     ======         ======

Liabilities and Shareholders' Equity
Current Liabilities
  Accounts payable and other current liabilities...........................          $  972         $  941
  Short-term borrowings....................................................             173             26
                                                                                     ------         ------
          Total Current Liabilities........................................           1,145            967

Long-term debt.............................................................           3,282          3,271
Other liabilities..........................................................             505            474
Deferred income taxes......................................................           1,058          1,072
Minority interest..........................................................             322            306
                                                                                     ------         ------
          Total Liabilities................................................           6,312          6,090

Shareholders' Equity
   Common stock, par value $.01 per share:
       authorized 300 shares, issued 155 shares............................               2              2
   Additional paid-in capital..............................................           1,736          1,736
   Retained earnings.......................................................             491            355
   Accumulated other comprehensive loss....................................            (287)          (254)
   Treasury stock: 12 shares and 10 shares at June 16, 2001 and December 30,
      2000, respectively...................................................            (301)          (193)
                                                                                     ------         ------
          Total Shareholders' Equity.......................................           1,641          1,646
                                                                                     ------         ------
             Total Liabilities and Shareholders' Equity....................          $7,953         $7,736
                                                                                     ======         ======

                        See accompanying notes to Condensed Consolidated Financial Statements.


</TABLE>


                                      -4-




Notes to Condensed Consolidated Financial Statements
Tabular dollars in millions
--------------------------------------------------------------------------------

Note 1 - Basis of Presentation
     The Pepsi Bottling  Group,  Inc.  ("PBG")  consists of bottling  operations
located in the United States,  Canada,  Spain, Greece and Russia. These bottling
operations  manufacture,  sell and  distribute  Pepsi-Cola  beverages  including
Pepsi-Cola,  Diet Pepsi, Mountain Dew and other brands of carbonated soft drinks
and other ready-to-drink beverages. Approximately 90% of PBG's net revenues were
derived from the sale of  Pepsi-Cola  beverages.  References  to PBG  throughout
these   Condensed   Consolidated   Financial   Statements  are  made  using  the
first-person notations of "we," "our" and "us."

     Prior  to our  formation,  we  were an  operating  unit  of  PepsiCo,  Inc.
("PepsiCo").  On March 31,  1999,  we offered 100  million  shares of PBG common
stock for sale at $23 per share in an initial  public  offering.  As of June 16,
2001, PepsiCo's ownership consisted of 37.0% of our outstanding common stock and
100% of our outstanding Class B common stock, together representing 45.5% of the
voting power of all classes of our voting  stock.  PepsiCo also owns 7.0% of the
equity of Bottling  Group,  LLC,  our  principal  operating  subsidiary,  giving
PepsiCo economic ownership of 41.5% of our combined operations at June 16, 2001.

     The accompanying  Condensed Consolidated Balance Sheet at June 16, 2001 and
the Condensed  Consolidated  Statements  of  Operations  for the 12 and 24-weeks
ended June 16, 2001 and June 10, 2000 and Cash Flows for the 24-weeks ended June
16,  2001 and June 10,  2000 have not been  audited,  but have been  prepared in
conformity with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X.  These  Condensed  Consolidated  Financial  Statements  should  be  read in
conjunction with the audited  consolidated  financial  statements for the fiscal
year ended  December 30, 2000 as presented in our Annual Report on Form 10-K. In
the opinion of  management,  this  interim  information  includes  all  material
adjustments,  which are of a normal and recurring  nature,  necessary for a fair
presentation.

Note 2 - Seasonality of Business
     The results for the second  quarter are not  necessarily  indicative of the
results that may be expected for the full year because of business  seasonality.
The seasonality of our operating  results arises from higher sales in the second
and third quarters  versus the first and fourth  quarters of the year,  combined
with the impact of fixed costs, such as depreciation, amortization and interest,
which are not significantly impacted by business seasonality.

Note 3 - Inventories

                                                        June 16,    December 30,
                                                          2001          2000
                                                          ----          ----
Raw materials and supplies....................          $  127        $  107
Finished goods................................             240           174
                                                        ------        ------
                                                        $  367        $  281
                                                        ======        ======



                                       -5-



Note 4 - Property, Plant and Equipment, net
                                                        June 16,    December 30,
                                                          2001         2000
                                                          ----         ----
Land..................................................  $  145        $  145
Buildings and improvements............................     913           903
Manufacturing and distribution equipment..............   2,248         2,186
Marketing equipment...................................   1,806         1,745
Other.................................................      97            89
                                                        ------        ------
                                                         5,209         5,068
Accumulated depreciation..............................  (2,777)       (2,710)
                                                        ------        ------
                                                        $2,432        $2,358
                                                        ======        ======

Note 5 - Income Tax Rate Change Benefit
     In the second quarter of 2001, the Canadian  Government enacted legislation
that  reduced  the  federal  corporate  income  tax rate  from 28% to 21% over a
four-year  period  beginning  January 1, 2001. In addition,  certain  provincial
income tax rates were also  reduced.  These rate  changes  reduced  deferred tax
liabilities  associated  with our operations in Canada.  The changes to deferred
taxes  resulted in a reduction  of our tax expense in the second  quarter of $16
million ($0.10 per diluted share after minority interest).

     On June 29, 2001, the Province of Ontario enacted  legislation that reduced
the provincial income tax rate. This change will further reduce our deferred tax
liabilities  associated  with our  operations  in Canada  and will  result in an
additional  income  tax  rate  benefit  in  the  third  quarter  of  $8  million
(approximately $0.05 per diluted share after minority interest).

Note 6 - Acquisitions
     On May 1, 2001, PBG acquired the Pepsi-Cola  bottling operations along with
the exclusive right to  manufacture,  sell and distribute  Pepsi-Cola  beverages
from Pepsi-Cola  Bottling of Northern California for an aggregate purchase price
of $70 million in cash and assumed debt.  This  acquisition was accounted for by
the purchase method of accounting.

Note 7 - Treasury Stock
     In the  second  quarter  of 2001,  the Board of  Directors  authorized  the
repurchase  of 10 million  shares of common  stock,  increasing  the  cumulative
amount  of  shares  that  can be  repurchased  to 25  million  shares.  We  made
repurchases  of  approximately  3 million  shares for $117  million in the first
24-weeks in 2001 and  approximately  3 million  shares for $58 million  over the
same period in 2000. Of the 25 million shares  authorized we have repurchased 13
million shares since the inception of our stock  repurchase plan, which began in
October 1999.

Note 8 - New Accounting Standards

Accounting for Derivative Instruments and Hedging Activities
     We adopted the accounting and reporting standards of Statement of Financial
Accounting  Standard 133,  "Accounting  for Derivative  Instruments  and Hedging
Activities",  as  amended  by SFAS 137 and SFAS 138,  on the first day of fiscal
year 2001. The adoption resulted in an increase in current assets of $4 million,
a reduction of  accumulated  other  comprehensive  loss of $4 million and had no
impact on our statement of operations.



                                      -6-



     All  derivatives  are now  recorded  at fair  value  as  either  assets  or
liabilities in our consolidated balance sheet. Using qualifying criteria defined
in SFAS 133, derivative instruments are designated and accounted for as either a
hedge of a  recognized  asset or  liability  (fair value  hedge) or a hedge of a
forecasted  transaction  (cash flow  hedge).  For a fair value  hedge,  both the
effective and ineffective portions of the change in fair value of the derivative
instrument,  along with an adjustment to the carrying  amount of the hedged item
for fair value  changes  attributable  to the hedged  risk,  are  recognized  in
earnings.  For a cash flow  hedge,  changes in the fair value of the  derivative
instrument  that  are  highly  effective  are  deferred  in  accumulated   other
comprehensive  loss until the underlying  hedged item is recognized in earnings.
The ineffective portion of fair value changes on qualifying hedges is recognized
in  earnings   immediately   and  is  recorded   consistent   with  the  expense
classification of the underlying hedged item. If a fair value or cash flow hedge
were to cease  to  qualify  for  hedge  accounting  or be  terminated,  it would
continue  to be carried on the  balance  sheet at fair value  until  settled but
hedge   accounting  would  be  discontinued   prospectively.   If  a  forecasted
transaction were no longer probable of occurring, amounts previously deferred in
accumulated  other  comprehensive  loss  would  be  recognized   immediately  in
earnings.

     On  occasion,  we may enter into a  derivative  instrument  for which hedge
accounting is not required  because it is entered into to offset  changes in the
fair value of an underlying  transaction recognized in earnings (natural hedge).
These instruments are reflected in the Condensed  Consolidated Balance Sheets at
fair value with changes in fair value recognized in earnings.


     As of June 16, 2001,  our use of derivative  instruments  was limited to an
interest rate swap, forward contracts, futures and options on futures contracts.
Our corporate policy prohibits the use of derivative  instruments for trading or
speculative  purposes,  and we have  procedures  in place to monitor and control
their use.

Cash Flow Hedges
     We are  subject  to market  risk with  respect  to the cost of  commodities
because our ability to recover  increased  costs through  higher  pricing may be
limited by the  competitive  environment  in which we  operate.  We use  futures
contracts  and options on futures in the normal  course of business to hedge the
risk of adverse  movements in commodity prices related to anticipated  purchases
of certain raw materials and fuel used in our operations. These contracts, which
generally  range  from 1 to 12  months  in  duration,  establish  our  commodity
purchase  prices within defined ranges in an attempt to limit our purchase price
risk resulting from adverse  commodity price movements and are designated as and
qualify for cash flow hedge accounting treatment.

     In 2001,  we  recognized  $2 million of deferred  gains from our  commodity
hedging  into income as inventory  being hedged was sold.  At June 16, 2001 a $2
million deferred loss remained in accumulated  other  comprehensive  loss in our
Condensed  Consolidated  Balance Sheet resulting from our commodity  hedges.  We
anticipate that this loss, which totals $1 million on an after-tax  basis,  will
be  recognized  in cost of sales in our  Condensed  Consolidated  Statements  of
Operations  over the next 12 months.  The  ineffective  portion of the change in
fair value of these  contracts  was not material to our results of operations in
the second quarter or first 24-weeks of 2001.



                                      -7-



Fair Value Hedges
     We finance a portion of our operations through fixed rate debt instruments.
At June 16, 2001 our debt instruments primarily consisted of $3 billion of fixed
rate  long-term  senior  notes,  3% of which we converted to floating  rate debt
through  the use of an interest  rate swap with the  objective  of reducing  our
overall  borrowing  costs.  This interest  rate swap,  which expires in 2004, is
designated  as and  qualifies  for  fair  value  hedge  accounting  and is  100%
effective in  eliminating  the interest rate risk inherent in our long-term debt
as the notional  amount,  interest payment and maturity date of the swap matches
the notional  amount,  interest  payment and maturity  date of the related debt.
Accordingly,  any market risk or opportunity  associated with this swap is fully
offset by the opposite market impact on the related debt. The second quarter and
first  24-weeks of 2001  changes in fair value of the  interest  rate swap was a
gain of $4 million and $7 million,  respectively.  These gains were  recorded in
interest expense, net in our Condensed Consolidated Statements of Operations and
prepaid expenses and other current assets in our Condensed  Consolidated Balance
Sheets.  An  offsetting  loss  was  recorded  in  interest  expense,  net in our
Condensed  Consolidated  Statements of Operations  and in long-term  debt in our
Condensed  Consolidated  Balance Sheets representing the change in fair value in
long-term debt.

Equity  Derivatives
     We use equity derivative  contracts with financial  institutions to hedge a
portion  of our  deferred  compensation  liability  which is based on our  stock
price.  These prepaid forward contracts for the purchase of PBG common stock are
accounted  for as natural  hedges.  The  earnings  impact  from these  hedges is
classified as selling,  delivery and administrative expenses consistent with the
expense classification of the underlying hedged item.

Business Combinations & Goodwill and Other Intangible Assets
     On July 20, 2001 the Financial  Accounting Standards Board issued SFAS 141,
"Business  Combinations" and SFAS 142,  "Goodwill and Other Intangible  Assets".
SFAS  141  replaces   Accounting   Principles   Board   Opinion  16,   "Business
Combinations" and SFAS 142 replaces APB 17,  "Intangible  Assets".  Beginning in
fiscal year 2002, we  anticipate  that we will no longer  amortize  goodwill and
certain franchise rights, but will evaluate them for impairment annually. We are
currently reviewing these statements to determine their impact.

Note 9 - Comprehensive Income
<TABLE>
<CAPTION>

                                                         12-weeks Ended            24-weeks Ended
                                                         --------------            --------------
                                                      June 16,      June 10,    June 16,      June 10,
                                                       2001           2000        2001          2000
                                                       ----           ----        ----          ----
<S>                                                    <C>          <C>         <C>           <C>
Net income......................................       $  116       $   85      $  142        $  102
Currency translation adjustment.................            -           (8)        (31)          (21)
FAS 133 adjustment..............................            -            -          (2)            -
                                                       ------       ------      ------        ------
Comprehensive Income............................       $  116       $   77      $  109        $   81
                                                       ======       ======      ======        ======


</TABLE>
                                      -8-



Item 2.

Management's  Discussion  and Analysis of Results of  Operations  and  Financial
--------------------------------------------------------------------------------
Condition
---------

Overview
     In the second quarter and first 24-weeks of 2001 The Pepsi Bottling  Group,
Inc.  (collectively  referred to as "PBG," "we," "our" and "us") again delivered
outstanding operating results. Highlights of the quarter were as follows:

o    We delivered 11% constant territory EBITDA growth in the second quarter and
     first 24-weeks of 2001.

o    We increased worldwide constant territory physical case volume by 4% in the
     second quarter and first 24-weeks of 2001.

o    We grew second quarter and second quarter  year-to-date  worldwide constant
     territory net revenue per case by 3% compared to the same periods in 2000.

o    We delivered  second quarter 2001 diluted  earnings per share of $0.78,  an
     increase of $0.20, or 36%, over 2000 and year-to-date  diluted earnings per
     share of $0.95,  an increase of $0.26, or 39%, over the same 24-week period
     in 2000. Diluted earnings per share in 2001 includes a tax benefit of $0.10
     resulting from a reduction in Canadian income tax rates.



     The  following  management's  discussion  and  analysis  should  be read in
conjunction   with  our  Condensed   Consolidated   Financial   Statements   and
accompanying  footnotes along with the cautionary  statements at the end of this
section.

Constant Territory
     We  believe  that  constant  territory  performance  results  are the  most
appropriate  indicators of operating  trends and  performance,  particularly  in
light of our stated intention of acquiring additional bottling territories,  and
are consistent with industry practice.  Constant territory operating results are
derived by adjusting  current year results to exclude  significant  current year
acquisitions  and  adjusting  prior  year  results  to  include  the  results of
significant  prior year acquisitions as if they had occurred on the first day of
the prior  fiscal  year.

Use of EBITDA
     EBITDA,  which is computed as operating income plus the sum of depreciation
and amortization, is a key indicator management and the industry use to evaluate
operating  performance.  It is not, however,  required under generally  accepted
accounting   principles   and  should  not  be  considered  an   alternative  to
measurements required by GAAP such as net income or cash flows.

Results of Operations
---------------------
<TABLE>
<CAPTION>

                                             Reported Change          Constant Territory Change
                                             ---------------          -------------------------
                                              June 16, 2001                 June 16, 2001
                                              -------------                 -------------
                                        12-weeks         24-weeks      12-weeks         24-weeks
                                        --------         --------      --------         --------
<S>                                        <C>             <C>            <C>               <C>
     EBITDA............................    12%              12%           11%               11%
     Volume............................     5%               4%            4%                4%
     Net Revenue per Case..............     3%               3%            3%                3%

</TABLE>

EBITDA
     EBITDA was $335  million and $536  million in the second  quarter and first
24-weeks of 2001,  representing  a 12%  increase  over the same periods of 2000,
respectively.  On a constant territory basis, EBITDA growth was 11% for both the
quarter and year-to-date periods reflecting a balanced equation of increased net
revenue per case and solid volume growth as well as continued  favorable cost of
sales trends.



                                      -9-




Volume
     Our  worldwide  physical  case  volume  increased  5% and 4% in the  second
quarter and first  24-weeks of 2001,  respectively.  Constant  territory  volume
growth was 4% in both the second quarter and year-to-date. In the U.S., constant
territory  volume increased 2% in the second quarter and year-to-date led by the
introduction  of Mountain Dew Code Red,  distribution  of Sierra Mist and strong
growth in  Aquafina,  driving  increases  in both our cold  drink and  take-home
segments.  Outside the U.S., our constant territory volumes increased 12% in the
quarter and 13% year-to-date  reflecting improvements across all of our markets,
particularly in Russia.

Net Revenues
     Net  revenues for the quarter grew $147  million,  an 8% increase  over the
prior year,  raising  year-to-date net revenues up 7% to $3,707 million over the
same period of 2000. On a constant  territory basis, net revenues grew 7% in the
quarter  and first  24-weeks  of 2001  driven  by  volume  growth of 4% and a 3%
increase in net revenue per case,  respectively.  Constant territory net revenue
per  case  growth  was  driven  by the  U.S.,  which  grew 5% in  both  periods,
reflecting  higher take-home pricing and positive package and channel mix, which
was driven by the  introduction  of Mountain Dew Code Red and SoBe.  Outside the
U.S., constant territory net revenues were up 7% in the quarter and year-to-date
reflecting a  double-digit  increase in volume and an approximate 5% decrease in
net revenue per case.  Excluding the negative  impact of currency  translations,
net revenue per case was  essentially  flat  outside the U.S.  and  increased 4%
worldwide in the second quarter and first 24-weeks of 2001.



Cost of Sales
     Cost of sales  increased $75 million,  or 7%, in the second quarter of 2001
and $112 million,  or 6%,  year-to-date.  On a constant territory basis, cost of
sales per case increased 3% for the quarter and 2% year-to-date, compared to the
same periods in 2000 reflecting  higher U.S.  concentrate  costs, and mix shifts
into higher cost packages and products offset by favorable currency translations
and country mix.

Selling, Delivery and Administrative Expenses
     Selling,  delivery and administrative  expenses grew $46 million, or 7%, in
the second quarter and $96 million,  or 7%, in the first 24-weeks of 2001.  This
primarily  reflects  increased  selling and delivery costs resulting from volume
growth  and our  continued  investment  in our  U.S.  and  Canadian  cold  drink
infrastructure as well as higher  advertising and marketing costs.  Current year
costs also include an  approximate  1  percentage  point  favorable  impact from
currency translations.

Income Tax Expense Before Rate Change
     PBG's full year  forecasted  effective  tax rate for 2001 is 36.5% and this
rate has been applied to our 2001 results. This rate corresponds to an effective
tax rate of 37.0% in 2000.  The decrease is primarily due to the reduced  impact
of fixed non-deductible expenses on higher anticipated pre-tax income in 2001.

Income Tax Rate Change Benefit
     In the second quarter of 2001, the Canadian  Government enacted legislation
that  reduced  the  federal  corporate  income  tax rate  from 28% to 21% over a
four-year  period  beginning  January 1, 2001. In addition,  certain  provincial
income tax rates were also  reduced.  These rate  changes  reduced  deferred tax
liabilities  associated  with our operations in Canada.  The changes to deferred
taxes  resulted in a reduction  of our tax expense in the second  quarter of $16
million ($0.10 per diluted share after minority interest).

     On June 29,  2001,  the  Province  of Ontario  enacted  legislation  that
reduced the  provincial  income tax rate.  This change will  further  reduce our
deferred  tax  liabilities  associated  with our  operations  in Canada and will
result in an  additional  income  tax rate  benefit  in the third  quarter of $8
million (approximately $0.05 per diluted share after minority interest).



                                      -10-



Liquidity and Capital Resources
-------------------------------
Cash Flows
     Net cash  provided by  operations  decreased  $69  million to $179  million
reflecting higher working capital requirements due to the growth of our business
and the unfavorable timing of payments on current liabilities,  partially offset
by strong growth in net income.

     Net cash used for  investments  increased by $105 million from $230 million
in the first  24-weeks  of 2000 to $335  million  over the same  period in 2001,
primarily due to  acquisition  spending which was $66 million higher in 2001 and
capital  expenditures,  which  increased  by $31  million,  driven by  increased
infrastructure spending.

     Net cash provided by (used for)  financing  increased by $98 million from a
use of cash of $65  million in 2000 to a source of cash of $33  million in 2001.
This change  reflects  $142 million of  short-term  borrowings,  which were used
primarily to fund investment spending and higher share repurchases.



Euro
----
     On  January  1,  1999,  eleven  member  countries  of  the  European  Union
established  fixed conversion  rates between existing  currencies and one common
currency,  the Euro. Beginning in January 2002, new  Euro-denominated  bills and
coins  will  be  issued,   and  existing   currencies  will  be  withdrawn  from
circulation.  Spain is one of the original member  countries that instituted the
Euro and, in June 2000,  Greece also  elected to  institute  the Euro  effective
January 1, 2001. We have  established  plans to address the issues raised by the
Euro currency conversion.  These issues include, among others, the need to adapt
computer and financial systems, business processes and equipment such as vending
machines  to  accommodate  Euro-denominated  transactions  and the impact of one
common currency on cross-border  pricing.  Since financial systems and processes
currently  accommodate  multiple  currencies,  we do not  expect  the system and
equipment  conversion costs to be material.  Due to numerous  uncertainties,  we
cannot reasonably estimate the long-term effects one common currency may have on
pricing,  costs and the resulting impact, if any, on our financial  condition or
results of operations.

Cautionary Statements
---------------------
     Except for the historical  information  and discussions  contained  herein,
statements contained in this Form 10-Q may constitute forward-looking statements
as defined  by the  Private  Securities  Litigation  Reform  Act of 1995.  These
forward-looking   statements  are  based  on  currently  available  competitive,
financial and economic data and our operating plans.  These statements involve a
number of risks, uncertainties and other factors that could cause actual results
to be  materially  different.  Among the  events  and  uncertainties  that could
adversely affect future periods are  lower-than-expected  net pricing  resulting
from marketplace competition,  material changes from expectations in the cost of
raw materials and  ingredients,  an inability to achieve the expected timing for
returns  on cold  drink  equipment  and  employee  infrastructure  expenditures,
material changes in expected levels of marketing  support payments from PepsiCo,
Inc.,  an  inability  to meet  projections  for  performance  in newly  acquired
territories,  unexpected costs associated with conversion to the common European
currency and unfavorable interest rate and currency fluctuations.



                                      -11-



Item 3.

Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------

     We have no material changes to the risk disclosures made in our 2000 Annual
Report on Form 10-K.



Item 4.

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

(a)  Annual Meeting of Shareholders  of The Pepsi Bottling Group,  Inc. was held
     on May 23, 2001.
(b)  The names of all directors are set forth in (c) below.  The proxies for the
     meeting  were  solicited  pursuant to  Regulation  14 under the  Securities
     Exchange Act of 1934.  There were no  solicitations  in  opposition  to the
     nominees as listed in the proxy and all such nominees were elected.
(c)  A brief  description  of each matter  voted on and the number of votes cast
     are as follows:
<TABLE>
<CAPTION>

                                                               Number of Votes (millions)
                                                               ---------------------------
                                                                                         Broker
Description of Proposals                                 For      Against    Abstain   Non-votes
------------------------                                 ---      -------    -------   ---------
1) Election of Directors:
<S>                                                      <C>        <C>        <C>        <C>
       Linda G. Alvarado                                 156        N/A         1         N/A
       Barry H. Beracha                                  156        N/A         1         N/A
       John T. Cahill                                    156        N/A         1         N/A
       Thomas W. Jones                                   156        N/A         1         N/A
       Thomas H. Kean                                    156        N/A         1         N/A
       Susan D. Kronick                                  156        N/A         1         N/A
       Margaret D. Moore                                 155        N/A         2         N/A
       Robert F. Sharpe, Jr.                             155        N/A         2         N/A
       Craig E. Weatherup                                156        N/A         1         N/A
2) Approval of the PBG Directors' Stock Plan             141         16         -         N/A
3) Approval of the appointment of KPMG LLP as
      independent auditors                               157        -           -         N/A


</TABLE>


                                      -12-




                     Independent Accountants' Review Report
                     --------------------------------------

The Board of Directors
The Pepsi Bottling Group, Inc.

We have reviewed the accompanying  Condensed  Consolidated  Balance Sheet of The
Pepsi  Bottling  Group,  Inc. as of June 16,  2001,  and the  related  Condensed
Consolidated Statements of Operations for the twelve and twenty-four weeks ended
June 16, 2001 and June 10, 2000 and the  Condensed  Consolidated  Statements  of
Cash Flows for the  twenty-four  weeks  ended June 16,  2001 and June 10,  2000.
These Condensed  Consolidated Financial Statements are the responsibility of The
Pepsi Bottling Group, Inc.'s management.

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

Based on our review, we are not aware of any material  modifications that should
be made to the Condensed Consolidated Financial Statements referred to above for
them to be in conformity with accounting  principles  generally  accepted in the
United States of America.

We have  previously  audited,  in accordance with auditing  standards  generally
accepted in the United States of America,  the Consolidated Balance Sheet of The
Pepsi Bottling Group, Inc. as of December 30, 2000, and the related Consolidated
Statements of Operations, Cash Flows and Changes in Shareholders' Equity for the
fifty-three week period then ended not presented herein; and in our report dated
January 30,  2001,  we expressed an  unqualified  opinion on those  consolidated
financial  statements.  In  our  opinion,  the  information  set  forth  in  the
accompanying  condensed  consolidated  balance sheet as of December 30, 2000, is
fairly  presented,  in all material  respects,  in relation to the  consolidated
balance sheet from which it has been derived.



/S/ KPMG LLP


New York, New York
July 11, 2001




                                      -13-




                   PART II - OTHER INFORMATION AND SIGNATURES


Item 6.           Exhibits and Reports on Form 8-K
-------           --------------------------------
                  (a)  Exhibits

                      See Index to Exhibits on page 16.




                                      -14-




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








                                                  THE PEPSI BOTTLING GROUP, INC.
                                                  ------------------------------
                                                           (Registrant)






Date:      July 27, 2001                                       Andrea L. Forster
           -------------                                       -----------------
                                                   Vice President and Controller




Date:      July 27, 2001                                        Alfred H. Drewes
           -------------                                        ----------------
                                                       Senior Vice President and
                                                         Chief Financial Officer



                                      -15-




                                INDEX TO EXHIBITS
                                    ITEM 6 (a)
                                    ----------



EXHIBITS
--------

Exhibit 11                   Computation of Basic and Diluted Earnings Per Share





                                      -16-




                                                                      EXHIBIT 11
                         The Pepsi Bottling Group, Inc.
               Computation of Basic and Diluted Earnings Per Share
                      (in millions, except per share data)
<TABLE>
<CAPTION>

                                                                   12-weeks Ended                24-weeks Ended
                                                                   --------------                --------------
                                                              June 16,        June 10,       June 16,        June 10,
                                                               2001            2000            2001            2000
                                                              -------         -------        -------         -------
Number of shares on which basic earnings per share is based:

<S>                                                             <C>              <C>            <C>             <C>
  Average outstanding during period................             143             148            144             148
  Add - Incremental shares under stock
    compensation plans.............................               5               -              5               -
                                                             ------          ------         ------          ------
Number of shares in which diluted
  earnings per share is based......................             148             148            149             148

Net earnings applicable to common
   shareholders (millions).........................          $  116          $   85         $  142          $  102

Net earnings on which diluted earnings
   per share is based (millions)...................          $  116          $   85         $  142          $  102

Basic earnings per share...........................          $ 0.81          $ 0.58         $ 0.98          $ 0.69

Diluted earnings per share.........................          $ 0.78          $ 0.58         $ 0.95          $ 0.69


</TABLE>


                                      -17-