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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(MARK ONE)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

FOR THE TRANSITION PERIOD FROM .

COMMISSION FILE NUMBER 0-24341



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 54-1865271                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|Two Bala Plaza, Suite #300, Philadelphia, PA                   |  | 19004                               
|(Address of Principal Executive Offices)                       |  | (Zip code)                          

(610) 660-7817

(REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)



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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 ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (check one):

Large Accelerated
Filer ̈Accelerated Filer  x    Non-Accelerated Filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act.):    Yes ̈No  x

The number of shares outstanding of each class of the issuers common stock as of May 7, 2007:

Common Stock ($.01 par value) 40,070,195



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##### Table of Contents

INDEX



|                               |  |                                                                                                                                 |  |     
|------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                               |  | PAGE                                                                                                                           
|PART I   FINANCIAL INFORMATION |  |                                                                                                                                
|                               |  |                                                                                                                                
|Item 1                         |  | Financial Statements                                                                                                            |  |     
|                               |  |                                                                                                                                
|                               |  | Consolidated Condensed Balance Sheets, March 31, 2007 (unaudited) and December 31, 2006                                         |  | 3   
|                               |  |                                                                                                                                
|                               |  | Consolidated Condensed Statements of Income (unaudited) for the three month periods ended March 31, 2007 and March 31, 2006     |  | 4   
|                               |  |                                                                                                                                
|                               |  | Consolidated Condensed Statement of Changes in Stockholders Equity (unaudited) as of March 31, 2007                            |  | 5   
|                               |  |                                                                                                                                
|                               |  | Consolidated Condensed Statements of Cash Flows (unaudited) for the three month periods ended March 31, 2007 and March 31, 2006 |  | 6   
|                               |  |                                                                                                                                
|                               |  | Notes to Consolidated Condensed Financial Statements (unaudited)                                                                |  | 7-18
|                               |  |                                                                                                                                
|Item 2                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                           |  | 19  
|                               |  |                                                                                                                                
|Item 3                         |  | Quantitative and Qualitative Disclosures about Market Risk                                                                      |  | 28  
|                               |  |                                                                                                                                
|Item 4                         |  | Controls and Procedures                                                                                                         |  | 28  
|                               | 
|PART II  OTHER INFORMATION     |  |                                                                                                                                
|                               |  |                                                                                                                                
|Item 6                         |  | Exhibits                                                                                                                        |  | 30  
|                               | 
|Signatures                     |  | 31                                                                                                                             



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##### Table of Contents

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)

Amounts in columns expressed in thousands

(except share information)



|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                                                                            |  | March 31,2007 |           |   | December 31,2006 |  
|ASSETS                                                                                                                                                      |  |               |           |   |                  |   |           |  
|Current Assets                                                                                                                                              |  |               |           |   |                  |   |           |  
|Cash and cash equivalents                                                                                                                                   |  | $             | 108,674   |   |                  | $ | 159,362   |  
|Accounts receivable, net of allowance for doubtful accounts of $24,538 and $24,354 respectively                                                             |  |               | 179,889   |   |                  |   | 224,575   |  
|Inventories                                                                                                                                                 |  |               | 78,076    |   |                  |   | 89,522    |  
|Prepaid expenses and other current assets                                                                                                                   |  |               | 12,296    |   |                  |   | 24,299    |  
|Deferred income taxes                                                                                                                                       |  |               | 6,584     |   |                  |   | 5,336     |  
|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|Total Current Assets                                                                                                                                        |  |               | 385,519   |   |                  |   | 503,094   |  
|                                                                                                                                                            |  |              
|Intangible assets, net                                                                                                                                      |  |               | 431,075   |   |                  |   | 371,624   |  
|Goodwill, net                                                                                                                                               |  |               | 424,788   |   |                  |   | 398,005   |  
|Property, plant and equipment, net                                                                                                                          |  |               | 50,553    |   |                  |   | 49,801    |  
|Deferred income taxes                                                                                                                                       |  |               | 8,110     |   |                  |   | 3,305     |  
|Other assets                                                                                                                                                |  |               | 200       |   |                  |   | 204       |  
|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|Total Assets                                                                                                                                                |  | $             | 1,300,245 |   |                  | $ | 1,326,033 |  
|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                        |  |               |           |   |                  |   |           |  
|Current Liabilities                                                                                                                                         |  |               |           |   |                  |   |           |  
|Trade accounts payable                                                                                                                                      |  | $             | 91,735    |   |                  | $ | 138,585   |  
|Bank loans and overdraft facilities                                                                                                                         |  |               | 113,230   |   |                  |   | 24,656    |  
|Income taxes payable                                                                                                                                        |  |               | 6,123     |   |                  |   | 2,975     |  
|Taxes other than income taxes                                                                                                                               |  |               | 70,086    |   |                  |   | 94,985    |  
|Other accrued liabilities                                                                                                                                   |  |               | 52,952    |   |                  |   | 57,620    |  
|Current portions of obligations under capital leases                                                                                                        |  |               | 2,219     |   |                  |   | 2,005     |  
|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|Total Current Liabilities                                                                                                                                   |  |               | 336,345   |   |                  |   | 320,826   |  
|                                                                                                                                                            |  |              
|Long-term debt, less current maturities                                                                                                                     |  |               | 4         |   |                  |   | 8         |  
|Long-term obligations under capital leases                                                                                                                  |  |               | 748       |   |                  |   | 1,122     |  
|Long-term obligations under Senior Secured Notes                                                                                                            |  |               | 314,955   |   |                  |   | 393,434   |  
|Deferred income taxes                                                                                                                                       |  |               | 78,535    |   |                  |   | 68,275    |  
|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|Total Long Term Liabilities                                                                                                                                 |  |               | 394,242   |   |                  |   | 462,839   |  
|                                                                                                                                                            |  |              
|Minority interests                                                                                                                                          |  |               | 5,808     |   |                  |   | 21,395    |  
|                                                                                                                                                            |  |              
|Stockholders Equity                                                                                                                                        |  |               |           |   |                  |   |           |  
|Common Stock ($0.01 par value, 80,000,000 shares authorized, 40,309,482 and 38,691,635 shares issued at March 31, 2007 and
December 31, 2006, respectively) |  |               | 404       |   |                  |   | 387       |  
|Additional paid-in-capital                                                                                                                                  |  |               | 423,097   |   |                  |   | 374,985   |  
|Retained earnings                                                                                                                                           |  |               | 122,908   |   |                  |   | 128,084   |  
|Accumulated other comprehensive income                                                                                                                      |  |               | 17,591    |   |                  |   | 17,667    |  
|Less Treasury Stock at cost (246,037 shares at March 31, 2007 and December 31, 2006)                                                                        |  |               | (150      | ) |                  |   | (150      | )
|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|Total Stockholders Equity                                                                                                                                  |  |               | 563,850   |   |                  |   | 520,973   |  
|                                                                                                                                                            |  |               |           |   |                  |   |           |  
|Total Liabilities and Stockholders Equity                                                                                                                  |  | $             | 1,300,245 |   |                  | $ | 1,326,033 |  
|                                                                                                                                                            |  |               |           |   |                  |   |           |  

The accompanying notes are an integral part of the consolidated condensed financial statements.



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##### Table of Contents

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)

Amounts in columns expressed in thousands

(except per share data)



|                                              |  |                    |         |   |                |   |         |  
|--------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | -
|                                              |  | Three months ended |        
|                                              |  | March 31, 2007     |         |   | March 31, 2006 |  
|PROFIT AND LOSS                               |  |                    |         |   |                |   |         |  
|Sales                                         |  | $                  | 288,996 |   |                | $ | 239,477 |  
|Excise taxes                                  |  |                    | (60,782 | ) |                |   | (49,360 | )
|Net Sales                                     |  |                    | 228,214 |   |                |   | 190,117 |  
|Cost of goods sold                            |  |                    | 181,897 |   |                |   | 152,656 |  
|                                              |  |                    |         |   |                |   |         |  
|Gross Profit                                  |  | $                  | 46,317  |   |                | $ | 37,461  |  
|                                              |  |                    |         |   |                |   |         |  
|Operating expenses                            |  |                    | 27,402  |   |                |   | 22,889  |  
|                                              |  |                    |         |   |                |   |         |  
|Operating Income                              |  | $                  | 18,915  |   |                | $ | 14,572  |  
|                                              |  |                    |         |   |                |   |         |  
|Non operating income / (expense), net         |  |                    |         |   |                |   |         |  
|Interest / (expense), net                     |  |                    | (8,649  | ) |                |   | (8,059  | )
|Other financial income / (expense), net       |  |                    | (15,400 | ) |                |   | 3,823   |  
|Other non operating income / (expense), net   |  |                    | (343    | ) |                |   | 1,311   |  
|                                              |  |                    |         |   |                |   |         |  
|Income before taxes                           |  | ($                 | 5,477   | ) |                | $ | 11,647  |  
|                                              |  |                    |         |   |                |   |         |  
|Income tax (benefit) / expense                |  |                    | (1,030  | ) |                |   | 1,864   |  
|Minority interests                            |  |                    | 729     |   |                |   | 1,968   |  
|                                              |  |                    |         |   |                |   |         |  
|Net income                                    |  | ($                 | 5,176   | ) |                | $ | 7,815   |  
|                                              |  |                    |         |   |                |   |         |  
|Net income per share of common stock, basic   |  | ($                 | 0.13    | ) |                | $ | 0.22    |  
|                                              |  |                    |         |   |                |   |         |  
|Net income per share of common stock, diluted |  | ($                 | 0.13    | ) |                | $ | 0.22    |  
|                                              |  |                    |         |   |                |   |         |  

The accompanying notes are an integral part of the consolidated condensed financial statements.

Earnings per share data for comparative periods for 2006 have been restated in respect of 3 to 2 split that took place on June 13, 2006.



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##### Table of Contents

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN

STOCKHOLDERS EQUITY (UNAUDITED)

Amounts
in columns expressed in thousands



|                                                         |  |              |  |                |                          |              |                  |        |    |                                   |   |  |       |         |  |   |         |   |  |   |        |   |  |   |         |  
|-------------------------------------------------------- |  | ------------ |  | -------------- | ------------------------ | ------------ | ---------------- | ------ | -- | --------------------------------- | - |  | ----- | ------- |  | - | ------- | - |  | - | ------ | - |  | - | ------- | -
|                                                         |  | Common Stock |  |                | AdditionalPaid-inCapital |              | RetainedEarnings |        |    | Accumulatedothercomprehensiveloss |   |  | Total |        
|                                                         |  | Common Stock |  | Treasury Stock |                          |              |                  |        |    |                                   |   |  |       |         |  |  
|                                                         |  | No. ofShares |  | Amount         |                          | No. ofShares |                  | Amount |    |                                   |   |  |       |         |  |   |         |   |  |  
|Balance at December 31, 2006                             |  | 38,692       |  | $              | 387                      |              | 246              |        | $  | (150                              | ) |  | $     | 374,985 |  | $ | 128,084 |   |  | $ | 17,667 |   |  | $ | 520,973 |  
|                                                         |  |              |  |                |                          |              |                  |        |    |                                   |   |  |       |         |  |   |         |   |  |   |        |   |  |   |         |  
|Net income for 2007                                      |  |             |  |                |                         |              |                 |        |    |                                  |   |  |       |        |  |   | (5,176  | ) |  |   |       |   |  |   | (5,176  | )
|Foreign currency translation adjustment                  |  |             |  |                |                         |              |                 |        |    |                                  |   |  |       |        |  |   |        |   |  |   | (76    | ) |  |   | (76     | )
|                                                         |  |              |  |                |                          |              |                  |        |    |                                   |   |  |       |         |  |   |         |   |  |   |        |   |  |   |         |  
|Comprehensive income for 2007                            |  |             |  |                |                         |              |                 |        |    |                                  |   |  |       |        |  |   | (5,176  | ) |  |   | (76    | ) |  |   | (5,252  | )
|Common stock issued in public placement                  |  | 1,554        |  |                | 16                       |              |                 |        |    |                                  |   |  |       | 42,338  |  |   |        |   |  |   |       |   |  |   | 42,354  |  
|Common stock issued in connection with options           |  | 64           |  |                | 1                        |              |                 |        |    |                                  |   |  |       | 774     |  |   |        |   |  |   |       |   |  |   | 775     |  
|Refundable purchase price related to Botapol acquisition |  |             |  |                |                         |              |                 |        |    |                                  |   |  |       | 5,000   |  |   |        |   |  |   |       |   |  |   | 5,000   |  
|Balance at March 31, 2007                                |  | 40,310       |  | $              | 404                      |              | 246              |        | ($ | 150                               | ) |  | $     | 423,097 |  | $ | 122,908 |   |  | $ | 17,591 |   |  | $ | 563,850 |  
|                                                         |  |              |  |                |                          |              |                  |        |    |                                   |   |  |       |         |  |   |         |   |  |   |        |   |  |   |         |  

The accompanying notes are an integral part of the consolidated condensed financial statements.



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##### Table of Contents

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (UNAUDITED)

Amounts in columns expressed in thousands



|                                                                                              |  |                             |         |   |      |   |         |  
|--------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                              |  | Three months endedMarch 31, |        
|                                                                                              |  | 2007                        |         |   | 2006 |  
|CASH FLOW                                                                                     |  |                             |         |   |      |   |         |  
|Operating Activities                                                                          |  |                             |         |   |      |   |         |  
|Net income                                                                                    |  | ($                          | 5,176   | ) |      | $ | 7,815   |  
|Adjustments to reconcile net income to net cash provided by / (used in) operating activities: |  |                             |         |   |      |   |         |  
|Depreciation and amortization                                                                 |  |                             | 2,434   |   |      |   | 2,069   |  
|Deferred income taxes                                                                         |  |                             | (7,148  | ) |      |   | 1,872   |  
|Bad debt provision                                                                            |  |                             | 188     |   |      |   | 377     |  
|Minority interests                                                                            |  |                             | 729     |   |      |   | 1,968   |  
|Hedge valuation                                                                               |  |                             |        |   |      |   | (11,772 | )
|Unrealized foreign exchange losses                                                            |  |                             | 3,364   |   |      |   | 7,753   |  
|Cost of debt extinguishment                                                                   |  |                             | 11,869  |   |      |   |        |  
|Stock options expense                                                                         |  |                             | 463     |   |      |   | 242     |  
|Changes in operating assets and liabilities:                                                  |  |                             |         |   |      |   |         |  
|Accounts receivable                                                                           |  |                             | 44,461  |   |      |   | 46,815  |  
|Inventories                                                                                   |  |                             | 11,431  |   |      |   | 12,576  |  
|Prepayments and other current assets                                                          |  |                             | 6,807   |   |      |   | 1,802   |  
|Trade accounts payable                                                                        |  |                             | (46,825 | ) |      |   | (41,235 | )
|Income and other taxes                                                                        |  |                             | (16,543 | ) |      |   | (10,724 | )
|Other accrued liabilities and other                                                           |  |                             | (3,649  | ) |      |   | (9,882  | )
|                                                                                              |  |                             |         |   |      |   |         |  
|Net Cash provided by Operating Activities                                                     |  |                             | 2,405   |   |      |   | 9,676   |  
|                                                                                              |  |                            
|Investing Activities                                                                          |  |                             |         |   |      |   |         |  
|Investment in distribution assets                                                             |  |                             | (5,410  | ) |      |   | (1,245  | )
|Proceeds from the disposal of equipment                                                       |  |                             | 2,647   |   |      |   | 114     |  
|Proceeds from the disposal of financial assets                                                |  |                             |        |   |      |   | 1,150   |  
|Refundable purchase price related to Botapol acquisition                                      |  |                             | 5,000   |   |      |   |        |  
|Acquisitions of subsidiaries, net of cash acquired                                            |  |                             | (90,917 | ) |      |   | (1,260  | )
|                                                                                              |  |                             |         |   |      |   |         |  
|Net Cash used in Investing Activities                                                         |  |                             | (88,680 | ) |      |   | (1,241  | )
|                                                                                              |  |                            
|Financing Activities                                                                          |  |                             |         |   |      |   |         |  
|Borrowings on bank loans and overdraft facility                                               |  |                             | 94,311  |   |      |   | 6,035   |  
|Payment of bank loans and overdraft facility                                                  |  |                             | (5,733  | ) |      |   | (839    | )
|Payment of Senior Secured Notes                                                               |  |                             | (95,440 | ) |      |   |        |  
|Hedge closure                                                                                 |  |                             |        |   |      |   | (4,677  | )
|Payment of capital leases                                                                     |  |                             | (160    | ) |      |   | (405    | )
|Issuance of shares in public placement                                                        |  |                             | 42,354  |   |      |   |        |  
|Options exercised                                                                             |  |                             | 311     |   |      |   | 293     |  
|                                                                                              |  |                             |         |   |      |   |         |  
|Net Cash provided by Financing Activities                                                     |  |                             | 35,643  |   |      |   | 407     |  
|                                                                                              |  |                             |         |   |      |   |         |  
|Currency effect on brought forward cash balances                                              |  |                             | (56     | ) |      |   | 673     |  
|Net Increase / (Decrease) in Cash                                                             |  |                             | (50,632 | ) |      |   | 9,515   |  
|Cash and cash equivalents at beginning of period                                              |  |                             | 159,362 |   |      |   | 60,745  |  
|                                                                                              |  |                             |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                                    |  | $                           | 108,674 |   |      | $ | 70,260  |  
|                                                                                              |  |                             |         |   |      |   |         |  
|                                                                                              |  |                            
|Supplemental Schedule of Non-cash Investing Activities                                        |  |                             |         |   |      |   |         |  
|Common stock issued in connection with investment in subsidiaries                             |  | $                           |        |   |      | $ | 157     |  
|                                                                                              |  |                             |         |   |      |   |         |  
|                                                                                              |  |                            
|Supplemental disclosures of cash flow information                                             |  |                             |         |   |      |   |         |  
|Interest paid                                                                                 |  | $                           | 18,124  |   |      | $ | 19,754  |  
|Income tax paid                                                                               |  | $                           | 6,600   |   |      | $ | 4,681   |  
|                                                                                              |  |                             |         |   |      |   |         |  

The accompanying notes are an integral part of the consolidated condensed financial statements.



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##### Table of Contents

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables expressed in thousands, except per share information



|1. | ORGANIZATION AND DESCRIPTION OF BUSINESS
|-- | ----------------------------------------

Central
European Distribution Corporation (CEDC), a Delaware corporation, and its subsidiaries (collectively referred to as we, us, our, or the Company) operate primarily in the alcohol beverage
industry. Historically the Company has operated as a distributor and importer of alcoholic beverages in Poland. Since acquisitions made in 2005, the Company became the largest vodka producer by value, and the leading distributor and importer of
alcoholic beverages in Poland. In July 2006, the Company expanded outside of Poland through the acquisition of Bols Hungary, becoming a leading importer of alcoholic beverages in Hungary. The Company is based in Warsaw and operates through its
subsidiaries in Poland and Hungary.



|2. | BASIS OF PRESENTATION
|-- | ---------------------

Our consolidated financial
statements are prepared in accordance with accounting principles generally accepted in the United States. Our Company consolidates all entities that we control by ownership of a majority voting interest. All inter-company accounts and transactions
have been eliminated in the consolidated financial statements.

CEDCs subsidiaries maintain their books of account and prepare their
statutory financial statements in their respective local currencies. The subsidiaries financial statements have been adjusted to reflect accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial
information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by generally accepted accounting principles in the United States of
America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present our financial condition, results of operations and cash flows for the
interim periods presented have been included. Operating results for the three-month period ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles for complete financial statements.

The unaudited interim
financial statements should be read with reference to the consolidated financial statements and footnotes thereto included in our annual report on Form 10-K for the year ended December 31, 2006.



|3. | ACQUISITIONS
|-- | ------------

On February 20, 2007 the Company
closed a tender for the remaining outstanding shares of common stock of Polmos Bialystok, obtaining an additional 2.54 million shares for approximately $90.9 million, thus increasing the Companys ownership in Polmos Bialystok to 90.14%.
The acquisition of these shares was financed through a previously arranged credit facility. Additional shares totaling 0.22% of all outstanding shares were acquired subsequent to the tender. As of March 31, 2007 the Company owned 90.36% of the
outstanding common stock of Polmos.

As of March 31, 2007, the Company also acquired the distribution assets of a small distributor in
Northeast Poland. The consideration of $ 0.7 million was paid on April 2, 2007.

The fair value of the assets acquired as of the
recent acquisition date is:



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##### Table of Contents

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



|                                                   |  |    |         |  
|-------------------------------------------------- |  | -- | ------- | -
|ASSETS                                             |  |    |         |  
|Equipment, net                                     |  |    | 117     |  
|Trademarks, net                                    |  |    | 59,583  |  
|                                                   |  |    |         |  
|Total Assets                                       |  | $  | 59,700  |  
|                                                   |  |    |         |  
|LIABILITIES                                        |  |    |         |  
|Deferred taxlong term liability                   |  |    | 11,122  |  
|Minority interests                                 |  |    | (16,316 | )
|                                                   |  |    |         |  
|Total Liabilities                                  |  | ($ | 5,194   | )
|                                                   |  |    |         |  
|Net identifiable assets and liabilities            |  |    | 64,894  |  
|Goodwill on acquisition                            |  |    | 26,737  |  
|Consideration paid, satisfied in cash              |  |    | 90,917  |  
|Consideration to be paid, presented in liabilities |  |    | 714     |  
|                                                   |  |    |         |  
|Cash (acquired)                                    |  | $  | 0       |  
|                                                   |  |    |         |  
|Net Cash Outflow                                   |  | $  | 90,917  |  



|4. | INTANGIBLE ASSETS OTHER THAN GOODWILL
|-- | -------------------------------------

The major
components of intangible assets are:



|                                   |  |               |         |   |                  |   |         |  
|---------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                   |  | March 31,2007 |         |   | December 31,2006 |  
|Non-amortizable intangible assets: |  |               |         |   |                  |   |         |  
|Trademarks                         |  | $             | 428,635 |   |                  | $ | 369,052 |  
|Total                              |  |               | 428,635 |   |                  |   | 369,052 |  
|Amortizable intangible assets:     |  |               |         |   |                  |   |         |  
|Trademarks                         |  | $             | 5,664   |   |                  | $ | 5,663   |  
|Customer relationships             |  |               | 1,228   |   |                  |   | 1,228   |  
|Less accumulated amortization      |  |               | (4,452  | ) |                  |   | (4,319  | )
|Total                              |  |               | 2,440   |   |                  |   | 2,572   |  
|                                   |  |               |         |   |                  |   |         |  
|Total intangible assets            |  | $             | 431,075 |   |                  | $ | 371,624 |  
|                                   |  |               |         |   |                  |   |         |  

Following the tender for the additional shares of Polmos Bialystok in February 2007, the Company
recorded an additional $59.6 million of the carrying value of the trademarks to reflect the ownership increase from 69% to 90% as well as the updated trademarks valuation. This relates mainly to Absolwent and Zubrówka trademarks which are not
amortizable assets.

Management considers trademarks that are non-amortizable assets to have high or market-leader brand recognition within
their market segments based on the length of time they have existed, the comparatively high volumes sold and their general market positions relative to other products in their respective market segments. These trademarks include Soplica,
Zubrówka, Absolwent, Royal and the rights for Bols Vodka in Poland, Hungary and Russia. Taking the above into consideration, as well as the evidence provided by analyses of vodka products life cycles, market studies, competitive and
environmental trends, management believes that these brands will generate cash flows for an indefinite period of time, and that the useful lives of these brands are indefinite. In accordance with SFAS 142, intangible assets with an indefinite life
are not amortized but are reviewed at least annually for impairment.



|5. | COMPREHENSIVE INCOME/(LOSS)
|-- | ---------------------------

Comprehensive
income/(loss) is defined as all changes in equity during a period except those resulting from investments by owners and distributions to owners. Comprehensive income/(loss) includes net income adjusted by, among other items, foreign currency
translation adjustments. The foreign translation losses/gains on the re-measurements from foreign currencies to U.S. dollars are classified separately as a component of accumulated other comprehensive income included in stockholders equity.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



As of March 31, 2007, the Polish Zloty exchange rate used to translate the balance sheet
strengthened as compared to the exchange rate as of December 31, 2006, and as a result a loss to comprehensive income/(loss) was recognized. Additionally, translation gains and losses with respect to long-term subordinated inter-company loans
with the parent company are charged to other comprehensive income. No deferred tax benefit has been recorded on the comprehensive income/(loss) in regard to the long-term inter-company transactions with the parent company, as the repayment of any
equity investment is not anticipated in the foreseeable future.



|6. | EARNINGS PER SHARE
|-- | ------------------

The following table sets forth
the computation of basic and diluted earnings per share for the periods indicated.



|                                                                                 |  |                             |        |   |      |   |       
|-------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------
|                                                                                 |  | Three months endedMarch 31,
|                                                                                 |  | 2007                        |        |   | 2006
|Basic:                                                                           |  |                             |        |   |      |   |       
|Net income                                                                       |  | ($                          | 5,176  | ) |      | $ | 7,815 
|                                                                                 |  |                             |        |   |      |   |       
|Weighted average shares of common stock outstanding                              |  |                             | 39,055 |   |      |   | 35,613
|Basic earnings per share                                                         |  | ($                          | 0.13   | ) |      | $ | 0.22  
|                                                                                 |  |                             |        |   |      |   |       
|Diluted:                                                                         |  |                             |        |   |      |   |       
|Net income                                                                       |  | ($                          | 5,176  | ) |      | $ | 7,815 
|                                                                                 |  |                             |        |   |      |   |       
|Weighted average shares of common stock outstanding                              |  |                             | 39,055 |   |      |   | 35,613
|Net effect of dilutive employee stock options based on the treasury stock method |  |                             | 387    |   |      |   | 485   
|Totals                                                                           |  |                             | 39,442 |   |      |   | 36,098
|Diluted earnings per share                                                       |  | ($                          | 0.13   | ) |      | $ | 0.22  
|                                                                                 |  |                             |        |   |      |   |       

Contingent shares for acquisitions and employee stock options granted have been included in the
above calculations of diluted earnings per share since the exercise price is less than the average market price of the common stock during three months period ended March 31, 2006 and 2007.

In June 2006, the Company executed a 3 for 2 stock split. The comparatives for 2006 shown above have been adjusted to reflect this change.



|7. | BORROWINGS
|-- | ----------

Bank Facilities

In June 2006, the Company consolidated all working capital facilities to three banks. These facilities are used primarily to support the Companys
working capital requirements. These credit lines are only denominated in Polish Zloty.

As of March 31, 2007, $38.6 million remained
available under the Companys overdraft facilities. These overdraft facilities are renewed on an annual basis.

As of March 31,
2007, the company had utilized approximately $69.2 million of a multipurpose credit line agreement in connection with a tender offer in Poland to purchase the remaining outstanding shares of Polmos Bialystok S.A. The Companys obligations under
the credit line agreement are guaranteed through promissory notes by certain subsidiaries of the Company. The indebtedness under the credit line agreement bears interest at a rate equal to the one month Warsaw Interbank Rate plus a margin of 1.25%
and matures on April 15, 2007. The bank guarantee was valid from October 16, 2006 until April 15, 2007. On April 16, 2007 an annex to this agreement was signed extending maturity to June 15, 2007 and reducing the bank margin
to 1%. The Company has a bank commitment in place to refinance this loan prior to maturity.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



Senior Secured Notes

In connection with the Bols and Polmos Bialystok acquisitions, on July 25, 2005 the Company completed the issuance of 325 million 8%
Senior Secured Notes due 2012 (the Notes). Interest is due semi-annually on the 25th of January and July, and the Notes are guaranteed on a senior basis by certain of the Companys subsidiaries. The Indenture governing our Notes
contains certain restrictive covenants, including covenants limiting the Companys ability to: make certain payments, including dividends or other distributions, with respect to the share capital of the parent or its subsidiaries; incur or
guarantee additional indebtedness or issue preferred stock; make certain investments; prepay or redeem subordinated debt or equity; create certain liens or enter into sale and leaseback transactions; engage in certain transactions with affiliates;
sell assets or consolidate or merge with or into other companies; issue or sell share capital of certain subsidiaries; and enter into other lines of business.

In order to reduce the interest rates that the Company is paying, the Company completed two redemptions of its Senior Secured Notes during the first quarter of 2007 as described below.

On January 19, 2007, the Company completed a redemption of the Senior Secured Notes equal to 32.5 million. In addition to the payment of
principle and accrued interest, the Company paid a redemption premium of 8%. The repurchase was financed with the proceeds from the equity offerings completed in December 2006.

On March 29, 2007 the Company completed a second redemption of the Senior Secured Notes equal to 32.5 million. In addition to the payment
of principle and accrued interest, the Company paid a redemption premium of 8%. The repurchase was financed with the proceeds from the equity offerings completed in February 2007.

In line with these redemptions of the Senior Secured Notes, the Company recognized a loss of $2.8 million related to the portion of the Interest Rate Swap
of $32.5 million closed in connection with the January redemption and prepaid financing costs associated with retired debt for $2.2 million relating to both redemptions.

As of March 31, 2007 and December 31, 2006, the Company had accrued interest included in other accrued liabilities of $5.5 million and $15.5 million respectively related to the Senior Secured Notes, with the
next coupon due for payment on July 25, 2007. Total obligations under the Senior Secured Notes are shown net of deferred finance costs, amortized over the life of the borrowings using the effective interest rate method and fair value
adjustments from the application of hedge accounting as shown in the table below:



|                                     |  |               |         |   |                  |   |         |  
|------------------------------------ |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                     |  | March 31,2007 |         |   | December 31,2006 |  
|Senior Secured Notes                 |  | $             | 345,729 |   |                  | $ | 427,810 |  
|Fair value bond mark to market       |  |               | (22,114 | ) |                  |   | (20,452 | )
|Unamortized portion of closed hedges |  |               | (1,198  | ) |                  |   | (3,760  | )
|Unamortized bond costs               |  |               | (7,462  | ) |                  |   | (10,164 | )
|                                     |  |               |         |   |                  |   |         |  
|Total                                |  | $             | 314,955 |   |                  | $ | 393,434 |  
|                                     |  |               |         |   |                  |   |         |  



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



Total borrowings as disclosed in the financial statements are:



|                                                                   |  |               |         |                  |   |        
|------------------------------------------------------------------ |  | ------------- | ------- | ---------------- | - | -------
|                                                                   |  | March 31,2007 |         | December 31,2006
|Short term bank loans and overdraft facilities for working capital |  | $             | 113,230 |                  | $ | 24,656 
|                                                                   |  |              
|Total short term bank loans and overdraft facilities               |  |               | 113,230 |                  |   | 24,656 
|                                                                   |  |              
|Current portion of long term debt                                  |  |               |        |                  |   |       
|Long term obligations under Senior Secured Notes                   |  |               | 314,955 |                  |   | 393,434
|Other total long term debt, less current maturities                |  |               | 4       |                  |   | 8      
|                                                                   |  |               |         |                  |   |        
|Total debt                                                         |  | $             | 428,189 |                  | $ | 418,098
|                                                                   |  |               |         |                  |   |        

The increase in short term bank loans was due to the draw down of approximately $69.0 million under
a new credit line as described above, and $20.0 million from existing working capital facilities in connection with the purchase of 2,536,669 shares of Polmos Bialystok S.A through the tender offer completed in February 2007.



|                                             |  |               |        
|-------------------------------------------- |  | ------------- | -------
|                                             |  | March 31,2007
|Principal repayments for the following years |  |               |        
|2007                                         |  | $             | 113,230
|2008                                         |  |               | 4      
|2009                                         |  |               |       
|2010                                         |  |               |       
|2011 and beyond                              |  |               | 314,955
|                                             |  |               |        
|Total                                        |  | $             | 428,189
|                                             |  |               |        



|8. | INVENTORIES
|-- | -----------

Inventories are stated at the lower of
cost (first-in, first-out method) or market value. Elements of cost include materials, labor and overhead and are classified as follows:



|                                    |  |               |        |                  |   |       
|----------------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                                    |  | March 31,2007 |        | December 31,2006
|Raw materials and supplies          |  | $             | 15,389 |                  | $ | 13,084
|In-process inventories              |  |               | 273    |                  |   | 298   
|Finished goods and goods for resale |  |               | 62,414 |                  |   | 76,140
|                                    |  |               |        |                  |   |       
|Total                               |  | $             | 78,076 |                  | $ | 89,522
|                                    |  |               |        |                  |   |       

Because of the nature of the products supplied by the Company, great attention is paid to inventory
rotation. Where goods are estimated to be obsolete or unmarketable they are written down to a value reflecting the net realizable value in their relevant condition.

Cost includes customs duty (where applicable), and all costs associated with bringing the inventory to a condition for sale. These costs include importation, handling, storage and transportation costs, and exclude
rebates received from suppliers, which are reflected as reductions to closing inventory. Inventories are comprised primarily of beer, wine, spirits, packaging materials and non-alcoholic beverages.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



|9. | LEASE OBLIGATIONS
|-- | -----------------

Operating Leases and Rent
Commitments

In February 2004, the Company entered into a non cancelable operating lease agreement commencing May 1, 2004 for its
main warehouse and office in Warsaw, which stipulated monthly payments of $122,700. This agreement was signed for a seven-year period.

In
September 2006, the Company entered into a non cancelable operating lease agreement commencing October 1, 2006 for its headquarters in Warsaw, which stipulated monthly payments of $40,700. This agreement was signed for a four-year period.

The Company also has rental agreements for all of the regional offices and warehouse space. Monthly rentals range from approximately $2,000
to $11,670. All of the regional office and warehouse leases can be terminated by either party within two or three months prior notice.

The following is a schedule by years of the future rental payments under the non-cancelable operating lease as of March 31, 2007:



|           |  |   |       
|---------- |  | - | ------
|2007       |  | $ | 2,496 
|2008       |  |   | 2,868 
|2009       |  |   | 2,819 
|2010       |  |   | 1,458 
|Thereafter |  |   | 820   
|           |  |   |       
|Total      |  | $ | 10,461
|           |  |   |       

During the first quarter of 2007, the Company continued its policy of renewing its transportation
fleet by way of capital leases. The future minimum lease payments for the assets under capital lease as of March 31, 2007 are as follows:



|                   |  |   |       |  
|------------------ |  | - | ----- | -
|2007               |  | $ | 1,407 |  
|2008               |  |   | 1,560 |  
|2009               |  |   |      |  
|                   |  |   |       |  
|Gross payments due |  | $ | 2,967 |  
|Less interest      |  |   | (237  | )
|                   |  |   |       |  
|Net payments due   |  | $ | 2,730 |  
|                   |  |   |       |  



|10. | INCOME TAXES
|--- | ------------

The Company operates in four tax
jurisdictions, the United States of America, Poland, The Netherlands and Hungary. All Polish subsidiaries file their own corporate tax returns as well as account for their own deferred tax assets and liabilities. The Company does not file a tax
return in Delaware based upon its consolidated income, but does file a return in Delaware based on the income statement for transactions occurring in the United States of America.

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate in each of our tax jurisdictions. The company is
currently generating tax loss carry forwards in the United States at a 35% tax rate, which has the effect of reducing the overall effective tax rate below the 19% Polish statutory rate

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement 109, effective January 1, 2007. Interpretation 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a
tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge
of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions
that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the
more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Interpretation 48 also provides guidance on the accounting for and disclosure of
unrecognized tax benefits, interest and penalties. Adoption of Interpretation 48 did not have a significant impact on the Corporations financial statements.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



The Company has recorded a provision for the penalty and interests on penalty for a Polish subsidiary
in the amount of approximately $0.2 million. This provision was recognized during 2006 and was not related to the implementation of FASB Interpretation No. 48.

The Company files income tax returns in the U.S., Poland, Hungary and the Netherlands. Tax liabilities (including corporate income tax, Value Added Tax (VAT), social security and other taxes) of the Companys
subsidiaries may be subject to examinations by the tax authorities back up to the year as indicated in the table below:



|                 |  |     
|---------------- |  | ----
|Tax jurisdiction |  |     
|U.S.             |  | 2003
|                 | 
|Poland           |  | 2001
|                 | 
|Hungary          |  | 2001
|                 | 
|The Netherlands  |  | 2001

Currently there is no examination of the Corporations income tax returns for prior years in
any of its tax jurisdictions. As the application of tax laws and regulations and transactions are susceptible to varying interpretations, amounts reported in the consolidated financial statements could be changed at a later date upon final
determination by the tax authorities.



|11. | INTEREST INCOME / (EXPENSE)
|--- | ---------------------------

For the three months
ended March 31, 2007 and 2006, the following items are included in Interest Income / (expense):



|                                       |  |                              |        |   |      |    |        |  
|-------------------------------------- |  | ---------------------------- | ------ | - | ---- | -- | ------ | -
|                                       |  | Three months ended March 31, |       
|                                       |  | 2007                         |        |   | 2006 |   
|Interest income                        |  | $                            | 1,316  |   |      | $  | 868    |  
|Interest expense                       |  |                              | (9,965 | ) |      |    | (8,927 | )
|                                       |  |                              |        |   |      |    |        |  
|Total interest income / (expense), net |  | ($                           | 8,649  | ) |      | ($ | 8,059  | )



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



|12. | OTHER FINANCIAL INCOME
|--- | ----------------------

For the three months ended
March 31, 2007, the following items are included in Other Financial Income:



|                                                                                     |  |                              |        |   |      |    |        |  
|------------------------------------------------------------------------------------ |  | ---------------------------- | ------ | - | ---- | -- | ------ | -
|                                                                                     |  | Three months ended March 31, |       
|                                                                                     |  | 2007                         |        |   | 2006 |   
|Foreign exchange impact related to Senior Secured Notes financing                    |  | ($                           | 3,364  | ) |      | ($ | 7,753  | )
|Net mark to market valuation adjustment on fair value hedge and Senior Secured Notes |  |                              | 95     |   |      |    |       |  
|Cost of bank guarantee for tender                                                    |  |                              | (349   | ) |      |    |       |  
|Premium for early debt retirement                                                    |  |                              | (6,940 | ) |      |    |       |  
|Gain on closed CIRS contracts (described in Note 13, below)                          |  |                              |       |   |      |    | 11,772 |  
|Write-off of hedge associated with retired debt                                      |  |                              | (2,757 | ) |      |    |       |  
|                                                                                     |  |                             
|Write-off of financing costs associated with retired debt                            |  |                              | (2,167 | ) |      |    |       |  
|Other foreign exchange gains (losses)                                                |  |                              | 82     |   |      |    | (196   | )
|                                                                                     |  |                              |        |   |      |    |        |  
|Total other financial income / (expense), net                                        |  | ($                           | 15,400 | ) |      | $  | 3,823  |  



|13. | FINANCIAL INSTRUMENTS
|--- | ---------------------

Financial Instruments and
Their Fair Values

Financial instruments consist mainly of cash and cash equivalents, accounts receivable, accounts payable, bank loans,
overdraft facilities and long-term debt. All of the monetary assets represented by these financial instruments are located in Poland. Consequently, they are subject to currency translation risk when reporting in U.S. Dollars.

Derivative financial instruments

The
Company is exposed to market movements in foreign currency exchange rates that could affect the Companys results of operations and financial condition. In accordance with SFAS 133, Accounting for Derivative Instruments and Hedging
Activities, the Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value.

The fair values of the Companys derivative instruments can change with fluctuations in interest rates and/or currency rates and are expected to offset changes in the values of the underlying exposures. The
Companys derivative instruments are held to hedge economic exposures. The Company follows internal policies to manage interest rate and foreign currency risks, including limitations on derivative market-making or other speculative activities.

To qualify for hedge accounting under SFAS No. 133, the details of the hedging relationship must be formally documented at the
inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risk that is being hedged, the derivative instrument, how effectiveness is being assessed and how ineffectiveness will be measured. The
derivative must be highly effective in offsetting either changes in the fair value or cash flows, as appropriate, of the risk being hedged.

Effectiveness is evaluated on a retrospective and prospective basis based on quantitative measures. When it is determined that a derivative is not, or has ceased to be, highly effective as a hedge, the Company discontinues hedge accounting
prospectively. The Company discontinues hedge accounting prospectively when (1) the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item; (2) the derivative expires or is sold, terminated, or
exercised; (3) it is no longer probable that the forecasted transaction will occur; or (4) management determines that designating the derivative as a hedging instrument is no longer appropriate.

Fair value hedges are hedges that offset the risk of changes in the fair values of recorded assets, liabilities and firm commitments. The Company records
changes in fair value of derivative instruments which are designated and deemed effective as fair value hedges, in earnings offset by the corresponding changes in the fair value of the hedged items.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



In September 2005, the Company entered into a coupon swap arrangement which exchanges a fixed Euro
based coupon of 8%, with a variable Euro based coupon (IRS) based upon the 6 month Euribor rate plus a margin. The hedge is accounted for as a fair value hedge according to SFAS 133 and is tested for effectiveness on a quarterly basis using the long
haul method. Under this method, as long as the hedge is deemed highly effective both the fair value of the hedge and the hedge item are marked to market with the net impact recorded as gain or loss in other financial income. For the three months
ending March 31, 2007, the company recorded a net gain of $95,000. In September 2005, the Company entered into a second hedge that exchanged the variable Euro coupon with a variable Polish Zloty coupon (CIRS). However, due to the continued
strength of the Polish economy and currency the Company closed this swap contract. The hedge did not qualify for hedge accounting and therefore the changes in fair value were reflected in the results of operations.

In February 2006 and December 2006, a portion of the IRS hedge was closed and a new hedging relationship was created. The mark to market valuation of the
closed hedges at the time was frozen and is being amortized over the remaining useful life of the hedged item. The hedge closure in December 2006 was related to the part of the Senior Secured Notes repurchased in January 2007. Consequently, the
amount was written off in January 2007 following the repurchase. As of March 31, 2007, there is an unamortized asset of $1.0 million recorded as an adjustment to the valuation of the Senior Secured Notes.



|14. | STOCK OPTION PLANS AND WARRANTS
|--- | -------------------------------

As of
January 1, 2006, the Company adopted SFAS No. 123(R) Share-Based Payment requiring the recognition of compensation expense in the Condensed Consolidated Statements of Income related to the fair value of its employee share-based
options. SFAS No. 123(R) revises SFAS No. 123 Accounting for Stock-Based Compensation and supersedes APB Opinion No. 25 Accounting for Stock Issued to Employees. SFAS No. 123(R) is supplemented by SEC
Staff Accounting Bulletin (SAB) No. 107 Share-Based Payment. SAB No. 107 expresses the SEC staffs views regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations including
the valuation of share-based payments arrangements.

The Company recognizes the cost of all employee stock options on a straight-line
attribution basis over their respective vesting periods, net of estimated forfeitures. The Company has selected the modified prospective method of transition; accordingly, prior periods have not been restated.

SFAS No. 123(R) Share-Based Payment requires the recognition of compensation expense in the Consolidated Statements of Income related to
the fair value of employee share-based options. Determining the fair value of share-based awards at the grant date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, the associated
volatility and the expected dividends. Judgment is also required in estimating the amount of share-based awards expected to be forfeited prior to vesting. If actual forfeitures differ significantly from these estimates, share-based compensation
expense could be materially impacted. Prior to adopting SFAS No. 123(R), the Company applied Accounting Principles Board (APB) Opinion No. 25, and related Interpretations, in accounting for its stock-based compensation plans.
All employee stock options were granted at or above the grant date market price. Accordingly, no compensation cost was recognized for fixed stock option grants in prior periods.

The Companys 1997 Stock Incentive Plan (Incentive Plan) provides for the grant of stock options, stock appreciation rights, restricted
stock and restricted stock units to directors, executives, and other employees (employees) of the Company and to non-employee service providers of the Company. Following a shareholder resolution in April 2003 and the stock splits of May
2003, May 2004 and June 2006, the Incentive Plan authorizes, and the Company has reserved for future issuance, up to 5,906,250 shares of Common Stock (subject to an anti-dilution adjustment in the event of a stock split, re-capitalization, or
similar transaction). The Compensation Committee of the Board of Directors of the Company administers the Incentive Plan.

The option
exercise price for stock options granted under the Incentive Plan may not be less than fair market value but in some cases may be in excess of the closing price of the Common Stock on the date of grant. The Company uses the stock option price based
on the closing price of the Common Stock on the day before the date of grant if such price is not materially different than the opening price of the Common Stock on the day of the grant. Stock options may be exercised up to 10 years after the date
of grant except as otherwise provided in the particular stock option agreement. Payment for the shares must be in cash, which must be received by the Company prior to any shares being issued. Stock options granted as part of an employee employment
contract vest within 1-2 years. Stock options granted as part of a loyalty program vest after three years. The Incentive Plan will expire in November 2007; however, a new stock incentive plan was approved by CEDC shareholders during the annual
shareholders meeting on April 30, 2007. This new plan will expire in November 2017. The terms and conditions of the new stock incentive plan are substantially similar to those of the old stock incentive plan.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



Before January 1, 2006 CEDC, the holding company, realized net operating losses and therefore an
excess tax benefit (windfall) resulting from the exercise of the awards and a related credit to Additional Paid-in Capital (APIC) of $2.1 million was not recorded in the Companys books. Footnote 82 of SFAS 123(R) states that the excess tax
benefits and the credit to APIC for the windfall should not be recorded until the deduction reduces income taxes payable on the basis that cash tax savings have not occurred. The Company will recognize the windfall upon realization.

A summary of the Companys stock option activity, and related information for the period ended March 31, 2007 is as follows:



|                               |  |                  |   |  |                                |      
|------------------------------ |  | ---------------- | - |  | ------------------------------ | -----
|Total Options                  |  | Number ofOptions |   |  | Weighted-AverageExercise Price
|Outstanding at January 1, 2007 |  | 1,319,900        |   |  | $                              | 19.31
|Granted                        |  | 191,000          |   |  | $                              | 29.57
|Exercised                      |  | (64,275          | ) |  | $                              | 15.59
|Forfeited                      |  | (37,762          | ) |  | $                              | 23.23
|                               |  |                  |   |  |                                |      
|Outstanding at March 31, 2007  |  | 1,408,863        |   |  | $                              | 20.76
|Exercisable at March 31, 2007  |  | 925,175          |   |  | $                              | 18.85

During 2007, the range of exercise prices for outstanding options was $7.85 to $27.70. During 2007,
the weighted average remaining contractual life of options outstanding was 5.6 years. Exercise prices for options outstanding as of March 31, 2007 ranged from $1.13 to $29.70.

The Company has issued stock options to employees under share-based compensation plans. Stock options are issued at the current market price, subject to a
vesting period with the vesting periods ranging from 1 to 3 years. As of March 31, 2007, the Company has not changed the terms of any outstanding awards.

During the three months ended March 31, 2007, the Company recognized compensation cost of $0.46 million and a related deferred tax asset of $0.10 million.

As of March 31, 2007, there was $2.4 million of total unrecognized compensation cost related to non-vested stock options granted under the Plan. The
costs are expected to be recognized over a weighted average period of 7.2 months through 2007.

Total cash received from exercise of options
during the three months ended March 31, 2007 amounted to $0.31 million.

The compensation expense related to all options was calculated
based on the fair value of each option grant using the binomial distribution model. The Company has never paid cash dividends and does not currently have plans to pay cash dividends, and thus has assumed a 0% dividend yield. Expected volatilities
are based on average of implied and historical volatility projected over the remaining term of the options. The expected life of stock options is estimated based on historical data on exercise of stock options, post-vesting forfeitures and other
factors to estimate the expected term of the stock options granted. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected life of the
options. In addition, the Company applies an expected forfeiture rate when amortizing stock-based compensation expenses. The estimate of the forfeiture rates is based primarily upon historical experience of employee turnover. As individual grant
awards become fully vested, stock-based compensation expense is adjusted to recognize actual forfeitures. The following weighted-average assumptions were used in the calculation of fair value:



|                                    |  |              |  |            
|----------------------------------- |  | ------------ |  | -----------
|                                    |  | 2007         |  | 2006       
|Fair Value                          |  | $10.01       |  | $7.33      
|Dividend Yield                      |  | 0%           |  | 0%         
|Expected Volatility                 |  | 35.1% -38.4% |  | 31.9 50.7%
|Weighted Average Volatility         |  | 38.2%        |  | 33.9%      
|Risk Free Interest Rate             |  | 5.0% -5.1%   |  | 4.3  5.1% 
|Expected Life of Options from Grant |  | 3.2          |  | 3.2        



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables
expressed in thousands, except per share information



The effect of the change in estimate related to the use of the binomial distribution model has been
accounted for on a prospective basis. The Company will value all future stock option grants using the binomial distribution model. Management believes that the binomial distribution model is better than the Black-Scholes model because the binomial
distribution model is a more flexible model that considers the impact of non-transferability, vesting and forfeiture provisions in the valuation of employee stock options.



|15. | STOCKHOLDERS EQUITY
|--- | --------------------

In February 2007, the
Company completed a public offering of 1,553,571 shares of common stock at an offering price of $28 per share. The offering raised $42.3 million net of expenses, which was used to repurchase an additional portion of the Senior Secured Notes on
March 30, 2007.

According to the share sale agreement with Takirra Investment Corporation, Rémy Cointreau S.A., and Botapol
Management B.V. (an indirect subsidiary of Rémy) to acquire 100% of the outstanding capital stock of Botapol Holding B.V., we were entitled to the potential reimbursement of $5.0 million to be paid in cash if the weighted average of the
closing price of the Companys common stock exceeded $27.1 per share at any time during the period from twelve to eighteen months after the closing of the Bols Acquisition. We have met that condition and were reimbursed with $5.0 million
recorded in additional paid in capital.



|16. | COMMITMENTS AND CONTINGENT LIABILITIES
|--- | --------------------------------------

The Company
is involved in litigation from time to time and has claims against it in connection with matters arising in the ordinary course of business. In the opinion of management, the outcome of these proceedings will not have a material adverse effect on
the Companys operations.

As part of the Share Purchase Agreement related to the Polmos Bialystok Acquisition, the Company is required
to ensure that Polmos Bialystok will make investments of at least 77.5 million Polish Zloty (approximately $23 million based on the then-current exchange rate) during the five years after the acquisition was consummated. As of March 31,
2007, the Company has invested 21.4 million Polish Zloty (approximately $7.3 million) in Polmos Bialystok.



|17. | RELATED PARTY TRANSACTION
|--- | -------------------------

In January of 2005, the
Company entered into a rental agreement for a facility located in northern Poland, which is 33% owned by the Companys Chief Operating Officer. The monthly rent to be paid by the Company for this location is approximately $15,000 per month and
relates to facilities to be shared by two subsidiaries of the Company.

During the twelve months of 2006, the Company made sales to a
restaurant which is partially owned by the Chief Executive Officer of the Company. All sales were made on normal commercial terms, and total sales for the three months ended March 31, 2006 and 2007 were approximately $18,000 and $26,000.



|18. | SUBSEQUENT EVENTS
|--- | -----------------

On April 17, 2007, the
Company signed a binding preliminary share purchase agreement to acquire 100% of the outstanding shares of a leading Polish distributor of alcoholic beverages in exchange for $8 million, with 20% to be paid in shares of the Companys common
stock and 80% to be paid in cash. The transaction is subject to Polish Anti-Monopoly Office approval, and other closing conditions.



|19. | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|--- | -----------------------------------------

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.157, Fair Value Measurements (SFAS 157). SFAS 157 clarifies the principle that fair value should be based on the assumptions market participants would use
when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value
hierarchy. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years, with early adoption permitted. The Company is currently estimating the impact
that the implementation of SFAS 157 would have on the consolidated financial statements when adopted, however no material impact is expected.



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##### Table of Contents

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial LiabilitiesIncluding an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items
for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for our Company January 1, 2008. The Company is evaluating the impact that the adoption of SFAS
No. 159 will have on our consolidated financial statements when adopted, however no material impact is expected.



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##### Table of Contents

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following analysis should be read in conjunction with the Consolidated Financial Statements and the notes thereto appearing elsewhere in this report.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information.

This report contains forward-looking statements, which provide our current expectations or forecasts of future events. These forward-looking statements
may be identified by the use of forward-looking terminology, including the terms believes, estimates, anticipates, expects, intends, may, will or should
or, in each case, their negative, or other variations or comparable terminology, but the absence of these words does not necessarily mean that a statement is not forward-looking. They appear in a number of places throughout this report and include,
without limitation:



| |  |  | information concerning possible or assumed future results of operations, trends in financial results and business plans, including those relating to earnings growth
and revenue growth, liquidity, prospects, strategies and the industry in which the Company and its subsidiaries, including Bols, and Polmos Bialystok operate, as well as the integration of Polmos Bialystok and the effect of such acquisitions on the
Company;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | statements about the level of our costs and operating expenses relative to the Company revenues, and about the expected composition of the Companys revenues;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | statements about integration of the Companys acquisitions, including future acquisitions the Company may make;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | information about the impact of Polish regulations on the Company business;
| | - |  | ---------------------------------------------------------------------------



| |  |  | other statements about the Companys plans, objectives, expectations and intentions; and
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | other statements that are not historical facts.
| | - |  | -----------------------------------------------

By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that
forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, the development of the industry in which we operate, and the effects of acquisitions, such as Bols and
Bialystok, on us may differ materially from those anticipated in or suggested by the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and liquidity, and the development of the
industry in which we operate, are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.

We urge you to read and carefully consider the items of the other reports that we have filed with or furnished to the SEC for a more complete discussion
of the factors and risks that could affect us and our future, including the risk factors described in the Companys Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC on March 15, 2007. In light of
these risks, uncertainties and assumptions, the forward-looking events described in this report may not occur as described, or at all.

You
should not unduly rely on these forward-looking statements, because they reflect our judgment only as of the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement to reflect
circumstances or events after the date of this report, or to reflect on the occurrence of unanticipated events. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified
in their entirety by the cautionary statements referred to above and contained elsewhere in this report.

The following discussion and
analysis provides information which management believes is relevant to the readers assessment and understanding of the Companys results of operations and financial condition and should be read in conjunction with the Consolidated
Financial Statements and the notes thereto found elsewhere in this report.

Overview

We are the largest vodka producer by value and volume in Poland and a leading distributor and importer of alcoholic beverages in Poland and in Hungary.
Our business involves the distribution of products that we produce from our two distilleries, importation on an exclusive basis of many well known international beers, wines and spirits brands and wholesaling of a range of products from local and
international drinks companies, in Poland and Hungary.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



Results of Operations:

Three months ended March 31, 2007 compared to three months ended March 31, 2006

A summary of the Companys operating
performance (expressed in thousands except per share amounts) is presented below.



|                                              |  |                    |         |   |                |   |         |  
|--------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | -
|                                              |  | Three months ended |        
|                                              |  | March 31, 2007     |         |   | March 31, 2006 |  
|PROFIT AND LOSS                               |  |                    |         |   |                |   |         |  
|Sales                                         |  | $                  | 288,996 |   |                | $ | 239,477 |  
|Excise taxes                                  |  |                    | (60,782 | ) |                |   | (49,360 | )
|Net Sales                                     |  |                    | 228,214 |   |                |   | 190,117 |  
|Cost of goods sold                            |  |                    | 181,897 |   |                |   | 152,656 |  
|                                              |  |                    |         |   |                |   |         |  
|Gross Profit                                  |  | $                  | 46,317  |   |                | $ | 37,461  |  
|                                              |  |                    |         |   |                |   |         |  
|Operating expenses                            |  |                    | 27,402  |   |                |   | 22,889  |  
|                                              |  |                    |         |   |                |   |         |  
|Operating Income                              |  | $                  | 18,915  |   |                | $ | 14,572  |  
|                                              |  |                    |         |   |                |   |         |  
|Non operating income / (expense), net         |  |                    |         |   |                |   |         |  
|Interest / (expense), net                     |  |                    | (8,649  | ) |                |   | (8,059  | )
|Other financial income / (expense), net       |  |                    | (15,400 | ) |                |   | 3,823   |  
|Other non operating income / (expense), net   |  |                    | (343    | ) |                |   | 1,311   |  
|                                              |  |                    |         |   |                |   |         |  
|Income before taxes                           |  | $                  | (5,477  | ) |                |   | 11,647  |  
|                                              |  |                    |         |   |                |   |         |  
|Income tax (benefit) / expense                |  |                    | (1,030  | ) |                |   | 1,864   |  
|                                              |  |                   
|Minority interests                            |  |                    | 729     |   |                |   | 1,968   |  
|                                              |  |                    |         |   |                |   |         |  
|Net income                                    |  | $                  | (5,176  | ) |                | $ | 7,815   |  
|                                              |  |                    |         |   |                |   |         |  
|Net income per share of common stock, basic   |  | $                  | (0.13   | ) |                | $ | 0.22    |  
|                                              |  |                    |         |   |                |   |         |  
|Net income per share of common stock, diluted |  | $                  | (0.13   | ) |                | $ | 0.22    |  
|                                              |  |                    |         |   |                |   |         |  

Net Sales

Net
sales represent total sales net of all customer rebates, excise tax on production and value added tax. Total net sales increased by approximately 20.0%, or $38.1 million, from $190.1 million for the three months ended March 31, 2006 to $228.2
million for the three months ended March 31, 2007. This increase in sales is due to the following factors:



|                                                |  |   |        
|----------------------------------------------- |  | - | -------
|Net Sales for three months ended March 31, 2006 |  | $ | 190,117
|Increase from acquisitions                      |  |   | 9,878  
|Existing business sales growth                  |  |   | 13,517 
|Impact of foreign exchange rates                |  |   | 14,702 
|                                                |  |   |        
|Net sales for three months ended March 31, 2007 |  | $ | 228,214



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



Factors impacting our sales in the first quarter of 2007 include:



| |  |  | Acquisitions provided an additional $9.9 million of sales for the twelve months ended March 31, 2007.
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | Liter sales of the key vodka brands we produce (Absolwent, Bols, Soplica and Zubrówka) grew by 15% in the first quarter 2007 as compared to the first quarter
2006.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sales of imported products increased by approximately 73.8% in value terms, or $9.0 million, from $12.2 million for the three months ended March 31, 2006 to
$21.2 million for the three months ended March 31, 2007.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Polish Zloty versus the U.S. Dollar for the three months ended March 31, 2007 strengthened as compared to the strength of the Polish Zloty versus the
U.S. Dollar for the three months ended March 31, 2006. Based upon average exchange rates for the three months ended March 31, 2007 and 2006, the Polish Zloty appreciated by approximately 7%. This resulted in an increase of $14.7
million of sales in U.S. Dollar terms.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Easter, a peak sales period for wines and spirits, fell one week earlier in April 2007 as compared to April 2006. This provided a benefit at the end of March 2007
instead of early April as in the prior year.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit

Total gross profit increased by approximately 23.5%, or $8.8 million, to $46.3 million for the three months ended March 31, 2007, from $37.5 million
for the three months ended March 31, 2006, reflecting sales growth due to the factors noted above in the three months ended March 31, 2007. Gross margin increased from 19.7% of net sales for the three months ended March 31, 2006 to
20.3% of net sales for the three months ended March 31, 2007. This increase in gross margin resulted primarily from changes in sales mix, including growth in the sales of products we produce and growth of sales of products we import on an
exclusive basis.

As part of our continued strategy to drive sales of our own brands, we have reduced our portfolio of lower margin
SKUs which effected a reduction in our sales by approximately $15 million for the three months ended March 31, 2007 as compared to the three months ended March 31, 2006, and replaced a significant portion of these sales with higher
margin SKUs of products which we produce and import. This has contributed to a margin improvement for the three months ended March 31, 2007 as compared to the three months ended March 31, 2006. Our gross margins were also enhanced by
our new, more favorable trade terms from our new export contracts which took effect in the third quarter of 2006.

Operating Expenses

Operating expenses consist of selling, general and administrative, or S,G&A expenses, advertising expenses, non-production depreciation
and amortization, and provision for bad debt. Total operating expenses increased by approximately 19.7%, or $4.5 million, from $22.9 million for the three months ended March 31, 2006 to $27.4 million for the three months ended March 31,
2007. Approximately $1.9 million of this increase resulted primarily from the effects of the acquisition of Bols Hungary in August 2006 and the remainder of the increase resulted primarily from the growth of the business and the impact of foreign
exchange expenses.



|                                                         |  |   |       
|-------------------------------------------------------- |  | - | ------
|Operating expenses for three months ended March 31, 2006 |  | $ | 22,889
|Increase from acquisitions                               |  |   | 1,876 
|Existing business growth                                 |  |   | 867   
|Impact of foreign exchange rates                         |  |   | 1,770 
|                                                         |  |   |       
|Operating expenses for three months ended March 31, 2007 |  | $ | 27,402



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



The table below sets forth the items of operating expenses.



|                              |  |                             |        |      |   |       
|----------------------------- |  | --------------------------- | ------ | ---- | - | ------
|                              |  | Three Months EndedMarch 31,
|                              |  | 2007                        |        | 2006
|                              |  | ($ in thousands)           
|S,G&A                         |  | $                           | 22,800 |      | $ | 18,549
|Marketing.                    |  |                             | 2,547  |      |   | 2,466 
|Depreciation and amortization |  |                             | 1,830  |      |   | 1,497 
|Bad debt provision            |  |                             | 225    |      |   | 377   
|                              |  |                             |        |      |   |       
|Total operating expense       |  | $                           | 27,402 |      | $ | 22,889

S,G&A consists of salaries, warehousing and transportation costs and administrative expenses.
S,G&A increased by approximately 23.2%, or $4.3 million, from $18.5 million for the three months ended March 31, 2006 to $22.8 million for the three months ended March 31, 2007. Approximately $1.5 million of this increase resulted
primarily from the effects of the Bols Hungary acquisition in August 2006 and the remainder of the increase resulted primarily from the growth of the business and the 7% appreciation of the Polish Zloty against the U.S. Dollar described above.
As a percent of sales, S,G&A has increased from 9.8% of net sales for the three months ended March 31, 2006 to 10.0% of net sales for the three months ended March 31, 2007.

Depreciation and amortization increased by approximately 20.0%, or $ 0.3 million, from $1.5 million for the three months ended March 31, 2006
to $1.8 million for the three months ended March 31, 2007. This increase resulted primarily from the effect of business acquisitions.

Bad debt expense remained stable at approximately 0.1% of net sales.

Operating Income

Total operating income increased by approximately 29.5%, or $4.3 million, from $14.6 million for the three months ended March 31, 2006 to $18.9
million for the three months ended March 31, 2007. This increase resulted primarily from our existing business growth. Operating margin increased from 7.7% of net sales for the three months ended March 31, 2006 to 8.3% of net sales for the
three months ended March 31, 2007. The increase in operating margin is due primarily to the higher gross profit margin as described above.

Non
Operating Income and Expenses

Total interest expense increased by approximately 6.2%, or $0.5 million, from $8.1 million for the three
months ended March 31, 2006 to $8.6 million for the three months ended March 31, 2007. This increase resulted primarily from higher interest rates in 2007 as compared to 2006.

In order to reduce the Companys overall cost of borrowings, the Company completed a redemption of a portion of its Senior Secured Notes. In
connection with this redemption, the Company incurred one-off early debt retirement costs of approximately $6.9 million relating to the 8% premium for early debt redemption and $5.0 million of written off financing costs and hedges associated with
the retired debt. For detailed information regarding these costs please refer to Note 12 to our consolidated financial statements. In addition the Company recognized $3.4 million in foreign exchange rate losses on our Senior Secured Notes related to
the impact of movements in exchange rates.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



Other non-operating income decreased by approximately $1.7 million for the three months ended
March 31, 2007. This decrease resulted primarily from a gain in sales of assets recorded in 2006, including a gain on sales of accounts receivable which were fully provided for.

Income Tax

Our effective tax rate for the three months ending March 31, 2007 was 18.8%, which
was driven primarily by the tax rate in Poland of 19%, where most of our income is generated and the tax loss carry forward generated in the U.S.

The
Companys Future Liquidity and Capital Resources

The Companys primary uses of cash in the future will be to fund its working
capital requirements, service indebtedness, finance capital expenditures and fund acquisitions. The Company expects to fund these requirements in the future with cash flows from its operating activities, cash on hand, and the financing arrangements
described below.

Financing Arrangements

Existing Credit Facilities

As of March 31, 2007, the Company had total debt outstanding under existing credit
facilities in the Polish Zloty equivalent of approximately $113.2 million. In order to fund working capital and other liquidity requirements, the Company also has available non-committed credit lines with various banks and credit institutions. As of
March 31, 2007, the amount of available, unutilized and uncommitted credit facilities was the Polish Zloty equivalent of approximately $38.6 million. These existing credit facilities are subject to renewal on an annual basis.

Financing for Polmos Bialystok Tender

On
October 12, 2006, Carey Agri entered into a multipurpose credit line agreement and a bank guarantee with Fortis Bank SA/NV, Austrian Branch, in connection with a tender offer in Poland by Carey Agri to purchase up to 4,048,334 shares of Polmos
Bialystok S.A.

The credit line agreement provides for a credit limit of up to 350 million Polish Zloty (approximately $120 million)
which may be disbursed (i) as a non-revolving loan to be used to finance the tender offer or (ii) to pay amounts due under the bank guarantee. Carey Agris obligations under the credit line agreement are guaranteed through promissory
notes by certain subsidiaries of the Company. The indebtedness under the credit line agreement bears interest at a rate equal to the one month Warsaw Interbank Rate plus a margin of 1.00% and matures on June 15, 2007.

The bank guarantee was issued to secure Carey Agris obligations arising from the tender offer. The bank guarantee was valid from October 16,
2006 (the date the tender offer was announced) through July 15, 2007. The commission for the bank guarantee was 0.1% of the guarantee amount per month. Following the Companys February 2007 tender for the outstanding common stock of Polmos
Bialystok, the bank guarantee was cancelled.

In February 2007, the Company drew down approximately $69.2 million under the credit line
agreement following the closing of the tender offer for the outstanding common stock of Polmos Bialystok. The Company anticipates refinancing this credit line agreement prior to its termination in June 2007 with a longer term credit facility that
has already been committed.

Senior Secured Notes

On July 25, 2005 the Company completed the issuance of 325 million 8% Senior Secured Notes due 2012. The Indenture governing the Senior Secured Notes contains certain restrictive covenants, including
covenants limiting the Companys ability to: make certain payments, including dividends or other distributions, with respect to the share capital of the parent or its subsidiaries; incur or guarantee additional indebtedness or issue preferred
stock; make certain investments; prepay or redeem subordinated debt or equity; create certain liens or enter into sale and leaseback transactions; engage in certain transactions with affiliates; sell assets or consolidate or merge with or into other
companies; issue or sell share capital of certain subsidiaries; and enter into other lines of business.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



On January 19, 2007 the Company completed a redemption of the Senior Secured Notes equal to
32.5 million. In addition to the payment of principal and accrued interest, the Company paid an early redemption premium of 8%. The redemption was financed with the proceeds from the Companys equity offerings completed in December 2006.

On March 29, 2007 the Company completed a second redemption of the Senior Secured Notes equal to 32.5 million. In addition
to the payment of principal and accrued interest the Company paid an early redemption premium of 8%. The redemption was financed with the proceeds from the Companys equity offerings completed in February 2007.

In line with these redemptions of the Senior Secured Notes, the Company recognized a loss of $2.8 million related to the portion of the Interest Rate
Swap of $32.5 million closed in connection with the January redemption and prepaid financing costs associated with retired debt for $2.2 million relating to both redemptions.

Equity Offering

In February 2007, the Company closed a public offering of 1,553,571 shares of common
stock at an offering price of $28 per share. The proceeds from this offering were used to repurchase an additional portion of our Senior Secured Notes as described above.

Statement of Liquidity and Capital Resources

During the periods under review, the Companys
primary sources of liquidity were cash flows generated from operations, credit facilities, the equity offerings and proceeds from options exercised. The Companys primary uses of cash were to fund its working capital requirements, service
indebtedness, finance capital expenditures and fund acquisitions. The following table sets forth selected information concerning the Companys consolidated cash flow during the periods indicated.



|                                    |  |                                  |  |                                  |        |  
|----------------------------------- |  | -------------------------------- |  | -------------------------------- | ------ | -
|                                    |  | Three monthsended March 31, 2007 |  | Three monthsended March 31, 2006 |       
|                                    |  | ($ in thousands)                 | 
|Cash flow from operating activities |  | $2,405                           |  | $                                | 9,676  |  
|Cash flow from investing activities |  | $(88,680)                        |  | $                                | (1,241 | )
|Cash flow from financing activities |  | $35,643                          |  | $                                | 407    |  

Net cash flow from operating activities

Net cash flow from operating activities represents net cash from operations, servicing of finance and taxation. Net cash provided by operating activities
for the three months ended March 31, 2007 was $2.4 million as compared to $9.7 million for the three months ended March 31, 2006. The primary driver for this decrease was a change in working capital. Working capital movements utilized $4.3
million of cash outflows for the three months ended March 31, 2007 as compared to $0.6 million of cash outflows for the three months ended March 31, 2006. The higher utilization of working capital in 2007 was driven primarily by the timing
of Easter. As Easter, a key selling period for the Company, was one week earlier in April 2007 as compared to 2006, the Company began pre-selling for the holiday in the last week of the quarter resulting in higher sales and accounts receivables. In
addition, the Company built up inventory levels at the end of March 2007, in order to be able to fulfill orders during the first week of April.

Net
cash flow used in investing activities

Net cash flows used in investing activities represents net cash used to acquire subsidiaries and
fixed assets as well as proceeds from sales of fixed assets. Net cash used in investing activities for the three months ended March 31, 2007 was $88.7 million as compared to $1.2 million for the three months ended March 31, 2006. The
primary cash outflows from investing activities for the three months ended March 31, 2007 were the acquisition of additional shares of common stock of Polmos Bialystok that took place in February 2007, which resulted in cash outflow of $90.9
million, as well as net cash outflows of $2.8 million for purchases of fixed assets.

In January of 2007, the Company received a payment of
$5 million related to the Botapol acquisition completed in August 2005. According to the acquisition agreement, up to $5.0 million of the cash consideration paid for Botapol was required to be reimbursed to the Company if the weighted average of the
closing price of the Companys common stock exceeded $27.1 per share at any time during the period from twelve to eighteen months after the closing of the Bols Acquisition. This condition was met and the Company has recorded the cash inflow.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



Net cash flow from financing activities

Net cash flow from financing activities represents cash used for servicing indebtedness, borrowings under credit facilities and cash inflows from private
placements and exercise of options. Net cash provided by financing activities was $35.6 million for the three months ended March 31, 2007 as compared to $0.4 million for the three months ended March 31, 2006. The cash flows from financing
activities during the three months ended March 31, 2007 include outflows of $95.4 million for the payments to redeem a portion of our Senior Secured Notes plus and inflows of $42.4 million from the public offering of our common stock issued in
connection with this redemption. The Company also drew down $94.3 million of short term facilities in order to finance the acquisition of additional shares of common stock of Polmos Bialystok as described above.

The Companys Future Liquidity and Capital Resources

The
Companys primary uses of cash in the future will be to fund its working capital requirements, service indebtedness, finance capital expenditures and fund acquisitions. The Company expects to fund these requirements in the future with cash
flows from its operating activities, cash on hand, and the financing arrangements described above.

Effects of Inflation and Foreign Currency
Movements

Inflation in Poland is projected at 2.3% to 2.6% for 2007, compared to actual inflation of 1.0% in 2006.

Substantially all of Companys operating cash flows and assets are denominated in Polish Zloty. This means that the Company is exposed to
translation movements both on its balance sheet and income statement. The impact on working capital items is demonstrated on the cash flow statement as the movement in exchange on cash and cash equivalents. The impact on the income statement is by
the movement of the average exchange rate used to restate the income statement from Polish Zloty and Hungarian Forint to U.S. Dollars. The amounts shown as exchange rate gains or losses on the face of the income statement relate only to realized
gains or losses on transactions that are not denominated in Polish Zloty or Hungarian Forint.

As a result of the remaining outstanding
260 million of Senior Secured Notes due 2012, we are exposed to foreign exchange movements. Movements in the EUR-Polish Zloty exchange rate will require us to revalue our liability on the Senior Secured Notes accordingly, the impact of
which will be reflected in the results of the Companys operations. In order to manage the cash flow impact of foreign exchange changes, the Company has entered into certain hedge agreements. As of March 31, 2007, the Company had
outstanding a hedge contract on a notional amount of 254.0 of the Senior Secured Notes for a seven year interest rate swap agreement. The swap agreement exchanges a fixed Euro based coupon of 8%, with a variable Euro based coupon (IRS) based
upon the 6 month Euribor rate plus a margin.

The average Polish Zloty/ U.S. Dollar exchange rate used to re-translate our income
statement depreciated by approximately 7% as compared to the same period in 2006. The actual period-end Polish Zloty/ U.S. Dollar exchange rate used to re-translate our balance sheet appreciated by less than 0.1% as compared to
December 31, 2006.

Contractual Obligations

As described in Note 7, the Company redeemed a portion of the outstanding Senior Secured Notes, thus reducing contractual obligations due in July 2012 by 65 million. In addition, the Company drew down $94.3
million of short term facilities primarily to finance the acquisition of additional shares of common stock of Polmos Bialystok.

Critical Accounting
Policies and Estimates

General

The
Companys discussion and analysis of its financial condition and results of operations are based upon the Companys consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in
the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of net sales, expenses, assets and liabilities. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



Goodwill and Intangibles

Following the introduction of SFAS 142, acquired goodwill is no longer amortized. Instead the Company assesses the recoverability of its goodwill at least once a year or whenever adverse events or changes in
circumstances or business climate indicate that expected future cash flows (undiscounted and without interest charges) for individual business units may not be sufficient to support the recorded goodwill. If undiscounted cash flows are not
sufficient to support the goodwill, an impairment charge would be recognized to reduce the carrying value of the goodwill based on the expected discounted cash flows of the business unit. No such charge has been considered necessary through the date
of the accompanying financial statements. Intangibles are amortized over their effective useful life. In estimating fair value, management must make assumptions and projections regarding such items as future cash flows, future revenues, future
earnings, and other factors. The assumptions used in the estimate of fair value are generally consistent with the past performance of each reporting unit and are also consistent with the projections and assumptions that are used in current operating
plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment loss for the assets.
The fair values calculated have been adjusted where applicable to reflect the tax impact upon disposal of the asset.

In connection with
the Bols and Bialystok acquisitions, the Company has acquired trademark rights to various brands, which were capitalized as part of the purchase price allocation process. As these brands are well established they have been assessed to have an
indefinite life. These trademarks rights will not be amortized; however, management assesses them at least once a year for impairment.

The
calculation of the impairment charge for goodwill and indefinite lived intangible assets, requires the use of estimates. The discount rate used for the calculation was 7.47%. Factoring in a deviation of 10% for the discount rate as compared to
managements estimate, there would still be no need for an impairment charge against goodwill.

Accounting for Business Combinations

The acquisition of businesses is an important element of the Companys strategy. We account for our acquisitions under the
purchase method of accounting in accordance with SFAS 141, Business Combinations, and allocate the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The determination of the values of the assets
acquired and liabilities assumed, as well as associated asset useful lives, requires management to make estimates. The Companys acquisitions typically result in goodwill and other intangible assets; the value and estimated life of those assets
may affect the amount of future period amortization expense for intangible assets with finite lives as well as possible impairment charges that may be incurred.

The calculation of purchase price allocation requires judgment on the part of management in determining the valuation of the assets acquired and liabilities assumed.

Derivative Instruments

The Company is exposed to
market movements from changes in foreign currency exchange rates that could affect the Companys results of operations and financial condition. In accordance with SFAS 133, Accounting for Derivative Instruments and Hedging Activities, the
Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value.

The
fair values of the Companys derivative instruments can change with fluctuations in interest rates and/or currency rates and are expected to offset changes in the values of the underlying exposures. The Companys derivative instruments are
held to hedge economic exposures. The Company follows internal policies to manage interest rate and foreign currency risks, including limitations on derivative market-making or other speculative activities.

At the inception of a transaction, the Company documents the relationship between the hedging instruments and hedged items, as well as its risk
management objective. This process includes linking all derivatives designated to specific firm commitments or forecasted transitions. The Company also documents its assessment, both at the hedge inception and on an ongoing basis, of whether the
derivative financial instruments that are used in hedging transactions are highly effective in offsetting changes in fair value or cash flows of hedged items.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Amounts in tables expressed in thousands, except per share information



Share Based Payments

As of January 1, 2006, the Company adopted SFAS No. 123(R) Share-Based Payment requiring the recognition of compensation expense in the Condensed Consolidated Statements of Income related to the
fair value of its employee share-based options. SFAS No. 123(R) revises SFAS No. 123 Accounting for Stock-Based Compensation and supersedes APB Opinion No. 25 Accounting for Stock Issued to Employees. SFAS
No. 123(R) is supplemented by SEC Staff Accounting Bulletin (SAB) No. 107 Share-Based Payment. SAB No. 107 expresses the SEC staffs views regarding the interaction between SFAS No. 123(R) and certain
SEC rules and regulations including the valuation of share-based payments arrangements.

Grant-date fair value of stock options is
estimated using a lattice-binomial option-pricing model. We recognize compensation cost for awards over the vesting period. The majority of our stock options have a vesting period between one to three years.

See Note 14 for more information regarding stock-based compensation.

Recently issued accounting pronouncements

In September 2006, the FASB issued Statement of Financial
Accounting Standards No. 157, Fair Value Measurements (SFAS 157). SFAS 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair
value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years, with early adoption permitted. The Company is currently estimating the impact that the implementation of SFAS 157 would have on the
consolidated financial statements when adopted.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilitiesincluding an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains
and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for our Company January 1, 2008. The Company is evaluating the impact that the
adoption of SFAS No. 159 will have on our consolidated financial statements.



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|ITEM 3: | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Our operations are conducted primarily in Poland and our functional currency is the Polish Zloty and the reporting currency is the U.S. Dollar. Our financial instruments consist mainly of cash and cash equivalents, accounts receivable,
accounts payable, bank loans, overdraft facilities and long-term debt. All of the monetary assets represented by these financial instruments are located in Poland. Consequently, they are subject to currency translation risk when reporting in U.S.
Dollars.

If the U.S. Dollar increases in value against the Polish Zloty, the value in U.S. Dollars of assets, liabilities, revenues
and expenses originally recorded in Polish Zloty will decrease. Conversely, if the U.S. Dollar decreases in value against the Polish Zloty, the value in U.S. Dollars of assets, liabilities, revenues and expenses originally recorded in Polish
Zloty will increase. Thus, increases and decreases in the value of the U.S. Dollar can have a material impact on the value in U.S. Dollars of our non-U.S. Dollar assets, liabilities, revenues and expenses, even if the value of these
items has not changed in their original currency.

Our commercial foreign exchange exposure mainly arises from the fact that substantially
all of our revenues are denominated in Polish Zloty, and our Senior Secured Notes are denominated in Euros. This Euro debt has been lent down to the operating subsidiary level in Poland, thus exposing the Company to movements in the Euro/Polish
Zloty exchange rate. Every 1% movement in this exchange rate would result in an approximately $2.6 million change in the valuation of the liability with the offsetting pre-tax gains or losses recorded in the profit and loss of the Company per annum
without considering any potential early repayments of the Senior Secured Notes.

Because all of our working capital financing is at
floating rates, changes in interest rates may impact our net interest expense, positively in the event of a reduction in base rates and adversely should base rates increase. A 1 basis point change in the change of our base rates for working capital
financing would result in an approximately $113,000 increase or decrease in our borrowing costs, based upon year end working capital facilities utilized.

As a result of the remaining outstanding 260 million of Senior Secured Notes due 2012, we are exposed to foreign exchange movements. Movements in the Euro/Polish Zloty exchange rate will require us to
revalue our liability on the Senior Secured Notes accordingly, the impact of which will be reflected in the results of the Companys operations. In order to manage the cash flow impact of foreign exchange changes, the Company has entered into
certain hedge agreements. As of March 31, 2007, the Company had outstanding a hedge contract for a seven year interest rate swap agreement hedging 254.0 million EUR of the Senior Secured Notes. The swap agreement exchanges a fixed Euro
based coupon of 8%, with a variable Euro based coupon (IRS) based upon the 6 month Euribor rate plus a margin. Any changes in Euribor will result in a change in the interest expense. Each basis point move in Euribor will result in an increase or a
decrease in annual interest expense of 25,600.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Disclosure Controls and
Procedures. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934) refer to the controls and other procedures of a company that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. A
companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures
of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
the companys assets that could have a material effect on the financial statements.

Inherent Limitations in Internal Control over
Financial Reporting. The Companys management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Companys disclosure controls and procedures or internal control over financial reporting
will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the limitations in all control
systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Further, the design of any control system is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any design will succeed in



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achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due
to error or fraud may occur and not be detected. Accordingly, the Companys disclosure controls and procedures are designed to provide reasonable assurance that the controls and procedures will meet their objectives.

Changes to Internal Control over Financial Reporting. The Chief Executive Officer and the Chief Financial Officer conclude that, during the
most recent fiscal quarter, there have been no changes in the Companys internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial
reporting.



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PART II. OTHER INFORMATION



|ITEM 6. | EXHIBITS
|------- | --------

(a) Exhibit



|               |  |                                                                                                                                                                                         
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Exhibit Description                                                                                                                                                                     
|3.1            |  | Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to the Quarterly Report on Form 10-Q filed with the SEC on August 8, 2006 and incorporated herein by
reference).
|               | 
|3.2            |  | Amended and Restated Bylaws (filed as Exhibit 99.3 to the Periodic Report on Form 8-K filed with the SEC on May 3, 2006 and incorporated herein by reference).                          
|               | 
|31.1 *         |  | Certificate of the CEO pursuant to Rule 13a-15(e) or Rule 15d-15(e).                                                                                                                    
|               | 
|31.2 *         |  | Certificate of the CFO pursuant to Rule 13a-15(e) or Rule 15d-15(e).                                                                                                                    
|               | 
|32.1 *         |  | Certification of the CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                     
|               | 
|32.2 *         |  | Certification of the CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                     

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|* | Filed herewith
|- | --------------



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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.



|                   |  |                                           |  |                                                            
|------------------ |  | ----------------------------------------- |  | -----------------------------------------------------------
|                   |  | CENTRAL EUROPEAN DISTRIBUTION CORPORATION
|                   |  | (registrant)                             
|                   |  |                                          
|Date: May 10, 2007 |  | By:                                       |  | /s/ William V. Carey                                       
|                   |  |                                           |  | William V. Carey President and Chief
Executive Officer     
|                   |  |                                          
|Date: May 10, 2007 |  | By:                                       |  | /s/ Chris Biedermann                                       
|                   |  |                                           |  | Chris Biedermann Vice President and Chief
Financial Officer



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