UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

# FORM 10-Q

X    Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

# For the
quarterly period ended September 30, 2001

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 1-2944

STOKELY-VAN CAMP, INC._________________________________________________(Exact name of registrant as specified in its charter)

| | Indiana                                                       |  | 35-0690290                         
| | ------------------------------------------------------------- |  | -----------------------------------
| | (State or other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification No.)
| | Quaker TowerP.O. Box 049001 Chicago, Illinois                 |  | 60604-9001                         
| | (Address of principal executive office)                       |  | (Zip Code)                         

(312) 222-7111_________________________________________________(Registrant's telephone number, including area code)

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 | __
| | --- | - | -- | --

The registrant had
2,989,371 shares of Common Stock outstanding on October 31, 2001, all of which
were held by The Quaker Oats Company.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESINDEX TO FORM 10-Q

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

| | Condensed Consolidated Statements of Income,  Reinvested Earnings and Comprehensive Income  for the Nine and Three Months Ended  September 30, 2001 and 2000
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Condensed Consolidated Balance Sheets as of  September 30, 2001 and December 31, 2000                                                                       
| | Condensed Consolidated Statements of Cash Flows for  the Nine Months Ended September 30, 2001 and 2000                                                      
| | Notes to the Condensed Consolidated Financial  Statements                                                                                                   

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

PART II - OTHER INFORMATION

SIGNATURES

STOKELY-VAN
CAMP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME,
REINVESTED EARNINGS AND COMPREHENSIVE INCOME(UNAUDITED)

`Nine Months Ended
                                                              September 30,
Dollars in Millions                                         2001         2000
--------------------------------------------------------------------------------

Net sales                                              $ 1,513.7    $ 1,376.7
Cost of goods sold                                         695.3        647.2
                                                       ---------    ----------
Gross profit                                               818.4        729.5

Selling, general and administrative expenses               489.1        447.1
Interest income - net                                      (52.5)       (67.8)
                                                       ----------   ----------

Income before income taxes                                 381.8        350.2
Provision for income taxes                                 142.9        135.0
                                                       ----------   ----------

Net income                                                 238.9        215.2

Dividends on preference and preferred stock                 (0.6)        (0.6)
Reinvested Earnings - Beginning of Year                  1,541.7      1,307.8
                                                       -----------  ----------
Reinvested Earnings - End of Period                    $ 1,780.0    $ 1,522.4
                                                       ===========  ==========
Comprehensive Income:
Net income                                            $    238.9   $    215.2
Other Comprehensive Income:
    Foreign currency translation adjustments                (0.3)          --
                                                       -----------   ---------
Total Comprehensive Income                            $    238.6   $    215.2
                                                       ===========   =========`

See accompanying notes to the condensed consolidated financial statements.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME,REINVESTED
EARNINGS AND COMPREHENSIVE INCOME(UNAUDITED)

`Three Months Ended
                                                                September 30,
Dollars in Millions                                         2001          2000
--------------------------------------------------------------------------------

Net sales                                             $    553.9    $    507.4
Cost of goods sold                                         255.6         239.3
                                                      ----------    ----------
Gross profit                                               298.3         268.1

Selling, general and administrative expenses               185.2         154.5
Interest income - net                                      (15.1)        (24.2)
                                                      ----------    ----------

Income before income taxes                                 128.2         137.8
Provision for income taxes                                  48.1          53.2
                                                      ----------    ----------

Net income                                                  80.1          84.6

Dividends on preference and preferred stock                 (0.2)         (0.2)
Reinvested Earnings - Beginning of Period                1,700.1       1,438.0
Reinvested Earnings - End of Period                   ----------    ----------
                                                       $ 1,780.0     $ 1,522.4
                                                      ==========    ==========

Comprehensive Income:
Net income                                           $      80.1   $      84.6
Other Comprehensive Income:
    Foreign currency translation adjustments                (0.2)           --
                                                      ----------    ----------
Total Comprehensive Income                           $      79.9   $      84.6
                                                      ==========    ==========`

See accompanying notes to the condensed consolidated financial statements.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)

`September 30,   December 31,
Dollars in Millions                                     2001           2000
--------------------------------------------------------------------------------

Assets

Current Assets:
  Cash and cash equivalents                        $     3.4       $     3.2
  Due from The Quaker Oats Company                   1,560.0         1,226.4
  Trade accounts receivable - net of allowances          5.4             4.8
  Inventories:
    Finished goods                                      74.7            56.3
    Materials and supplies                              14.0            14.9
                                                   ---------      ----------
Total inventories                                       88.7            71.2

Other current assets                                    46.6            60.2
                                                   ----------     ----------
        Total Current Assets                         1,704.1         1,365.8

  Property, plant and equipment                        609.4           566.9
  Less: accumulated depreciation                       182.2           149.7
                                                   ----------     ----------
     Property - net                                    427.2          417.2

Other assets                                            13.5             9.0
                                                   ----------     ----------
Total Assets                                       $ 2,144.8       $ 1,792.0
                                                   ==========     ==========

Liabilities and Shareholders' Equity

Current Liabilities:
  Trade accounts payable                         $      54.6     $      41.6
  Accrued payroll, benefits and bonus                    8.9            13.1
  Accrued advertising and merchandising                 74.2            26.5
  Income taxes payable                                  74.1            16.6
  Other current liabilities                             24.2            23.7
                                                    ----------     ----------
        Total Current Liabilities                      236.0           121.5

Long-term debt                                           0.8             1.7
Other liabilities                                       51.2            53.4
Deferred income taxes                                   11.2             7.8

Redeemable Preference and Preferred Stock               15.3            15.3

Common Shareholders' Equity:
  Common stock, $1 par value, authorized 10 million shares;
     issued 3,591,381 shares                             3.6             3.6
  Additional paid-in capital                            68.7            68.7
  Reinvested earnings                                1,780.0         1,541.7
  Cumulative translation adjustments                    (1.1)           (0.8)
  Treasury common stock, at cost, 602,010 shares       (20.9)          (20.9)
                                                     ----------     ----------
      Total Common Shareholders' Equity              1,830.3         1,592.3
                                                     ----------     ----------
Total Liabilities and Shareholders' Equity         $ 2,144.8       $ 1,792.0
                                                     ==========     ==========`

See accompanying notes to the condensed consolidated financial statements.

# STOKELY-VAN CAMP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

`Nine Months Ended
                                                            September 30,
Dollars in Millions                                     2001         2000
--------------------------------------------------------------------------------


Cash Flows from Operating Activities:
Net income                                           $ 238.9         $ 215.2
Adjustments to reconcile net income to net cash provided
   by operating activities:
  Depreciation                                          36.4            28.1
  Deferred income taxes                                  3.4             2.0
  Loss on disposition of property, plant and equipment   1.6             0.2
  Increase in trade accounts receivable                 (0.6)           (0.5)
  Increase in inventories                              (17.5)          (22.8)
  Decrease in other current assets                      13.6             6.4
  Increase in trade accounts payable                    13.0             2.1
  Increase in income taxes payable                      57.5            42.0
  Increase in other current liabilities                 44.0            20.2
  Other items                                           (7.0)           (2.3)
                                                   ------------    ------------

     Net Cash Provided by Operating Activities         383.3           290.6
                                                   ------------    ------------
Cash Flows from Investing Activities:
Additions to property, plant and equipment             (48.2)          (95.6)
Proceeds from sales of property, plant and equipment     0.2             0.4
                                                   ------------    ------------
     Net Cash Used in Investing Activities             (48.0)          (95.2)
                                                   ------------    ------------

Cash Flows from Financing Activities:
Change in amount due from The Quaker Oats Company     (333.6)         (192.5)
Cash dividends                                          (0.6)           (0.6)
Proceeds from long-term debt                             0.2             --
Reduction of long-term debt                             (1.1)           (0.1)
                                                   ------------    ------------

     Net Cash Used in Financing Activities            (335.1)         (193.2)
                                                   ------------    ------------
Net Increase in Cash and Cash Equivalents                0.2             2.2
Cash and Cash Equivalents - Beginning of Year            3.2             3.2
                                                   ------------    ------------
Cash and Cash Equivalents - End of Period              $ 3.4           $ 5.4
                                                    ===========    ============`

See accompanying notes to the condensed consolidated financial statements.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)SEPTEMBER 30, 2001

## Note 1 - Basis of Presentation

The condensed consolidated financial
statements include Stokely-Van Camp, Inc. (a wholly-owned subsidiary of The
Quaker Oats Company, or Quaker) and its subsidiaries (the Company or Stokely).
The condensed consolidated statements of income, reinvested earnings and
comprehensive income for the nine and three months ended September 30, 2001 and
2000, the condensed consolidated balance sheet as of September 30, 2001, and the
condensed consolidated statements of cash flows for the nine months ended
September 30, 2001 and 2000, have been prepared by the Company without audit. In
the opinion of management, these financial statements include all adjustments
necessary to present fairly the financial position, results of operations and
cash flows as of September 30, 2001, and for all periods presented. All
adjustments made have been of a normal and recurring nature. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles (GAAP) have been
condensed or omitted. The Company believes that the disclosures included are
adequate and provide a fair presentation of interim period results. Interim
financial statements are not necessarily indicative of the financial position or
operating results for an entire year. It is suggested that these interim
financial statements be read in conjunction with the audited financial
statements and the notes thereto included in the Companys Form 10-K for
the year ended December 31, 2000.

## Note 2 -
Redeemable Preference and Preferred Stock

5% Cumulative Convertible Second Preferred Stock:

As of September 30, 2001,
authorized shares were 500,000 and issued and outstanding shares were 7,305. The
voting 5% Cumulative Convertible Second Preferred Stock ($20 par value) is
convertible at the holders option, on a share-for-share basis, into
non-voting 5% Cumulative Prior Preference Stock ($20 par value).

5% Cumulative Prior Preference Stock:

As of September 30, 2001,
authorized shares were 1,500,000, issued shares were 756,839 and outstanding
shares were 756,506.

Both issues are redeemable at the Company's option for $21 per share.

On November 7, 2001, the
Board of Directors of Stokely authorized management to call its 5% Cumulative Convertible Second Preferred Stock and its 5% Cumulative Prior Preference Stock (collectively, Preferred Stock) for redemption in
accordance with their respective terms. No date has yet been fixed for such redemption.  Management is moving forward and
finalizing its plans for the redemption, however, there can be no assurance as to
whether and for when management will call the Preferred Stock for redemption.

## Note 3 -
Estimates and Assumptions

The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)SEPTEMBER 30, 2001

## Note 4 -
Related Party Transactions

Effective October 1, 1999,
Stokely entered into an agreement with Quaker Sales and Distribution, Inc.,
(QSD), a wholly-owned subsidiary of Quaker, to provide sales and distribution
services for the Company in North America. Under the terms of the agreement, QSD
purchases finished goods from Stokely at a contracted price based on the sales
price to the ultimate customer less an agreed-upon amount to compensate QSD for
services provided, which for the nine months ended September 30, 2001, was
approximately 9 percent of the sales price to the ultimate customer. The
agreement was renewed for the year 2001 and is automatically renewable each year
unless one of the parties notifies the other of its intention not to renew. As a
result, a majority of Stokelys sales are to Quaker, a related party.
Current year results include net sales of $1.48 billion and $543.0 million from
Stokely to QSD under the sales and distribution agreement for the nine and three
months ended September 30, 2001, respectively.

## Note 5 -
Current and Pending Accounting Changes

In 2001 and the prior year,
the Emerging Issues Task Force (EITF), a subcommittee of the Financial
Accounting Standards Board (FASB), discussed a number of topics related to
certain expenses that the Company reports in merchandising expense, a component
of selling, general and administrative (SG&A) expenses. In April 2001, the
EITF issued EITF No. 00-25, Vendor Income Statement Characterization of
Consideration from a Vendor to a Retailer. This guidance requires certain
promotional expenses paid to retailers by vendors to be classified in the income
statement as a reduction of sales or as cost of goods sold. In May and November
2000, the EITF issued and amended, respectively, EITF No. 00-14,
Accounting for Certain Sales Incentives. This guidance requires
certain coupons, rebate offers and free products offered concurrently with a
single exchange transaction with a customer to be recognized when incurred and
reported as a reduction of sales. The EITF recently changed the required
adoption of EITF No. 00-14 to the first quarter ending March 31, 2002, in order
to coincide with the adoption of EITF No. 00-25. The Company expects the
adoption of EITF No. 00-14 and EITF No. 00-25 to result in a reclassification of
expenses and a restatement to reduce previously reported net sales and SG&A
expenses. The Company expects that this reclassification will result in up to a
$255 million reduction in net sales, or approximately 15 percent of net sales,
and a corresponding $255 million decrease in SG&A expenses in each of the
three years ended December 31, 2001, 2000 and 1999. Earnings will not be
affected and the Company does not expect the adoption of these accounting
changes to have a material effect on reported growth rates.

On January 1, 2001,  the Company  adopted  Statement of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities,"  as amended by SFAS No. 137 and SFAS No.  138.  See Note 6 for  additional  information  on the
adoption of SFAS No. 133.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)SEPTEMBER 30, 2001

The Company also adopted
EITF No. 00-22, Accounting for Points and Certain Other
Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free Products
or Services to Be Delivered in the Future, for the quarter ending March
31, 2001. The impact of adopting EITF No. 00-22 was not material to year-to-date
results and is not anticipated to be material for the full year.

## Note 6 -
Derivative Commodity and Financial Instruments

The Company actively monitors
its exposure to commodity price risk and uses futures and options to manage
price exposure on purchased or anticipated purchases of commodities. The Company
uses derivatives only for purposes of managing risk associated with underlying
exposures. The Company does not trade or use instruments with the objective of
earning financial gains on the commodity price fluctuations alone, nor does it
use instruments where there are not underlying exposures. The Companys use
of derivative instruments may result in short-term gains or losses and increased
earnings volatility. Complex instruments involving leverage or multipliers are
not used. Management believes that its use of derivative instruments to manage
risk is in the Companys best interest. The Company does not use foreign
exchange or interest rate derivative instruments because underlying exposures
are not material.

On January 1, 2001, the
Company adopted SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138. In
accordance with the provisions of SFAS No. 133, the Company recorded a
transition adjustment upon adoption of the standard to recognize its derivative
instruments at fair value and to recognize the ineffective portion of cash flow
hedges. The effect of this transition adjustment was not material to either
reported earnings or accumulated other comprehensive income. The net gains and
losses related to hedge ineffectiveness also were not material.

Initially, upon adoption of
the new derivative accounting standard, and prospectively as of the date new
derivatives are entered into, the Company designates the derivative as either
(1) a hedge of a recognized asset or liability or an unrecognized firm
commitment (fair value hedge), or (2) a hedge of a forecasted transaction or the
variability of cash flows to be received or paid in the future related to a
recognized asset or liability (cash flow hedge). For fair value hedges, both the
effective and ineffective portions of the changes in the fair value of the
derivative, along with the gain or loss on the hedged item, are recorded in
earnings and reported in the condensed consolidated statements of income,
reinvested earnings and comprehensive income on the same line as the hedged
item. Unlike fair value hedges, the effective portion of the changes in the fair
value of the derivative that is designated as a cash flow hedge is recorded in
accumulated other comprehensive income. When the hedged item is realized, the
gain or loss included in accumulated other comprehensive income is reclassed to
the same line in the condensed consolidated statements of income, reinvested
earnings and comprehensive income as the hedged item. In addition, both the fair
value changes excluded from the Companys effectiveness assessments and the
ineffective portion of the changes in the fair value of derivatives used as cash
flow hedges are immediately recognized in cost of goods sold.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)SEPTEMBER 30, 2001

The Company formally
documents its hedge relationships, including identifying the hedge instruments
and hedged items, as well as its risk management objectives and strategies for
entering into the hedge transaction. Derivatives are recorded in the condensed
consolidated balance sheets at fair value in other assets and other liabilities.
This process includes matching the hedge instrument to the underlying hedged
item (assets, liabilities, firm commitments or forecasted transactions). At
hedge inception and at least quarterly thereafter, the Company assesses whether
the derivatives used to hedge transactions are highly effective in offsetting
changes in either the fair value or cash flows of the hedged item. When it is
determined that a derivative ceases to be a highly effective hedge, the Company
discontinues hedge accounting, and any gains or losses on the derivative
instrument would be recognized in earnings during the period it no longer
qualifies as a hedge.

The Company uses commodity
futures and options to reduce price exposures on purchased or anticipated
purchases of corn sweetener. Beginning in 2001, the Company also initiated
hedges for diesel fuel, natural gas and corrugated packaging materials. The corn
sweetener and corrugated packaging materials contracts are accounted for as cash
flow hedges when the hedged item represents a forecasted transaction or the
variability in cash flows received or paid related to a recognized asset or
liability.

## Note 7 
Quaker Merger with PepsiCo

On December 2, 2000,
Quaker, PepsiCo, Inc. (PepsiCo) and BeverageCo, Inc., a direct wholly-owned
subsidiary of PepsiCo, entered into an Agreement and Plan of Merger, which was
amended on March 15, 2001 (the merger agreement). On August 1, 2001, Quaker and
PepsiCo received unconditional clearance from the U.S. Federal Trade Commission
to merge and the merger was finalized on August 2, 2001. Pursuant to the merger
agreement and subject to the terms and conditions set forth therein, BeverageCo,
Inc. was merged with and into Quaker, with Quaker being the surviving
corporation of that merger. As a result of the merger, Quaker is a wholly-owned
subsidiary of PepsiCo. Stokely is therefore an indirect wholly-owned subsidiary
of PepsiCo and Stokely stock is not affected by the merger. The merger has been
structured as a stock-for-stock tax-free reorganization and is intended to
qualify as a pooling of interests business combination for accounting purposes.

For more information
regarding this transaction, refer to the caption Change in Control
Arrangements found under Part III of the Companys Form 10-K for the
year ended December 31, 2000, and Quakers joint proxy statement/prospectus
related to the merger, filed with the Securities and Exchange Commission on
March 21, 2001, and first mailed to Quakers shareholders on or about March
22, 2001.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESMANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

## Introduction

Stokely has been a
wholly-owned subsidiary of Quaker since 1983. Stokelys business is
primarily composed of the Gatorade thirst quencher business in the United
States.

Effective October 1, 1999,
Stokely entered into an agreement with Quaker Sales and Distribution, Inc.
(QSD), a wholly-owned subsidiary of Quaker, to provide sales and distribution
services for the Company in North America. Under the terms of the agreement, QSD
purchases finished goods from Stokely at a contracted price based on the sales
price to the ultimate customer less an agreed-upon amount to compensate QSD for
services provided. (This amount was approximately 9 percent of the sales price
to the ultimate customer for the nine and three months ended September 30, 2001
and 2000.) Therefore, a majority of Stokelys sales are to Quaker, a
related party. Results for the nine months ended September 30, 2001 and 2000,
included sales of $1.48 billion and $1.35 billion, respectively, from the
Company to Quaker under the sales and distribution agreement. Results for the
three months ended September 30, 2001 and 2000, included sales of $543.0 million
and $498.5 million, respectively, from the Company to Quaker under the sales and
distribution agreement. The agreement is automatically renewable each year
unless one of the parties notifies the other of its intention not to renew.

## Nine Months
Ended September 30, 2001, Compared withNine Months Ended September 30, 2000

Operating Results

Consolidated net sales for the nine months ended September 30, 2001 (current year), grew
10 percent to $1.51 billion. In the United States, where more than 98 percent of the total current
year sales were generated, volume and sales grew 6 percent and 10 percent,
respectively. Sales of three new Gatoradeflavors, increased sales from
multiple packs and growth in core flavors contributed to strong growth in the
current year. The difference between volume and sales growth was driven by both
price increases taken mid-year 2000 and product mix.

Operating income increased
$46.9 million to $329.3 million in the current year, primarily due to increased
volume and pricing, offset by increased advertising and merchandising (A&M)
expense, partly to support the introduction of new flavors.

Interest and Income Taxes

Net interest income of
$52.5 million in the current year decreased $15.3 million as a result of lower
interest rates on the amounts due from The Quaker Oats Company. The effective
tax rate was 37.4 percent and 38.5 percent as of September 30, 2001 and 2000,
respectively. The decrease was primarily due to a reduction in the effective
state tax rates compared to the first nine months of 2000.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESMANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

## Three Months
Ended September 30, 2001, Compared with Three Months Ended September 30, 2000

Operating Results

Consolidated net sales for the three months ended September 30, 2001 (current quarter), grew
9 percent to $553.9 million. In the United States, where more than 98 percent of the total current
quarter sales were generated, volume and sales grew 5 percent and 9 percent,
respectively. Sales of three new Gatoradeflavors, increased sales from
multiple packs and growth in core flavors contributed to strong growth in the
current quarter. The difference between volume and sales growth was driven by
both price increases taken in September 2000 and product mix.

Operating income decreased
$0.5 million to $113.1 million in the current quarter, primarily due to
increased A&M spending to respond to competitive activity and to support
business growth. The increase in A&M spending was partly offset by increased
volume and pricing.

Interest and Income Taxes

Net interest income of
$15.1 million in the current quarter decreased $9.1 million as a result of lower
interest rates on the amounts due from The Quaker Oats Company. The effective
tax rate was 37.5 percent and 38.6 percent as of September 30, 2001 and 2000,
respectively. The decrease was primarily due to a reduction in the effective
state tax rates compared to the third quarter of 2000.

## Liquidity and
Capital Resources

Net cash provided by
operating activities was $383.3 million and $290.6 million for the nine months
ended September 30, 2001 and 2000, respectively, primarily reflecting lower
working capital and higher net income in the current year. Capital expenditures
for the nine months ended September 30, 2001 and 2000, were $48.2 million and
$95.6 million, respectively. The Company expects that capital expenditures and
cash dividends for the remainder of the year will be financed through cash flow
from operating activities.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIESMANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

## Derivative
Commodity and Financial Instruments

The Company actively
monitors its exposure to commodity price risk and uses futures and options to
manage price exposure on purchased or anticipated purchases of corn sweetener.
Beginning in 2001, the Company also initiated hedges for diesel fuel, natural
gas and corrugated packaging materials. The Company uses derivatives only for
purposes of managing risk associated with underlying exposures. The Company does
not trade or use instruments with the objective of earning financial gains on
the commodity price fluctuations alone, nor does it use instruments where there
are not underlying exposures. The Companys use of derivative instruments
may result in short-term gains or losses and increased earnings volatility.
Complex instruments involving leverage or multipliers are not used. Management
believes that its use of derivative instruments to manage risk is in the
Companys best interest. The Company does not use foreign exchange or
interest rate derivative instruments because underlying exposures are not
material.

The Company has estimated
its market risk exposures using sensitivity analyses. Market risk exposure has
been defined as the change in fair value of a derivative commodity or financial
instrument assuming a hypothetical 10 percent adverse change in market prices or
rates. Fair value was determined using quoted market prices, if available. The
results of the sensitivity analyses as of September 30, 2001, did not differ
materially from the amounts reported as of December 31, 2000. Actual changes in
market prices or rates may differ from hypothetical changes presented in
sensitivity analyses.

## Current and
Pending Accounting Changes

In 2001 and the prior year,
the Emerging Issues Task Force (EITF), a subcommittee of the Financial
Accounting Standards Board (FASB), discussed a number of topics related to
certain expenses that the Company reports in merchandising expense, a component
of SG&A expenses. In April 2001, the EITF issued EITF No. 00-25,
Vendor Income Statement Characterization of Consideration from a Vendor to
a Retailer. This guidance requires certain promotional expenses paid to
retailers by vendors to be classified in the income statement as a reduction of
sales or as cost of goods sold. In May and November 2000, the EITF issued and
amended, respectively, EITF No. 00-14, Accounting for Certain Sales
Incentives. This guidance requires certain coupons, rebate offers and free
products offered concurrently with a single exchange transaction with a customer
to be recognized when incurred and reported as a reduction of sales. The EITF
recently changed the required adoption of EITF No. 00-14 to the first quarter
ending March 31, 2002, in order to coincide with the adoption of EITF No. 00-25.
The Company expects the adoption of EITF No. 00-14 and EITF No. 00-25 to result
in a reclassification of expenses and a restatement to reduce previously
reported net sales and SG&A expenses. The Company expects that this
reclassification will result in up to a $255 million reduction in net sales, or
approximately 15 percent of net sales, and a corresponding $255 million decrease
in SG&A expenses in each of the three years ended December 31, 2001, 2000
and 1999. Earnings will not be affected and the Company does not expect the
adoption of these accounting changes to have a material effect on reported
growth rates.

# STOKELY-VAN
CAMP, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On January 1, 2001, the Company
adopted Statement of Financial Accounting Standards (SFAS) No. 133,
Accounting for Derivative Instruments and Hedging Activities, as
amended by SFAS No. 137 and SFAS No. 138. In accordance with the provisions of
SFAS No. 133, the Company recorded a transition adjustment upon adoption of the
standard to recognize its derivative instruments at fair value and to recognize
the ineffective portion of cash flow hedges. The effect of this transition
adjustment was not material to either reported earnings or accumulated other
comprehensive income.

The Company also adopted
EITF No. 00-22, Accounting for Points and Certain Other
Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free Products
or Services to Be Delivered in the Future, for the quarter ending March
31, 2001. The impact of adopting EITF No. 00-22 was not material to year-to-date
results and is not anticipated to be material for the full year.

## Cautionary
Statement on Forward-Looking Statements

Forward-looking statements,
within the meaning of Section 21E of the Securities Exchange Act of 1934, are
made throughout this Managements Discussion and Analysis. Statements that
are not historical facts, including statements about expectations or projected
results, are forward-looking statements.

The Companys results
may differ materially from those suggested by the forward-looking statements.
Forward-looking statements are based on managements current views and
assumptions, and involve risks and uncertainties that could significantly affect
expected results. For example, operating results may be affected by factors such
as: actions of competitors; changes in laws and regulations (including changes
in governmental interpretations of regulations and changes in accounting
standards); customer and consumer demand (including customer and consumer
responses to marketing); effectiveness of spending, investments or programs
(including cost-reduction and production capacity expansion projects); changes
in market prices or rates; fluctuations in the cost and availability of supply
chain resources; weather; and the ability of Quaker to execute manufacturing,
distribution and outsourcing initiatives and plant consolidations. In addition,
capital expenditures may be affected by the amount of cash flow from operating
activities; and the Companys market risk exposures may be affected by
actual changes in market prices of derivative commodity instruments if actual
changes differ from the hypothetical changes used in sensitivity analyses.

Forward-looking statements
speak only as of the date they were made, and the Company undertakes no
obligation to update them.

Continued growth in sales,
earnings and cash flows from the Gatorade thirst quencher operations is
dependent on, among other things: the level of competition from its key
competitors; the ability to obtain increasing points of availability; the
projected outcome of supply chain management programs; capital spending plans;
markets for key commodities, especially P.E.T. resins and cardboard; and the
efficiency and effectiveness of A&M programs.

# PART II -
OTHER INFORMATION

|Item 6. | Exhibits and Reports on Form 8-K                                                                                              
|------- | ------------------------------------------------------------------------------------------------------------------------------
|(a)     | Reports on Form 8-K                                                                                                           
|        | A Form 8-K was filed by the Company on August 15, 2001, concerning the Company's Change in Control.                           
|        | A Form 8-K was filed by the Company on November 13, 2001, concerning the Company's proposed redemption of its Preferred Stock.

All other items in Part II are either inapplicable to the Company during the quarter ended
September 30, 2001, the answer is negative or a response has been previously reported and an additional report
of the information need not be made, pursuant to the Instructions to Part II.

# SIGNATURES

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

|                         |  |  | Stokely-Van Camp, Inc.(Registrant)                      
|------------------------ |  |  | --------------------------------------------------------
|Date:  November 14, 2001 |  |  | /s/ W. Timothy HeavisideW. Timothy HeavisidePresident   
|                         |  |  | /s/ Renee GarbusRenee GarbusVice President and Treasurer