FORM 10-Q


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



         [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




                                       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 333-14217

                                  ============
                          Core-Mark International, Inc.

             (Exact name of registrant as specified in its charter)

         Delaware                                                     91-1295550
         (State or other jurisdiction of                        (I.R.S. Employer
           incorporation or organization)                    Identification No.)

         395 Oyster Point Boulevard, Suite 415
         South San Francisco, CA                                           94080
         (Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code: (650) 589-9445

                                  ============

     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. _x_ Yes ___ No

                 At October 31, 2001, Registrant had outstanding
                       5,500,000 shares of Common Stock.

                 ===============================================


<PAGE>


                 Core-Mark International, Inc. and Subsidiaries

                    FORWARD-LOOKING STATEMENTS OR INFORMATION

     Certain  statements  contained in this quarterly  report on Form 10-Q under
the caption  "Management's  Discussion  and Analysis of Financial  Condition and
Results of  Operations,"  and  elsewhere  herein and in the  documents  (if any)
incorporated  herein by reference are not statements of historical  fact but are
future-looking    or    forward-looking    statements    that   may   constitute
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934,  as amended.  Certain,  but not  necessarily  all, of such
forward-looking  statements can be identified by the use of such forward-looking
terminology as the words  "believes,"  "expects,"  "may,"  "will,"  "should," or
"anticipates"  (or the  negative of such terms) or other  variations  thereon or
comparable  terminology,  or  because  they  involve  discussions  of  Core-Mark
International,   Inc.'s  (the  "Company's")   strategy.   Such   forward-looking
statements are based upon a number of assumptions  concerning  future conditions
that may  ultimately  prove to be  inaccurate.  The  ability  of the  Company to
achieve the results  anticipated in such  statements is subject to various risks
and uncertainties and other factors which may cause the actual results, level of
activity, performance or achievements of the Company or the industry in which it
operates to be materially different from any future results,  level of activity,
performance  or  achievements  expressed  or  implied  by  such  forward-looking
statements. Such factors include, among others, the general state of the economy
and business  conditions  in the United  States and Canada;  adverse  changes in
consumer  spending;  the  ability  of the  Company  to  implement  its  business
strategy,  including the ability to integrate recently acquired  businesses into
the Company;  the ability of the Company to obtain financing;  competition;  the
level of retail sales of cigarettes and other tobacco products; possible effects
of legal proceedings  against  manufacturers and sellers of tobacco products and
the effect of government regulations affecting such products. As a result of the
foregoing  and  other  factors  affecting  the  Company's  business  beyond  the
Company's  control,  no assurance can be given as to future  results,  levels of
activity,  performance  or  achievements  and  neither the Company nor any other
person  assumes  responsibility  for the  accuracy  and  completeness  of  these
statements.
<TABLE>
<CAPTION>


                                                                            Page
PART I - FINANCIAL INFORMATION
<S>                                                                          <C>

Item 1: Financial Statements

     Condensed Consolidated Balance Sheets as of December 31, 2000
     and September 30, 2001................................................    3
     Condensed Consolidated Statements of Income for the three
     and nine months ended September 30, 2000 and 2001.....................    4
     Condensed Consolidated Statements of Cash Flows for the nine
     months ended September 30, 2000 and 2001..............................    5
     Notes to Condensed Consolidated Financial Statements..................    6

Item 2: Management's Discussion and Analysis of Financial Condition
        and Results of Operations................. ........................    8

Item 3: Quantitative and Qualitative Disclosures About Market
        Risk...............................................................   12

PART II - OTHER INFORMATION

Item 1:  Legal Proceedings.................................................   13
Item 2:  Changes in Securities and Use of Proceeds.........................   13
Item 3:  Defaults Upon Senior Securities...................................   13
Item 4:  Submission of Matters to a Vote of Security Holders...............   13
Item 5:  Other Information.................................................   13
Item 6:  Exhibits and Reports on Form 8-K..................................   13

Signature..................................................................   14
</TABLE>

                                      -2-
<PAGE>


                 CORE-MARK INTERNATIONAL, INC. AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                            (In Thousands of Dollars)
<TABLE>
<CAPTION>

                                                                                 December 31,  September 30,
                                                                                     2000          2001
                                                                                    --------     --------
Assets                                                                                          (Unaudited)
<S>                                                                                    <C>           <C>

Current assets:
     Cash.......................................................................    $ 28,129     $ 32,452
     Receivables:
         Trade accounts, less allowance for doubtful accounts of $2,660 and
              $3,029, respectively..............................................     109,594      120,994
         Other..................................................................      17,055       18,161
     Inventories, net of LIFO allowance of $46,319 and $51,486, respectively....     111,983       62,575
     Prepaid expenses and other.................................................       7,694        8,401
                                                                                    --------     --------
         Total current assets...................................................     274,455      242,583

Property and equipment..........................................................      72,954       74,879
     Less accumulated depreciation..............................................     (41,888)     (43,795)
                                                                                    --------     --------
     Net property and equipment.................................................      31,066       31,084

Other assets....................................................................       9,588        6,886
Goodwill, net of accumulated amortization of $23,540 and $25,102,
     respectively...............................................................      59,767       58,205
                                                                                    --------     --------
Total assets....................................................................    $374,876     $338,758
                                                                                    ========     ========
Liabilities and Shareholders' Equity
Current liabilities:
     Trade accounts payable.....................................................    $ 51,791     $ 66,666
     Cigarette and tobacco taxes payable........................................      52,933       47,735
     Income taxes payable.......................................................       3,476        3,824
     Deferred income taxes......................................................       3,759        4,313
     Other accrued liabilities..................................................      31,851       30,611
                                                                                    --------     --------
         Total current liabilities..............................................     143,810      153,149

Long-term debt..................................................................     186,617      130,000
Other accrued liabilities and deferred income taxes.............................       8,591       10,084
                                                                                    --------      -------
     Total liabilities..........................................................     339,018      293,233

Commitments and contingencies:
Shareholders' equity:
     Common stock; $.01 par value; 10,000,000 shares authorized;
         5,500,000 shares issued and outstanding................................          55           55
     Additional paid-in capital.................................................      26,121       26,121
     Retained earnings..........................................................      16,178       27,105
     Accumulated comprehensive loss:
         Cumulative currency translation adjustments............................      (3,836)      (5,096)
         Additional minimum pension liability...................................      (2,660)      (2,660)
                                                                                    --------     --------
         Total shareholders' equity.............................................      35,858       45,525
                                                                                    --------     --------
Total liabilities and shareholders' equity......................................    $374,876     $338,758
                                                                                    ========     ========
            See Notes to Condensed Consolidated Financial Statements.

</TABLE>

                                      -3-
<PAGE>


                 CORE-MARK INTERNATIONAL, INC. AND SUBSIDIARIES
                   Condensed Consolidated Statements of Income
                            (In Thousands of Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                               Three Months                  Nine Months
                                                            Ended September 30,          Ended September 30,
                                                           ---------------------     -------------------------
                                                             2000          2001         2000           2001
                                                           -------- ------------     ----------     ----------
<S>                                                          <C>           <C>          <C>              <C>

Net sales............................................      $782,723     $904,380     $2,277,342     $2,537,207
Cost of goods sold...................................       730,774      849,042      2,128,653      2,378,948
                                                           --------     --------     ----------     ----------
    Gross profit.....................................        51,949       55,338        148,689        158,259
Operating and administrative expenses................        41,461       43,222        120,395        128,530
                                                           --------     --------     ----------     ----------
    Operating income.................................        10,488       12,116         28,294         29,729

Interest expense, net................................         3,290        2,656          9,551          8,539
Debt refinancing costs...............................           318          318            955            955
                                                           --------     --------     ----------     ----------
    Income before income taxes.......................         6,880        9,142         17,788         20,235

Income tax expense...................................         3,262        4,205          8,434          9,308
                                                           --------     --------     ----------     ----------
    Net income.......................................      $  3,618     $  4,937     $    9,354     $   10,927
                                                           ========     ========     ==========     ==========
</TABLE>




























            See Notes to Condensed Consolidated Financial Statements.
                                      -4-

<PAGE>


                 CORE-MARK INTERNATIONAL, INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                            (In Thousands of Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                          Nine Months
                                                                                     Ended  September 30,
                                                                                    ---------------------
                                                                                      2000         2001
                                                                                    --------     --------
<S>                                                                                     <C>          <C>

CASH PROVIDED BY OPERATING ACTIVITIES:

Net income......................................................................    $  9,354     $ 10,927

     Adjustments to reconcile net income to net cash provided by operating
         activities:
     LIFO expense...............................................................       1,650        5,167
     Amortization of goodwill...................................................       1,562        1,562
     Depreciation and amortization..............................................       4,863        5,687
     Amortization of debt refinancing fees......................................         955          955
     Deferred income taxes......................................................         947        1,974
     Other......................................................................       1,516          501

     Changes in operating assets and liabilities................................      19,994       39,747
                                                                                    --------     --------
Net cash provided by operating activities.......................................      40,841       66,520
                                                                                    --------     --------
INVESTING ACTIVITIES:

     Additions to property and equipment........................................      (6,023)      (4,559)
                                                                                    --------     --------
Net cash used in investing activities...........................................      (6,023)      (4,559)
                                                                                    --------     --------
FINANCING ACTIVITIES:

     Net payments under accounts receivable securitization......................     (25,000)     (30,000)
     Net payments under revolving credit agreement..............................      (7,733)     (26,617)
                                                                                    --------     --------
Net cash used in financing activities...........................................     (32,733)     (56,617)
                                                                                    --------     --------

Effects of changes in foreign exchange rates....................................        (711)      (1,021)
                                                                                    --------     --------
Increase in cash................................................................       1,374        4,323
Cash, beginning of period.......................................................      17,279       28,129
                                                                                    --------     --------
CASH, END OF PERIOD.............................................................    $ 18,653     $ 32,452
                                                                                    ========     ========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash payments during the period for:
     Interest...................................................................    $ 11,270     $ 10,679
     Income taxes...............................................................       9,712        7,054
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.
                                      -5-
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                      NINE MONTHS ENDED SEPTEMBER 30, 2001
                                   (UNAUDITED)


1.  BASIS OF PRESENTATION

     The condensed  consolidated  balance  sheet as of September  30, 2001,  the
condensed  consolidated  statements of income for the three-month and nine-month
periods  ended  September  30,  2000 and 2001,  and the  condensed  consolidated
statements of cash flows for the nine-month periods ended September 30, 2000 and
2001 have been prepared by Core-Mark  International,  Inc. and subsidiaries (the
"Company").  In the opinion of management,  all adjustments,  consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company at September 30, 2001,  and of the results of its  operations and
cash flows for the interim periods then ended,  have been included.  The results
of  operations  for the interim  periods are not  necessarily  indicative of the
operating results for the full year.

     The  condensed  consolidated  balance  sheet as of December  31,  2000,  is
derived  from  the  audited  financial  statements  but  does  not  include  all
disclosures  required by accounting  principles generally accepted in the United
States of America. The notes accompanying the consolidated  financial statements
of the Company included in the Company's Annual Report on Form 10-K for the year
ended  December  31,  2000  ("2000  Form  10-K")  include a  description  of the
Company's significant  accounting policies and additional  information pertinent
to an  understanding of both the December 31, 2000 balance sheet and the interim
financial statements included herein.

2.  INVENTORIES

     The condensed  consolidated  financial  statements have been prepared using
the LIFO  method  of  accounting  for  inventories.  The use of the LIFO  method
resulted in an increase  in cost of goods sold and a  corresponding  decrease in
inventories  of $0.8  million  and  $0.2  million  for the  three  months  ended
September 30, 2000 and 2001, respectively, and $1.7 million and $5.2 million for
the nine months ended  September 30, 2000 and 2001,  respectively.  Interim LIFO
calculations  are based on management's  estimates of year-end  inventory levels
and inflation rates for the year.

3.  EXCISE TAXES

     State and provincial excise taxes on cigarettes  included in sales and cost
of goods sold were $153.2  million and $162.3 million for the three months ended
September 30, 2000 and 2001, respectively, and $449.3 million and $464.7 million
for the nine months ended September 30, 2000 and 2001, respectively.

4.  NEW ACCOUNTING STANDARDS

     In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 140,  "Accounting for
Transfers and Servicing of Financial Assets and  Extinguishment of Liabilities,"
which  revises  the  standards  for  accounting  for  securitizations  and other
transfers of financial  assets and  collateral  and requires  entities that have
securitized  financial assets to provide specific  disclosures.  SFAS No. 140 is
effective for transfers and servicing of financial assets and extinguishments of
liabilities  occurring  after March 31, 2001.  The Company  adopted the standard
effective April 1, 2001, as required.  The adoption of SFAS No. 140 did not have
a material impact on the Company's consolidated financial statements.


     In June 2001,  the FASB  approved  for  issuance  SFAS No.  141,  "Business
Combinations" and SFAS No.142,  "Goodwill and Other Intangible Assets". SFAS No.
141  addresses the initial  recognition  and  measurement  of goodwill and other
intangible assets acquired in a business  combination and SFAS No. 142 addresses
the initial  recognition and measurement of intangibles  assets acquired outside
of a business combination whether acquired individually or with a group of other
assets.  SFAS No. 142 also addresses the recognition and measurement of goodwill
and other intangibles  assets subsequent to their  acquisition.  SFAS No. 141 is
applicable  to  business  combinations  beginning  July 1, 2001.  The Company is
required to adopt SFAS No. 142 no later than its fiscal year  beginning  January
1, 2002 at which time  goodwill will no longer be amortized but will be required
to be tested for  impairment  at least  annually  at the  reporting  unit level.
Intangible  assets are required to be tested for impairment.  Intangible  assets
with  definitive  useful  lives will be  amortized  over their  useful  life and
intangible  assets  with an  indefinite  useful life are not  amortized  until a
definitive useful life is determined.  The Company is evaluating the impact that
the  adoption  of SFAS  No.  141 and SFAS No.  142  will  have on its  financial
position,  results of  operations  and cash flows.  Upon  implementation  of the
statement,  the Company will cease to record  amortization  expense,  which will
total $2.1 million for the fiscal year ended December 31, 2001.

                                      -6-
<PAGE>

     In  August  2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
Retirement  Obligations."  SFAS No. 143 will become  effective  for Core-Mark on
January 1,  2002.  The  Company  is  currently  analyzing  the effect  that this
standard will have on its financial  statements,  but does not expect a material
impact.


     In  October  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 will become effective
for Core-Mark on January 1, 2002. The Company is currently  analyzing the effect
that this standard will have on its financial statements,  but does not expect a
material impact.


5.  COMPREHENSIVE INCOME

     The Company's total comprehensive  income was $3.3 million and $4.0 million
for the three months ended  September 30, 2000 and 2001  respectively,  and $8.6
million and $9.7 million for the nine months ended  September  30, 2000 and 2001
respectively,  which  included  net  income and other  comprehensive  income and
losses related to foreign currency translation adjustments.


6. SEGMENT INFORMATION

     Management has determined that the only  reportable  segment of the Company
is its wholesale  distribution  segment,  based on the level at which  executive
management  reviews  the  results  of  operations  in  order  to make  decisions
regarding  performance  assessment  and resource  allocation.  There has been no
change in the segment  reported or the basis of measurement of segment profit or
loss from that which was  reported in the  Company's  2000 Form 10-K.  Wholesale
distribution  segment  information for the  three-month  and nine-month  periods
ended September 30, and asset  information as of December 31, 2000 and September
30, 2001 is set forth below (dollars in thousands):
<TABLE>
<CAPTION>


                                                                                Three Months              Nine Months
                                                                             Ended September 30,      Ended September 30,
                                                                            --------------------    ------------------------
                                                                              2000        2001         2000           2001
                                                                            --------    --------    ----------    ----------
<S>                                                                            <C>         <C>          <C>           <C>

         Net sales to external customers...............................     $782,723    $904,380    $2,277,342    $2,537,207

         Segment pretax operating income  (1)..........................     $  7,476    $  8,579    $   19,960    $   19,422
         Less: Goodwill and other unallocated amortization ............          594         592         1,776         1,768
               Interest income: unallocated and other..................         (316)     (1,473)         (559)       (3,536)
               Amortization of debt refinancing costs..................          318         318           955           955
                                                                            --------    --------    ----------    ----------
         Consolidated income before income taxes.......................     $  6,880    $  9,142    $   17,788    $   20,235
                                                                            ========    ========    ==========    ==========
</TABLE>

<TABLE>
<CAPTION>

         Assets                                                          December 31, September 30,
                                                                              2000        2001
                                                                            --------    --------
<S>                                                                           <C>          <C>

         Segment information...........................................     $362,593    $325,376
         Add: Corporate and other......................................       12,283      13,382
                                                                            --------    --------
         Consolidated assets...........................................     $374,876    $338,758
                                                                            ========    ========
</TABLE>

-----------------------------------------------------------------------
  (1) Represents operating income, including allocated interest expense, but
  excluding amortization of goodwill and debt refinancing costs, and income
  taxes.
                                      -7-

<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


     The following  discussion  should be read in conjunction with  Management's
Discussion and Analysis and the discussion under the heading "Legal  Proceedings
- Regulatory and Legislative Matters" included in the Company's 2000 Form 10-K.

GENERAL

     The  Company  is one  of the  largest  broad-line,  full-service  wholesale
distributors of packaged consumer products to the convenience retail industry in
western  North  America.   The  products  distributed  by  the  Company  include
cigarettes,  food  products  such as candy,  fast food,  snacks,  groceries  and
non-alcoholic beverages, and non-food products such as film, batteries and other
sundries,  health and beauty  care  products  and  tobacco  products  other than
cigarettes. For the nine months ended September 30, 2001, approximately 72%, 19%
and 9% of the  Company's net sales were derived from  cigarettes,  food products
and non-food products, respectively.

TOBACCO INDUSTRY BUSINESS ENVIRONMENT

     Manufacturers and distributors of cigarettes and other tobacco products are
currently  facing a number  of  significant  issues  that  affect  the  business
environment in which they operate  including  proposed  additional  governmental
regulation;  actual and proposed  excise tax  increases  (see "Impact of Tobacco
Taxes " below);  increased  litigation  involving  health  and other  effects of
cigarette  smoking  and  other  uses of  tobacco;  and  litigation  by the  U.S.
Department of Justice to recover federal  Medicare costs allegedly  connected to
smoking.   The  tobacco  industry  is  also  currently  subject  to  significant
regulatory  restrictions,  such as the requirement that product packages display
warning  labels,   a  prohibition  on  television  and  radio   advertising  and
prohibitions on sales to minors.

     In August 1996, the United States Food and Drug  Administration (the "FDA")
determined  that it had  jurisdiction  over  cigarettes  and  smokeless  tobacco
products  and  issued  regulations   restricting  the  sale,   distribution  and
advertising of cigarettes and smokeless tobacco products,  especially to minors.
The FDA regulations are  significant  not only because of their  substance,  but
also because the FDA determined  that it has  jurisdiction  over  cigarettes and
smokeless  tobacco  as  "combination  products  having  both a  drug  component,
including  nicotine,  and device  components."  The  regulations  regulate  such
products as  "devices."  The major U.S.  tobacco  manufacturers  challenged  the
jurisdiction of the FDA to regulate tobacco products as "drugs" or "devices" and
in April 1997 the U.S.  District Court for the Middle District of North Carolina
held that the FDA could impose restrictions on access to and labeling of tobacco
products, but did not have authority to restrict the promotion and advertisement
of such products.  The court stayed implementation of the FDA regulations except
for those  establishing  a  federal  minimum  age of 18 for the sale of  tobacco
products  and  requiring  proof of age for anyone under the age of 27. On August
14, 1998,  however,  the United  States Court of Appeals for the Fourth  Circuit
reversed  the  decision  of the  District  Court,  finding  that the FDA  lacked
statutory authority to regulate tobacco products altogether.  The FDA's petition
for review was granted by the Supreme Court,  and on March 21, 2000, the Supreme
Court  ruled  5-4  that  the FDA did not  have  authority  to  regulate  tobacco
products.

     In response to the Supreme  Court  ruling,  legislation  has recently  been
introduced in Congress that would grant authority to the FDA to regulate tobacco
products.  One cigarette manufacturer expressed interest in such legislation but
the remaining  companies  have stated their  opposition.  The prospects for this
legislation are uncertain.

     In June 1997, a so called "national settlement" of many of these issues was
proposed following  negotiations among major U.S. tobacco  manufacturers,  state
attorneys general,  representatives of the public health community and attorneys
representing  plaintiffs in certain smoking and health litigation.  The national
settlement required  implementation by federal  legislation,  however,  and such
legislation was considered but not passed by the Congress in 1998.

                                      -8-
<PAGE>

     In light of the failure of the national settlement legislation, in November
1998, 46 states,  five  territories and the District of Columbia  entered into a
settlement of  approximately  $250 billion with four major tobacco  companies to
resolve  litigation  over  smoking-related  costs  incurred  by  state  Medicaid
programs. The settlement - which takes effect in each settling jurisdiction when
the  courts in each  such  jurisdiction  enter a final  consent  decree  and any
appeals  of such  decree  are  disposed  of or become  time-barred  - allows for
payment of the agreed sum by the cigarette  manufacturers over 25 years, settles
the state and  territory  health-care  claims  against the tobacco  industry and
imposes a number of new marketing,  advertising, sales and other restrictions on
tobacco products.

     Included  in the  terms  of the  settlement  are  conditions  that  tobacco
companies  participating  in  the  settlement  may  not:  target  youth  in  the
advertising,  promotion or marketing of tobacco  products  (including the use of
cartoons  in such  promotion);  use  tobacco  brand  names to sponsor  concerts,
athletics  events  or other  events  in which a  significant  percentage  of the
audience  is under 18 years of age;  advertise  products in  conspicuous  places
outdoors  (such as  billboards)  or on transit  vehicles;  merchandise a tobacco
brand  name  through  the  marketing,  distribution  or sale of apparel or other
merchandise;  provide  free  samples of tobacco  products  in any area except an
adults-only  facility;  distribute or sell cigarettes in pack sizes of less than
20; or lobby state  legislatures on certain  anti-tobacco  initiatives  (such as
limitations on youth access to vending  machines).  These provisions took effect
by April 23, 1999.

     Over the past  decade,  various  state and local  governments  have imposed
significant regulatory restrictions on tobacco products,  including sampling and
advertising  bans or  restrictions,  packaging  regulations and  prohibitions on
smoking in  restaurants,  office  buildings  and public  places.  With a limited
number of exceptions,  the state Medicaid  litigation  settlement  prohibits the
participating tobacco manufacturers from challenging any restriction relating to
tobacco  control  enacted  prior to June 1,  1998.  Additional  state  and local
legislative  and  regulatory  actions are being  considered and are likely to be
promulgated  in the future.  The Company is unable to assess the future  effects
that these various proposals may have on the sale of the Company's products.

     On September 22, 1999,  the U.S.  Department of Justice filed "an action to
recover health care costs paid for and furnished...by the federal government for
lung cancer, heart disease, emphysema and other tobacco-related illnesses caused
by the fraudulent and tortious  conduct of..." the major tobacco  manufacturers.
The defendant companies  announced that they would fight the litigation,  and on
December 27, 1999 moved to dismiss the government's  complaint. On September 28,
2000, the U.S. District Court for the District of Columbia dismissed some of the
government's claims but allowed the case to precede on two "civil RICO" grounds,
on which all parties have filed  procedural  motions that the court continues to
review.  A recent offer by the Justice  Department to settle the  litigation has
not  been  accepted  to date and the  parties  are  engaging  in  discovery  and
pre-trial motions. If the Justice Department  prevails in the litigation,  or if
the litigation is settled,  there can be no assurance  that the litigation  will
not result in  increased  cigarette  prices  and/or a material  reduction of the
consumption of tobacco products in the United States;  such circumstances  could
have a material adverse affect on the Company's business and financial position.

     In  addition,  proposals  have been  made in  Congress  in recent  years to
require additional warning notices on tobacco products,  to disallow advertising
and  promotional  expenses as  deductions  under  federal tax law and to further
regulate the production and  distribution  of cigarettes and smokeless  tobacco.
While neither the FDA regulations, the state Medicaid litigation settlement, nor
recent  legislation  would impose  restrictions  on the sale of  cigarettes  and
smokeless   tobacco  products  to  adults,   there  can  be  no  assurance  such
restrictions  will not be  proposed  in the  future  or that  any such  proposed
legislation  or  regulations  would not  result in a material  reduction  of the
consumption  of  tobacco  products  in the  United  States  or would  not have a
material adverse effect on the Company's business and financial position.

     On July 14,  2000,  a Florida  state  court jury  awarded  $145  billion in
punitive damages against the major U.S. tobacco  companies to a class of Florida
smokers who allegedly died or became ill due to cigarette  smoking.  The tobacco
companies  have  moved to set aside the award  and  remove  the case to  federal
court. On November 3, 2000,  U.S.  District Judge Ursula Ungaro - Benages of the
Southern  District of Florida denied the defendants motion to remove the case to
federal  court.  The $145  billion  judgment was returned to the state court for
further  proceedings.  On November 6, 2000,  the Florida  state court denied the
defendants'  motion to set aside the  punitive  damage  award and  rejected  the
tobacco companies  request for a new trial. The tobacco  companies  appealed the
judgment. The appeal is pending in the Third District Court of Appeals, 11th and
16th Circuits, in Miami, Florida.

                                      -9-
<PAGE>

     The Company is subject to various federal,  state and local  environmental,
health and safety laws and regulations. Generally, these laws impose limitations
on the discharge of pollutants  and the presence of hazardous  substances in the
workplace  and establish  standards for vehicle and employee  safety and for the
handling  of solid  and  hazardous  wastes.  These  laws  include  the  Resource
Conservation  and  Recovery  Act,  the  Comprehensive   Environmental  Response,
Compensation  and  Liability  Act,  the Clean Air Act, the  Hazardous  Materials
Transportation   Act  and  the  Occupational   Safety  and  Health  Act.  Future
developments,  such as stricter environmental or employee health and safety laws
and regulations thereunder,  could affect the Company's operations.  The Company
does not currently  anticipate  that the cost of its  compliance  with or of any
foreseeable  liabilities under environmental and employee health and safety laws
and  regulations  will  have a  material  adverse  effect  on its  business  and
financial condition.

THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS
ENDED SEPTEMBER 30, 2000

     NET SALES.  Net sales for the three  months ended  September  30, 2001 were
$904.4  million,  an increase of $121.7 million or 15.5% over the same period in
2000. The increase in net sales was primarily due to an increase in net sales of
cigarettes,  as well as increased  sales of food and  non-food  products in 2001
compared to 2000. While sales increased within the Company's  existing  customer
base,  a  significant  portion of the increase  was  attributed  to new customer
relationships commencing since September 30, 2000.

     Net sales of cigarettes for the three months ended  September 30, 2001 were
$645.3  million,  an increase of $88.9  million or 16.0% over the same period in
2000. The increase in net sales of cigarettes was  principally  due to increases
in  manufacturers'  list  prices,  which  have been  passed on to the  Company's
customers  in the form of higher  prices and an  increase in carton  sales.  The
Company's  total  cigarette unit sales for the three months ended  September 30,
2001 were 22.5 million cartons,  an increase of 2.0 million cartons or 9.7% from
the same  period of 2000.  The  increase  in carton  sales was  attributable  to
increased volume with new and existing customers. Net sales of food and non-food
products for the three months ended September 30, 2001 were $259.1  million,  an
increase of $32.7 million or 14.5% over the same period in 2000.

     GROSS  PROFIT.  Gross profit for the three months ended  September 30, 2001
was $55.3  million,  an increase of $3.4 million or 6.5% over the same period in
2000.  The gross profit  margin for the three months  ended  September  30, 2001
decreased  to 6.1% of net  sales  as  compared  to  6.6%  of net  sales  for the
comparable period in 2000.

     For the three months ended September 30, 2001, the Company  recognized LIFO
expense of $0.2 million  compared to $0.8 million for the  comparable  period in
2000.  The decrease in LIFO expense for the three  months  ended  September  30,
2001,  was primarily the result of a cigarette  price  increase that occurred in
the third  quarter  of 2000,  whereas  no such  increase  occurred  in the third
quarter of 2001.

     OPERATING  AND  ADMINISTRATIVE   EXPENSES.   Operating  and  administrative
expenses for the three months ended  September 30, 2001 were $43.2  million,  an
increase of $1.8  million or 4.3% over the same  period in 2000,  which was at a
slower rate than real growth in volume. Such expenses for the three months ended
September  30,  2001  decreased  to 4.8% of net sales as compared to 5.3% of net
sales for the same  period in 2000,  primarily  due to the fact that the Company
continues to exert tight control over expenses.

     OPERATING  INCOME. As a result of the foregoing  factors,  operating income
for the three months ended September 30, 2001 was $12.1 million,  an increase of
$1.6  million  or 15.5% over the same  period in 2000.  As a  percentage  of net
sales,  operating  income for the three  months  ended  September  30,  2001 and
September 30, 2000 was 1.3%.

     NET  INTEREST  EXPENSE.  Net  interest  expense for the three  months ended
September  30, 2001 was $2.7  million,  a decrease  of $0.6  million or 19.3% as
compared  to the same  period in 2000,  which  resulted  from a decrease  in the
Company's average debt levels and a decrease in average borrowing rates.

NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS
ENDED SEPTEMBER 30, 2000

     NET SALES.  Net sales for the nine  months  ended  September  30, 2001 were
$2,537.2 million, an increase of $259.9 million or 11.4% over the same period in
2000. The increase in net sales was primarily due to an increase in net sales of
cigarettes,  as well as increased  sales of food and  non-food  products in 2001
compared to 2000. While sales increased within the Company's  existing  customer
base,  a  significant  portion of the increase  was  attributed  to new customer
relationships commencing since September 30, 2000.

                                      -10-
<PAGE>

     Net sales of cigarettes  for the nine months ended  September 30, 2001 were
$1,821.7 million, an increase of $197.6 million or 12.2% over the same period in
2000. The increase in net sales of cigarettes was  principally  due to increases
in  manufacturers'  list  prices,  which  have been  passed on to the  Company's
customers in the form of higher  prices,  and an increase in carton  sales.  The
Company's  total  cigarette  unit sales for the nine months ended  September 30,
2001 were 64.2 million cartons,  an increase of 4.1 million cartons or 6.8% from
the same period of 2000.  Cigarette  carton  sales in the U.S.  increased by 3.8
million  cartons or 7.7%  compared to the same period in 2000.  The  increase in
carton  sales  was  attributable  to  increased  volume  with  new and  existing
customers.  Net sales of food and  non-food  products  for the nine months ended
September  30, 2001 were $715.5  million,  an increase of $62.2  million or 9.5%
over the same period in 2000.

     GROSS PROFIT. Gross profit for the nine months ended September 30, 2001 was
$158.3  million,  an  increase  of $9.6  million or 6.4% over the same period in
2000.  The gross  profit  margin for the nine months  ended  September  30, 2001
decreased  to 6.2% of net  sales  as  compared  to  6.5%  of net  sales  for the
comparable period in 2000.

     For the nine months ended  September 30, 2001, the Company  recognized LIFO
expense of $5.2 million  compared to $1.7 million for the  comparable  period in
2000. The increase in LIFO expense for the nine months ended September 30, 2001,
was  primarily  the result of a cigarette  price  increase  that occurred in the
first nine months of 2001,  which was  substantially  in excess of the increases
occurring in the first nine months of 2000.

     OPERATING  AND  ADMINISTRATIVE   EXPENSES.   Operating  and  administrative
expenses for the nine months ended  September 30, 2001 were $128.5  million,  an
increase  of $8.1  million or 6.8% over the same period in 2000.  However,  such
expenses for the nine months ended  September 30, 2001  decreased to 5.1% of net
sales as compared to 5.3% for the same period in 2000, primarily due to the fact
that the Company continues to exert tight control over expenses.

     OPERATING  INCOME. As a result of the foregoing  factors,  operating income
for the nine months ended  September 30, 2001 was $29.7 million,  an increase of
$1.4 million or 5.1% as compared to the same period in 2000.  As a percentage of
net sales,  operating  income for the nine months ended  September  30, 2001 and
September 30, 2000 was 1.2%.

     NET  INTEREST  EXPENSE.  Net  interest  expense for the nine  months  ended
September  30,  2001 was $8.5  million,  a  decrease  of $1.0  million  or 10.6%
compared to 2000,  which resulted from a decrease in the Company's  average debt
levels and a decrease in average borrowing rates.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's  liquidity  requirements  arise primarily from the funding of
its  working  capital  needs,  capital  expenditure  programs  and debt  service
requirements with respect to its credit facilities. The Company has no mandatory
reductions  of  principal  on  its  Revolving  Credit  Facility,   its  Accounts
Receivable  Facility or its $75 million Senior Subordinated Notes prior to their
final maturities in 2003. The Company has  historically  financed its operations
through internally generated funds and borrowings under its credit facilities.

     The Company's  debt  obligations  totaled  $130.0  million at September 30,
2001, a decrease of $56.6  million or 30.3% from $186.6  million at December 31,
2000.  The net  decrease  in  outstanding  debt is  primarily  due to  decreased
borrowings  needed  to  finance  working  capital  funding  requirements.   Debt
requirements  are  generally  the  highest  at  December  31,  when the  Company
historically carries higher inventory.

     The  Company's  principal  sources of  liquidity  are net cash  provided by
operating  activities  and  its  credit  facilities.  At year  end  the  Company
typically  carries  higher  inventories  which  are then  liquidated  in  future
periods.  Therefore,  net cash  provided by  operating  activities  is typically
higher at interim periods than at the end of any fiscal year.

     The Company made capital  expenditures  of $4.6 million for the nine months
ended  September  30,  2001,   primarily  related  to  warehouse  and  equipment
purchases.  For the  remainder  of 2001,  the  Company  estimates  it will spend
approximately $3 to $4 million on similar capital requirements.

                                      -11-
<PAGE>

IMPACT OF TOBACCO TAXES

     State and Canadian provincial tobacco taxes represent a significant portion
of the Company's net sales and cost of goods sold attributable to cigarettes and
other  tobacco  products.  In the  first  nine  months  of 2001,  such  taxes on
cigarettes represented  approximately 23% of cigarette net sales in the U.S. and
43% in Canada. In general, such taxes have been increasing,  and many states and
Canadian  provinces are currently  weighing proposals for higher excise taxes on
cigarettes and other tobacco products.

     Under  current  law,  almost all state and  Canadian  provincial  taxes are
payable by the Company  under  credit terms  which,  on the average,  exceed the
credit  terms the Company has  approved  for its  customers  to pay for products
which include such taxes.  This practice has benefited the Company's  cash flow.
If the Company were required to pay such taxes at the time such  obligation  was
incurred  without  the  benefit  of credit  terms,  the  Company  would  incur a
substantial  permanent increase in its working capital requirements and might be
required  to seek  additional  financing  in order to meet such  higher  working
capital  requirements.  Consistent  with  industry  practices,  the  Company has
secured a bond to guarantee  its tax  obligations  to those states and provinces
requiring such a surety (a majority of states in the Company's operating areas).

     The U.S.  federal excise tax on cigarettes is currently $3.40 per carton of
cigarettes.  The  federal  excise  tax  will  increase  by $.50  per  carton  of
cigarettes in 2002.  Unlike the state and provincial taxes described above, U.S.
federal excise taxes on cigarettes are paid by the cigarette  manufacturers  and
passed  through to the Company as a component  of the cost of  cigarettes.  Such
increases in U.S.  federal  taxes will increase the  Company's  working  capital
requirements  by  increasing  the  balances  of  its  inventories  and  accounts
receivable.  Legislation  has been  introduced  in  Congress  in 2001 to further
increase the federal excise tax on cigarettes, but prospects for its passage are
uncertain.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company  believes there has been no material  change in its exposure to
market risk from that  discussed in the Company's  2000  Consolidated  Financial
Statements.
                                      -12-
<PAGE>

                           PART II - OTHER INFORMATION


Item 1:  Legal Proceedings

     As  previously  reported,  in November  1999,  the Company was named in two
separate  law  suits  filed  in  State  Court in New  Mexico  by two  individual
plaintiffs.   The  other   defendants   include  the  principal   U.S.   tobacco
manufacturers,  as well as other distributors.  The complaints seek compensatory
and  punitive  damages  for  injuries  allegedly  caused  by the use of  tobacco
products.  During the first quarter of 2001,  the Company was dismissed from one
of the above cases.

     The Company does not believe the remaining  suit above will have a material
adverse  effect on the  Company's  financial  condition.  The  Company  has been
indemnified with respect to certain claims alleged in the remaining suit above.

     In  addition,  the  Company is a party to other  lawsuits  incurred  in the
ordinary course of its business.  The Company believes it is adequately  insured
with respect to such  lawsuits or that such  lawsuits  will not result in losses
material to its consolidated financial position or results of operations.

Item 2:  Changes in Securities and Use of Proceeds

         Not applicable


Item 3: Defaults Upon Senior Securities

         Not applicable


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

         Not applicable


Item 5: Other Information

         Not applicable


Item 6: Exhibits and Reports on Form 8-K

(a)      Exhibits

         None.

(b)      Reports on Form 8-K:

         None.
                                      -13-
<PAGE>


 SIGNATURE


         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 in the City of South San Francisco,
California, on November 12, 2001.


                          CORE-MARK INTERNATIONAL, INC.



                          By         /s/ Leo F. Korman
                             -----------------------------------
                          Leo F. Korman, Senior Vice President and
                          Chief Financial Officer

                                      -14-