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WASHINGTON, D.C. 20549

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

OR

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

FOR THE TRANSITION PERIOD JANUARY 1, 2002 TO JUNE 30, 2002.

COMMISSION FILE NUMBER 0-24341

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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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| | DELAWARE(STATE OF INCORPORATION) |  | 54-18652710(IRS EMPLOYER IDENTIFICATION NO.) | 
| | -------------------------------- |  | -------------------------------------------- | 

| | 1343 MAIN STREET, #301SARASOTA, FLORIDA(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) |  | 34236(ZIP CODE) | 
| | ------------------------------------------------------------------------------ |  | --------------- | 

(941) 330-1558(REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.Yes x No o

The number of shares outstanding of each class of the issuers
common stock as of June 30, 2002:

Common Stock ($.01 par value) 5,708,614 shares

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INDEX

|         |  |                                                                                                                                      | PAGE
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------ | ----
|PART I.  |  | FINANCIAL INFORMATION                                                                                                                |     
|         |  |                                                                                                                                      |     
|Item 1.  |  | Financial Statements                                                                                                                 | 3   
|         |  |                                                                                                                                      |     
|         |  | Consolidated Condensed Balance Sheets, June 30, 2002    (unaudited) and December 31, 2001                                            | 3   
|         |  |                                                                                                                                      |     
|         |  | Consolidated Condensed Statements of Income (unaudited) for    the three and six month periods ended June 30, 2001 and June 30, 2002 | 5   
|         |  |                                                                                                                                      |     
|         |  | Consolidated Condensed Statement of Changes in Stockholders    Equity (unaudited) as of June 30, 2002                               | 6   
|         |  |                                                                                                                                      |     
|         |  | Consolidated Condensed Statements of Cash Flows (unaudited)    for the six month periods ended June 30, 2001 and June 30, 2002       | 7   
|         |  |                                                                                                                                      |     
|         |  | Notes to Consolidated Condensed Financial Statements    (unaudited)                                                                  | 8   
|         |  |                                                                                                                                      |     
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition    and Results of Operations                                             | 15  
|         |  |                                                                                                                                      |     
|Item 3.  |  | Quantitative and Qualitative Disclosure About Market Risk                                                                            | 22  
|         |  |                                                                                                                                      |     
|         |  |                                                                                                                                      |     
|         |  |                                                                                                                                      |     
|PART II. |  | OTHER INFORMATION                                                                                                                    |     
|         |  |                                                                                                                                      |     
|Item 6.  |  | Exhibits and Reports on Form 8-K                                                                                                     | 24  
|         |  |                                                                                                                                      |     

|           |   
|---------- | --
|           |   
|SIGNATURES | 25
|           |   
|           |   



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##### Table of Contents

PART IFINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)in thousands, except per share data

|                                                                                                   |  | December 31,2001 |        | June 30,2002 |  
|-------------------------------------------------------------------------------------------------- |  | ---------------- | ------ | ------------ | -
|                                                                                                   |  |                  |        |              |  
|CURRENT ASSETS                                                                                     |  |                  |        |              |  
|Cash and cash equivalents                                                                          |  | $                | 2,466  |              | $
|Accounts receivable, (net of allowance for doubtful accounts of $1,930 and $3,092    respectively) |  |                  | 38,102 |              |  
|Inventories                                                                                        |  |                  | 9,001  |              |  
|Prepaid expenses and other current assets                                                          |  |                  | 1,560  |              |  
|Deferred income taxes                                                                              |  |                  | 480    |              |  
|                                                                                                   |  |                  |        |              |  
|TOTAL CURRENT ASSETS                                                                               |  | $                | 51,609 |              | $
|Intangible assets, net                                                                             |  |                  | 3,002  |              |  
|Goodwill, net                                                                                      |  |                  | 9,969  |              |  
|Equipment, net                                                                                     |  |                  | 3,372  |              |  
|Deferred income taxes                                                                              |  |                  | 411    |              |  
|Other assets                                                                                       |  |                  | 614    |              |  
|                                                                                                   |  |                  |        |              |  
|TOTAL ASSETS                                                                                       |  | $                | 68,977 |              | $
|                                                                                                   |  |                  |        |              |  

See accompanying notes.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)  CONTINUEDin thousands,
except per share data

|                                                                                                                                                            |  | December 31, 2001 |        | June 30, 2002 |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ------------- | -
|                                                                                                                                                            |  |                   |        |               |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                        |  |                   |        |               |  
|CURRENT LIABILITIES                                                                                                                                         |  |                   |        |               |  
|Trade accounts payable                                                                                                                                      |  | $                 | 29,685 |               | $
|Bank loans and overdraft facilities                                                                                                                         |  |                   | 9,861  |               |  
|Current portion of long term debt                                                                                                                           |  |                   | 1,912  |               |  
|Current portion of obligations under capital leases                                                                                                         |  |                   | 269    |               |  
|Income taxes payable                                                                                                                                        |  |                   | 308    |               |  
|Taxes other than income taxes                                                                                                                               |  |                   | 999    |               |  
|Other accrued liabilities                                                                                                                                   |  |                   | 1,692  |               |  
|                                                                                                                                                            |  |                   |        |               |  
|TOTAL CURRENT LIABILITIES                                                                                                                                   |  |                   | 44,726 |               |  
|Long term debt, less current maturities                                                                                                                     |  |                   | 3,344  |               |  
|Long term obligations under capital leases                                                                                                                  |  |                   | 151    |               |  
|Redeemable common stock                                                                                                                                     |  |                   |        |               |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                               |  |                   |        |               |  
|STOCKHOLDERS EQUITY                                                                                                                                        |  |                   |        |               |  
|Preferred Stock ($0.01 par value, 1,000,000 shares authorized; no shares issued and    outstanding)                                                         |  |                   |       |               |  
|Common Stock ($0.01 par value, 20,000,000 shares authorized, 4,402,356 and    5,781,514 shares issued at December 31, 2001 and June 30, 2002, respectively) |  |                   | 46     |               |  
|Additional paid-in-capital                                                                                                                                  |  |                   | 15,383 |               |  
|Retained earnings                                                                                                                                           |  |                   | 7,161  |               |  
|Accumulated other comprehensive loss                                                                                                                        |  |                   | (1,684 | )             |  
|Less Treasury Stock at cost (72,900 shares at December 31, 2001 and at June 30,    2002)                                                                    |  |                   | (150   | )             |  
|                                                                                                                                                            |  |                   |        |               |  
|TOTAL STOCKHOLDERS EQUITY                                                                                                                                  |  |                   | 20,756 |               |  
|                                                                                                                                                            |  |                   |        |               |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                  |  | $                 | 68,977 |               | $
|                                                                                                                                                            |  |                   |        |               |  

See accompanying notes.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATIONCONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)in thousands, except per share data

|                                                                                         |  | Three months ended |        | Six months ended |  
|---------------------------------------------------------------------------------------- |  | ------------------ | ------ | ---------------- | -
|                                                                                         |  |                    |        |                  |  
|                                                                                         |  | June 30, 2001      |        | June 30, 2002    |  
|                                                                                         |  |                    |        |                  |  
|Net sales                                                                                |  | $                  | 45,530 |                  | $
|Cost of goods sold, excluding amortization and depreciation,    including excise tax     |  |                    | 39,662 |                  |  
|                                                                                         |  |                    |        |                  |  
|Gross margin, excluding amortization and depreciation                                    |  |                    | 5,868  |                  |  
|Selling, general and administrative expenses, excluding    amortization and depreciation |  |                    | 3,982  |                  |  
|Depreciation of equipment                                                                |  |                    | 226    |                  |  
|Amortization of goodwill and trademarks                                                  |  |                    | 214    |                  |  
|Bad debt expense                                                                         |  |                    | 116    |                  |  
|                                                                                         |  |                    |        |                  |  
|Operating Income                                                                         |  |                    | 1,330  |                  |  
|Non operating income (expense)                                                           |  |                    |        |                  |  
|Interest income                                                                          |  |                    | 25     |                  |  
|Interest expense                                                                         |  |                    | (353   | )                |  
|Realized and un-realized foreign currency transaction losses, net                        |  |                    | (449   | )                |  
|Other (expense) income, net                                                              |  |                    | 15     |                  |  
|                                                                                         |  |                    |        |                  |  
|Income before taxes                                                                      |  |                    | 568    |                  |  
|Income tax expense                                                                       |  |                    | 97     |                  |  
|                                                                                         |  |                    |        |                  |  
|Net income                                                                               |  | $                  | 471    |                  | $
|                                                                                         |  |                    |        |                  |  
|Net income per share of common stock, basic                                              |  | $                  | 0.11   |                  | $
|                                                                                         |  |                    |        |                  |  
|Net income per share of common stock, diluted                                            |  | $                  | 0.11   |                  | $
|                                                                                         |  |                    |        |                  |  

See accompanying notes.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATIONCONSOLIDATED CONDENSED STATEMENT OF CHANGES INSTOCKHOLDERS EQUITY (UNAUDITED)in thousands except per share data

|                                                                            |  | Capital Stock |       |             |   |              |  |  |        |   |                          
|--------------------------------------------------------------------------- |  | ------------- | ----- | ----------- | - | ------------ |  |  | ------ | - | -------------------------
|                                                                            |  |               |       |             |   |              |  |  |        |   |                          
|                                                                            |  | Issued        |       | In Treasury |   |              |  |  |        |   |                          
|                                                                            |  |               |       |             |   |              |  |  |        |   |                          
|                                                                            |  | No. ofShares  |       | Amount      |   | No. ofShares |  |  | Amount |   | AdditionalPaid-in-Capital
|                                                                            |  |               |       |             |   |              |  |  |        |   |                          
|Balance at December     31, 2001                                            |  |               | 4,504 |             | $ | 46           |  |  | (73    | ) |                          
|Net income for the six     months ended June     30, 2002                   |  |               |       |             |   |              |  |  |        |   |                          
|Foreign currency     translation adjustment                                 |  |               |       |             |   |              |  |  |        |   |                          
|                                                                            |  |               |       |             |   |              |  |  |        |   |                          
|Comprehensive income     for the six months     ended June 30, 2002         |  |               |       |             |   |              |  |  |        |   |                          
|Private placement     issuance of Company     stock                         |  |               | 800   |             |   | 8            |  |  |        |   |                          
|Stock issued for     acquisitions                                           |  |               | 254   |             |   | 2            |  |  |        |   |                          
|Stock options/warrants     exercised by     employees and     non-employees |  |               | 224   |             |   | 2            |  |  |        |   |                          
|                                                                            |  |               |       |             |   |              |  |  |        |   |                          
|Balance at June 30,     2002                                                |  |               | 5,782 |             | $ | 58           |  |  | (73    | ) |                          
|                                                                            |  |               |       |             |   |              |  |  |        |   |                          

See accompanying notes.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS (UNAUDITED)in thousands, except per share data

|                                                                                               |  | Six months endedJune 30, 2001 |        | Six months endedJune 30, 2002 |  
|---------------------------------------------------------------------------------------------- |  | ----------------------------- | ------ | ----------------------------- | -
|                                                                                               |  |                               |        |                               |  
|OPERATING ACTIVITIES                                                                           |  |                               |        |                               |  
|Net income                                                                                     |  |                               | 850    |                               |  
|Adjustments to reconcile net income to net cash provided by (used in)     operating activities |  |                               |        |                               |  
|Depreciation and amortization                                                                  |  |                               | 844    |                               |  
|Deferred income tax benefit                                                                    |  |                               | (266   | )                             |  
|Bad debt provisions                                                                            |  |                               | 328    |                               |  
|Foreign exchange losses                                                                        |  |                               | 233    |                               |  
|Accounts receivable                                                                            |  |                               | 5,892  |                               |  
|Inventories                                                                                    |  |                               | 3,155  |                               |  
|Prepayments and other current assets                                                           |  |                               | (839   | )                             |  
|Trade accounts payable                                                                         |  |                               | (9,474 | )                             |  
|Income and other taxes                                                                         |  |                               | 50     |                               |  
|Other accrued liabilities and other                                                            |  |                               | 926    |                               |  
|                                                                                               |  |                               |        |                               |  
|Net Cash Provided by/(Used In) Operating Activities                                            |  |                               | 1,699  |                               |  
|INVESTING ACTIVITIES                                                                           |  |                               |        |                               |  
|(Purchase)/disposal of equipment, net                                                          |  |                               | (836   | )                             |  
|Acquisition of business, net of cash acquired                                                  |  |                               | (1,344 | )                             |  
|                                                                                               |  |                               |        |                               |  
|Net Cash Used In Investing Activities                                                          |  |                               | (2,180 | )                             |  
|FINANCING ACTIVITIES                                                                           |  |                               |        |                               |  
|Borrowings on overdraft facility                                                               |  |                               | 679    |                               |  
|Payments of overdraft facility                                                                 |  |                               |        |                               |  
|Short term borrowings                                                                          |  |                               |        |                               |  
|Payment of short term borrowings                                                               |  |                               | (346   | )                             |  
|Long term borrowings                                                                           |  |                               | 4,401  |                               |  
|Payments of long term borrowings                                                               |  |                               | (5,431 | )                             |  
|Net proceeds from Private Placement Issuance of shares                                         |  |                               |        |                               |  
|Net proceeds from exercise of employee and non-employee options                                |  |                               |        |                               |  
|Purchase of treasury shares                                                                    |  |                               | (30    | )                             |  
|                                                                                               |  |                               |        |                               |  
|Net Cash (Used in)/Provided By Financing Activities                                            |  |                               | (727   | )                             |  
|                                                                                               |  |                               |        |                               |  
|Net Increase (Decrease) in Cash and cash equivalents                                           |  |                               | (1,208 | )                             |  
|Cash and cash equivalents at beginning of period                                               |  |                               | 2,428  |                               |  
|                                                                                               |  |                               |        |                               |  
|Cash and cash equivalents at end of period                                                     |  | $                             | 1,220  |                               | $
|                                                                                               |  |                               |        |                               |  
|SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING     ACTIVITIES AND FINANCING ACTIVITIES            |  |                               |        |                               |  
|Common stock issued in connection with acquisition of businesses                               |  | $                             | 98     |                               | $
|                                                                                               |  |                               |        |                               |  
|Capital lease                                                                                  |  |                               |        |                               | $
|                                                                                               |  |                               |        |                               |  
|Debt assumed in acquisition of businesses                                                      |  |                               |        |                               | $
|                                                                                               |  |                               |        |                               |  
|Supplemental disclosures of cash flow information                                              |  |                               |        |                               |  
|Interest paid                                                                                  |  | $                             | 645    |                               | $
|Income tax paid                                                                                |  | $                             | 446    |                               | $

See accompanying notes.



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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 data

1.   ORGANISATION AND
DESCRIPTION OF BUSINESS

| | Central European Distribution Corporation (CEDC) was organized as a Delaware Corporation in September 1997 to operate as a holding company through its sole subsidiary, Carey Agri International Poland Sp. z o.o.(Carey
Agri). In 1999, CEDC formed two subsidiaries (MTC and CFW) and in 2000 and in 2001 acquired two additional companies (PHA and Astor) and in 2002 it acquired Damianex and AGIS as disclosed in Note 5 below. CEDC and its subsidiaries are referred to
herein as the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.   BASIS OF PRESENTATION

| | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair presentation have been included and the disclosures herein are adequate to make the information presented not misleading. Operating results for the six-month period ended June
30, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The balance sheet at December 31, 2001 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | For further information, refer to the consolidated financial statements and footnotes thereto included in the Registrant Companys annual report on Form 10-K for the year ended December 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

3.   COMPREHENSIVE INCOME

| | As of June 30, 2002, the Company recorded and accumulated other comprehensive loss of $1,699,000 compared to an accumulated loss of $1,684,000 as at December 31, 2001. The movement of $15,000 was due to currency
fluctuations, largely between the Polish Zloty and the U.S. Dollar, which relate to the Companys investments in its subsidiaries of a long-term investment nature.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)Amounts in
tables expressed in thousands, except per share data

4.   EARNINGS PER SHARE

| | Earnings per share of common stock is calculated under the provisions of SFAS No. 128, Earnings per Share. The increase in stock in 2002 gives effect to the acquisition of both Damianex and AGIS in
2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                              
| | The following table sets forth the computation of basic and diluted earnings per share for the periods indicated.                                                                                            



|                                                                           |  | Three Months Ended |       | Six Months Ended |  
|-------------------------------------------------------------------------- |  | ------------------ | ----- | ---------------- | -
|                                                                           |  |                    |       |                  |  
|                                                                           |  | June 30,2001       |       | June 30,2002     |  
|                                                                           |  |                    |       |                  |  
|Basic:                                                                     |  |                    |       |                  |  
|Net income                                                                 |  | $                  | 471   |                  | $
|                                                                           |  |                    |       |                  |  
|Weighted Average shares of common stock outstanding                        |  |                    | 4,362 |                  |  
|                                                                           |  |                    |       |                  |  
|Basic Earnings Per Share                                                   |  | $                  | 0.11  |                  | $
|                                                                           |  |                    |       |                  |  
|Diluted:                                                                   |  |                    |       |                  |  
|Net Income                                                                 |  | $                  | 471   |                  | $
|                                                                           |  |                    |       |                  |  
|Weighted Average shares of common stock outstanding                        |  |                    | 4,362 |                  |  
|                                                                           |  |                    |       |                  |  
|Net effect of dilutive stock options-based on the treasury    stock method |  |                    |       |                  |  
|Totals                                                                     |  |                    | 4,362 |                  |  
|                                                                           |  |                    |       |                  |  
|Diluted Earnings Per Share                                                 |  | $                  | 0.11  |                  | $
|                                                                           |  |                    |       |                  |  



| | Employee and non-employee options totalling 124,000 have been exercised during the first half of 2002 and 99,610 warrants, granted in connection with the 1998 Initial Public Offering were converted.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)Amounts in
tables expressed in thousands, except per share data

5.   ACQUISITIONS

| | On April 22, 2002, the Company completed the acquisition of 100% of the voting shares of Damianex S.A., an alcohol distributor in south-eastern Poland. The purchase price of $8,974,000 consisted of $7,138,000 in cash and
the issuance of 152,996 shares of common stock valued at $1,836,000. The source of the funds consisted of a long-term loan of $2,500,000 from Bank Fortis in Warsaw, Poland and $4,638,000 from a private placement offering of common stock, (gross
proceeds $8,400,000) finalized by the Company on March 28, 2002.                                                                                                                                                                                                                                                                                                                                                         
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Damianex is Polands largest independent beer distributor and has a strong market position in the South-east of Poland. The acquisition has been accounted for as a purchase and the results of Damianex have been
included into the consolidated financial statements from the acquisition date. The premium paid in excess of estimated fair market value as at the date of acquisition has been accounted for as goodwill ($5,738,000 which is not tax deductible) and in
accordance with SFAS 141 will not be amortized, but will be subject to a periodic impairment review. The Company is in the process of obtaining an independent valuation of the acquired assets and will finalize the purchase price allocation during
the next quarter ending September 30, 2002.                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Certain common stock issued in connection with the acquisition is subject to a put option, which allows the seller to require the Company to repurchase the shares at $12.00 per share during the period between April 25,
2003 and April 29, 2003. The common stock attributable to this option has been classified as redeemable common stock at an amount of $12.00 per share ($1,835,952 in the aggregate). The Common Stock given in consideration for the acquisition is
subject to a twelve-month lock up period.                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | On April 24, 2002, the Company completed the acquisition of 100% of the voting stock of AGIS S.A., An alcohol distributor in northern Poland. The purchase price of $6,739,000 consisted of $4,568,000 in cash and the
issuance of 172,696 shares of common stock valued at $2,171,000. The source of the funds was a long-term loan of $1,800,000 from Bank Fortis in Warsaw, Poland and $2,768,000 from a private placement offering of common stock, (gross proceeds
$8,400,000) finalized by the Company on March 28, 2002.                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | AGIS has a strong market position in the northern of Poland. The acquisition has been accounted for as a purchase and the results of AGIS have been included into the consolidated condensed financial statements from the
acquisition date. The premium paid in excess of estimated fair market value as at the date of acquisition has been accounted for as goodwill ($6,239,000 which is not tax deductible) and under SFAS 141 will not be amortized, but will be subjected to
a periodic impairment review. The Company is in the process of obtaining an independent valuation of the acquired assets and will finalize the purchase price allocation during the next quarter ending September 30, 2002.                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The CEDC common stock given in consideration for the acquisition is subject to a six- month lock up period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | On April 5, 2001, the Company purchased 97% of the voting shares of Astor Sp. z o.o. (Astor) for $1.2 million cash and 31,264 shares of common stock (stock valued at approximately $98,000). The shares issued may not be
sold without the Companys consent for three years subsequent to the acquisition. The terms of the agreement allow for an additional payment of both cash and Company stock, which are contingent upon Astor achieving a certain profit target. As
at March 31, 2002, the Company has paid in regards to the contingent consideration $484,000 in cash and issued an additional 81,427 shares of common stock valued at approximately $974,000. If Astor is able to achieve the remaining target earnings,
the total acquisition cost is expected to be approximately $3.6 million, which includes $900,000 contingent consideration, which may be paid over the next two years.

10



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)Amounts in
tables expressed in thousands, except per share data

| | The Company obtained an independent valuation for this acquisition. The cost of the acquisition was allocated to the tangible assets acquired based on their fair values at the date of acquisition and estimated values per
the valuation report. The excess ($2,245,000) of the cost over the amounts allocated as described above represents goodwill. The purchase price allocations were finalized during the second quarter of 2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | The following unaudited pro forma results of operations of the Company give effect to the acquisition of Astor Sp. z o.o., Damianex S.A. and AGIS S.A. as though the transaction had occurred on January 1, 2001 and
assuming the Private Placement of 800,000 shares of common stock took place on the same day.                                                                                                                         



|                           |  | Three months ended                  |        | Six months ended |  
|-------------------------- |  | ----------------------------------- | ------ | ---------------- | -
|                           |  |                                     |        |                  |  
|                           |  | June 30,2001                        |        | June 30,2002     |  
|                           |  |                                     |        |                  |  
|                           |  | In Thousands, except per share data |       
|Net sales                  |  | $                                   | 77,336 |                  | $
|Net income (loss)          |  |                                     | 1,073  |                  |  
|Net income per share data: |  |                                     |        |                  |  
|Basic EPS                  |  | $                                   | 0.23   |                  | $
|Diluted EPS                |  | $                                   | 0.23   |                  | $



| | The unaudited pro forma financial information presented is not necessarily indicative of either the results of operations that would have occurred had Astor, Damianex and AGIS been acquired on the dates indicated above
or the future results of operations of the combined companies.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6. AMORTIZATION OF GOODWILL

The Company has adopted SFAS No. 142 effective January 1, 2002. Under
SFAS No.142 goodwill is no longer amortized but reviewed at the beginning of the fiscal year for impairment, or more frequently if certain indicators arise. In addition, the statement requires reassessment of the useful lives of previously
recognized intangible assets.

The Companys carrying value of goodwill is approximately $22.5 million at June 30, 2002 and is attributable to its only reporting unit (wholesale spirit division). The
Company has completed its transitional impairment review of goodwill and as a result concluded that there is no impairment to be recognized at June 30, 2002.

With the adoption SFAS No. 142, the Company ceased
amortization of goodwill as of January 01, 2002. Had the Company been accounting for its goodwill under SFAS No. 142 for all periods presented, the Companys net income and earnings per share would have been as follows:



|                                                    |  | Three months ended  June30, |      | Six months endedJune 30, |  
|--------------------------------------------------- |  | --------------------------- | ---- | ------------------------ | -
|                                                    |  |                             |      |                          |  
|                                                    |  | 2001                        |      | 2002                     |  
|                                                    |  |                             |      |                          |  
|Reported net income                                 |  | $                           | 471  |                          | $
|Goodwill amortization                               |  |                             | 116  |                          |  
|                                                    |  |                             |      |                          |  
|Adjusted net income                                 |  | $                           | 587  |                          | $
|                                                    |  |                             |      |                          |  
|Basic earnings per share of common stock            |  |                             |      |                          |  
|Reported net income                                 |  | $                           | 0.11 |                          | $
|                                                    |  |                             |      |                          |  
|                                                    |  |                             |      |                          |  
|Goodwill amortization                               |  | $                           | 0.03 |                          |  
|                                                    |  |                             |      |                          |  
|Adjusted basic earnings per share of common stock   |  | $                           | 0.14 |                          | $
|                                                    |  |                             |      |                          |  
|Diluted earnings per share of common stock          |  |                             |      |                          |  
|Reported net income                                 |  | $                           | 0.11 |                          | $
|Goodwill amortization                               |  | $                           | 0.03 |                          |  
|                                                    |  |                             |      |                          |  
|Adjusted diluted earnings per share of common stock |  | $                           | 0.14 |                          | $
|                                                    |  |                             |      |                          |  



The following table reflects the components of intangible assets as of June 30, 2002.

|                                  |  | December 31, 2001 |       | June 30, 2002 |  
|--------------------------------- |  | ----------------- | ----- | ------------- | -
|                                  |  |                   |       |               |  
|Trademarks                        |  | $                 | 3,904 |               | $
|Less accumulated amortization     |  | $                 | 902   |               | $
|                                  |  |                   |       |               |  
|Total amortized intangible assets |  | $                 | 3,002 |               | $
|                                  |  |                   |       |               |  

The amortization expense for the three months ended June 30, 2002 was $103,000.

Estimated aggregate future amortization expense for intangible
assets is as follows:

|2002       |  | $ | 204   | 
|---------- |  | - | ----- | 
|2003       |  |   | 204   | 
|2004       |  |   | 204   | 
|2005       |  |   | 204   | 
|Thereafter |  |   | 2,047 | 
|           |  |   |      
|           |  | $ | 2,863 | 
|           |  |   |      





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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)Amounts in
tables expressed in thousands, except per share data

7.   LONG-TERM DEBT AND SHORT-TERM BANK LOANS

|Long-term loans      |  | December 31,2001 |       | June 30,2002 |  
|-------------------- |  | ---------------- | ----- | ------------ | -
|                     |  |                  |       |              |  
|USD                  |  | $                | 5,256 |              | $
|PLN                  |  |                  |      |              | $
|                     |  |                  |       |              |  
|Total long-term debt |  | $                | 5,256 |              | $
|                     |  |                  |       |              |  
|Current-portion      |  | $                | 1,912 |              | $
|Long-term portion    |  | $                | 3,344 |              | $



| | During January 2002, the Company obtained a 3 million zloty loan ($742,000) for its subsidiary PHA. The loan is repayable over a three-year period. Principal payments are required to be made semi-annually starting June
2002. The interest rate on the zloty loan is considered to be market in Poland. The loan was to enable PHA to acquire a Carey Agri branches as part of an operational re-organization. The proceeds from the sale to PHA were used by Carey Agri to
reduce its overdraft facilities.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | In April 2002, the Company obtained a $4.3 million loan in order to fund in part the acquisitions of Damianex and AGIS. The loan is repayable over a three-year period with annual instalments starting April 2003. The
interest rate is considered to be market rate in Poland.                                                                                                                                                                                                                               



|Short-term loans                                    |  | December 31,2001 |       | June 30,2002 |  
|--------------------------------------------------- |  | ---------------- | ----- | ------------ | -
|                                                    |  |                  |       |              |  
|USD                                                 |  | $                | 2,275 |              | $
|EUR                                                 |  | $                | 1,219 |              | $
|PLN                                                 |  | $                | 6,367 |              | $
|                                                    |  |                  |       |              |  
|Total short-term borrowing and overdraft facilities |  | $                | 9,861 |              | $
|                                                    |  |                  |       |              |  

| | The Companys short term borrowing is exclusively for cash purchases from domestic vodka producers. These facilities are all on one-year terms though in practice they are renewed. Because of the legal form they are
disclosed as short-term loans.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                      
| | The weighted average interest rate for the six months ended June 30, 2002 was 6.95% and for the three months ended June 30, 2002 it was 7.3%.                                                                                                        

8.   CAPITAL LEASE OBLIGATIONS

| | During the six-month period, the Company entered into a number of capital leases for transportation equipment. The future minimum lease payments for the assets under capital leases at June 30, 2002 are as
follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|              |  | December 31,2001 |     | June 30,2002 |  
|------------- |  | ---------------- | --- | ------------ | -
|              |  |                  |     |              |  
|2002          |  | $                | 280 |              | $
|2003          |  | $                | 157 |              | $
|2004          |  |                  |     |              | $
|              |  |                  |     |              |  
|              |  | $                | 437 |              | $
|Less interest |  |                  | (17 | )            |  
|              |  |                  |     |              |  
|              |  | $                | 420 |              | $
|              |  |                  |     |              |  



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)Amounts in
tables expressed in thousands, except per share data

9.   INCOME TAXES

| | Total income tax expense varies from expected income tax expense computed at enacted Polish statutory rates (28% in 2001 and 2002) as follows:
| | ----------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                 |  | Three months endedJune 30, |     |      | Six months endedJune 30, |     
|---------------------------------------------------------------------------------------------------------------- |  | -------------------------- | --- | ---- | ------------------------ | ----
|                                                                                                                 |  |                            |     |      |                          |     
|                                                                                                                 |  | 2001                       |     | 2002 |                          |     
|                                                                                                                 |  |                            |     |      |                          |     
|Tax at the Polish Statutory rate                                                                                 |  | $                          | 159 |      | $                        | 711 
|Permanent differences and other items                                                                            |  |                            | (17 | )    |                          | 34  
|Temporary differences relating to restatement of     unrealised foreign exchange losses on hedging     contracts |  |                            | (45 | )    |                          | (146
|                                                                                                                 |  |                            |     |      |                          |     
|Tax charge                                                                                                       |  | $                          | 97  |      | $                        | 599 
|                                                                                                                 |  |                            |     |      |                          |     



| | Tax liabilities (including corporate income tax, Value Added Tax, social security, and other taxes) of the Companys Polish subsidiaries may be subject to examinations by Polish tax authorities for up to five years
from the end of the year in which the tax is payable. CEDCs US federal income tax returns are also subject to examination by the US tax authorities. As the application of tax laws and regulations for the many types of transactions is
susceptible to varying interpretations, amounts reported in the financial statements may change at a later date upon final determination by the tax authorities.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAmounts in tables expressed in
thousands, except per share data

10.   COMMITMENTS AND CONTINGENT LIABILITIES

| | The Company is involved in litigation and has claims against it for matters arising in the ordinary course of business. In the opinion of management, the outcome will not have a material adverse effect on the
Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11.   DERIVATIVE FINANCIAL INSTRUMENTS

| | All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. The Company uses derivatives to moderate the financial market risks of its business acquisitions.
Derivative products such as forward contracts are used to hedge the foreign currency market exposures underlying the Companys acquisition loans (currently $11.3 million). The Company hedging policy is not based on the requirements of SFAS 133
and therefore may be considered speculative.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The Company recorded a $106,000 gain and a $268,100 loss for the three-month periods ended June 30, 2001 and 2002 respectively, in regards to their derivative financial instruments. The gains have been recognized in
non-operating income.                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | In the six-months ended June 30, 2002 the Company recorded a loss of $57,100 as opposed to a loss of $176,000 in the six-months ended June 30, 2001.                                                                                                                                                                                                                                                                                                                                                                    

| | RELATED PARTY TRANSACTIONS                                                                                                   
| | -----------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                              
| | In May 2002, the Company made a loan of $20,000 to its Chief Financial Officer. The loan is to be repaid by December 7, 2002.



14



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

|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 elsewhere in this report.

Overview

In April, we saw the realization of a significant step in our strategy of
building a nationwide alcohol distribution network in Poland with the acquisitions on Damianex S.A. and AGIS S.A. These acquisitions along with steady management of our existing assets have meant that the Company has been able to increase both in
terms of operating profits and net earnings.

In the six months ended June 30, 2002, Poland saw a reduction in its inflation rate, which was reduced from 6.2% in the first six months of 2001 to 1.6% as at June
30, 2002. As a consequence core-lending (3 month WIBOR) rates have also fallen year on year, from 16.1% as at June 30, 2001 to 9.1% as at June 30, 2002.

Weakness in economies across the globe have lead to a
stronger than expected performance of the Polish zloty versus the U.S. Dollar. In the six months ended June 30, 2002, it depreciated 1.4% to 4.0418 as opposed to an appreciation of 3.8% in the six months ended June 30, 2001.

In the following discussion we will refer to core results. Core results are an indication of the results of the Companys continuing operations excluding the impact of acquisitions in 2002. For
the six months period ended June 30, 2002, we have also excluded the results of Astor for the three months ended March 31, 2002 as it was acquired on April 5, 2001.

Results of Operations

Six months ended June 30, 2002 compared with six months ended June 30, 2001

Total net sales increased $35.0 million, or 44.3% from $79.1 million to $114.1 million. The
increase is attributable to:

|Net sales for the six months ended June 30, 2001 |  | $ | 79.1million  |  |  |        | 
|------------------------------------------------ |  | - | ------------ |  |  | ------ | 
|Increase in core sales                           |  | $ | 3.8million   |  |  | /4.8%  | 
|Incremental sales from new acquisitions          |  | $ | 31.2million  |  |  | /39.5% | 
|Net sales for the six months ended June 30, 2002 |  | $ | 114.1million |  |  |        | 

As part of the management process of the integration of the acquired companies, the Company has undertaken a review of all clients of the companies acquired in what is referred
to as second tier distributors. Where this review has highlighted clients whose profitability did not reflect the risk being undertaken, the Company has stopped supply to these clients. We will continue to stop supplying clients where we consider
margins are not adequate. Our objective is to generate profitable revenue growth.

Gross margin has increased $5.0 million or 48.1% from $10.4 million to $15.4 million. The increase is attributable
to:

|Gross margin for the six months ended June 30, 2001 |  | $ | 10.4million |  |  |        | 
|--------------------------------------------------- |  | - | ----------- |  |  | ------ | 
|Increase in margin resulting from core operations   |  | $ | 1.2million  |  |  | /11.5% | 
|Incremental margin resulting from new acquisitions  |  | $ | 3.8million  |  |  | /36.6% | 
|Gross margin for the six months ended June 30, 2002 |  | $ | 15.4million |  |  |        | 



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

When expressed as a percentage of sales for the six months ended June 30, 2001, the gross margin
was 13.2%. For the six months ended June 30, 2002 the total gross margin as a percentage of sales was 13.5%. Within this total core operations recorded a gross margin for the six months ended June 30, 2002 of 13.9%, whilst the acquisitions recorded
a gross margin of 12.3%.

In core operations the 0.7% increase in margin was the result of:

| | 1. |  | Cutting back on low margin business, and                                                                                                        
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | 2. |  | higher than expected sales of higher-margin imported beer (14% increase), imported wines (13.9% increase) and imported spirits (11.3% increase).

Sales, general
and administrative expenses (SG&A) increased $2.4 million or 32.9% from $7.3 million to $9.7 million. The increase is attributable to:

|SG&A for the six months ended June 30, 2001  |  | $ | 7.3million |  |  |        | 
|-------------------------------------------- |  | - | ---------- |  |  | ------ | 
|Increase in SG&A from core operations        |  | $ | 0.4million |  |  | / 4.9% | 
|Incremental SG&A resulting from acquisitions |  | $ | 2.0million |  |  | /28.0% | 
|SG&A for the six months ended June 30, 2002  |  | $ | 9.7million |  |  |        | 

The increase in core SG&A expense is primarily as a result of year on year inflation adjustments. As a percentage of sales, core SG&A was 9.3% for both periods. In total,
SG&A as a percentage of sales fell from 9.3% in 2001 to 8.5% in 2002 mainly due to the acquisitions operating on a lower SG&A base.

Depreciationincreased $132,500 or 30.6% from $432,800 to
$565,300. Of this increase, $88,900 relates to the new acquisitions. The balance of $43,600 results mainly from hardware and software upgrades to the Companys existing network.

Debt provisions
increased $252,200 or 76.9% from $327,900 to $580,100. The increase is mainly due to the merging of two of our larger depots into one and writing off the outstanding receivables of the liquidated depot. As a percentage of sales, the debt provisions
are in line with the Companys target of 0.3-0.5%.

Operating profitincreased $2.6 million or 136.8% from $1.9 million to $4.5 million. The increase is attributable to:

|Operating profit for the six months ended June 30, 2001 |  | $ | 1.9 million |  |  |        | 
|------------------------------------------------------- |  | - | ----------- |  |  | ------ | 
|Increase in operating profit from core operations       |  | $ | 0.8 million |  |  | /42.0% | 
|Incremental operating profit from acquisitions          |  | $ | 1.8 million |  |  | /94.8% | 
|Operating profit for the six months ended June 30, 2002 |  | $ | 4.5 million |  |  |        | 

As a percentage of sales operating profit for the six months ended June 30, 2002 was 3.9%, whereas for the corresponding period in 2001 it was 2.4%. Core operating profit ended
June 30, 2002 was 3.3%. The factors underlying the increases in operating profit have been given in the above commentary.

Net interest costs decreased by $54,500 or 9.0% from $605,800 to $551,300. The
decrease is attributable to:

|Net interest charge for the six months ended June 30, 2001      |  | $ | 605,800  |  
|--------------------------------------------------------------- |  | - | -------- | -
|Decrease resulting from core operations                         |  | $ | (262,100 | )
|Incremental net interest charge from operations in Acquisitions |  | $ | 166,400  |  
|Incremental interest charge from acquisition debt               |  | $ | 41,200   |  
|Net interest charge for the six months ended June 30, 2002      |  | $ | 551,300  |  

A reduction of short and long-term debt combined with a 700 basis points reduction in core zloty lending rates have enabled the company to reduce its core operating interest
costs.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

Net losses in foreign exchange (FX) transactions including both realized and un-realized
increased by $56,200 or 24.1% from $232,900 to $289,100. The increase is attributable to:

|Net FX losses for the six months ended June 30, 2001   |  | $ | 232,900 |  
|------------------------------------------------------ |  | - | ------- | -
|Net FX loss arising from $4.3 million acquisition loan |  | $ | 93,700  |  
|Net FX gain arising from core operations               |  | $ | (38,100 | )
|Net FX losses from acquired operations                 |  | $ | 600     |  
|Net FX losses for the six months ended June 30, 2002   |  | $ | 289,100 |  

The Company has pro-actively managed its exposure to foreign exchange losses by the structured repayments of U.S. dollar denominated debt and with the use of hedging
instruments.

Key exchange rates for the six months ended June 30, 2001 and 2002 were:

|                                        |  | Six months endedJune 30, |       
|--------------------------------------- |  | ------------------------ | ------
|                                        |  |                          |       
|                                        |  | 2001                     |       
|                                        |  |                          |       
|Exchange rate at end of period          |  |                          | 3.9871
|Average exchange rate during the period |  |                          | 4.0420
|Highest exchange rate during the period |  |                          | 4.1578
|Lowest exchange rate during the period  |  |                          | 3.9432

Profit before tax increased $2.5 million or 227% from $1.1 million to $3.6 million. The increase is attributable to:

|Profit before tax for the six months ended June 30, 2001   |  | $ | 1.1 million |  |        | 
|---------------------------------------------------------- |  | - | ----------- |  | ------ | 
|Increase in profit before tax arising from core operations |  | $ | 1.0 million |  | / 91%  | 
|Incremental profit before tax from acquisitions            |  | $ | 1.5 million |  | / 136% | 
|Profit before tax for the six months ended June30, 2002    |  | $ | 3.6 million |  |        | 

As a percentage of sales profit before tax for the six months ended June 30, 2002 was 3.2% of which 2.5% was from core operations. For the six months ended June 30, 2001, profit
before tax as a percentage of sales was 1.4%.

The factors giving rise to the increase in profit before tax are discussed above.

Taxation increased $644,000 or 154%
from $254,000 to $898,000. The increase was due to the increase in profit before tax noted above. As a percentage of profit before tax for 2001, taxes were 23.0% and for 2002 taxes were 24.8%. This increase was a result of the movement in deferred
tax.

Net earningsincreased $1.87 million or 220% from $0.85 million to $2.72 million. The increase is attributable to:

|Net earnings for the six months ended June 30, 2001 |  | $ | 850,100   |  |  |        | 
|--------------------------------------------------- |  | - | --------- |  |  | ------ | 
|Increase due from core operations                   |  | $ | 868,000   |  |  | / 102% | 
|Increase due from acquisitions                      |  | $ | 1,004,800 |  |  | / 118% | 
|Net earnings for the six months ended June 30, 2002 |  | $ | 2,722,900 |  |  |        | 

The reasons for the increases are noted above.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

Three months ended June 30, 2002 compared with three months ended June 30, 2001

Total net sales increased $26.0 million, or 57.1% from $45.5 million to $71.5 million. The increase is attributable to:

|Net sales for the three months ended June 30, 2001 |  | $ | 45.5 million   |  |         | 
|-------------------------------------------------- |  | - | -------------- |  | ------- | 
|Timing Effect of Easter sales (see note below)     |  | $ | ( 3.0) million |  | /(6.6%) | 
|Increase in core sales                             |  | $ | 2.5 million    |  | / 5.4%  | 
|Incremental sales from new acquisitions            |  | $ | 26.5 million   |  | / 58.3% | 
|Net sales for the three months ended June 30, 2002 |  | $ | 71.5 million   |  |         | 

In the three months ended June 30, 2002, the Company recorded a net decline in its core sales of approximately $0.5 million (1.2%). One of the main reasons was because in 2002,
the Easter selling period, which is the Companys second biggest sales period after the Christmas season, fell in the later half of March whereas in 2001 it was in April. In addition, and as mentioned above, the Company has undertaken a review
of clients in what is referred to as second tier distributors. Where this review has highlighted clients whose profitability did not reflect the risk being undertaken, the Company stopped supply to these clients.

Gross margin has increased $3.6 million or 61.0% from $5.9 million to $9.5 million. The increase is attributable to:

|Gross margin for the three months to June 30, 2001  |  | $ | 5.9 million    |  |          | 
|--------------------------------------------------- |  | - | -------------- |  | -------- | 
|Timing effect from Easter sales (see note in sales) |  | $ | ( 0.4) million |  | / (6.8)% | 
|Increase in margin resulting from core operations   |  | $ | 0.6 million    |  | / 10.2%  | 
|Incremental margin resulting from new acquisitions  |  | $ | 3.4 million    |  | / 57.6%  | 
|Gross margin for the six months to June 30, 2002    |  | $ | 9.5 million    |  |          | 

In the three months ended June 30, 2002, the Company recorded a net increase in its gross profit of approximately $200,000. However, this was diluted by the Easter selling period
being in March as opposed to April as 2002 as per the sales note above. When expressed as a percentage of sales for the three months to June 30, 2001, the total gross margin was 12.9%. For the three months ended June 30, 2002 the total gross margin
as a percentage of sales was 13.3%. Within this total, core operations recorded a gross margin of 13.5%.

In core operations the 0.7% increase in margin was the result of:

| | 1. |  | Cutting back on low margin business, and                                                                                                      
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | 2. |  | higher than expected sales of higher-margin imported beer (15% increase), imported wines (10.9%increase) and imported spirits (11.3%increase).

Sales, general and
administrative expenses (SG&A) increased $1.8 million or 45.0% from $4.0 million to $5.8 million. The increase is attributable to:

|SG&A for the three months ended June 30, 2001 |  | $ | 4.0 million |  |         | 
|--------------------------------------------- |  | - | ----------- |  | ------- | 
|Increase in SG&A from core operations         |  | $ | 0.0 million |  | / 0.0%  | 
|Incremental SG&A resulting from acquisitions  |  | $ | 1.8 million |  | / 45.0% | 
|SG&A for the three months ended June 30, 2002 |  | $ | 5.8 million |  |         | 

The Company seeks to manage its cost base to ensure that is stays in line with sales. As a percentage of sales, core SG&A was 8.8% for both periods. As a total SG&A as
a percentage of sales fell from 8.8% in 2001 to 8.0% in 2002 as a result of the new acquisitions operating on a lower cost base.

Depreciationincreased $105,400 or 46.6% from $226,100 to $331,500. Of
this increase $87,100 relates to the new acquisitions. The balance of $18,300 results mainly from hardware and software upgrades required to the Companys existing network.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

Debt provisions increased $79,300 or 68.1% from $116,400 to $195,700. Substantially all
this increase stemmed from core operations as most major provisions for debt at the acquired companies were addressed as part of the acquisition process. As a percentage of sales, the provisions remain within the Companys target range of
0.3-0.5% of sales.

Operating profitincreased $1.9 million or 146% from $1.3 million to $3.2 million. The increase is attributable to:

|Operating profit for the three months ended June 30, 2001 |  | $ | 1.3 million |  |  |         | 
|--------------------------------------------------------- |  | - | ----------- |  |  | ------- | 
|Increase in operating profit from core operations         |  | $ | 0.2 million |  |  | / 15.4% | 
|Incremental operating profit from acquisitions            |  | $ | 1.7 million |  |  | /130.6% | 
|Operating profit for the three months ended June 30, 2002 |  | $ | 3.2 million |  |  |         | 

As a percentage of sales, operating profit for the three months ended June 30, 2002, was 4.4%, whilst for the corresponding period in 2001 it was 2.9%. The core operating profit
ended June 30, 2002 was 3.5%. The factors underlying the increases in operating profit have been given in the above commentary.

Net interest costs decreased by $16,000 or 4.9% from $327,700 to $343,700.
The decrease is attributable to:

|Net interest charge for the three months ended June 30, 2001    |  | $ | 327,700  |  
|--------------------------------------------------------------- |  | - | -------- | -
|Decrease resulting from core operations                         |  | $ | (154,900 | )
|Incremental net interest charge from operations in Acquisitions |  | $ | 129,700  |  
|Incremental interest charge from acquisition debt               |  | $ | 41,200   |  
|Net interest charge for the three months ended June 30, 2002    |  | $ | 343,700  |  

A reduction of short and long-term debt combined with a 700 basis points reduction in core zloty lending rates have enabled the company to reduce its core operating interest
costs.

Net losses in foreign exchange (FX) transactions including both realized and un-realized decreased by $258,900 from $448,900 to $190,000. The decrease is attributable to:

|Net FX losses for the three months ended June 30, 2001 |  | $ | 448,900  |  
|------------------------------------------------------ |  | - | -------- | -
|Net FX loss arising from $4.3 million acquisition loan |  | $ | 93,700   |  
|Net FX gain arising from core operations               |  | $ | (352,600 | )
|Net FX losses for the three months ended June 30, 2002 |  | $ | 190,000  |  

The Company has pro-actively managed its exposure to foreign exchange losses by the structured repayments of U.S. dollar denominated debt and by the use of hedging instruments.

Key exchange rates for the three months ended June 30, 2001 and 2002 were:

|                                        |  | Three months endedJune 30, |       
|--------------------------------------- |  | -------------------------- | ------
|                                        |  |                            |       
|                                        |  | 2001                       |       
|                                        |  |                            |       
|Exchange rate at end of period          |  |                            | 3.9871
|Average exchange rate during the period |  |                            | 3.9930
|Highest exchange rate during the period |  |                            | 4.1047
|Lowest exchange rate during the period  |  |                            | 3.9432



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

Profit before tax increased $1,972,200 or 347.3% from $567,800 to $2,540,000. The increase
is attributable to:

|Profit before tax for the three months ended June 30, 2001 |  | $ | 567,800   |  |  |          | 
|---------------------------------------------------------- |  | - | --------- |  |  | -------- | 
|Increase in profit before tax arising from core operations |  | $ | 398,200   |  |  | / 70.1%  | 
|Incremental profit before tax from acquisitions            |  | $ | 1,574,000 |  |  | / 277.2% | 
|Profit before tax for the six months ended June 30, 2002   |  | $ | 2,540,000 |  |  |          | 

The factors giving rise to the increase in profit before tax are discussed above.

Taxation increased $501,700 from $97,300 to
$599,000. The increase was due to the increase in profit before tax noted above. As a percentage of profit before tax for 2001, it was 17.2% and for 2002 it was 23.6%. This increase is a result of movements in deferred tax.

Net earnings increased $1,470,800 or 312.6% from $470,500 to $1,941,300. The increase is attributable to:

|Net earnings for the three months ended June 30, 2001 |  | $ | 470,500   |  |  |         | 
|----------------------------------------------------- |  | - | --------- |  |  | ------- | 
|Increase due from core operations                     |  | $ | 337,900   |  |  | / 71.8% | 
|Increase due from acquisitions                        |  | $ | 1,132,900 |  |  | /240.8% | 
|Net earnings for the three months ended June 30, 2002 |  | $ | 1,941,300 |  |  |         | 

The reasons for the increases are noted above.

STATEMENT OF LIQUIDITY AND CAPITAL RESOURCES

The Companys net cash balance increased $215,000 in the first six months of 2002 compared to a decrease of $1.2 million in the corresponding period of 2001, primarily as a result of financing activities.

The net cash provided by operating activities decreased by $2.4 million in 2002 to a negative $0.7 million compared to a positive $1.7 million in 2001. The decrease was due to increased use of cash on delivery (C.O.D.) terms with major
suppliers where the discounts available offered approximately 150 basis points advantage between the difference of bank lending rates and the cash discount rate being offered by suppliers.

The investing
activities amount to $12.1 million in the 2002 and are primarily due to the acquisitions of Damianex and AGIS. During the 2001 period the investing activities amounted to $2.1 million of which the largest part was the acquisition of
Astor.

Financing activities generated $13.0 million of which $7.5 million was due to the Private Placement of the Companys common stock in March of this year as well as a $4.3 million long term loan. Both
the placement proceeds and the new loan were used to fund the acquisitions of Damianex and AGIS as discussed above.

The Company began 2002 with debts of $15.5 million. As mentioned above, in the first six
months of 2002 the Company has increased net borrowings by $4.3 million as part funding for its acquisitions of Damianex and AGIS. In addition, as at June 30, 2002 the acquired companies had total operational bank debts, which are used exclusively
for cash purchases, of approximately $7 million. As at June 30, 2002, the Company had total third party debts of $26.4 million.

The total of the Companys stockholders equity may be affected by the
cumulative of other comprehensive income adjustments which as at June 30, 2002 stood at $1.7 million. See note 3 to the condensed consolidated financial statements for further information.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

STATEMENT ON INFLATION AND CURRENCY FLUCTUATIONS

Inflation in
Poland is projected at 3.2% for the whole of 2002, compared to 6.2% for 2001. For the first six months of 2002, the inflation was 1.6%. The share of purchases denominated in non-Polish currency has decreased resulting in lower foreign exchange
exposure for purchases. The Zloty has depreciated 1.4% against the US Dollar in the first six months of 2002.

SEASONALITY

The Companys working capital requirements are
seasonal, and are normally highest in the months of November to December. Liquidity is then normally improving when collections are made on the higher sales during the month of January.

The Company expects to
experience some variability in sales and net income on a quarterly basis.

OTHER MATTERS

The Company continues to be involved in litigation from time to time in the ordinary
course of business. In managements opinion, the litigation in which the Company is currently involved, individually and in the aggregate, is not material to the Companys financial condition or results of operations.

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. The preparation of these financial statements requires the Company to make estimates and judgments that affect the
reported amounts of revenues, 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.

| | Revenue and Margin Recognition
| | ------------------------------

The Company only recognizes revenue and margin when goods have been delivered to customers on the basis of a validated customer
order. The Company does not operate a policy of goods shipped on consignment nor does it offer goods on a sale or return basis.

| | Expenses
| | --------

The Company recognizes expenses in the period in which either the cost is incurred or in the period in which the associated revenue and margin has
been recognized.

| | Provisions For Doubtful Debts
| | -----------------------------

The Company makes general provision for doubtful debt based on the aging of its trade receivables. Where circumstances require
it, the Company will make specific provision for any excess not provided for under the general provision.

| | Inventory
| | ---------

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

| | Goodwill and Intangibles
| | ------------------------

Goodwill associated with the excess purchase price over fair value of assets acquired and other identifiable intangibles are currently
amortized on a straight-line basis over their estimated useful lives.



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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

|ITEM 3: | Quantitative and Qualitative Disclosures About Marketable Securities
|------- | --------------------------------------------------------------------



| | Foreign Currency Risk. Currently some of the Companys loans are denominated in currencies other than its functional currency, the Polish Zloty, and as a result we may be exposed to foreign exchange risks. To
contain these risks the Company acquires fixed period forward exchange contracts as and when it can buy at favorable rates. The Company does not consistently acquire sufficient contract to match the underlying acquisition loan in terms of value, but
instead manages in terms of rates available.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | For the six months ended June 30, 2002, the Company incurred net losses on foreign currency risks of $289,000. This compares to net losses for the six months ended June 30, 2001, of around $233,000.                                                                                                                                                                                                                                                                                                                 

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PART II.OTHER INFORMATION

|Item 2. | Changes in Securities and Use of Proceeds
|------- | -----------------------------------------

| | (c) |  | On April 22, 2002, the Company issued 152,996 shares of its common stock as part of the compensation paid in the acquisition of Damianex S.A. Additionally $7.2 million was paid as part of the cost of this acquisition. See
note 5 to the financial statements. On April 24, 2002, the Company issued 172,696 shares of its common stock as part of the compensation paid in the acquisition of AGIS S.A. Additionally $4.6 million was paid as part of the costs of this
acquisition. See note 5 to the financial statements.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | These securities were issued without registration under the Securities Act in reliance on the exemption provided by Regulation S for sales to entities which are not United States persons, as defined by
Section 902(k) of Regulation S. The stock certificates for all such securities bear a legend indicating that the stock is restricted and may not be sold to United States persons without registration or an exemption from such requirement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

| | (a) |  | The Company held its annual meeting of stockholders on April 29, 2002.                                                                                                                                                 
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 
| | (b) |  | At the meeting, directors were elected, incentive bonus plan was approved and independent accountants were ratified for the 2002 fiscal year. The votes cast for, against and withheld for each proposal is as
follows:

> (i)   Directors:

|Nominees                        | FOR |           | AGAINST |         | Withheld Authority to Vote | 
|------------------------------- | --- | --------- | ------- | ------- | -------------------------- | 
|                                |     |           |         |         |                            | 
|William V. Carey                |     | 4,196,994 |         |         |                            | 
|James T. Grossmann              |     | 4,196,994 |         |         |                            | 
|Tony Housh                      |     | 4,196,994 |         |         |                            | 
|Jan W. Laskowski                |     | 4,196,994 |         |         |                            | 
|Jeffrey Peterson                |     | 4,196,994 |         |         |                            | 
|Joe M. Richardson               |     | 4,196,994 |         |         |                            | 
|                                |     |           |         |         |                            | 
|                                |     |           |         |         |                            | 
|                                | FOR |           | AGAINST |         | Withheld Authority to Vote | 
|                                |     |           |         |         |                            | 
|(ii)   Incentive Bonus Plan     |     | 4,079,260 |         | 110,349 |                            | 
|                                |     |           |         |         |                            | 
|                                | FOR |           | AGAINST |         | Withheld Authority to Vote | 
|                                |     |           |         |         |                            | 
|(iii)   Independent Accountants |     | 4,193,734 |         | 625     |                            | 

> 

|Item 5. | Other Information
|------- | -----------------

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|Item 6. | EXHIBITS AND REPORTS ON FORM 8K
|------- | -------------------------------

| | (a)   |  | Exhibit                                                                                                                                     
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------
| |       |  |                                                                                                                                             
| |       |  | 99                                                                                                                                          
| |       |  |                                                                                                                                             
| | (b)   |  | Reports on Form 8-K                                                                                                                         
| |       |  |                                                                                                                                             
| |       |  | During the quarter ended June 30, 2002, the Company filed the following reports on Form 8-K.                                                
| |       |  |                                                                                                                                             
| | (i)   |  | Form 8-K filed on May 9, 2002 reporting under item 2.                                                                                       
| |       |  |                                                                                                                                             
| | (ii)  |  | Amendment on Form 8-K/A to the May 9 current report filed on May 14, 2002 reporting under item 2 and 7 and containing financial statements. 
| |       |  |                                                                                                                                             
| | (iii) |  | Amendment on Form 8-K/A to the May 9 current report filed on June 3, 2002 reporting under items 2 and 7 and containing financial statements.



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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: August 13, 2002 |  | By:
|                      |  |    
|                      |  |    

|                      |  |    
|--------------------- |  | ---
|Date: August 13, 2002 |  | By:
|                      |  |    
|                      |  |