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 2, 2000
                                           -----------------

                                       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 September 29, 2000:
145,719,818




                         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 36-weeks ended September 2, 2000 and September 4, 1999             2

                      Condensed Consolidated Statements of Cash Flows -
                           36-weeks ended September 2, 2000 and September 4, 1999                    3

                      Condensed Consolidated Balance Sheets -
                           September 2, 2000 and December 25, 1999                                   4

                      Notes to Condensed Consolidated Financial Statements                         5-8

        Item 2.       Management's Discussion and Analysis of Results of
                           Operations and Financial Condition                                     9-14

        Item 3.       Quantitative and Qualitative Disclosures About
                           Market Risk                                                              14

        Item 4.       Submission of Matters to a Vote of Securities Holders                         14

                      Independent Accountants' Review Report                                        15

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>
<CAPTION>

                                                                          12-weeks Ended                36-weeks Ended
                                                                          --------------                --------------
                                                                     September      September      September      September
                                                                      2, 2000        4, 1999        2, 2000        4, 1999
                                                                      -------        -------        -------        -------

<S>                                                                     <C>            <C>            <C>            <C>
    Net Revenues....................................................  $2,125         $2,036         $5,583         $5,319
    Cost of sales...................................................   1,163          1,162          3,041          3,043
                                                                      ------         ------         ------         ------

    Gross Profit....................................................     962            874          2,542          2,276
    Selling, delivery and administrative expenses...................     706            669          2,020          1,892
    Non-cash compensation charge....................................       -              -              -             45
                                                                      ------         ------         ------         ------

    Operating Income................................................     256            205            522            339
    Interest expense, net...........................................      44             44            133            141
    Foreign currency loss...........................................       1              1              1              1
    Minority interest...............................................      16             12             31             19
                                                                      ------         ------         ------         ------
    Income before income taxes......................................     195            148            357            178
    Income tax expense..............................................      72             56            132             69
                                                                      ------         ------         ------         ------

    Net Income......................................................  $  123         $   92         $  225         $  109
                                                                      ======         ======         ======         ======

    Basic Earnings Per Share........................................  $ 0.84         $ 0.59         $ 1.52         $ 0.93
    Weighted-Average Shares Outstanding.............................     147            155            148            117

    Diluted Earnings Per Share......................................  $ 0.82         $ 0.59         $ 1.51         $ 0.93
    Weighted-Average Shares Outstanding.............................     149            155            149            117

    Pro Forma Diluted Earnings Per Share
    As reported.....................................................  $ 0.82         $ 0.59         $ 1.51         $ 0.70
    Excluding non-cash compensation charge..........................  $ 0.82         $ 0.59         $ 1.51         $ 0.89
    Weighted-Average Share Outstanding..............................     149            155            149            155
</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>
<CAPTION>
                                                                                             36-weeks Ended
                                                                                             --------------
                                                                                        September      September
                                                                                         2, 2000        4, 1999
                                                                                         -------        -------
    Cash Flows - Operations
<S>                                                                                         <C>            <C>
      Net income......................................................................     $225           $109
      Adjustments to reconcile net income to net cash provided by operations:
            Depreciation..............................................................      232            252
            Amortization..............................................................       91             90
            Deferred income taxes.....................................................      (10)            (3)
            Non-cash compensation charge..............................................        -             29
            Other non-cash charges and credits, net...................................      125             91
            Changes in operating working capital, excluding effects of
                acquisitions:
              Trade accounts receivable...............................................     (208)          (258)
              Inventories.............................................................      (23)           (11)
              Prepaid expenses, deferred income taxes and other current assets........        8              1
              Accounts payable and other current liabilities..........................      108            134
                                                                                         ------         ------
            Net change in operating working capital ..................................     (115)          (134)
                                                                                         ------         ------
    Net Cash Provided by Operations...................................................      548            434
                                                                                         ------         ------
    Cash Flows - Investments
       Capital expenditures...........................................................     (342)          (371)
       Acquisitions of bottlers.......................................................       (2)          (166)
       Sale of property, plant and equipment..........................................        4             21
       Other, net.....................................................................       (6)             8
                                                                                         ------         ------

    Net Cash Used by Investments......................................................     (346)          (508)
                                                                                         ------         ------

    Cash Flows - Financing
       Short-term borrowings - three months or less...................................       12            (78)
       Proceeds from third-party debt.................................................        -          3,260
       Replacement of PepsiCo allocated debt..........................................        -         (3,300)
       Payments of third-party debt...................................................       (9)           (49)
       Dividends paid.................................................................       (9)            (3)
       Treasury stock transactions....................................................      (95)             -
       Net IPO proceeds...............................................................        -          2,208
       Decrease in advances from PepsiCo..............................................        -         (1,834)
                                                                                         ------         ------
    Net Cash (Used) Provided by Financing.............................................     (101)           204
                                                                                         ------         ------

    Effect of Exchange Rate Changes on Cash and Cash Equivalents......................       (6)            (2)
                                                                                         ------         ------
    Net Increase  in Cash and Cash Equivalents........................................       95            128
    Cash and Cash Equivalents - Beginning of Period...................................      190             36
                                                                                         ------         ------
    Cash and Cash Equivalents - End of Period.........................................   $  285         $  164
                                                                                         ======         ======

    Supplemental Cash Flow Information
    Liabilities incurred and/or assumed in connection with acquisitions of bottlers...   $    -         $   48
                                                                                         ======         ======

    Third-party interest and income taxes paid........................................   $  287         $  131
                                                                                         ======         ======
</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>
<CAPTION>

                                                                                    (Unaudited)
                                                                                     September       December
                                                                                      2, 2000        25, 1999
                                                                                      -------        --------
Assets
Current Assets
<S>                                                                                    <C>            <C>
  Cash and cash equivalents................................................           $  285         $  190
  Trade accounts receivable, less allowance of $48 at
        September 2, 2000 and December 25, 1999............................            1,000            827
  Inventories..............................................................              311            293
  Prepaid expenses, deferred income taxes and other current assets.........              154            183
                                                                                      ------         ------
          Total Current Assets.............................................            1,750          1,493

Property, plant and equipment, net.........................................            2,296          2,218
Intangible assets, net.....................................................            3,726          3,819
Other assets...............................................................               78             89
                                                                                      ------         ------
           Total Assets....................................................           $7,850         $7,619
                                                                                      ======         ======

Liabilities and Shareholders' Equity
Current Liabilities
  Accounts payable and other current liabilities...........................           $1,041         $  924
  Short-term borrowings....................................................               24             23
                                                                                      ------         ------
          Total Current Liabilities........................................            1,065            947

Long-term debt.............................................................            3,270          3,268
Other liabilities..........................................................              430            385
Deferred income taxes......................................................            1,128          1,178
Minority interest..........................................................              307            278
                                                                                      ------         ------
          Total Liabilities................................................            6,200          6,056

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.......................................................              354            138
   Accumulated other comprehensive loss....................................             (257)          (223)
   Treasury stock: 9 shares and 5 shares at September 2, 2000 and December
      25, 1999, respectively...............................................             (185)           (90)
                                                                                      ------         ------
          Total Shareholders' Equity.......................................            1,650          1,563
                                                                                      ------         ------
           Total Liabilities and Shareholders' Equity......................           $7,850         $7,619
                                                                                      ======         ======
</TABLE>

     See accompanying notes to Condensed Consolidated Financial Statements.



                                       -4-




The Pepsi Bottling Group, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
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  100,000,000  shares of PBG common
stock for sale at $23 per share in an initial public offering  generating $2,208
million  in net  proceeds.  These  proceeds  were used to repay  obligations  to
PepsiCo and fund  acquisitions.  Subsequent to the  offering,  PepsiCo owned and
continues to own  55,005,679  shares of common  stock,  consisting of 54,917,329
shares of common  stock and  88,350  shares of Class B common  stock.  PepsiCo's
ownership has increased from 35.4% on March 31, 1999 to 37.8% of the outstanding
common stock at September 2, 2000 as a result of net  repurchases of 9.3 million
shares under our share repurchase program,  which began in October 1999. PepsiCo
also owns 100% of the outstanding  Class B common stock,  together  representing
45.9% of the  voting  power of all  classes of our voting  stock.  In  addition,
PepsiCo  owns  7.1%  of  the  equity  of  Bottling  Group,  LLC,  our  principal
operating subsidiary, giving PepsiCo economic ownership of 42.2% of our combined
operations at September 2, 2000.

     The  accompanying   Condensed  Consolidated  Financial  Statements  include
information that has been presented on a "carve-out" basis for the periods prior
to our initial public offering. This information includes the historical results
of operations and assets and liabilities  directly  related to PBG, and has been
prepared  from  PepsiCo's  historical  accounting  records.  Certain  estimates,
assumptions and allocations  were made in determining  such financial  statement
information.  Therefore,  these Condensed  Consolidated Financial Statements may
not necessarily be indicative of the results of operations,  financial  position
or cash  flows  that  would have  existed  had we been a  separate,  independent
company from the first day of all periods presented.

     The accompanying Condensed Consolidated Balance Sheet at September 2, 2000,
the Condensed  Consolidated  Statements  of  Operations  for the 12 and 36-weeks
ended  September 2, 2000 and  September 4, 1999 and the  Condensed  Consolidated
Statements of Cash Flows for the 36-weeks ended  September 2, 2000 and September
4, 1999  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 year ended December 25,
1999  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.



                                       -5-


Note 2 - New Accounting Standards
     In June 1998,  the  Financial  Accounting  Standards  Board ("FASB") issued
Statement  of  Financial  Accounting  Standard 133  "Accounting  for  Derivative
Instruments and Hedging Activities." This statement  establishes  accounting and
reporting standards for hedging activities and derivative instruments, including
certain  derivative   instruments   embedded  in  other  contracts,   which  are
collectively  referred to as derivatives.  It requires that an entity recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position and measure those instruments at fair value.

     In July 1999, the FASB issued Financial  Accounting  Standard 137, delaying
the  implementation of SFAS 133 for one year. SFAS 133 will now be effective for
our first quarter of fiscal year 2001. In June 2000,  the FASB issued  Statement
of Financial  Accounting  Standard 138,  amending the  accounting  and reporting
standards of SFAS 133.

     While the impact of the  adoption of these  pronouncements  is dependent on
the fair value of our derivatives and related financial  instruments on the date
of  adoption,  it is not  expected  to have a material  impact on our results of
operations.

Note 3 - Seasonality of Business
     The results for the third  quarter and first  36-weeks 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 4 - Inventories
<TABLE>
<CAPTION>

                                                                   September       December
                                                                    2, 2000        25, 1999
                                                                    -------        --------

<S>                                                                      <C>           <C>
Raw materials and supplies...................................       $  119          $  110
Finished goods...............................................          192             183
                                                                    ------          ------
                                                                    $  311          $  293
                                                                    ======          ======

Note 5 - Property, Plant and Equipment, net
                                                                   September       December
                                                                    2, 2000        25, 1999
                                                                    -------        --------

Land.........................................................       $  144          $  145
Buildings and improvements...................................          870             852
Production and distribution equipment........................        2,146           2,112
Marketing equipment..........................................        1,713           1,596
Other........................................................           89              84
                                                                    ------          ------
                                                                     4,962           4,789
Accumulated depreciation.....................................       (2,666)         (2,571)
                                                                    ------          ------
                                                                    $2,296          $2,218
                                                                    ======          ======
</TABLE>

                                      -6-
<TABLE>
<CAPTION>

Note 6 - Comprehensive Income
                                                          12-weeks Ended                36-weeks Ended
                                                          --------------                --------------
                                                     September      September      September     September
                                                      2, 2000        4, 1999        2, 2000       4, 1999
                                                      -------        -------        -------       -------

<S>                                                      <C>          <C>             <C>            <C>
Net income........................................    $  123         $   92         $  225         $  109
Currency translation adjustment...................       (13)            (8)           (34)            (4)
Minimum pension liability adjustment..............         -              -              -             19
                                                      ------         ------         ------         ------
Comprehensive Income..............................    $  110         $   84         $  191         $  124
                                                      ======         ======         ======         ======
</TABLE>

Note 7 - Comparability of Results
Asset Lives
-----------
     At the beginning of fiscal year 2000, we changed the estimated useful lives
of  certain  categories  of assets  primarily  to  reflect  the  success  of our
preventive  maintenance  programs in extending the useful lives of these assets.
The changes,  which are detailed in the table below,  lowered total depreciation
cost by $16 million,  or $0.06 per diluted share, and $48 million,  or $0.18 per
diluted share, for the 12 and 36-weeks ended September 2, 2000, respectively.

                                                         Estimated Useful Lives
                                                         ----------------------
                                                               (in years)
                                                               ----------
                                                           2000          1999
                                                           ----          ----
Manufacturing equipment...............................      15             10
Heavy fleet...........................................      10              8
Fountain dispensing equipment.........................       7              5
Small specialty coolers and marketing equipment.......       3         5 to 7

Initial Public Offering
-----------------------
     The 1999 financial  information  for the period prior to our initial public
offering has been carved out from the financial  statements of PepsiCo using the
historical results of operations and assets and liabilities of our business. The
Condensed  Consolidated  Financial Statements reflect certain costs that may not
necessarily be indicative of the costs we would have incurred had we operated as
an  independent,  stand-alone  entity from the  beginning  of 1999.  These costs
include an allocation of PepsiCo corporate  overhead and interest  expense,  and
income taxes:

o         We  included  corporate   overhead  related  to  PepsiCo's   corporate
          administrative   functions  based  on  a  specific  identification  of
          PepsiCo's  administrative  costs  relating to the bottling  operations
          and, to the extent that such identification was not practicable, based
          upon the  percentage  of our  revenues to PepsiCo's  consolidated  net
          revenues.   These  costs  are   included  in  selling,   delivery  and
          administrative  expenses in our Condensed  Consolidated  Statements of
          Operations.


                                      -7-

o         We allocated $3.3 billion of PepsiCo debt to our business.  We charged
          interest  expense  on  this  debt  using  PepsiCo's   weighted-average
          interest rate. Once we issued $3.3 billion of third-party  debt in the
          first  quarter  of  1999,  our  actual  interest  rates  were  used to
          determine  interest  expense for the remainder of the year.  Allocated
          interest expense was deemed to have been paid to PepsiCo,  in cash, in
          the period in which the cost was incurred.

o         We  reflected  income  tax  expense  in  our  Condensed   Consolidated
          Financial Statements as if we had actually filed a separate income tax
          return.  Our  allocable  share of income taxes was deemed to have been
          paid to  PepsiCo,  in  cash,  in the  period  in  which  the  cost was
          incurred.

The amounts of the historical allocations described above are as follows:

                                                                        1999
                                                                        ----
     Corporate overhead expense...................................      $  3
     Interest expense.............................................      $ 28
     PepsiCo weighted-average interest rate.......................       5.8%


     In addition,  our historical capital structure is not representative of our
current  structure  due to our initial  public  offering.  In 1999,  immediately
preceding the offering, we had 55,000,000 shares of common stock outstanding. In
connection  with the offering,  we sold  100,000,000  shares to the public.  Pro
forma 1999 average shares outstanding  reflect our initial public offering as if
it occurred on the first day of fiscal year 1999.

Note 8 - Non-cash Compensation Charge
     In  connection  with  the  consummation  of our  initial  public  offering,
substantially all non-vested PepsiCo stock options held by our employees vested.
As a result,  we  incurred a $45  million  non-cash  compensation  charge in the
second  quarter of 1999 ($29  million  after tax or $0.19 per share based on pro
forma weighted-average shares outstanding),  equal to the difference between the
market  price of the  PepsiCo  capital  stock  and the  exercise  price of these
options at the vesting date.



                                       -8-




Item 2.

Management's  Discussion  and Analysis of Results of  Operations  and  Financial
-------------------------------------------------------------------------------
Condition
---------
Overview
     Since becoming a public company through an initial public offering on March
31, 1999, The Pepsi Bottling  Group,  Inc.  (collectively  referred to as "PBG,"
"we," "our" and "us") has made substantial progress against our key objectives -
fixing  the  economics  of our  take-home  business,  aggressively  growing  our
high-margin cold drink volume and sharply improving our international  business.
This trend has continued in the third quarter:

o    We delivered  13% and 16%  constant  territory  EBITDA  growth in the third
     quarter and first 36-weeks of 2000, respectively.

o    We delivered third quarter,  constant  territory  volume growth of nearly
     2%. On a year-to-date basis, worldwide constant territory volume grew 1%.

o    We delivered $0.82 in diluted earnings per share in the third quarter, an
     increase of $0.23 over 1999. On a year-to-date basis,  diluted earnings per
     share grew $0.62 from $0.89 to $1.51 after  adjusting  the number of shares
     outstanding in 1999 and excluding a 1999 non-cash compensation charge.

o    We generated $204 million of operating free cash flow in the first 36-weeks
     of 2000, $112 million better than the prior year.

     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
achieved 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.  Constant  territory  results  also exclude any unusual
impairment and other charges and credits.

Use of EBITDA
     EBITDA, which is computed as operating income plus the sum of depreciation,
amortization and any unusual  non-cash  charges and credits,  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.



                                       -9-

Comparability of Results
Asset Lives
-----------
     At the beginning of fiscal year 2000, we changed the estimated useful lives
of  certain  categories  of assets  primarily  to  reflect  the  success  of our
preventive  maintenance  programs in extending the useful lives of these assets.
The  changes,  which  are  detailed  in  Note  7 to the  Condensed  Consolidated
Financial  Statements,  lowered total depreciation cost by $16 million, or $0.06
per diluted share,  and $48 million,  or $0.18 per diluted share, for the 12 and
36-weeks ended September 2, 2000,  respectively.  We anticipate that this change
will reduce full year 2000  depreciation  expense by  approximately  $70 million
equivalent to $0.27 per diluted share.

Initial Public Offering
-----------------------
     The 1999 financial  information  for the period prior to our initial public
offering has been carved out from the financial  statements of PepsiCo using the
historical results of operations and assets and liabilities of our business. The
Condensed  Consolidated  Financial Statements reflect certain costs that may not
necessarily be indicative of the costs we would have incurred had we operated as
an  independent,  stand-alone  entity from the  beginning  of 1999.  These costs
include an allocation of PepsiCo corporate  overhead and interest  expense,  and
income  taxes.  We reflected  income tax expense in the  Condensed  Consolidated
Financial  Statements as if we had actually  filed a separate  income tax return
and allocated overhead and interest expense as follows:

                                                                         1999
                                                                         ----
     Corporate overhead expense......................................... $  3
     Interest expense................................................... $ 28
     PepsiCo weighted-average interest rate.............................  5.8%

     In addition,  our historical capital structure is not representative of our
current  structure  due to our initial  public  offering.  In 1999,  immediately
preceding the offering, we had 55,000,000 shares of common stock outstanding. In
connection with the offering, we sold 100,000,000 shares to the public.

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

                                        Reported  and Constant
                                           Territory Change
                                           ----------------
                                          September 2, 2000
                                          -----------------
                                        12-weeks     36-weeks
                                        --------     --------
<S>                                         <C>          <C>
     EBITDA..............................   13%          16%
     Volume..............................    2%           1%
     Net Revenue per Case................    3%           4%
</TABLE>

EBITDA
     Reported  EBITDA was $365 million and $845 million in the third quarter and
first 36-weeks of 2000,  respectively,  representing a 13% and 16% increase over
the same periods of 1999. This growth was a reflection of strong pricing in U.S.
foodstores,  an increased mix of higher margin cold drink volume, favorable cost
of sales  trends  and  continued  growth  in our  operations  outside  the U.S.,
particularly in Russia.



                                      -10-


Volume
     Our  worldwide  physical  case  volume grew nearly 2% in the quarter and 1%
year-to-date  on both a reported  and  constant  territory  basis.  In the U.S.,
reported volume turned positive in the quarter and was flat  year-to-date.  On a
constant  territory  basis,  U.S.  volume  was  positive  in  the  quarter  with
year-to-date  volume  down 1% as growth in our cold drink  segment was offset by
declines in our take home business. Our cold drink trends reflect our successful
placement of cold drink equipment as our net placements have continued at a rate
which  should  allow us to meet our 2000 North  American  target of 150,000  net
placements.  While  take-home  volume  remained  lower in the  quarter and first
36-weeks of 2000  reflecting the effect of our price  increases in that segment,
volume growth began to improve toward the end of the third quarter.

     Outside the U.S., our constant  territory volumes remained strong,  growing
6%  in  both  the  quarter  and  year-to-date,  led  by  Russia  where  we  have
aggressively  reestablished brand Pepsi,  introduced our own line of value brand
beverage products  (Fiesta) and continued to increase  distribution of our water
products.  Partially  offsetting  the growth in Russia were  volume  declines in
Canada resulting from significant price increases in foodstores in that country.

Net Revenues
     Third  quarter net revenues  were $2,125  million,  a more than 4% increase
over the prior year.  Year-to-date net revenues grew by 5% to $5,583 million. On
a constant territory basis, worldwide net revenue per case grew 3% and 4% in the
quarter and for the first 36-weeks of 2000,  respectively.  These increases were
driven by strong pricing,  particularly in U.S. foodstores, and an increased mix
of higher-revenue  cold drink volume.  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 2, 2000.

Cost of Sales
     Cost of sales was  essentially  flat for both the quarter and  year-to-date
when  compared to the same periods of 1999.  On a per case basis,  cost of sales
was more than 1% better in the  quarter  and 1%  year-to-date.  Included  in the
current  year costs is the  favorable  impact  from the change in our  estimated
useful lives of manufacturing  assets,  which totaled $8 million and $25 million
in the  third  quarter  and  first  36-weeks  of  2000,  respectively.  Currency
translations  had an  approximately 1 percentage  point favorable  impact on the
third quarter and year-to-date  results.  Excluding the effects of the change in
depreciation lives and currency translations,  cost of sales on a per case basis
were  almost  2%  higher  in  the  quarter  and  year-to-date,  as  higher  U.S.
concentrate  costs were  partially  offset by favorable  packaging and sweetener
costs.


Selling, delivery and administrative expenses
     Selling,  delivery and administrative  expenses grew $37 million, or 6%, in
the third quarter, bringing year-to-date growth to $128 million, or 7%, over the
comparable periods in 1999. Current year costs include the favorable impact from
the change in our  estimated  useful  lives of selling and  delivery  assets and
currency  translations. Depreciation  expense  was lower by $8  million  and $23
million in the third  quarter  and first  36-weeks of 2000,  respectively,  as a
result of the changes in estimated useful lives.  Currency  translations had a 1
percentage point favorable impact on the third quarter and year-to-date results.
Excluding  the  effects  of  the  change  in  depreciation  lives  and  currency
translations,  selling,  delivery and administrative  expenses were 8% higher in
the quarter and 9% higher year-to-date, primarily reflecting our continued heavy
investment  in  our  North  American  cold  drink  infrastructure  resulting  in
additional  headcount,  delivery routes and  depreciation.  In addition,  higher
marketing and advertising  costs to promote our products and higher  performance
based   compensation  costs  including  costs  associated  with  our  previously
announced 401(k) plan contributed to the cost growth.



                                      -11-



Interest expense, net
     Interest  expense  was  flat  in  the  quarter  and  decreased  $8  million
year-to-date  primarily  reflecting  lower external debt outside the U.S. in the
first half of 2000.

Non-cash Compensation Charge
     In  connection  with  the  consummation  of our  initial  public  offering,
substantially all non-vested PepsiCo stock options held by our employees vested.
As a result,  we  incurred a $45  million  non-cash  compensation  charge in the
second  quarter of 1999 ($29  million  after tax or $0.19 per share based on pro
forma weighted-average shares outstanding),  equal to the difference between the
market  price of the  PepsiCo  capital  stock  and the  exercise  price of these
options at the vesting date.

Minority Interest
     PBG and  PepsiCo  contributed  bottling  businesses  and assets used in the
bottling businesses to Bottling Group, LLC, our principal operating  subsidiary,
in  connection  with the  formation of Bottling  Group,  LLC. As a result of the
contribution of these assets,  we own 92.9% of Bottling  Group,  LLC and PepsiCo
owns the remaining 7.1%. Accordingly,  starting from our initial public offering
on March 31, 1999,  our  Condensed  Consolidated  Financial  Statements  reflect
PepsiCo's  share of consolidated  net income of Bottling Group,  LLC as minority
interest in our Condensed Consolidated Statements of Operations.

Provision for Income Taxes
     Our full  year  forecasted  tax rate for 2000 is 37% and this rate has been
applied to our 2000  results.  This rate  corresponds  to an effective tax rate,
excluding any unusual impairment and other charges and credits,  of 38% in 1999.
The  one  point  decrease  is  primarily  due to the  reduced  impact  of  fixed
non-deductible expenses on higher anticipated pre-tax income in 2000.

Earnings Per Share
<TABLE>
<CAPTION>


                                                               12-weeks Ended            36-weeks Ended
                                                               --------------            --------------
                                                           September    September    September    September
                                                            2, 2000      4, 1999      2, 2000      4, 1999
                                                            -------      -------      -------      -------
<S>                                                         <C>           <C>          <C>          <C>
Basic earnings per share on reported net income..........   $ 0.84       $ 0.59       $ 1.52       $ 0.93
Average shares outstanding (millions)....................      147          155          148          117

Diluted earnings per share on reported net income........   $ 0.82       $ 0.59       $ 1.51       $ 0.93
Average shares outstanding (millions)....................      149          155          149          117
</TABLE>

     Diluted earnings per share reflect the potential  dilution that could occur
if stock options from our stock  compensation  plan were  exercised or converted
into common stock that would then  participate  in net income.  Our  significant
share price improvement  during 2000 has resulted in $0.02 per share of dilution
in the quarter and $0.01 per share of dilution year-to-date.

     Our  historical  capital  structure  is not  representative  of our current
structure due to our initial public offering. In 1999, immediately preceding the
offering,  we had 55 million shares of common stock  outstanding.  In connection
with the offering,  we sold 100 million shares of common stock to the public and
used the $2.2  billion of proceeds to repay  obligations  to PepsiCo and to fund
acquisitions.



                                  -12-




     The table below sets forth 1999 earnings per share adjusted for the initial
public offering  assuming 155 million shares had been outstanding for the entire
period  presented.  Shares  outstanding  in 2000 reflect the effect of our share
repurchase  program,  which  began in October  1999 when our Board of  Directors
authorized the repurchase of up to 10 million shares of our common stock. In the
second quarter of 2000,  our Board of Directors  authorized the repurchase of an
additional 5 million shares.  Approximately  1.3 million shares were repurchased
in the third quarter of 2000 with a total of over 9 million  shares  repurchased
since the program began.



<TABLE>
<CAPTION>


                                                                 12-weeks Ended           36-weeks Ended
                                                                 --------------           --------------
                                                           September      September    September   September
                                                            2, 2000        4, 1999     2, 2000      4, 1999
                                                            -------        -------     -------      -------
<S>                                                         <C>            <C>         <C>         <C>
Diluted earnings per share on reported net income.......    $ 0.82         $ 0.59      $ 1.51       $ 0.70
Pro forma average shares outstanding (millions).........       149            155         149          155
</TABLE>

Liquidity and Capital Resources
-------------------------------
Cash Flows
     Net cash provided by operating  activities  increased  $114 million to $548
million in the first  36-weeks of 2000 driven by strong EBITDA  growth  combined
with improved working capital trends.

     Net cash used by investments decreased by $162 million from $508 million at
the end of the third  quarter of 1999 to $346  million in the first  36-weeks of
2000,  primarily due to  acquisition  spending,  which was $164 million lower in
2000. Capital expenditures  decreased by $29 million, or 8%, as increases in the
U.S.  associated  with our cold drink strategy were offset by decreases  outside
the U.S.

     Net cash  (used)  provided  by  financing  decreased  from a source of $204
million in 1999 to a use of $101 million in 2000.  This  decrease  resulted from
net cash received from IPO  activities in 1999 coupled with $95 million of share
repurchases in 2000.

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
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.



                                      -13-



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.

Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We have no material  changes to the disclosures  made on this matter in our
1999 Annual Report on Form 10-K.

Item 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

(a) Annual Meeting of Shareholders of The Pepsi Bottling Group, Inc. was held on
    May 24, 2000.

(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 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 Shares (millions)
                                                   ---------------------------
                                                                             Broker
Description of Proposals                        For    Against    Abstain   Non-votes
------------------------                        ---    -------    -------   ---------
<S>                                             <C>       <C>       <C>       <C>
1) Election of Directors
     Linda G. Alvarado                           158      N/A          1      N/A
     Barry H. Beracha                            159      N/A          1      N/A
     John T. Cahill                              159      N/A          1      N/A
     Thomas W. Jones                             159      N/A          1      N/A
     Thomas H. Kean                              159      N/A          1      N/A
     Susan D. Kronick                            159      N/A          1      N/A
     Robert F. Sharpe, Jr.                       158      N/A          1      N/A
     Karl M. von der Heyden                      158      N/A          1      N/A
     Craig E. Weatherup                          159      N/A          1      N/A

2) Approval of the PBG Long-Term Incentive Plan  143       10          -        6
3) Approval of the PBG Executive Incentive
     Compensation Plan                           155        4          -      N/A
4) Approval of the appointment of KPMG LLP as
     independent auditors                        159        -          -      N/A

</TABLE>

                                      -14-



                     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 2, 2000, and the related  Condensed
Consolidated  Statements of Operations for the twelve and thirty-six weeks ended
September  2,  2000  and  September  4,  1999  and  the  Condensed  Consolidated
Statements of Cash Flows for the  thirty-six  weeks ended  September 2, 2000 and
September 4, 1999.  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  review procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

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

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the Consolidated Balance Sheets of The Pepsi Bottling Group, Inc. as
of December 25, 1999,  and the related  Consolidated  Statements of  Operations,
Cash Flows and Changes in  Shareholders'  Equity for the  fifty-two  week period
then ended not  presented  herein;  and in our report dated January 25, 2000, 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 25, 1999, 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 4, 2000



                                      -15-



PART II - OTHER INFORMATION AND SIGNATAURES


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

                      See Index to Exhibits on page 18.



                                      -16-



     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 16, 2000                                    Andrea L. Forster
           ----------------                                    -----------------
                                                              Vice President and
                                                                      Controller






Date:      October 16, 2000                                 Lionel L. Nowell III
           ----------------                                 --------------------
                                                    Executive Vice President and
                                                         Chief Financial Officer



                                      -17-



                               INDEX TO EXHIBITS
                                   ITEM 6 (a)



EXHIBITS
--------
Exhibit 11              Computation of Basic and Diluted Earnings Per Share

Exhibit 27.1            Financial Data Schedule 36-weeks ended September 2, 2000



                                      -18-


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            36-weeks Ended
                                                                   --------------            --------------
                                                               9/02/00       9/04/99     9/02/00       9/04/99
                                                               -------       -------     -------       -------
Number of shares on which basic earnings per share is based:
<S>                                                             <C>         <C>           <C>             <C>
  Average outstanding during period................             147         155           148             117

  Add - Incremental shares under stock
    compensation plans.............................               2           -             1               -
                                                              -----       -----         -----           -----
Number of shares in which diluted
  earnings per share is based......................             149         155           149             117

Net earnings applicable to common
   shareholders (millions).........................           $ 123       $  92         $ 225           $ 109

Net earnings on which diluted earnings
   per share is based (millions)...................           $ 123       $  92         $ 225           $ 109

Basic earnings per share...........................           $0.84       $0.59         $1.52           $0.93

Diluted earnings per share.........................           $0.82       $0.59         $1.51           $0.93

</TABLE>



                                      -19-