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  September  8,  2001
----                                                    -------------------

                                       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
 incorporation 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 Common Stock outstanding as of October 6, 2001: 141,941,777



                         The Pepsi Bottling Group, Inc.
                         ------------------------------
                                      Index

<TABLE>
                                                                                     Page No.
                                                                                     --------

Part I           Financial Information

<S>                                                                                  <C>

      Item 1.    Financial Statements

                 Condensed Consolidated Statements of Operations -
                   12 and 36-weeks ended September 8, 2001 and September 2, 2000            2

                 Condensed Consolidated Statements of Cash Flows -
                   36-weeks ended September 8, 2001 and September 2, 2000                   3

                 Condensed Consolidated Balance Sheets -
                   September 8, 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

                 Independent Accountants' Review Report                                    13

Part II          Other Information and Signatures

      Item 6.    Exhibits                                                                  16

</TABLE>

                                       -1-



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

<TABLE>


                                                                                   12-weeks Ended             36-weeks Ended
                                                                                   --------------             --------------
                                                                                September   September      September   September
                                                                                 8, 2001     2, 2000        8, 2001     2, 2000
                                                                                ---------   ---------      ---------   ---------
<S>                                                                                <C>        <C>            <C>         <C>

    Net Revenues................................................................   $2,274      $2,125         $5,981      $5,583
    Cost of sales...............................................................    1,222       1,163          3,212       3,041
                                                                                   ------      ------         ------      ------

    Gross Profit................................................................    1,052         962          2,769       2,542
    Selling, delivery and administrative expenses...............................      767         706          2,177       2,020
                                                                                   ------      ------         ------      ------

    Operating Income............................................................      285         256            592         522
    Interest expense, net.......................................................       45          44            135         133
    Foreign currency loss.......................................................        -           1              -           1
    Minority interest...........................................................       18          16             37          31
                                                                                   ------      ------         ------      ------

    Income before income taxes..................................................      222         195            420         357
    Income tax expense before rate change.......................................       81          72            153         132
    Income tax rate change benefit..............................................       (9)          -            (25)          -
                                                                                   ------      ------         ------      ------

    Net Income..................................................................   $  150      $  123         $  292      $  225
                                                                                   ======      ======         ======      ======

    Basic Earnings Per Share....................................................   $ 1.05      $ 0.84         $ 2.03      $ 1.52
    Weighted-Average Shares Outstanding.........................................      142         147            144         148

    Diluted Earnings Per Share..................................................   $ 1.02      $ 0.82         $ 1.97      $ 1.51
    Weighted-Average Shares Outstanding.........................................      147         149            148         149

</TABLE>

     See accompanying notes to Condensed Consolidated Financial Statements.



                                       -2-



                         The Pepsi Bottling Group, Inc.
                 Condensed Consolidated Statements of Cash Flows
                             in millions, unaudited
<TABLE>

                                                                                   36-weeks Ended
                                                                                   --------------
                                                                                September   September
                                                                                 8, 2001     2, 2000
                                                                                ---------   ---------
<S>                                                                               <C>         <C>
 Cash Flows - Operations
      Net income................................................................     $292        $225
      Adjustments to reconcile net income to net cash provided by operations:
            Depreciation........................................................      257         232
            Amortization........................................................       92          91
            Deferred income taxes...............................................       17         (10)
            Other non-cash charges and credits, net.............................      133         125
            Changes in operating working capital, excluding effects of
                acquisitions:
              Accounts receivable...............................................     (274)       (208)
              Inventories.......................................................      (58)        (23)
              Prepaid expenses and other current assets.........................        8           8
              Accounts payable and other current liabilities....................       70         108
                                                                                     ----        ----
            Net change in operating working capital ............................     (254)       (115)
                                                                                     ----        ----
    Net Cash Provided by Operations.............................................      537         548
                                                                                     ----        ----

    Cash Flows - Investments
       Capital expenditures.....................................................     (397)       (342)
       Acquisitions of bottlers.................................................     (111)         (2)
       Sale of property, plant and equipment....................................        4           4
       Other, net...............................................................      (24)         (6)
                                                                                     ----        ----

    Net Cash Used by Investments................................................     (528)       (346)
                                                                                     ----        ----

    Cash Flows - Financing
       Short-term borrowings - three months or less.............................       67          12
       Payments of third-party debt.............................................        -          (9)
       Dividends paid...........................................................       (9)         (9)
       Proceeds from exercise of stock options..................................       11           -
       Purchase of treasury stock...............................................     (169)        (95)
                                                                                     ----        ----

    Net Cash Used by Financing..................................................     (100)       (101)
                                                                                     ----        ----

    Effect of Exchange Rate Changes on Cash and Cash Equivalents................       (4)         (6)
                                                                                     ----        ----
    Net (Decrease)/ Increase  in Cash and Cash Equivalents......................      (95)         95
    Cash and Cash Equivalents - Beginning of Period.............................      318         190
                                                                                     ----        ----
    Cash and Cash Equivalents - End of Period...................................     $223        $285
                                                                                     ====        ====

    Supplemental Cash Flow Information
    Third-party interest and income taxes paid..................................     $235        $287
                                                                                     ====        ====

</TABLE>

     See accompanying notes to Condensed Consolidated Financial Statements.



                                       -3-



                        The Pepsi Bottling Group, Inc.
                      Condensed Consolidated Balance Sheets
                      in millions, except per share amounts

<TABLE>

                                                                                (Unaudited)
                                                                                 September   December
                                                                                  8, 2001    30, 2000
                                                                                ----------   --------
<S>                                                                               <C>         <C>

Assets
Current Assets
  Cash and cash equivalents.....................................................    $  223     $  318
  Accounts receivable, less allowance of $43 at
        September 8, 2001 and $42 at December 30, 2000..........................     1,074        796
  Inventories...................................................................       340        281
  Prepaid expenses and other current assets.....................................       127        189
                                                                                    ------     ------
          Total Current Assets..................................................     1,764      1,584

  Property, plant and equipment, net............................................     2,485      2,358
  Intangible assets, net........................................................     3,692      3,694
  Other assets..................................................................       106        100
                                                                                    ------     ------
           Total Assets.........................................................    $8,047     $7,736
                                                                                    ======     ======

Liabilities and Shareholders' Equity
Current Liabilities
  Accounts payable and other current liabilities................................    $1,011     $  941
  Short-term borrowings.........................................................        93         26
                                                                                    ------     ------
          Total Current Liabilities.............................................     1,104        967

  Long-term debt................................................................     3,281      3,271
  Other liabilities.............................................................       518        474
  Deferred income taxes.........................................................     1,072      1,072
  Minority interest.............................................................       338        306
                                                                                    ------     ------
          Total Liabilities.....................................................     6,313      6,090

Shareholders' Equity
   Common stock, par value $0.01 per share:
       authorized 300 shares, issued 155 shares.................................         2          2
   Additional paid-in capital...................................................     1,738      1,736
   Retained earnings............................................................       638        355
   Accumulated other comprehensive loss.........................................      (297)      (254)
   Treasury stock: 13 shares and 10 shares at September 8, 2001 and December
      30, 2000, respectively....................................................      (347)      (193)
                                                                                    ------     ------
          Total Shareholders' Equity............................................     1,734      1,646
                                                                                    ------     ------
           Total Liabilities and Shareholders' Equity...........................    $8,047     $7,736
                                                                                    ======     ======

</TABLE>

     See accompanying notes to Condensed Consolidated Financial Statements.



                                       -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  non-carbonated  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 September
8, 2001,  PepsiCo's ownership consisted of 37.3% of our outstanding common stock
and 100% of our outstanding Class B common stock, together representing 45.8% 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.

     The accompanying  Condensed Consolidated Balance Sheet at September 8, 2001
and the Condensed Consolidated  Statements of Operations for the 12 and 36-weeks
ended  September  8, 2001 and  September 2, 2000 and Cash Flows for the 36-weeks
ended  September 8, 2001 and September 2, 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 third  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

<TABLE>
                                                                                September   December
                                                                                 8, 2001    30, 2000
                                                                                ---------   --------
<S>                                                                              <C>         <C>

Raw materials and supplies......................................................    $127        $107
Finished goods..................................................................     213         174
                                                                                    ----        ----
                                                                                    $340        $281
                                                                                    ====        ====

</TABLE>

                                       -5-


Note 4 - Property, Plant and Equipment, net

<TABLE>
                                                                                September   December
                                                                                 8, 2001    30, 2000
                                                                                ---------   --------
<S>                                                                               <C>         <C>

Land............................................................................   $  146     $  145
Buildings and improvements......................................................      917        903
Manufacturing and distribution equipment........................................    2,293      2,186
Marketing equipment.............................................................    1,846      1,745
Other...........................................................................      103         89
                                                                                   ------     ------
                                                                                    5,305      5,068
Accumulated depreciation........................................................   (2,820)    (2,710)
                                                                                   ------     ------
                                                                                   $2,485     $2,358
                                                                                   ======     ======

</TABLE>


Note 5 - Income Tax Rate Change Benefit
     During  2001,  the Canadian  Government  passed laws  reducing  federal and
certain  provincial  corporate  income tax rates.  These  rate  changes  reduced
deferred tax liabilities  associated with our operations in Canada, and resulted
in one-time gains in the 12-weeks and 36-weeks ended  September 8, 2001 of $0.06
per share and $0.16 per share, respectively.

Note 6 - Acquisitions
     During  2001,  PBG  acquired  the   operations   and  exclusive   right  to
manufacture,  sell and  distribute  Pepsi-Cola  beverages  from two  independent
bottlers. In May and August of 2001, we acquired Pepsi-Cola Bottling of Northern
California  and  Pepsi-Cola  Elmira  Bottling  Co.  Inc.,  respectively,  for an
aggregate  purchase  price of $116  million  of cash  and  assumed  debt.  These
acquisitions were accounted for by the purchase method,  and were made to enable
us to provide  better  service to our large  retail  customers as well as reduce
costs through economies of scale.

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 repurchased
approximately  4 million  shares for $169 million in the first  36-weeks in 2001
and approximately 4 million shares for $95 million over the same period in 2000.
Of the 25 million shares  authorized we have repurchased 14 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.

     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



                                       -6-



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 September 8, 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, the amount of deferred  losses from our commodity  hedging that we
recongnize  into income was not  material.  At  September 8, 2001 an $11 million
deferred loss remained in accumulated other  comprehensive loss in our Condensed
Consolidated  Balance Sheets resulting from our commodity  hedges. We anticipate
that this loss, which is $7 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 third quarter or
first 36-weeks of 2001.

Fair Value Hedges
     We finance a portion of our operations through fixed rate debt instruments.
At September 8, 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 change in fair
value of the interest rate swap was a gain of $5 million for the first  36-weeks
of 2001.  The fair value  change was  recorded in interest  expense,  net in our
Condensed  Consolidated  Statements  of Operations  and in prepaid  expenses and
other  current  assets  in  our  Condensed   Consolidated   Balance  Sheets.   A
corresponding  adjustment 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.



                                       -7-



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",  which requires that the purchase method of accounting
be used for all business combinations  initiated after June 30, 2001, as well as
purchase  method business  combinations  completed after June 30, 2001, and SFAS
142,  "Goodwill and Other Intangible  Assets",  which requires that goodwill and
intangible  assets with  indefinite  useful  lives no longer be  amortized,  but
instead tested for impairment.  SFAS 141 replaces  Accounting  Principles  Board
Opinion 16, "Business  Combinations"  and SFAS 142 replaces APB 17,  "Intangible
Assets".  Effective the first day of fiscal year 2002 we will no longer amortize
goodwill and certain  franchise  rights,  but will evaluate them for  impairment
annually.  We expect that the adoption of these statements will lower our fiscal
year 2002  amortization  expense by  approximately  $128  million,  or $0.61 per
diluted share,  based on the  weighted-average  number of  year-to-date  diluted
shares outstanding.

Note 9 - Comprehensive Income

<TABLE>

                                                        12-weeks Ended             36-weeks Ended
                                                        --------------             --------------
                                                     September   September      September   September
                                                      8, 2001     2, 2000        8, 2001     2, 2000
                                                     ---------   ---------      ---------   ---------
<S>                                                  <C>         <C>            <C>         <C>

Net income......................................         $150        $123           $292        $225
Currency translation adjustment.................           (1)        (13)           (32)        (34)
FAS 133 adjustment..............................           (9)          -            (11)          -
                                                         ----        ----           ----        ----
Comprehensive Income............................         $140        $110           $249        $191
                                                         ====        ====           ====        ====

</TABLE>

Note 10 - Subsequent Events
     On October 10, 2001,  our Board of Directors  approved a two-for-one  stock
split of our  common  stock.  Shareholder  approval  will be sought at a special
meeting scheduled for November 27, 2001.

                                      -8-

Item 2.

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

Overview
     The  third  quarter  of  2001  marked  the  11th  consecutive   quarter  of
outstanding  operating results for The Pepsi Bottling Group, Inc.  (collectively
referred to as "PBG," "we," "our" and "us"). Highlights of these results were as
follows:

o    We delivered 10% constant  territory EBITDA growth in the third quarter and
     11% in the first 36-weeks of 2001.

o    Our worldwide  constant  territory  physical case volume grew by 3% in both
     the third quarter and first 36-weeks of 2001.

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

o    We delivered  third  quarter 2001 diluted  earnings per share of $1.02,  an
     increase of $0.20, or 24%, over 2000 and year-to-date  diluted earnings per
     share of $1.97,  an increase of $0.46, or 30%, over the same 36-week period
     in 2000.  Diluted earnings per share in 2001 includes tax benefits of $0.06
     and $0.16 in the third quarter and  year-to-date,  respectively,  resulting
     from reductions 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>

                                                 Reported Change      Constant Territory Change
                                                 ---------------      -------------------------
                                                September 8, 2001         September 8, 2001
                                                -----------------         -----------------
                                               12-weeks   36-weeks       12-weeks   36-weeks
                                               --------   --------       --------   --------
<S>                                            <C>         <C>            <C>        <C>

     EBITDA.............................            11%        11%            10%        11%
     Volume.............................             4%         4%             3%         3%
     Net Revenue per Case...............             3%         3%             3%         3%

</TABLE>

EBITDA
     On a reported basis,  EBITDA was $405 million and $941 million in the third
quarter and first 36-weeks of 2001,  respectively,  representing an 11% increase
over the same  periods of 2000.  The  constant  territory  growth of 10% for the
third quarter and 11% for the first  36-weeks of 2001 was a reflection of higher
pricing in the U.S., an increased mix of higher margin cold drink volume



                                       -9-



and continued growth in our operations outside the U.S., particularly in Russia,
partially offset by investments in our cold drink infrastructure.

Volume
     Our  worldwide  physical case volume grew 4% in the third quarter and first
36-weeks of 2001,  respectively.  Constant territory volume growth was 3% in the
third quarter reflecting flat volume in the U.S. and 13% growth outside the U.S.
On a year-to-date  basis,  constant  territory volume growth was 3% driven by 1%
volume growth in the U.S. and 13% growth outside the United States.  U.S. volume
results in the third quarter  include an approximate 2% negative impact from the
53rd week in 2000 that caused a shift in calendar weeks in 2001.  Excluding this
negative  impact,  U.S.  volume grew  approximately  2% in the third quarter and
remained at 1% on a year-to-date  basis. The quarter and year-to-date growth was
led by the  introduction  of Mountain  Dew Code Red,  expanded  distribution  of
Sierra  Mist and strong  growth in  Aquafina.  Outside the U.S.,  all  countries
delivered solid volume growth in both the quarter and first 36 weeks of 2001.

Net revenues
     Reported net revenues were $2,274  million and $5,981  million in the third
quarter and first  36-weeks of 2001,  respectively,  representing  a 7% increase
over the prior  year  periods.  On a  constant  territory  basis,  net  revenues
increased by 6% in both the quarter and year-to-date reflecting 3% volume growth
and 3%  growth  in  net  revenue  per  case.  Higher  pricing,  particularly  in
foodstores,  and an increased mix of higher-revenue cold drink volume reflecting
new product innovation and strong Aquafina  performance,  drove U.S. net revenue
per case growth of 5% in both the quarter and year-to-date. Also contributing to
the positive net revenue trends was solid international volume growth.  Reported
net revenues and net revenue per case were lowered by approximately 1 percentage
point due to  currency  translations  in both the  quarter  and  36-weeks  ended
September 8, 2001.

Cost of sales
     Cost of sales  increased  $59 million,  or 5%, in the third quarter of 2001
and $171 million,  or 6%,  year-to-date.  On a constant territory basis, cost of
sales per case  increased  1% in both the  quarter and  year-to-date  reflecting
higher U.S.  concentrate  costs and mix shifts into  higher  cost  packages  and
products offset by country mix and favorable currency translations.

Selling, delivery and administrative expenses
     Selling,  delivery and administrative  expenses grew $61 million, or almost
9%, in the third quarter,  bringing  year-to-date growth to $157 million, or 8%,
over the comparable  periods in 2000. This primarily  reflects increased selling
and  delivery  costs,  specifically  our  continued  investment  in our U.S. and
Canadian cold drink  execution  including  people,  routes and  equipment.  Also
contributing to the change in selling,  delivery and administrative expenses are
higher  advertising  and marketing  costs offset by an  approximate 1 percentage
point favorable impact from currency translations.

Income tax expense before rate change
     Our full year  forecasted 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% in 2000.  The half point  decrease is primarily due to the reduced impact of
fixed non-deductible expenses on higher anticipated pre-tax income in 2001.



                                      -10-



Income tax rate change benefit
     During  2001,  the Canadian  Government  passed laws  reducing  federal and
certain  provincial  corporate  income tax rates.  These  rate  changes  reduced
deferred tax liabilities  associated with our operations in Canada, and resulted
in one-time gains in the 12-weeks and 36-weeks ended  September 8, 2001 of $0.06
per share and $0.16 per share, respectively.

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

Cash Flows
     Net cash  provided by operating  activities  decreased  $11 million to $537
million in the first  36-weeks of 2001,  which was primarily due to  unfavorable
working  capital cash flows  reflecting the timing of cash payments and receipts
resulting  from the negative  impact of the 53rd week  calendarization  issue in
2001. Strong EBITDA growth mitigated the impact of working capital cash flows.

     Net cash used by investments increased by $182 million from $346 million at
the end of the third  quarter of 2000 to $528  million in the first  36-weeks of
2001,  primarily due to acquisition  spending,  which was $109 million higher in
2001.  Capital  expenditures  increased by $55 million,  or 16%,  reflecting our
continued investment in U.S. and Canada's cold drink infrastructure.

     Net cash used by  financing  decreased $1 million from the end of the third
quarter of 2000 to the first  36-weeks  of 2001.  This  change  reflects  higher
short-term  borrowings,  which  were  used  primarily  to fund  increased  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 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 the 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.



                                      -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  September  8,  2001,  and the  related
Condensed  Consolidated  Statements of Operations  for the twelve and thirty-six
weeks  ended  September  8,  2001  and  September  2,  2000  and  the  Condensed
Consolidated  Statements of Cash Flows for the thirty-six  weeks ended September
8, 2001 and September 2, 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
October 9, 2001



                                      -13-



PART II - OTHER INFORMATION AND SIGNATAURES


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

                        See Index to Exhibits on page 15.



                                      -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:      October 19, 2001                             Andrea L. Forster
           ----------------                       ------------------------------
                                                  Vice President and Controller



Date:      October 19, 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>

                                                            12-weeks Ended         36-weeks Ended
                                                            --------------         --------------
                                                          9/08/01    9/02/00      9/08/01   9/02/00
                                                          -------    -------      -------   -------

Number of shares on which basic earnings
  per share is based:

<S>                                                       <C>        <C>          <C>        <C>

  Average outstanding during period................           142        147          144       148

  Add - Incremental shares under stock
    compensation plans.............................             5          2            4         1
                                                             ----       ----         ----      ----

Number of shares in which diluted
  earnings per share is based......................           147        149          148       149

Net earnings applicable to common
   shareholders (millions).........................         $ 150      $ 123        $ 292     $ 225

Net earnings on which diluted earnings
   per share is based (millions)...................         $ 150      $ 123        $ 292     $ 225

Basic earnings per share...........................         $1.05      $0.84        $2.03     $1.52

Diluted earnings per share.........................         $1.02      $0.82        $1.97     $1.51

</TABLE>

                                      -17-