10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012

OR

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

FOR THE TRANSITION PERIOD FROM              TO             

COMMISSION FILE NUMBER 001-35293

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware	54-1865271
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
3000 Atrium Way, Suite 265 Mt. Laurel, New Jersey	08054
(Address of Principal Executive Offices)	(Zip code)

(856) 273-6980

(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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

Large Accelerated Filer	x	Accelerated Filer	¨
Non-Accelerated Filer	¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	¨

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

The number of shares outstanding of each class of the issuer’s common stock as of May 8, 2012: Common Stock ($.01 par value) 78,842,022

INDEX

		PAGE
PART I FINANCIAL INFORMATION
Item 1	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2012 (unaudited) and as of December  31, 2011		1
	Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited) for the three month periods ended March 31, 2012 and March 31, 2011		2
	Condensed Consolidated Statements of Cash Flow (unaudited) for the three month periods ended March  31, 2012 and March 31, 2011		3
	Notes to Condensed Consolidated Financial Statements (unaudited)		4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3	Quantitative and Qualitative Disclosures about Market Risk		25
Item 4	Controls and Procedures		25
PART II OTHER INFORMATION			26
Item 1	Legal Proceedings		26
Item 1A	Risk Factors		26
Item 6	Exhibits		27

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

All amounts are expressed in thousands

(except share information)

	March 31, 2012 (unaudited)			December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	107,798		$	94,410
Accounts receivable, net of allowance for doubtful accounts at March 31, 2012 of $26,221 and at December 31, 2011 of $23,112		280,761			466,317
Inventories		121,324			116,897
Prepaid expenses		23,594			16,982
Other current assets		19,341			20,007
Deferred income taxes		6,572			8,455
Debt issuance costs		2,959			2,962
Total Current Assets		562,349			726,030
Intangible assets, net		508,605			463,848
Goodwill		731,675			666,653
Property, plant and equipment, net		193,838			179,478
Deferred income taxes, net		22,811			22,295
Debt issuance costs		12,789			13,550
Non-current assets held for sale		675			675
Total Non-Current Assets		1,470,393			1,346,499
Total Assets	$	2,032,742		$	2,072,529
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	69,868		$	144,801
Bank loans and overdraft facilities		66,708			85,762
Short-term obligations under Convertible Senior Notes		305,977			0
Income taxes payable		7,208			8,766
Taxes other than income taxes		99,863			188,307
Other accrued liabilities		70,715			44,501
Current portions of obligations under capital leases		1,159			1,109
Total Current Liabilities		621,498			473,246
Long-term obligations under capital leases		728			532
Long-term obligations under Convertible Senior Notes		0			304,645
Long-term obligations under Senior Secured Notes		950,643			932,764
Long-term accruals		2,221			2,027
Deferred income taxes		99,199			92,945
Commitments and contingent liabilities (Note 13)
Total Long-Term Liabilities		1,052,791			1,332,913
Stockholders’ Equity
Common Stock ($0.01 par value, 120,000,000 shares authorized, 73,125,230 and 72,740,302 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively)		731			727
Preferred Stock ($0.01 par value, 1,000,000 shares authorized, none issued and outstanding)		0			0
Additional paid-in-capital		1,370,335			1,369,471
Accumulated deficit		(1,069,070	)		(1,131,566	)
Accumulated other comprehensive income		56,607			27,888
Less Treasury Stock at cost (246,037 shares at March 31, 2012 and December 31, 2011)		(150	)		(150	)
Total Stockholders’ Equity		358,453			266,370
Total Liabilities and Stockholders’ Equity	$	2,032,742		$	2,072,529

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

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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

All amounts are expressed in thousands

(except per share information)

	Three months ended March 31,
	2012			2011
Sales	$	323,975		$	336,139
Excise taxes		(175,767	)		(179,428	)
Net sales		148,208			156,711
Cost of goods sold		89,529			97,374
Gross profit		58,679			59,337
Selling, general and administrative expenses		61,770			57,877
Gain on remeasurement of previously held equity interests		0			(7,898	)
Operating income / (loss)		(3,091	)		9,358
Non operating income / (expense), net
Interest income / (expense), net		(26,224	)		(26,852	)
Other financial income / (expense), net		97,922			31,046
Other non operating income / (expense), net		(2,598	)		(976	)
Income before income taxes and equity in net losses from unconsolidated investments		66,009			12,576
Income tax expense		(3,513	)		(2,641	)
Equity in net losses of affiliates		0			(8,814	)
Net income attributable to the company		62,496			1,121
Net income from operations per share of common stock, basic	$	0.86		$	0.02
Net income from operations per share of common stock, diluted	$	0.86		$	0.02
Other comprehensive income, net of tax:
Foreign currency translation adjustments		28,719			137,016
Comprehensive income attributable to the company	$	91,215		$	138,137

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

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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)

All amounts are expressed in thousands

	Three months ended March 31,
	2012			2011
Cash flows from operating activities
Net income	$	62,496		$	1,121
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,815			5,131
Deferred income taxes		121			725
Unrealized foreign exchange gains		(98,681	)		(31,651	)
Stock options fair value expense		864			693
Equity loss in affiliates		0			8,814
Gain on fair value remeasurement of previously held equity interest		0			(6,397	)
Other non cash items		(26	)		1,780
Changes in operating assets and liabilities:
Accounts receivable		226,728			268,051
Inventories		6,964			(5,197	)
Prepaid expenses and other current assets		(3,114	)		(16,860	)
Trade accounts payable		(89,358	)		(83,645	)
Other accrued liabilities and payables (including taxes)		(87,043	)		(58,176	)
Net cash provided by operating activities		23,766			84,389
Cash flows from investing activities
Purchase of fixed assets		(1,329	)		(505	)
Proceeds from the disposal of fixed assets		127			0
Purchase of trademarks		0			(17,473	)
Acquisitions of subsidiaries, net of cash acquired		0			(23,475	)
Net cash used in investing activities		(1,202	)		(41,453	)
Cash flows from financing activities
Borrowings on bank loans and overdraft facility		8,594			0
Payment of bank loans, overdraft facility and other borrowings		(26,872	)		(4,104	)
Decrease in short term capital leases payable		90			(102	)
Proceeds from options exercised		0			66
Net cash used in financing activities		(18,188	)		(4,140	)
Currency effect on brought forward cash balances		9,012			6,992
Net increase in cash		13,388			45,788
Cash and cash equivalents at beginning of period		94,410			122,324
Cash and cash equivalents at end of period	$	107,798		$	168,112
Supplemental Schedule of Non-cash Investing Activities
Common stock issued in connection with investment in subsidiaries	$	0		$	23,131

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

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CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Amounts in tables expressed in thousands, except share and per share information

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and description of business

Central European Distribution Corporation (“CEDC”) and its subsidiaries (collectively referred to as “we,” “us,” “our,” or the “Company”) operate primarily in the alcohol beverage industry. We are one of the largest producers of vodka in the world and are Central and Eastern Europe’s largest integrated spirit beverages business, measured by total volume, with approximately 33.2 million nine-liter cases produced and distributed in 2011. Our business primarily involves the production and sale of our own spirit brands (principally vodka), and the importation on an exclusive basis of a wide variety of spirits, wines and beers. Our primary operations are conducted in Poland, Russia, Ukraine and Hungary. We have six operational manufacturing facilities located in Poland and Russia.

In Poland, we are one of the largest vodka producers with a brand portfolio that includes Absolwent, Żubrówka, Żubrówka Biała, Bols, Palace and Soplica brands, each of which we produce at our Polish distilleries. We produce and sell vodkas primarily in three of four vodka sectors: premium, mainstream and economy. In Poland, we also own and produce Royal, the top-selling vodka in Hungary.

We are also the largest vodka producer in Russia, the world’s largest vodka market. Our Green Mark brand is the top-selling mainstream vodka in Russia and the second-largest vodka brand by volume in the world, and our Parliament and Zhuravli brands are two top-selling sub-premium vodkas in Russia.

As well as sales and distribution of its own branded spirits, the Company is a leading exclusive importer of wines and spirits in Poland, Russia and Hungary.

Liquidity

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As discussed further in Note 5, certain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, our Convertible Senior Notes (the “Convertible Notes”) are due on March 15, 2013. Our current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment on Convertible Notes and, unless the transaction with Russian Standard Corporation is completed as scheduled, the Company may default on them. The Company’s cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at March 31, 2012. These conditions raise substantial doubt about the Company’s ability to continue as a going concern unless the transaction with Russian Standard described below is completed as scheduled.

As discussed further in Note 16, on April 23, 2012, the Company announced that definitive agreements had been signed with Russian Standard Corporation (via Roust Trading Limited) for a strategic transaction. Pursuant to these agreements, on May 4, 2012 Roust Trading Limited and its affiliates invested $100 million in the Company by purchasing a combination of newly issued shares of the Company’s common stock and notes exchangeable into the Company’s common shares following shareholder approval. In addition, Roust Trading Limited has agreed to purchase from the Company up to $210 million principal amount of newly issued, Unsecured Senior Notes due July 31, 2016 at a blended interest rate of 6.00%. While we believe that this transaction would allow the Company to settle the Convertible Notes before March 15, 2013, the transaction is subject to certain risks, including shareholder approval which may not be obtained. The Company’s annual general meeting (AGM) is scheduled for June 29, 2012 at which time the final vote of the shareholders will be known. We believe that if the transaction is completed as scheduled, the Convertible Notes will be repaid by their maturity date which would substantially reduce doubts about the Company’s ability to continue as a going concern.

Basis of presentation

These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

CEDC’s subsidiaries maintain their books of account and prepare their statutory financial statements in their respective local currencies. The subsidiaries’ financial statements have been adjusted to reflect U.S. GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present our financial condition, results of operations and comprehensive income and cash flows for the interim periods presented have been included. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012.

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The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2011, filed on February 29, 2012.

The significant interim accounting policies include the recognition of a pro-rata share of certain estimated annual sales incentives, marketing, promotion and advertising costs, generally in proportion to sales, and the recognition of income taxes using an estimated annual effective tax rate adjusted for tax amendments related to prior years and changes in estimate.

On February 7, 2011, the Company acquired full voting and economic control over Whitehall Group and changed the accounting treatment for its interest in Whitehall from the equity method of accounting to consolidation beginning on February 7, 2011.

2. SALE OF ACCOUNTS RECEIVABLE

On February 24, 2011, two subsidiaries of the Company, namely CEDC International sp. z o.o. (“CEDC International”) and Polmos Białystok S.A. (“Polmos Bialystok”), entered into factoring arrangements (“Factoring Agreements”) with ING Commercial Finance Polska (“ING Polska”) for the sale up to 290.0 million Polish zlotys (approximately $93.0 million) of receivables. On January 1, 2012, the total limit under the Factoring Agreements was reduced from 290.0 million Polish zlotys ($93.0 million) to 250.0 Polish zlotys ($80.2 million) and from March 1, 2012 it was further reduced to 220.0 million Polish zlotys ($70.5 million). The Factoring Agreements were to mature on April 30, 2012, however on April 25, 2012 the Company extended these agreements until September 30, 2012 with further decrease of the total limit from April 25, 2012 to 200.0 million Polish zlotys (approximately $64.1 million).

As of March 31, 2012, the total balance of receivables under factoring amounted to 177.3 million Polish zlotys (approximately $56.8 million) of the 220.0 million Polish zlotys limit available.

For the three months ended March 31, 2012, the Company sold receivables in the amount of 302.8 million Polish zlotys ($97.1 million) and recognized a loss on the sale in the statement of operations and comprehensive income in the amount of 3.2 million Polish zlotys ($1.0 million) in respect of the non-recourse factoring. The Company has no continuing involvement with the sold non-recourse receivables.

As of March 31, 2012, the liabilities from factoring with recourse amounted to $1.4 million and are included in the short term bank loans in the balance sheet. Corresponding receivables from factoring with recourse are presented under accounts receivable in the balance sheet.

3. COMPREHENSIVE INCOME

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

As of March 31, 2012, our functional currencies (Polish zloty, Russian ruble and Hungarian forint) exchange rates used to translate the balance sheet strengthened against the U.S. dollar as compared to the exchange rates as of December 31, 2011, and as a result $28.7 million of foreign currency translation adjustment was recognized as part of total comprehensive income, which mainly related to an increase in goodwill and intangible assets.

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4. EARNINGS PER SHARE

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

	Three months ended March 31,
	2012		2011
Net income / (loss)	$	62,496	$	1,121
Weighted average shares of common stock outstanding (used to calculate basic EPS)		72,885		71,208
Net effect of dilutive employee stock options based on the treasury stock method		63		93
Weighted average shares of common stock outstanding (used to calculate diluted EPS)		72,948		71,301
Net income / (loss) per common share - basic	$	0.86	$	0.02
Net income / (loss) per common share - diluted	$	0.86	$	0.02

Employee stock options granted have been included in the above calculations of diluted earnings per share where the exercise price is less than the average market price of the common stock during the three months ended March 31, 2012 and 2011. In addition there is no adjustment to fully diluted shares related to the Convertible Senior Notes as the average market price was below the conversion price for the periods.

5. BORROWINGS

Bank Facilities

As of March 31, 2012, the Company has outstanding liability of €25.0 million ($33.4 million) from the term loans from Zenit Bank, Alfa Bank and Raiffeisen Bank drawn by Whitehall:

• The loan agreement with Zenit Bank, dated March 29, 2011, matures on June 6, 2012. The credit limit under this loan agreement is €10.0 million ($13.3 million) and the loan is released in tranches maturing in 365 days, no later than June 6, 2012. The loan was released in four tranches between April 21, 2011 and September 13, 2011, and is repayable between April 20, 2012 and May 18, 2012. As of March 31, 2012, the Company had outstanding liability of €5.0 million ($6.7 million) from this term loan;

• The loan agreement with Alfa Bank, dated July 22, 2008, matures on October 18, 2014. The credit limit under this agreement is €20.0 million ($26.7 million) and the loan is released in tranches maturing within three, six or nine months, depending if they are pledged by inventory. The loan was released in eight tranches between September 14, 2011 and March 30, 2012, and is repayable between April 28, 2012 and October 30, 2012. As of March 31, 2012, the Company had outstanding liability of €15.1 million ($20.1 million) from this term loan;

• The loan agreement with Raiffeisen Bank, dated July 6, 2010, matures on July 6, 2012. The credit limit under this agreement is €10.0 million ($13.3 million) and the loan is released in tranches maturing within one to 12 months, not later than July 6, 2012. The loan was released in five tranches between September 12, 2011 and October 26, 2011, and is repayable between May 18, 2012, and July 6, 2012. As of March 31, 2012, the Company had outstanding liability of €4.9 million ($6.5 million) from this term loan.

The aforementioned loans drawn by Whitehall are guaranteed by Whitehall companies. The loans from Zenit Bank and Alfa Bank are secured by the Company’s inventory.

As of March 31, 2012, the Company has outstanding term loans of 879.6 million Russian rubles ($30.0 million) from Unicredit and JSC Grand Invest Bank, both drawn by Russian Alcohol, as well as, an overdraft facility from Sberbank drawn by Bravo Premium:

• The loan agreement with Unicredit, dated May 24, 2011, matures on November 23, 2012. This loan has no financial covenants and is secured by inventory of up to 720 million Russian rubles ($24.6 million) and guarantees given by companies of Russian Alcohol. As of March 31, 2012, the Company has outstanding liability of 600.0 million Russian rubles ($20.5 million) from this term loan;

• The loan agreement with JSC Grand Invest Bank, dated November 25, 2011, matures on November 23, 2012. This loan has no financial covenants that need to be met. As of March 31, 2012, the Company has outstanding liability of 279.6 million Russian rubles ($9.5 million) from this term loan;

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• The overdraft agreement with Sberbank, dated February 6, 2012, matures on February 5, 2013. The credit limit under this agreement is 60.0 million Russian rubles ($2.0 million). This loan is secured by fixed assets. As of March 31, 2012, the Company has outstanding liability of 52.5 million Russian rubles ($1.8 million) from this overdraft facility.

As of March 31, 2012, the Company had available to use under existing overdraft facility in Hungary 100.0 million Hungarian forints ($0.5 million).

Convertible Senior Notes due 2013

On March 7, 2008, the Company completed the issuance of $310 million aggregate principal amount of 3% Convertible Senior Notes due 2013 (the “Convertible Senior Notes”). Interest is due semi-annually on the 15^th of March and September, beginning on September 15, 2008. The Convertible Senior Notes are convertible in certain circumstances into cash and, if applicable, shares of our common stock, based on an initial conversion rate of 14.7113 shares per $1,000 principal amount, subject to certain adjustments. Upon conversion of the notes, the Company will deliver cash up to the aggregate principal amount of the notes to be converted and, at the election of the Company, cash and/or shares of common stock in respect to the remainder, if any, of the conversion obligation. The proceeds from the Convertible Senior Notes were used to fund the cash portions of the acquisition of Copecresto Enterprises Limited and Whitehall.

As of March 31, 2012 and December 31, 2011, the Company had accrued interest of $0.4 million and $2.7 million, respectively, related to the Convertible Senior Notes, with the next coupon due for payment on September 15, 2012. Total obligations under the Convertible Senior Notes are shown net of deferred finance costs, amortized over the life of the borrowings using the effective interest rate method as shown in the table below:

	March 31,			December 31,
	2012			2011
Convertible Senior Notes	$	310,000		$	310,000
Unamortized debt discount		(851	)		(1,070	)
Debt discount related to ASC 470-20		(3,172	)		(4,285	)
Total	$	305,977		$	304,645

For the three months ended March 31, 2012 and March 31, 2011, the additional pre-tax non-cash interest expense recognized in the consolidated statement of operations was $1.1 million each. Accumulated amortization related to the debt discount was $16.5 million and $12.2 million as of March 31, 2012 and March 31, 2011, respectively. Pre-tax increase in non-cash interest expense on our consolidated statements of operations and comprehensive income to be recognized until 2013, the maturity date of the CSNs, amounts to $3.2 million.

Senior Secured Notes due 2016

On December 2, 2009, the Company issued $380 million 9.125% Senior Secured Notes due 2016 and €380 million ($507.0 million) 8.875% Senior Secured Notes due 2016 (the “2016 Notes”) in an unregistered offering to institutional investors. The Company used a portion of the net proceeds from the 2016 Notes to redeem the Company’s outstanding 2012 Notes, having an aggregate principal amount of €245.4 million ($327.4 million) on January 4, 2010. The remainder of the net proceeds from the 2016 Notes was used to (i) purchase Lion Capital’s remaining equity interest in Russian Alcohol by exercising the Lion Option and the Co-Investor Option, pursuant to the terms and conditions of the Lion Option Agreement and the Co-Investor Option Agreement, respectively (ii) repay all amounts outstanding under Russian Alcohol credit facilities; and (iii) repay certain other indebtedness.

On December 9, 2010, the Company issued an additional €50.0 million ($66.7 million) 8.875% Senior Secured Notes due 2016 (the “2016 Notes”) in an unregistered offering to institutional investors. The Company used the net proceeds from the additional 2016 Notes to repay its term loans and overdraft facilities with Bank Handlowy w Warszawie S.A and Bank Zachodni WBK S.A.

As of March 31, 2012 and December 31, 2011 the Company had accrued interest of $28.5 million and $7.0 million respectively, related to the Senior Secured Notes due 2016, with the next coupon due for payment on June 1, 2012.

	March 31,			December 31,
	2012			2011
Senior Secured Notes due 2016	$	953,705		$	935,971
Unamortized debt discount		(3,062	)		(3,207	)
Total	$	950,643		$	932,764

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	March 31,
	2012
Principal repayments for the following years
2012	$	43,215
2013		327,912
2014		0
2015		0
2016 and beyond		950,643
Total	$	1,321,770

6. INVENTORIES

The following table summarizes our inventories:

	March 31,		December 31,
	2012		2011
Raw materials and supplies	$	22,926	$	22,237
In-process inventories		8,046		2,655
Finished goods and goods for resale		90,352		92,005
Total	$	121,324	$	116,897

Because of the nature of the products supplied by the Company, great attention is paid to inventory rotation. The number of days in inventory increased from at approximately 80 days as of December 31, 2011 to approximately 123 days as of March 31, 2012. As a comparison, the number of days in inventory as of March 31, 2011 amounted to 127 days with total balance of $137.5 million.

7. INCOME TAXES

Our tax charge for the three months ended March 31, 2012 was $3.5 million which represents an effective tax rate for this period of 5.3%. The underlying tax rates in our key jurisdictions are 19% in Poland, 20% in Russia, 21% in Ukraine, 16% in Hungary and 35% in the United States. Changes in the Company’s uncertain income tax position, excluding the related accrual for interest and penalties, for the three months ended March 31, 2012 relate to reductions, additions for prior and current year tax positions. There were no reductions for prior year tax positions, settlements or lapses in statutes of limitations. As of March 31, 2012 and December 31, 2011, the uncertain income tax position balance was $6.7 million and $6.4 million, respectively.

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8. OPERATING SEGMENTS

The Company operates and manages its business based upon three primary geographic segments: Poland, Russia and Hungary. Selected financial data split based upon this segmentation assuming elimination of intercompany revenues and profits is shown below: Segment information represents only continuing operations.

	Segment Net Sales
	Three months ended March 31,
	2012		2011
Segment
Poland	$	47,178	$	45,895
Russia		95,602		105,658
Hungary		5,428		5,158
Total Net Sales	$	148,208	$	156,711

	Operating income / (loss)
	Three months ended March 31,
	2012			2011
Segment
Poland before fair value adjustments	$	6,523		$	3,369
Gain on remeasurement of previously held equity interests		0			7,898
Poland after fair value adjustments		6,523			11,267
Russia		(7,778	)		(634	)
Hungary		720			661
Corporate Overhead
General corporate overhead		(1,692	)		(1,243	)
Option Expense		(864	)		(693	)
Total Operating income / (loss)	($	3,091	)	$	9,358

	Identifiable Operating Assets
	March 31,		December 31,
	2012		2011
Segment
Poland	$	599,163	$	601,966
Russia		1,382,192		1,424,529
Hungary		22,957		20,265
Corporate		28,430		25,769
Total Identifiable Assets	$	2,032,742	$	2,072,529

	Goodwill
	March 31,		December 31,
	2012		2011
Segment
Poland	$	276,188	$	252,080
Russia		448,794		408,464
Hungary		6,693		6,109
Total Goodwill	$	731,675	$	666,653

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9. INTEREST EXPENSE, NET

The following items are included in Interest expense, net:

	Three months ended March 31,
	2012			2011
Interest income	$	245		$	525
Interest expense		(26,469	)		(27,377	)
Total interest expense, net	($	26,224	)	($	26,852	)

10. OTHER FINANCIAL INCOME, NET

The following items are included in Other financial income, net:

	Three months ended March 31,
	2012			2011
Foreign exchange impact related to foreign currency financing	$	98,681		$	31,651
Other gains / (losses)		(759	)		(605	)
Total other financial income / (expense), net	$	97,922		$	31,046

11. OTHER NON-OPERATING EXPENSE

The following items are included in Other Non-Operating Expense:

	Three months ended March 31,
	2012			2011
Factoring costs and bank fees		(2,262	)		(671	)
Other gains / (losses)		(336	)		(305	)
Total other non operating income / (expense), net	($	2,598	)	($	976	)

12. STOCK BASED COMPENSATION PLANS AND WARRANTS

During the three months ended March 31, 2012, the range of exercise prices for outstanding options was $2.00 to $60.92. During the three months ended March 31, 2012, the weighted average remaining contractual life of options outstanding is 4.9 years. Exercise prices for options exercisable as of March 31, 2012 ranged from $2.00 to $60.92. The Company has also granted 51,761 restricted stock units at an average price of $4.38 and 399,415 restricted stock at an average price of $4.38 during the first quarter of 2012.

The Company has issued stock options to employees under stock based compensation plans. Stock options are issued at the current market price, subject to a vesting period, which varies from one to three years. As of March 31, 2012, the Company has not changed the terms of any outstanding awards.

During the three months ended March 31, 2012, the Company recognized compensation cost of $0.86 million.

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As of March 31, 2012, there was $3.4 million of total unrecognized compensation cost related to non-vested stock options, restricted stock units and restricted stock granted under the Company’s Stock Incentive Plan. The costs are expected to be recognized over period through 2012-2015.

The following weighted-average assumptions were used in the calculation of fair value for options granted during 2011. For the three months ended March 31, 2012 the Company did not grant any options to its employees.

	December 31, 2011
	2011
Fair Value	$	7.60
Dividend Yield		0	%
Expected Volatility		66.1	%
Weighted Average Volatility		66.1	%
Risk Free Interest Rate		3	%
Expected Life of Options from Grant		3.2

13. COMMITMENTS AND CONTINGENT LIABILITIES

Supply contracts

The Company has various agreements covering its sources of supply, which, in some cases, may be terminated by either party on relatively short notice. Thus, there is a risk that a portion of the Company’s supply of products could be curtailed at any time.

Bank Guarantees

In accordance with current legislation in Russia each producer of spirit beverages must acquire excise stamps and must pay excise tax in full before buying spirit for production purposes. For each lot of stamps purchased, the alcohol producer must provide the relevant body with a bank guarantee in the full amount of payment for the excise tax to secure the legality of usage of the excise stamps. This bank guarantee serves as insurance against the illegal usage of excise stamps by an alcohol producer.

In addition, under new legislation effective since August 1, 2011 the producer purchasing spirit alcohol must a) prepay the excise tax in full or b) provide the relevant tax body with a bank guarantee in the full amount of the excise tax before purchasing to secure payment of the excise tax. This bank guarantee serves as insurance that the excise tax is paid in time.

Russian Alcohol signed a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 18.2 billion Russian rubles (approximately $620.8 million) for a period from 1 to 4 years, Bravo Premium signed a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 600.0 million Russian rubles (approximately $20.5 million) for a period from 1 to 2 years and Whitehall signed a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 1.7 billion Russian rubles (approximately $58.0 million) as insurance against the illegal usage of excise stamps.

According to the agreements, companies have the right to obtain bank guarantees during the agreement term for each purchase of excise stamps and for the purchase of spirit. The guarantees for excise stamps are held by Rosalkoregulirovanie (the Federal Service for Alcohol Market Regulation), during the whole production period for which the excise stamps were purchased. The guarantee for excise tax is held by the beneficiary (the tax body) for 6 months after the end of month the spirit was purchased.

As of March 31, 2012, the Company has bank guarantees related to customs duties on imported goods in Poland of $2.0 million.

Operating Leases and Rent Commitments

The Company makes rental payments for real estate, vehicles, office, computer, and manufacturing equipment under operating leases. The following is a schedule by years of the future rental payments under the non-cancelable operating lease as of March 31, 2012:

2012	$	8,753
2013		9,130
2014		8,722
2015		8,148
2016		5,536
Thereafter		2,976
Total	$	43,265

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During the first quarter of 2012, the Company continued its policy of renewing its transportation fleet by way of capital leases. The future minimum lease payments for the assets under capital lease as of March 31, 2012 are as follows:

2012	$	1,194
2013		522
2014		171
Gross payments due	$	1,887
Less interest		(132	)
Net payments due	$	1,755

Legal proceedings

From time to time we are involved in legal proceedings arising in the normal course of our business, including opposition and cancellation proceedings with respect to trademarks similar to some of our brands, and other proceedings, both in the United States and elsewhere. Except as set forth below, we are not currently involved in or aware of any pending or threatened proceedings that we reasonably expect, either individually or in the aggregate, will result in a material adverse effect on our consolidated financial statements.

On October 24, 2011, a class action complaint titled Steamfitters Local 449 Pension Fund vs. Central European Distribution Corporation, et al., was filed in the United States District Court, District of New Jersey on behalf of a putative class of all purchasers of our common stock from August 5, 2010 through February 28, 2011 against us and certain of our officers. The complaint seeks unspecified money damages and alleges violations of federal securities law in connection with alleged materially false and misleading statements and/or omissions regarding our business, financial results and prospects in our public statements and public filings with the U.S. Securities & Exchange Commission for the second and third quarters of 2010, relating to declines in our vodka portfolio, our need to take an impairment charge relating to the deterioration in fair value of certain of our brands in Poland and negative financial results from the launch of Żubrówka Biała. Subsequent to the above complaint, a second, substantially identical class action complaint titled Tim Schuler v. Central European Distribution Corporation, et al., was filed in the same court. Motions to consolidate the two cases and for the appointment of lead plaintiff and lead counsel have been filed and are awaiting decision. As a result, no response to the complaints has yet been filed. The Company intends to mount a vigorous defense to the claims asserted. As of March 31, 2012 the original plaintiffs, Steamfitters Pension Fund and Tim Schuler, no longer remain in the lawsuits and the current plaintiffs are now the Prosperity Group and the Arkansas Pension Fund, however the names of the lawsuits have remained unchanged.

On November 11, 2011, a purported shareholder derivative action, titled Ying Yeung v. William V. Carey, et al., was filed in the United States District Court, District of New Jersey against the current members of our board of directors (and against the Company as the nominal defendant), seeking unspecified damages on behalf of the Company. A second, substantially identical shareholder derivative complaint, titled Russell Partch v. William V. Carey, et al., was subsequently filed in the same court. Plaintiff alleges that our directors breached their fiduciary duties of care, good faith and loyalty to the Company by failing to establish and maintain adequate internal controls and by failing to exercise proper oversight over management, which would have prevented the Company from disseminating the allegedly false and misleading statements to shareholders that are the subject of the securities class action litigation described above. The derivative actions are at a very preliminary stage, and no response to the complaints has yet been filed.

Although we believe the allegations in the class and derivative complaints are without merit, these types of lawsuits can be protracted, time-consuming, distracting to management and expensive and, whether or not the claims are ultimately successful, could ultimately have an adverse effect on our business.

14. FAIR VALUE MEASUREMENTS

The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed financial statements on a recurring basis or on a nonrecurring basis during the reporting period. The fair value is an exit price,

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representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels of inputs used to measure fair value are as follows:

Level 1 —	Quoted prices in active markets for identical assets or liabilities.
Level 2 —	Observable inputs other than quoted prices included in Level 1. We value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.
Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

As of March 31, 2012, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of cash and cash equivalents. The monetary assets represented by these financial instruments are primarily located in Poland, Hungary and Russia. Consequently, they are subject to currency translation risk when reporting in U.S. Dollars. The fair values of the cash and cash equivalents, Convertible Senior Notes and Secured Senior Notes is determined based on quoted market prices in public markets and is categorized as Level 1. The Company does not have any financial assets measured at fair value on a recurring basis as Level 3 and there were no transfers in or out of Level 1, Level 2 or Level 3 during the three months ended March 31, 2012.

Non-financial assets and liabilities, such as goodwill and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment on the occurrence of a triggering event or in the case of goodwill, on at least an annual basis. Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual depletion of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related net book value. As of the balance sheet date, the carrying value of its long-lived assets are recoverable and no impairment existed.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring and nonrecurring basis as of March 31, 2012, and December 31, 2011.

			Assets at Fair Value Using
			Quoted Prices in Activated Markets for Identical Assets		Significant Other Observable Inputs		Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
March 31, 2012
Recurring items
Cash and cash equivalents	$	107,798	$	107,798	$	0	$	0
Convertible Senior Notes	$	272,800	$	272,800	$	0	$	0
Secured Senior Notes	$	731,350	$	731,350	$	0	$	0
Nonrecurring items
Assets held for sale	$	675	$	0	$	0	$	675
December 31, 2011
Recurring items
Cash and cash equivalents	$	94,410	$	94,410	$	0	$	0
Convertible Senior Notes	$	248,000	$	248,000	$	0	$	0
Secured Senior Notes	$	702,700	$	702,700	$	0	$	0
Nonrecurring items
Assets held for sale	$	675	$	0	$	0	$	675

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The Company has other financial instruments, such as receivables, accounts payable, overdrafts, short term bank loans and other liabilities which have been excluded from the tables above. Due to the short-term nature of these instruments, the carrying value approximate their fair values. The Company did not have any other financial instruments with the scope of the fair value disclosure requirements as of March 31, 2012.

15. EFFECTS OF FOREIGN CURRENCY MOVEMENTS

Substantially all of the Company’s operating cash flows and assets are denominated in Polish zloty, Russian ruble and Hungarian forint. This means that the Company is exposed to translation movements both on its balance sheet and statement of operations and comprehensive income. The impact on working capital items is demonstrated on the cash flow statement as the movement in exchange on cash and cash equivalents. The impact on the statement of operations is by the movement of the average exchange rate used to restate the statement of operations from Polish zloty, Russian ruble and Hungarian forint to U.S. dollars. The amounts shown as exchange rate gains or losses on the face of the statements of operations relate only to realized gains or losses on transactions that are not denominated in Polish zloty, Russian ruble or Hungarian forint. Table below presents the exchange rates used for translation of our balance sheet and statement of operations and comprehensive income balances as of and for the three months ended March 31, 2012:

	Balance sheet rate as of March 31, 2012		Balance sheet rate as of December 31, 2011		Average rate for the three months ended March 31, 2012		Average rate for the three months ended March 31, 2011
PLN / US$		3.1191		3.4174		3.2249		2.8800
RUR / US$		29.3148		32.2092		30.1674		29.2089
HUF / US$		221.2128		240.6620		225.5175		198.6207

Because the Company’s reporting currency is the U.S. dollar, the translation effects of fluctuations in the exchange rate of our functional currencies have impacted the Company’s financial condition and results of operations and have affected the comparability of our results between financial periods.

The Company has borrowings including its Convertible Notes due 2013 and Senior Secured Notes due 2016 that are denominated in U.S. dollars and euros, which have been lent to its operations where the functional currency is the Polish zloty and Russian ruble. The effect of having debt denominated in currencies other than the Company’s functional currencies is to increase or decrease the value of the Company’s liabilities on that debt in terms of the Company’s functional currencies when those functional currencies depreciate or appreciate in value respectively. As a result of this, the Company is exposed to gains and losses on the re-measurement of these liabilities. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rate which could result in a significant impact in the results of the Company’s operations.

Exchange Rate	Value of notional amount	Pre-tax impact of a 1% movement in exchange rate
USD-Polish zloty	$426 million	$4.3 million gain/loss
USD-Russian ruble	$264 million	$2.6 million gain/loss
EUR-Polish zloty	€430 million or approximately $574 million	$5.7 million gain/loss

16. SUBSEQUENT EVENTS

On April 23, 2012, the Company announced that definitive agreements had been signed with Russian Standard Corporation (via Roust Trading Limited) for a strategic transaction. Pursuant to a securities purchase agreement, Roust Trading Limited has agreed to make an investment in the Company in three stages, subject to typical closing conditions. First, on May 4, 2012 Roust Trading Limited acquired 5,714,286 newly issued shares of the Company’s common stock for an aggregate purchase price of $30 million, or $5.25 per share, and JSC “Russian Standard Bank,” an affiliate of Roust Trading Limited, purchased $70 million aggregate principal amount of senior notes due March 18, 2013, bearing an interest rate of 3.00% (the “New Debt”) issued by the Company.

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Subject to the consummation of the Second Closing (as defined in the securities purchase agreement), the Company (on or after January 30, 2013) or Roust Trading Limited (on or after the completion of the Second Closing) may cause the New Debt to effectively be exchanged for newly issued shares of the Company’s common stock equal to the then-outstanding principal amount of the New Debt, plus accrued and unpaid interest thereon as of the Second Closing, divided by $5.25. The total amount of shares of the Company’s common stock expected to be issued in relation to the New Debt is approximately 13,333,333 shares of the Company’s common stock plus any additional shares representing accrued and unpaid interest under the New Debt as of the Second Closing. Second, if shareholder approval is obtained, then (subject to typical closing conditions), Roust Trading Limited will purchase $102.6 million aggregate principal amount of senior rollover notes due July 31, 2016 (the “Rollover Notes”), from the Company. The Company must use the proceeds (net of fees and expenses) from the issuance of the Rollover Notes to repurchase the Convertible Senior Notes held by Roust Trading Limited or its affiliates, in the same principal amount as the Rollover Notes, at par. Third, the Company, at its option, may issue to Roust Trading Limited senior backstop notes in an aggregate principal amount of up to $107.5 million due July 31, 2016 (the “Backstop Notes”) to be used by the Company to pay the remaining principal amount of the Convertible Senior Notes then outstanding. Each of the Rollover Notes and Backstop Notes will bear a blended interest rate of 6.00% over the term of each note.

The Company and Roust Trading Limited also entered into a governance agreement in support of this investment. In accordance with this governance agreement, Roust Trading Limited may nominate up to three directors to the Company’s Board of Directors depending on the amount of the Company’s common stock held by Roust Trading Limited. In addition, Roust Trading Limited received various minority protection rights.

17. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”), which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. The Company adopted ASU 2011-04 during the first quarter of the current fiscal year. The adoption of ASU 2011-04 did not have a material impact on the Company’s consolidated financial statements other than disclosures related to fair value measurements.

In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”), which was issued to enhance comparability between entities that report under U.S. GAAP and IFRS, and to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. However, in December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”), which deferred the guidance on whether to require entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. ASU 2011-12 reinstated the requirements for the presentation of reclassifications that were in place prior to the issuance of ASU 2011-05 and did not change the effective date for ASU 2011-05. For public entities, the amendments in ASU 2011-05 and ASU2011-12 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. The Company adopted both ASU 2011-05 and ASU 2011-12 during the first quarter of the current fiscal year. The adoption of ASU 2011-05 and ASU 2011-12 did not have a material impact on the Company’s consolidated financial statements, other than presentation of comprehensive income.

In September 2011, the FASB issued ASU 2011-08, “Testing Goodwill for Impairment” (“ASU 2011-08”), which simplifies testing for impairment by allowing an entity to first assess qualitative factors and determine if it is more likely than not (defined as 50% or more) that the fair value of the reporting unit is less than its carrying amount. That determination can then be used to decide if it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, which corresponds to the Company’s first quarter of current fiscal year. The Company will adopt ASU 2011-08 during the current fiscal year and this adoption is not expected to have a material impact on the Company’s consolidated financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

This report (and other oral and written statements we have made or make, including press releases containing information about our business, results of operations, financial condition, guidance and other business developments), contains forward-looking statements, which provide our current expectations or forecasts of future events. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology, but the absence of these words does not necessarily mean that a statement is not forward-looking. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include, without limitation:

• information concerning possible or assumed future results of operations, trends in financial results and business plans, including those relating to earnings growth and revenue growth, liquidity, prospects, strategies and the industry in which the Company and its affiliates operate, as well as the integration of recent acquisitions and other investments and the effect of such acquisitions and other investments on the Company;

• statements about the expected level of our costs and operating expenses, and about the expected composition of the Company’s revenues;

• information about the impact of governmental regulations on the Company’s businesses;

• statements about local and global credit markets, currency exchange rates and economic conditions;

• other statements about the Company’s plans, objectives, expectations and intentions including with respect to its credit facility and other outstanding indebtedness; and

• other statements that are not historical facts.

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

We urge you to read and carefully consider the items of this and other reports and documents that we have filed with or furnished to the SEC for a more complete discussion of the factors and risks that could affect our future performance and the industry in which we operate, including the risk factors described in this report and in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2012. In light of these risks, uncertainties and assumptions, the forward-looking events described in this report may not occur as described, or at all.

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

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

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Overview

The Company is one of the world’s largest vodka producers and Central and Eastern Europe’s largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. During 2011, the Company continued its strategy of integrating the business in Russia following the buyout of the remaining stake in Whitehall in the first quarter of 2011 when the Company took full economic and controlling ownership of the business. During the first quarter of 2012, the Company continued to focus on developing sales volumes in its key markets of Poland and Russia as well as reorganizing the Russia operations. Both the Polish and Russian vodka markets continued to see an overall market decline. In Poland, however, the Company was able to see year on year domestic volume and value growth for the quarter ending March 31, 2012 primarily due to the continued success of Żubrówka Biała and the higher margin flavored segment including Soplica. Total Russian volumes were down which were driven mainly by lower domestic vodka volumes, as a result of wholesalers de-stocking to lower levels of inventory and reduced sales to key accounts, during our renegotiations in the first quarter of 2012, partially offset by higher export volumes. On the domestic vodka front, sales volumes for the first quarter 2012 in Russia were down by 15% as compared to 2011, however, sell out from wholesalers to the retail trade was only down 8% - 9% reflecting the impact of continued de-stocking. Finally spirit, which is the main ingredient in vodka production showed signs of stabilizing in both Russia and Poland, however Russia is still impacted as compared to the same quarter in the prior year due to the rapid increases in spirit prices during 2011.

Significant factors affecting our consolidated results of operations

Effect of Exchange Rate and Interest Rate Fluctuations

Substantially all of Company’s operating cash flows and assets are denominated in Polish zloty, Russian ruble and Hungarian forint. This means that the Company is exposed to translation movements both on its balance sheet and statement of operations. The impact on working capital items is demonstrated on the cash flow statement as the movement in exchange on cash and cash equivalents. The impact on the statement of operations is due to the movement of the average exchange rate used to restate the statements of operations from Polish zloty, Russian ruble and Hungarian forint to U.S. dollars. The amounts shown as exchange rate gains or losses on the face of the statements of operations relate only to realized gains or losses on transactions that are not denominated in Polish zloty, Russian ruble or Hungarian forint. The table below presents the exchange rates used for translation of our balance sheet and statement of operations balances as of and for the quarter ended March 31, 2012:

	Balance sheet rate as of March 31, 2012		Average rate for the three months ended March 31, 2012
PLN / US$		3.1191		3.2249
RUR / US$		29.3148		30.1674
HUF / US$		221.2128		225.5175

Because the Company’s reporting currency is the U.S. dollar, the translation effects of fluctuations in the exchange rate of our functional currencies have impacted the Company’s financial condition and results of operations and have affected the comparability of our results between financial periods.

The Company also has borrowings including its Convertible Notes due 2013 and Senior Secured Notes due 2016 that are denominated in U.S. dollars and euros, which have been lent to its operations where the functional currency is the Polish zloty and Russian ruble. The effect of having debt denominated in currencies other than the Company’s functional currencies is to increase or decrease the value of the Company’s liabilities on that debt in terms of the Company’s functional currencies when those functional currencies depreciate or appreciate in value, respectively. As a result of this, the Company is exposed to gains and losses on the re-measurement of these liabilities. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rate which could result in a significant impact in the results of the Company’s operations.

Exchange Rate	Value of notional amount	Pre-tax impact of a 1% movement in exchange rate
USD-Polish zloty	$426 million	$	4.3 million gain/loss
USD-Russian ruble	$264 million	$	2.6 million gain/loss
EUR-Polish zloty	€430 million or approximately $574 million	$	5.7 million gain/loss

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Results of Operations:

Three months ended March 31, 2012 compared to three months ended March 31, 2011

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

	Three months ended March 31,
	2012			2011
Sales	$	323,975		$	336,139
Excise taxes		(175,767	)		(179,428	)
Net sales		148,208			156,711
Cost of goods sold		89,529			97,374
Gross profit		58,679			59,337
Operating expenses		61,770			57,877
Gain on remeasurement of previously held equity interests		0			(7,898	)
Operating income / (loss)		(3,091	)		9,358
Non operating income / (expense), net
Interest income / (expense), net		(26,224	)		(26,852	)
Other financial income / (expense), net		97,922			31,046
Other non operating income / (expense), net		(2,598	)		(976	)
Income before taxes and equity in net income from unconsolidated investments		66,009			12,576
Income tax expense		(3,513	)		(2,641	)
Equity in net losses of affiliates		0			(8,814	)
Net income attributable to the company		62,496			1,121
Net income from operations per share of common stock, basic	$	0.86		$	0.02
Net income from operations per share of common stock, diluted	$	0.86		$	0.02
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		28,719			137,016
Comprehensive income attributable to the company	$	91,215		$	138,137

Net Sales

Net sales represent total sales net of all customer rebates, excise tax on production and imports, and value added tax. Total net sales decreased by approximately 5.4%, or $8.5 million, from $156.7 million for the three months ended March 31, 2011 to $148.2 million for the three months ended March 31, 2012. The decrease was driven primarily by lower local currency sales of $6.3 million and the impact of foreign exchange translation of $8.7 million partially offset by the consolidation of Whitehall only for two months in 2011 comparing to full quarter in 2012, resulting in an increase of $6.5 million. The lower local currency sales was due to lower sales in Russia, which is described in more detail in the segmental analysis below.

	Segment Net Sales Three months ended March 31,
	2012		2011
Segment
Poland	$	47,178	$	45,895
Russia		95,602		105,658
Hungary		5,428		5,158
Total Net Sales	$	148,208	$	156,711

Sales for Poland increased by $1.3 million from $45.9 million for the three months ended March 31, 2011 to $47.2 million for the three months ended March 31, 2012. This increase was driven mainly by a volume growth of domestic vodkas of 7% and export volume growth of 17%, resulting in a net sales value increase of $6.2 million, or 15% in local currency terms, offset by weaker Polish zloty against the U.S. dollar which accounted for approximately $4.9 million of sales in U.S. dollar terms. The Company continued to see strong demand for its Żubrówka Biała as well as higher margin flavored vodkas including Soplica.

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Sales for Russia decreased by $10.1 million from $105.7 million for the three months ended March 31, 2011 to $95.6 million for the three months ended March 31, 2012. Included in the sales decline was the fact that domestic volume sales were down by 15% and overall sales value decreased by 12% in local currency. Lower sales volumes in Russia were primarily due to an overall weak vodka market in Russia, with total sales volumes in the industry down during the quarter, as well as continued lower inventory levels in the wholesale trade and reduced sales to key accounts during our renegotiations in the first quarter of 2012. The 15% decline in domestic sales represents the decline in sales into the trade, whereas sales out of the trade to the end customer was only down 8% - 9%, with the difference due to the impact of de-stocking. The sales value decrease of the Russian business was also driven by the weakening of the Russian ruble against the U.S. dollar which accounted for approximately $3.2 million of sales in U.S. dollar terms. This was partially offset by the effect of consolidation of Whitehall only for two months in 2011 comparing to full quarter in 2012, resulting in a year on year increase of $6.5 million.

Sales for Hungary increased by $0.2 million from $5.2 million for the three months ended March 31, 2011 to $5.4 million for the three months ended March 31, 2012 which resulted in a $0.9 million increase in volumes on local currency terms offset by a weaker Hungarian forint against the U.S. dollar which accounted for approximately $0.7 million of sales in U.S. dollar terms.

Gross Profit

Total gross profit decreased by approximately 1.0%, or $0.6 million, to $58.7 million for the three months ended March 31, 2012, from $59.3 million for the three months ended March 31, 2011. The decline in margin was driven primarily by the lower sales value in Russia. Although absolute gross margin declined, gross profit margins as a percentage of net sales increased by 1.7 percentage points from 37.9% to 39.6% for the three months ended March 31, 2012 as compared to the three months ended March 31, 2011. The improvement in gross margin percentage was driven by a number of factors including improved product and channel mix in Poland and price increases taken in Russia. Part of the improvement in pricing coming from the Russian market was offset by the year on year growth of spirit pricing which resulted in approximately $3.2 million of additional cost in the first quarter of 2012. The spirit prices in Russia have however recently begun to stabilize since January 2012, and in Poland spirit prices have been stable since February 2011 and into the beginning of 2012.

Operating Expenses

Operating expenses consist of selling, general and administrative, or “SG&A” expenses, advertising expenses, non-production depreciation and amortization, and provision for bad debts. Total operating expenses excluding fair value adjustments increased by $3.9 million, from $57.9 million for the three months ended March 31, 2011 to $61.8 million for the three months ended March 31, 2012. For comparability of costs between periods, operating expenses, after excluding the fair value adjustments, are shown separately in the table below. As a percent of net sales they increased from 36.9% for the three months ended March 31, 2011 to 41.7% for the three months ended March 31, 2012.

The table below sets forth the items of operating expenses.

	Operating Expenses Three Months Ended March 31,
	2012		2011
	($ in thousands)
SG&A	$	52,924	$	49,076
Marketing		6,490		5,950
Depreciation and amortization		2,356		2,851
Sub-Total		61,770		57,877
Fair value adjustments		0		(7,898	)
Total operating expense	$	61,770	$	49,979

SG&A consists of salaries, warehousing and transportation costs, administrative expenses and bad debt expense. SG&A expenses increased by $3.8 million, from $49.1 million for the three months ended March 31, 2011 to $52.9 million for the three months ended March 31, 2012. The increase in SG&A is primarily due to the inclusion of a full quarter of the Whitehall Group in 2012 of $3.9 million, which resulted in like for like SG&A staying flat.

Marketing expenses increased slightly mainly due to higher marketing spending primarily in Russia and Ukraine.

Depreciation and amortization decreased by $0.5 million, from $2.9 million for the three months ended March 31, 2011 to $2.4 million for the three months ended March 31, 2012.

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Operating Income

Total operating income decreased by $12.5 million, from $9.4 million income for the three months ended March 31, 2011 to $3.1 million loss for the three months ended March 31, 2012, primarily driven by lower domestic sales and higher spirit costs in the Russian market. The table below summarizes the segmental split of operating profit.

	Operating Income/(Loss) Three months ended March 31,
	2012			2011
Segment
Poland before fair value adjustments	$	6,523		$	3,369
Gain on remeasurement of previously held equity interests		0			7,898
Poland after fair value adjustments		6,523			11,267
Russia		(7,778	)		(634	)
Hungary		720			661
Corporate Overhead
General corporate overhead		(1,692	)		(1,243	)
Option Expense		(864	)		(693	)
Total Operating Profit/(Loss)		($3,091	)	$	9,358

Underlying operating income in Poland excluding fair value adjustments increased by approximately 91.2%, or $3.1 million, from $3.4 million for the three months ended March 31, 2011 to $6.5 million for the three months ended March 31, 2012. The operating loss in Russia increased by $7.2 million from $0.6 million loss for the three months ended March 31, 2011 to $7.8 million loss for the three months ended March 31, 2012. The changes in operating income in both of these segments were driven by all of the factors described above.

Non Operating Income and Expenses

Total interest expense decreased by approximately 2.6%, or $0.7 million, from $26.9 million for the three months ended March 31, 2011 to $26.2 million for the three months ended March 31, 2012. This decrease was primarily driven by the euro exchange rate as compared to the Polish zloty.

The Company recognized $97.9 million of non-cash unrealized foreign exchange rate income in the three months ended March 31, 2012, primarily related to the impact of movements in exchange rates on our U.S. dollar and euro denominated liabilities, as compared to $31.0 million of gain in the three months ended March 31, 2011.

Total other non-operating expenses increased by $1.6 million, from a loss of $1.0 million for the three months ended March 31, 2011 to a loss of $2.6 million for the three months ended March 31, 2012.

	Three months ended March 31,
	2012			2011
Factoring costs and bank fees		(2,262	)		(671	)
Other gains / (losses)		(336	)		(305	)
Total other non operating income / (expense), net		($2,598	)		($976	)

Income Tax

Our effective tax rate for the three months ended March 31, 2012 was 5.3% as compared to an average blended statutory rate of 21%. The difference in effective tax rates was due primarily to permanent tax differences related to the treatment of unrealized foreign exchange rate gains in Poland.

Statement of Liquidity and Capital Resources

During the three months ended March 31, 2012, the Company’s primary sources of liquidity were cash flows generated from operations. The Company’s primary uses of cash were to fund its working capital requirements, service indebtedness and finance capital expenditures. The following table sets forth selected information concerning the Company’s consolidated cash flow during the periods indicated.

	Three months ended March 31, 2012			Three months ended March 31, 2011
	($ in thousands)
Cash flow from operating activities	$	23,766		$	84,389
Cash flow from investing activities	$	(1,202	)	$	(41,453	)
Cash flow from financing activities	$	(18,188	)	$	(4,140	)

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Management views and performs analysis of financial and non financial performance indicators of the business by segments that are split by countries. The extensive analysis of indicators such as sales value in local currencies, gross margin and operating expenses by segment is included in the MD&A section of this Form 10-Q.

Net cash flow from operating activities

Net cash flow from operating activities represents net cash from operations and interest. Overall cash flow from operating activities decreased from cash generation of $84.4 million for the three months ended March 31, 2011 to cash generation of $23.8 million for the three months ended March 31, 2012. The primary factors contributing to this lower cash generation in 2012 are due to the fact that in the first quarter of 2011, the Company entered into factoring arrangements in Poland for the first time which resulted in higher cash collection during this quarter. In 2011 the Polish operations received the cash inflow from the peak Q4 2010 sales as well as the cash from the factored receivables of the quarter, resulting in a one-off benefit in cash flow for the period. During the same period in 2012, the Polish operations only received the normal factored cash flow from the first quarter of 2012.

Overall working capital movements of accounts receivable, inventory and accounts payable provided approximately $54.2 million of cash during the three months ended March 31, 2012. Days sales outstanding (“DSO”) as of March 31, 2012 amounted to 60.8 days as compared to 62 days as of March 31, 2011. The number of days in inventory as of March 31, 2012 amounted to 123 days as compared to 127 days as of March 31, 2011. In addition, the ratio of our current assets to current liabilities, net of inventories, was 0.71 as of March 31, 2012.

Net cash flow used in investing activities

Net cash flows used in investing activities represent net cash used to acquire subsidiaries and fixed assets. Net cash outflow for the three months ended March 31, 2012 was $1.2 million.

Net cash flow from financing activities

Net cash flow from financing activities represents cash used for servicing indebtedness, borrowings under credit facilities. Net cash used in financing activities was $18.2 million for the three months ended March 31, 2012 as compared to an outflow of $4.1 million for the three months ended March 31, 2011. The primary use in the three months ended March 31, 2012 was repayment of loans by the Company offset by certain loans drawn in Russia. For details see Note 5 to the Condensed Consolidated Financial Statements.

The Company’s Future Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As discussed further in Note 5, our Convertible Senior Notes (the “Convertible Notes”) are due on March 15, 2013. Our current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment and the Company may default on the Convertible Notes, unless the transaction with Russian Standard Corporation is completed as scheduled. The Company’s cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at March 31, 2012. These conditions raise substantial doubt about the Company’s ability to continue as a going concern unless the transaction with Russian Standard described below is completed as scheduled.

As discussed further in Note 16, on April 23, 2012, the Company announced that definitive agreements had been signed with Russian Standard Corporation (via Roust Trading Limited) for a strategic transaction. Pursuant to these agreements, on May 4, 2012 Roust Trading Limited and its affiliates invested $100 million in the Company by purchasing a combination of newly issued shares of the Company’s common stock and notes exchangeable into the Company’s common shares following shareholder approval. In addition, Roust Trading has agreed to purchase from the Company up to $210 million principal amount of newly issued, unsecured senior notes due July 31, 2016 at a blended interest rate of 6.00%. While we believe that this transaction would allow the Company to settle the Convertible Notes before March 15, 2013, the transaction is subject to certain risks, including shareholder approval which may not be obtained. The Company’s annual general meeting (AGM) is scheduled for June 29, 2012 at which time the final vote of the shareholders will be known. We believe that if the transaction is completed as scheduled, Convertible Notes will be repaid by their maturity date which would substantially reduce doubts about the Company’s ability to continue as a going concern. Under the terms of the Indenture for our Senior Secured Notes due 2016, we expect that any indebtedness we incur in exchange for, or to redeem or refinance, all or a portion of the Convertible Notes will be required to be incurred as permitted refinancing indebtedness (a term defined in the Indenture); as a result, the terms of the indenture may limit our ability to enter into agreements that contain limitations on dividends (and certain payments having similar effects) payable to the Company (or its subsidiaries) by its subsidiaries.

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Any failure to pay the Convertible Notes would also be an event of default under our Senior Secured Notes due 2016 and the terms of our other indebtedness. Such events would jeopardize our ability to continue as a going concern. Notwithstanding the foregoing, we believe that cash on hand, cash from operations and available credit facilities will be sufficient to fund our anticipated cash requirements for working capital purposes and normal capital expenditures, and that we will remain in compliance with the financial covenants contained in our debt agreements, for at least the next twelve months. The Company’s cash flow forecasts used in making this determination include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage the Company’s working capital needs.

For additional information, see also “Risk Factors—Risks Relating to Our Indebtedness”—included in Item 8 of our annual report on Form 10-K filed with the SEC on February 29, 2012.

Financing Arrangements

Bank Facilities

As of March 31, 2012, the Company has outstanding liability of €25.0 million ($33.4 million) from the term loans from Zenit Bank, Alfa Bank and Raiffeisen Bank drawn by Whitehall:

• The loan agreement with Zenit Bank dated March 29, 2011, matures on June 6, 2012. The credit limit under this loan agreement is €10.0 million ($13.3 million) and the loan is released in tranches maturing in 365 days, no later than June 6, 2012. The loan was released in four tranches between April 21, 2011, and September 13, 2011, repayable between April 20, 2012 and May 18, 2012. As of March 31, 2012, the Company has outstanding liability of €5.0 million ($6.7 million) from this term loan;

• The loan agreement with Alfa Bank dated July 22, 2008, matures on October 18, 2014. The credit limit under this agreement is €20.0 million ($26.7 million) and the loan is released in tranches maturing within three, six or nine months, depending if they are pledged on inventory. The loan was released in eight tranches between September 14, 2011, and March 30, 2012, repayable between April 28, 2012 and October 30, 2012. As of March 31, 2012 €15.1 million ($20.1 million) of this limit was granted to the Company;

• The loan agreement with Raiffeisen Bank dated July 6, 2010, matures on July 6, 2012. The credit limit under this agreement is €10.0 million ($13.3 million) and the loan is released in tranches maturing within one to 12 months, not later than July 6, 2012 . The loan was released in five tranches between September 12, 2011, and October 26, 2011, repayable between May 18, 2012, and July 6, 2012. As of March 31, 2012, the Company has outstanding liability of €4.9 million ($6.5 million) from this term loan.

The aforementioned loans drawn by Whitehall have no financial covenants that need to be met and are guaranteed by Whitehall companies. The loans from Zenit Bank and Alfa Bank are also secured on the Company’s inventory.

As of March 31, 2012, the Company also has outstanding total liability of 879.6 million Russian rubles ($30.0 million) from term loans from Unicredit and JSC Grand Invest Bank, both drawn by Russian Alcohol, as well as, an overdraft facility from Sberbank drawn by Bravo Premium:

• The loan agreement with Unicredit dated May 24, 2011, matures on November 23, 2012. This loan has no financial covenants and is secured by goods up to 720 million Russian rubles ($24.6 million) and guarantees given by companies of Russian Alcohol. As of March 31, 2012, the Company has outstanding liability of 600.0 million Russian rubles ($20.5 million) from this term loan;

• The loan agreement with JSC Grand Invest Bank dated November 25, 2011, matures on November 23, 2012. This loan has no financial covenants that need to be met. As of March 31, 2012, the Company has outstanding liability of 279.6 million Russian rubles ($9.5 million) from this term loan;

• The overdraft agreement with Sberbank dated February 6, 2012, matures on February 5, 2013. The credit limit under this agreement is 60 million Russian rubles ($2.0 million). This loan has no financial covenants and is secured by fixed assets. As of March 31, 2012, the Company has outstanding liability of 52.5 million Russian rubles ($1.8 million) from this overdraft facility.

As of March 31, 2012, the Company had available to use under existing overdraft facility in Hungary 100.0 million Hungarian forints ($0.5 million).

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Senior Secured Notes due 2016

On December 2, 2009, the Company issued and sold $380 million 9.125% Senior Secured Notes due 2016 and €380 million ($507 million) 8.875% Senior Secured Notes due 2016 (the “2016 Notes”) in an offering to institutional investors that was not required to be registered with the SEC. The Company used a portion of the net proceeds from the 2016 Notes to redeem the Company’s outstanding 2012 Notes, having an aggregate principal amount of €245.4 million ($327.4 million) on January 4, 2010. The remainder of the net proceeds from the 2016 Notes was used to (i) purchase Lion Capital’s remaining equity interest in Russian Alcohol by exercising the Lion Option and the Co-Investor Option, pursuant to the terms and conditions of the Lion Option Agreement and the Co-Investor Option Agreement, respectively (ii) repay all amounts outstanding under the Russian Alcohol credit facilities; and (iii) repay certain other indebtedness.

On December 9, 2010 the Company issued and sold additional €50 million ($66.7 million) 8.875% Senior Secured Notes due 2016 (the “2016 Notes”) in an offering to institutional investors that was not required to be registered with the SEC. The Company used the net proceeds from the additional 2016 Notes to repay its term loans and overdraft facilities with Bank Handlowy w Warszawie S.A and Bank Zachodni WBK S.A.

The 2016 Notes are guaranteed on a senior basis by certain of the Company’s subsidiaries. We are required to ensure that subsidiaries representing at least 85% of our consolidated EBITDA, as defined in the indenture, guarantee the notes. The notes are secured, directly or indirectly, by a variety of our and our subsidiary’s assets, including shares of the issuer of the notes and subsidiaries in Poland, Cyprus, Russia and Luxembourg, certain intercompany loans made by the issuer of the notes and our Russian finance company in connection with the issuance of the notes, trademarks related to the Soplica brand registered in Poland, European Union trademarks for the Parliament brand registered in Germany, and bank accounts over $5.0 million. We have also provided mortgages over our Polmos and Bols production plants and the Russian Alcohol Siberian and Topaz Distilleries. The indenture governing the 2016 Notes contains certain restrictive covenants, including covenants limiting the Company’s ability to: incur or guarantee additional debt; make certain restricted payments; transfer or sell assets; enter into transactions with affiliates; create certain liens; create restrictions on the ability of restricted subsidiaries to pay dividends or other payments; issue guarantees of indebtedness by restricted subsidiaries; enter into sale and leaseback transactions; merge, consolidate, amalgamate or combine with other entities; designate restricted subsidiaries as unrestricted subsidiaries; and engage in any business other than a permitted business. The indenture governing the 2016 Notes also contains a cross-acceleration covenant, which would apply in the event that we do not repay when due our Convertible Notes or any other indebtedness which equals or exceeds $30 million. In addition, in the event of a change of control (as that term is used in our indenture), we would be required to offer to repay the outstanding indebtedness under the 2016 Notes at a price equal to 101% of the aggregate principal amount thereof.

Convertible Senior Notes

On March 7, 2008, the Company completed the issuance of $310 million aggregate principal amount of 3% Convertible Senior Notes due 2013 (the “Convertible Notes”). Interest is due semi-annually on the 15th of March and September, beginning on September 15, 2008. The Convertible Notes are convertible in certain circumstances into cash and, if applicable, shares of our common stock, based on an initial conversion rate of 14.7113 shares per $1,000 principal amount, subject to certain adjustments. Upon conversion of the notes, the Company will deliver cash up to the aggregate principal amount of the notes to be converted and, at the election of the Company, cash and/or shares of common stock in respect to the remainder, if any, of the conversion obligation. The proceeds from the Convertible Notes were used to fund the cash portions of the acquisitions of Copecresto Enterprises Limited and Whitehall. The indenture governing the Convertible Notes also contains a cross-acceleration covenant, which would apply in the event that we do not repay when due any indebtedness which equals or exceeds $30 million. In addition, in the event of a fundamental change (as that term is used in our indenture), we would be required to offer to repay the outstanding indebtedness under the Convertible Notes in cash at a price equal to 100% of the aggregate principal amount thereof.

Effects of Inflation and Foreign Currency Movements

Inflation in Poland is projected at 3.7% for 2012, compared to actual inflation of 4.6% in 2011. In Russia, Hungary and Ukraine, inflation for 2012 is projected at 6.0%, 4.9% and 6.5% respectively, compared to actual inflation of 6.1%, 4.1% and 8.0% in 2011.

Substantially all of the Company’s operating cash flows and assets are denominated in Polish zloty, Russian ruble and Hungarian forint. This means that the Company is exposed to translation movements both on its balance sheet and statement of operations. The impact on working capital items is demonstrated on the cash flow statement as the movement in exchange on cash and cash equivalents. The impact on the statement of operations is by the movement of the average exchange rate used to restate the statement of operations from Polish zloty, Russian ruble and Hungarian forint to U.S. dollars. The amounts shown as exchange rate gains or losses on the face of the statements of operations relate only to realized gains or losses on transactions that are not denominated in Polish zloty, Russian ruble or Hungarian forint. Table below presents the exchange rates used for translation of our balance sheet and statement of operations balances as of and for the quarter ended March 31, 2012:

	Balance sheet rate as of March 31, 2012		Average rate for the three months ended March 31, 2012
PLN / US$		3.1191		3.2249
RUR / US$		29.3148		30.1674
HUF / US$		221.2128		225.5175

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Because the Company’s reporting currency is the U.S. dollar, the translation effects of fluctuations in the exchange rate of our functional currencies have impacted the Company’s financial condition and results of operations and have affected the comparability of our results between financial periods.

The Company has borrowings including its Convertible Notes due 2013 and Senior Secured Notes due 2016 that are denominated in U.S. dollars and euros, which have been lent to its operations where the functional currency is the Polish zloty and Russian ruble. The effect of having debt denominated in currencies other than the Company’s functional currencies is to increase or decrease the value of the Company’s liabilities on that debt in terms of the Company’s functional currencies when those functional currencies depreciate or appreciate in value respectively. As a result of this, the Company is exposed to gains and losses on the re-measurement of these liabilities. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rate which could result in a significant impact in the results of the Company’s operations.

Exchange Rate	Value of notional amount	Pre-tax impact of a 1% movement in exchange rate
USD-Polish zloty	$426 million	$	4.3 million gain/loss
USD-Russian ruble	$264 million	$	2.6 million gain/loss
EUR-Polish zloty	€430 million or approximately $574 million	$	5.7 million gain/loss

Significant Accounting Policies and Estimates

For a discussion of our critical accounting policies, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2011 Annual Report on Form 10-K.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our operations are conducted primarily in Poland and Russia, and our functional currencies are primarily the Polish zloty, Hungarian forint and Russian ruble, and our reporting currency is the U.S. dollar. Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, bank loans, overdraft facilities and long-term debt. All of the monetary assets represented by these financial instruments are located in Poland, Russia and Hungary. Consequently, they are subject to currency translation movements when reporting in U.S. dollars.

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

The Company has borrowings including its Convertible Notes due 2013 and Senior Secured Notes 2016 that are denominated in U.S. dollars and euros, which have been lent to its operations where the functional currency is the Polish zloty and Russian ruble. The effect of having debt denominated in currencies other than the Company’s functional currencies is to increase or decrease the value of the Company’s liabilities on that debt in terms of the Company’s functional currencies when those functional currencies depreciate or appreciate in value respectively. As a result of this, the Company is exposed to gains and losses on the re-measurement of these liabilities. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rate which could result in a significant impact in the results of the Company’s operations.

Exchange Rate	Value of notional amount	Pre-tax impact of a 1% movement in exchange rate
USD-Polish zloty	$426 million	$	4.3 million gain/loss
USD-Russian ruble	$264 million	$	2.6 million gain/loss
EUR-Polish zloty	€430 million or approximately $574 million	$	5.7 million gain/loss

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures.

We have carried out an evaluation under the supervision of, and with the participation of, our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2012. Since December 31, 2011, , we have begun the restructuring of our corporate finance and reporting department in Poland and Russia to implement more effective internal controls over financial reporting. However, our evaluation has disclosed material weaknesses still exist in our internal control over financial reporting as noted in Management’s Assessment on Internal Control over Financial Reporting located in Item 9A, Financial Statements and Supplementary Data, of our 2011 Annual Report on Form 10-K.

Due to our material weaknesses, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are not effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Changes in internal control over financial reporting.

There has been no material change in internal control over financial reporting in the quarter ended March 31, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Please refer to Note 13 of the accompanying Condensed Consolidated Financial Statements attached herein for a discussion of certain legal proceedings.

Item 1A. Risk Factors.

For a discussion of the Company’s risk factors, see the information under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on February 29, 2012.

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Item 6. Exhibits.

(a) Exhibits

Exhibit Number	Exhibit Description
3.1	Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Quarterly Report on Form 10-Q filed with the SEC on May 5, 2010 and incorporated herein by reference).
3.2	Amended and Restated Bylaws (filed as Exhibit 3.2 to the Quarterly Report on Form10-Q filed with the SEC on November 9, 2011 and incorporated herein by reference).
10.63(a)	Securities Purchase Agreement, dated April 23, 2012 by and among Central European Distribution Corporation and Roust Trading Ltd. (filed as Exhibit 10.1 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
10.63(b)	Governance Agreement, dated April 23, 2012 by and among Central European Distribution Corporation and Roust Trading Ltd. (filed as Exhibit 10.2 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
10.63(c)	Registration Rights Agreement, dated April 23, 2012, by and among Central European Distribution Corporation and Roust Trading Ltd. (filed as Exhibit 10.3to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
10.63(d)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation and Roust Trading Ltd. (filed as Exhibit 10.4 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).

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31.1*	Certificate of the CEO pursuant to Rule 13a-15(e) or Rule 15d-15(e).
31.2*	Certificate of the CFO pursuant to Rule 13a-15(e) or Rule 15d-15(e).
32.1*	Certification of the CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1(a)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation, Mr. David Bailey and Roust Trading Ltd. (filed as Exhibit 99.1 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
99.1(b)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation, Mr. N. Scott Fine and Roust Trading Ltd. (filed as Exhibit 99.2 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
99.1(c)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation, Mr. William Shanahan and Roust Trading Ltd. (filed as Exhibit 99.3 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
99.1(d)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation, Mr. Robert Koch and Roust Trading Ltd. (filed as Exhibit 99.4 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
99.1(e)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation, Mr. Markus Sieger and Roust Trading Ltd. (filed as Exhibit 99.5 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
99.1(f)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation, Mr. Marek Forysiak and Roust Trading Ltd. (filed as Exhibit 99.6 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
99.1(g)	Voting Agreement, dated April 23, 2012, by and among Central European Distribution Corporation, Mr. William V. Carey and Roust Trading Ltd. (filed as Exhibit 99.7 to the Periodic Report on Form 8-K filed with the SEC on April 24, 2012 and incorporated herein by reference).
101*	The following financial statements from Central European Distribution Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) Notes to Consolidated Financial Statements, tagged as blocks of text.

* Filed herewith.

28

SIGNATURES

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

	CENTRAL EUROPEAN DISTRIBUTION CORPORATION
	(registrant)
Date: May 10, 2012	By:	/s/    WILLIAM V. CAREY
		William V. Carey
		President and Chief Executive Officer
Date: May 10, 2012	By:	/s/    CHRIS BIEDERMANN
		Chris Biedermann
		Vice President and Chief Financial Officer

29

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, William V. Carey, certify that:

1. I have reviewed this report on Form 10-Q of Central European Distribution Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2012
By:	/s/ William V. Carey
	William V. Carey President and Chief Executive Officer (principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Chris Biedermann, certify that:

1. I have reviewed this report on Form 10-Q of Central European Distribution Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2012
By:	/s/ Chris Biedermann
	Chris Biedermann Vice President and Chief Financial Officer (principal financial officer)

EX-32.1

Exhibit 32.1

Written Statement of Chief Executive Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned, the Chief Executive Officer of Central European Distribution Corporation (the “Company”), hereby certifies that, to his knowledge on the date hereof:

(a) the Form 10-Q of the Company for the quarterly period ended March 31, 2012, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2012

/s/ William V. Carey

William V. Carey

Chairman, President and Chief Executive

Officer

EX-32.2

Exhibit 32.2

Written Statement of Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned, the Chief Financial Officer of Central European Distribution Corporation (the “Company”), hereby certifies that, to his knowledge on the date hereof:

(a) the Form 10-Q of the Company for the quarterly period ended March 31, 2012, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2012

/s/ Chris Biedermann

Chris Biedermann

Vice President and Chief Financial Officer

XML

Borrowings (Bank Facilities) (Details) In Millions, unless otherwise specified	0 Months Ended							0 Months Ended		3 Months Ended		0 Months Ended		3 Months Ended		0 Months Ended		3 Months Ended			3 Months Ended						3 Months Ended				3 Months Ended	0 Months Ended	3 Months Ended	0 Months Ended	3 Months Ended				0 Months Ended	3 Months Ended
	Jul. 22, 2008 Alfa Bank [Member]	Mar. 31, 2012 Raiffeisen Bank [Member] USD ($)	Mar. 31, 2012 Raiffeisen Bank [Member] EUR (€)	Mar. 31, 2012 Zenit Bank, Alfa Bank And Raiffeisen Bank [Member] USD ($)	Mar. 31, 2012 Zenit Bank, Alfa Bank And Raiffeisen Bank [Member] EUR (€)	Mar. 31, 2012 Overdraft Facility [Member] Hungary [Member] USD ($)	Mar. 31, 2012 Overdraft Facility [Member] Hungary [Member] HUF	Mar. 29, 2011 Loan Agreement [Member] Zenit Bank [Member] USD ($)	Mar. 29, 2011 Loan Agreement [Member] Zenit Bank [Member] EUR (€)	Mar. 31, 2012 Loan Agreement [Member] Zenit Bank [Member] USD ($)	Mar. 31, 2012 Loan Agreement [Member] Zenit Bank [Member] EUR (€)	Jul. 22, 2008 Loan Agreement [Member] Alfa Bank [Member] USD ($)	Jul. 22, 2008 Loan Agreement [Member] Alfa Bank [Member] EUR (€)	Mar. 31, 2012 Loan Agreement [Member] Alfa Bank [Member] USD ($)	Mar. 31, 2012 Loan Agreement [Member] Alfa Bank [Member] EUR (€)	Jul. 06, 2010 Loan Agreement [Member] Raiffeisen Bank [Member] USD ($)	Jul. 06, 2010 Loan Agreement [Member] Raiffeisen Bank [Member] EUR (€)	Mar. 31, 2012 Loan Agreement [Member] Raiffeisen Bank [Member]	Mar. 31, 2012 Loan Agreement [Member] Unicredit And JSC Grand Invest Bank [Member] USD ($)	Mar. 31, 2012 Loan Agreement [Member] Unicredit And JSC Grand Invest Bank [Member] RUB	Mar. 31, 2012 Loan Agreement [Member] JSC Grand Invest Bank [Member] USD ($)	Mar. 31, 2012 Loan Agreement [Member] JSC Grand Invest Bank [Member] RUB	Mar. 31, 2012 Loan Agreement [Member] Unicredit [Member] USD ($)	Mar. 31, 2012 Loan Agreement [Member] Unicredit [Member] RUB	May 24, 2011 Loan Agreement [Member] Unicredit [Member] USD ($)	May 24, 2011 Loan Agreement [Member] Unicredit [Member] RUB	Mar. 31, 2012 Overdraft Agreement [Member] Sberbank [Member] USD ($)	Mar. 31, 2012 Overdraft Agreement [Member] Sberbank [Member] RUB	Feb. 06, 2012 Overdraft Agreement [Member] Sberbank [Member] USD ($)	Feb. 06, 2012 Overdraft Agreement [Member] Sberbank [Member] RUB	Mar. 31, 2012 Minimum [Member] Raiffeisen Bank [Member]	Mar. 29, 2011 Minimum [Member] Loan Agreement [Member] Zenit Bank [Member]	Mar. 31, 2012 Minimum [Member] Loan Agreement [Member] Zenit Bank [Member]	Jul. 22, 2008 Minimum [Member] Loan Agreement [Member] Alfa Bank [Member]	Mar. 31, 2012 Minimum [Member] Loan Agreement [Member] Alfa Bank [Member]	Mar. 31, 2012 Minimum [Member] Loan Agreement [Member] Raiffeisen Bank [Member]	Mar. 31, 2012 Maximum [Member] Raiffeisen Bank [Member]	Mar. 31, 2012 Maximum [Member] Loan Agreement [Member] Zenit Bank [Member]	Jul. 22, 2008 Maximum [Member] Loan Agreement [Member] Alfa Bank [Member]	Mar. 31, 2012 Maximum [Member] Loan Agreement [Member] Alfa Bank [Member]	Mar. 31, 2012 Maximum [Member] Loan Agreement [Member] Raiffeisen Bank [Member]
Line of Credit Facility [Line Items]
Maximum credit limit under line of credit facility								$ 13.3	€ 10.0			$ 26.7	€ 20.0			$ 13.3	€ 10.0												$ 2.0	60.0
Outstanding liability		6.5	4.9	33.4	25.0					6.7	5.0			20.1	15.1				30.0	879.6	9.5	279.6	20.5	600.0			1.8	52.5
Initiation date										March 29, 2011	March 29, 2011			July 22, 2008	July 22, 2008			July 6, 2010			November 25, 2011	November 25, 2011	May 24, 2011	May 24, 2011			February 6, 2012	February 6, 2012
Maturity date										June 6, 2012	June 6, 2012			October 18, 2014	October 18, 2014			July 6, 2012			November 23, 2012	November 23, 2012	November 23, 2012	November 23, 2012			February 5, 2013	February 5, 2013
Loan agreement, number of tranches								4	4			8	8			5	5
Release of tranches, maturity date	six months																														one	365 days		three months			12		nine months
Date of tranches release, start date										April 21, 2011	April 21, 2011			September 14, 2011	September 14, 2011			September 12, 2011
Date of tranches release, end date										September 13, 2011	September 13, 2011			March 30, 2012	March 30, 2012			October 26, 2011
Repayable date																																	April 20, 2012		April 28, 2012	May 18, 2012		May 18, 2012		October 30, 2012	July 6, 2012
Amount of collateral on term loan																									24.6	720.0
Amount available under open credit facility						$ 0.5	100.0

XML

Other Non-Operating Expense (Components Of Other Non-Operating Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Other Non-Operating Expense [Abstract]
Factoring costs and bank fees	$ (2,262)	$ (671)
Other gains / (losses)	(336)	(305)
Total other non operating income / (expense), net	$ (2,598)	$ (976)

XML

Operating Segments (Segment Information On Net Sales) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Segment Reporting Information [Line Items]
Total Net Sales	$ 148,208	$ 156,711
Poland [Member]
Segment Reporting Information [Line Items]
Total Net Sales	47,178	45,895
Russia [Member]
Segment Reporting Information [Line Items]
Total Net Sales	95,602	105,658
Hungary [Member]
Segment Reporting Information [Line Items]
Total Net Sales	$ 5,428	$ 5,158

XML

Stock Option Plans And Warrants (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum range of exercise prices for outstanding options	$ 2.00
Maximum range of exercise prices for outstanding options	$ 60.92
Weighted average remaining contractual life of options outstanding (years)	4.9
Minimum range of exercise prices for options exercisable	$ 2.00
Maximum range of exercise prices for options exercisable	$ 60.92
Recognized compensation cost	$ 860,000
Total unrecognized compensation cost related to non-vested stock options	3,400,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Costs are expected to be recognized over period	2012
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Costs are expected to be recognized over period	2015
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units issued to employees, net of forfeitures	51,761
Average price restricted stock units	4.38
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units issued to employees, net of forfeitures	399,415
Average price restricted stock	$ 4.38

XML

Inventories (Components Of Inventories) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Inventories [Abstract]
Raw materials and supplies	$ 22,926	$ 22,237
In-process inventories	8,046	2,655
Finished goods and goods for resale	90,352	92,005
Total	$ 121,324	$ 116,897	$ 137,500

XML

Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Of Assets Measured On A Recurring And Nonrecurring Basis

			Assets at Fair Value Using
			Quoted Prices in Activated Markets for Identical Assets		Significant Other Observable Inputs		Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
March 31, 2012
Recurring items
Cash and cash equivalents	$	107,798	$	107,798	$	0	$	0
Convertible Senior Notes	$	272,800	$	272,800	$	0	$	0
Secured Senior Notes	$	731,350	$	731,350	$	0	$	0
Nonrecurring items
Assets held for sale	$	675	$	0	$	0	$	675
December 31, 2011
Recurring items
Cash and cash equivalents	$	94,410	$	94,410	$	0	$	0
Convertible Senior Notes	$	248,000	$	248,000	$	0	$	0
Secured Senior Notes	$	702,700	$	702,700	$	0	$	0
Nonrecurring items
Assets held for sale	$	675	$	0	$	0	$	675

XML

Commitments And Contingent Liabilities (Narrative) (Details) In Millions, unless otherwise specified				3 Months Ended				3 Months Ended
	Mar. 31, 2012 Poland [Member] USD ($)	Mar. 31, 2012 Russian Alcohol [Member] USD ($)	Mar. 31, 2012 Russian Alcohol [Member] RUB	Mar. 31, 2012 Russian Alcohol [Member] Minimum [Member]	Mar. 31, 2012 Russian Alcohol [Member] Maximum [Member]	Mar. 31, 2012 Bravo Premium [Member] USD ($)	Mar. 31, 2012 Bravo Premium [Member] RUB	Mar. 31, 2012 Bravo Premium [Member] Minimum [Member]	Mar. 31, 2012 Bravo Premium [Member] Maximum [Member]	Mar. 31, 2012 Whitehall [Member] USD ($)	Mar. 31, 2012 Whitehall [Member] RUB
Commitments And Contingent Liabilities [Line Items]
Amount under bank guarantee	$ 2.0	$ 620.8	18,200.0			$ 20.5	600.0			$ 58.0	1,700.0
Term of bank guarantee, years				1	4			1	2

XML

Borrowings (Tables)

3 Months Ended

Mar. 31, 2012

Line of Credit Facility [Line Items]

Principal Repayments

	March 31,
	2012
Principal repayments for the following years
2012	$	43,215
2013		327,912
2014		0
2015		0
2016 and beyond		950,643
Total	$	1,321,770

Convertible Senior Notes Due 2013 [Member]

Line of Credit Facility [Line Items]

Total Obligations Under Senior Notes

	March 31,			December 31,
	2012			2011
Convertible Senior Notes	$	310,000		$	310,000
Unamortized debt discount		(851	)		(1,070	)
Debt discount related to ASC 470-20		(3,172	)		(4,285	)
Total	$	305,977		$	304,645

Senior Secured Notes Due 2016 [Member]

Line of Credit Facility [Line Items]

Total Obligations Under Senior Notes

	March 31,			December 31,
	2012			2011
Senior Secured Notes due 2016	$	953,705		$	935,971
Unamortized debt discount		(3,062	)		(3,207	)
Total	$	950,643		$	932,764

XML

Operating Segments (Segment Information On Identifiable Assets) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Segment Reporting Information [Line Items]
Total Identifiable Assets	$ 2,032,742	$ 2,072,529
Poland [Member]
Segment Reporting Information [Line Items]
Total Identifiable Assets	599,163	601,966
Russia [Member]
Segment Reporting Information [Line Items]
Total Identifiable Assets	1,382,192	1,424,529
Hungary [Member]
Segment Reporting Information [Line Items]
Total Identifiable Assets	22,957	20,265
Corporate [Member]
Segment Reporting Information [Line Items]
Total Identifiable Assets	$ 28,430	$ 25,769

XML

Borrowings (Total Obligations Under Convertible Senior Notes) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Convertible Senior Notes	$ 0	$ 304,645
Convertible Senior Notes Due 2013 [Member]
Debt Instrument [Line Items]
Convertible Senior Notes	305,977	304,645
Debt discount related to ASC 470-20	(3,172)	(4,285)
Secured Senior Notes [Member]
Debt Instrument [Line Items]
Convertible Senior Notes	950,643	932,764
Secured Senior Notes [Member] | Convertible Senior Notes Due 2013 [Member]
Debt Instrument [Line Items]
Convertible Senior Notes	310,000	310,000
Unamortized debt discount	$ (851)	$ (1,070)

XML

Comprehensive Income (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012
Condensed Consolidated Statements Of Operations And Comprehensive Income [Abstract]
Foreign currency translation adjustment	$ 28.7

XML

Interest Expense, Net (Components Of Interest Expense, Net) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Interest Expense, Net [Abstract]
Interest income	$ 245	$ 525
Interest expense	(26,469)	(27,377)
Total interest expense, net	$ (26,224)	$ (26,852)

XML

Effects Of Foreign Currency Movements (Exchange Rates Used For Translation Of Balance Sheet And Statement Of Operations) (Details)	3 Months Ended			3 Months Ended			3 Months Ended
	Mar. 31, 2012 PLN / US$ [Member] PLN	Mar. 31, 2011 PLN / US$ [Member] PLN	Dec. 31, 2011 PLN / US$ [Member] PLN	Mar. 31, 2012 RUR / US$ [Member] RUB	Mar. 31, 2011 RUR / US$ [Member] RUB	Dec. 31, 2011 RUR / US$ [Member] RUB	Mar. 31, 2012 HUF / US$ [Member] HUF	Mar. 31, 2011 HUF / US$ [Member] HUF	Dec. 31, 2011 HUF / US$ [Member] HUF
Effects Of Foreign Currency Movements [Line Items]
Balance sheet rate	3.1191		3.4174	29.3148		32.2092	221.2128		240.6620
Average rate	3.2249	2.8800		30.1674	29.2089		225.5175	198.6207

XML

Income Taxes (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Income Tax [Line Items]
Income tax expense	$ 3,513,000	$ 2,641,000
Effective income tax rate	5.30%
Uncertain income tax position balance	$ 6,700,000		$ 6,400,000
Poland [Member]
Income Tax [Line Items]
Underlying tax rate	19.00%
Russia [Member]
Income Tax [Line Items]
Underlying tax rate	20.00%
Ukraine [Member]
Income Tax [Line Items]
Underlying tax rate	21.00%
Hungary [Member]
Income Tax [Line Items]
Underlying tax rate	16.00%
United States [Member]
Income Tax [Line Items]
Underlying tax rate	35.00%

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share

4. EARNINGS PER SHARE

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

	Three months ended March 31,
	2012		2011
Net income / (loss)	$	62,496	$	1,121
Weighted average shares of common stock outstanding (used to calculate basic EPS)		72,885		71,208
Net effect of dilutive employee stock options based on the treasury stock method		63		93
Weighted average shares of common stock outstanding (used to calculate diluted EPS)		72,948		71,301
Net income / (loss) per common share - basic	$	0.86	$	0.02
Net income / (loss) per common share - diluted	$	0.86	$	0.02

Employee stock options granted have been included in the above calculations of diluted earnings per share where the exercise price is less than the average market price of the common stock during the three months ended March 31, 2012 and 2011. In addition there is no adjustment to fully diluted shares related to the Convertible Senior Notes as the average market price was below the conversion price for the periods.

XML

Effects Of Foreign Currency Movements (Schedule Of Foreign Currency Exchange Rate Effect Before Tax) (Details) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012 PLN / US$ [Member] USD ($)	Mar. 31, 2012 RUR / US$ [Member] USD ($)	Mar. 31, 2012 EUR-Polish Zloty [Member] USD ($)	Mar. 31, 2012 EUR-Polish Zloty [Member] EUR (€)
Effects Of Foreign Currency Movements [Line Items]
Value of notional amount	$ 426	$ 264	$ 574	€ 430
Pre-tax impact of a 1% movement in exchange rate	$ 4.3	$ 2.6	$ 5.7

XML

Borrowings (Total Obligations Under Senior Secured Notes) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Senior Secured Notes	$ 0	$ 304,645
Secured Senior Notes [Member]
Debt Instrument [Line Items]
Senior Secured Notes	950,643	932,764
Secured Senior Notes [Member] | Senior Secured Notes Due 2016 [Member]
Debt Instrument [Line Items]
Senior Secured Notes	953,705	935,971
Unamortized debt discount	$ (3,062)	$ (3,207)

XML

Other Financial Income, Net (Tables)

3 Months Ended

Mar. 31, 2012

Other Financial Income, Net [Abstract]

Components Of Other Financial Income, Net

	Three months ended March 31,
	2012			2011
Foreign exchange impact related to foreign currency financing	$	98,681		$	31,651
Other gains / (losses)		(759	)		(605	)
Total other financial income / (expense), net	$	97,922		$	31,046

XML

Interest Expense, Net (Tables)

3 Months Ended

Mar. 31, 2012

Interest Expense, Net [Abstract]

Components Of Interest Expense, Net

	Three months ended March 31,
	2012			2011
Interest income	$	245		$	525
Interest expense		(26,469	)		(27,377	)
Total interest expense, net	($	26,224	)	($	26,852	)

XML

Stock Option Plans And Warrants (Schedule Of Weighted-Average Assumptions) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011
Stock Option Plans And Warrants [Abstract]
Fair Value	$ 7.60
Dividend Yield	0.00%
Expected Volatility	66.10%
Weighted Average Volatility	66.10%
Risk Free Interest Rate	3.00%
Expected Life of Options from Grant, years	3.2

XML

Borrowings (Principal Repayments) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012
Borrowings [Abstract]
2012	$ 43,215
2013	327,912
2014	0
2015	0
2016 and beyond	950,643
Total	$ 1,321,770

XML

Other Non-Operating Expense (Tables)

3 Months Ended

Mar. 31, 2012

Other Non-Operating Expense [Abstract]

Components Of Other Non-Operating Expense

	Three months ended March 31,
	2012			2011
Factoring costs and bank fees		(2,262	)		(671	)
Other gains / (losses)		(336	)		(305	)
Total other non operating income / (expense), net	($	2,598	)	($	976	)

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Stock Option Plans And Warrants (Tables)

3 Months Ended

Mar. 31, 2012

Stock Option Plans And Warrants [Abstract]

Schedule Of Weighted-Average Assumptions

	December 31, 2011
	2011
Fair Value	$	7.60
Dividend Yield		0	%
Expected Volatility		66.1	%
Weighted Average Volatility		66.1	%
Risk Free Interest Rate		3	%
Expected Life of Options from Grant		3.2

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Comprehensive Income

3 Months Ended

Mar. 31, 2012

Condensed Consolidated Statements Of Operations And Comprehensive Income [Abstract]

Comprehensive Income

3. COMPREHENSIVE INCOME

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

As of March 31, 2012, our functional currencies (Polish zloty, Russian ruble and Hungarian forint) exchange rates used to translate the balance sheet strengthened against the U.S. dollar as compared to the exchange rates as of December 31, 2011, and as a result $28.7 million of foreign currency translation adjustment was recognized as part of total comprehensive income, which mainly related to an increase in goodwill and intangible assets.

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Commitments And Contingent Liabilities (Tables)

3 Months Ended

Mar. 31, 2012

Commitments And Contingent Liabilities [Abstract]

Future Rental Payments Under Non-Cancelable Operating Lease

2012	$	8,753
2013		9,130
2014		8,722
2015		8,148
2016		5,536
Thereafter		2,976
Total	$	43,265

Future Minimum Lease Payments For Assets Under Capital Lease

2012	$	1,194
2013		522
2014		171
Gross payments due	$	1,887
Less interest		(132	)
Net payments due	$	1,755

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Borrowings (Convertible Senior Notes Due 2013) (Details) (Convertible Senior Notes Due 2013 [Member], USD $)	0 Months Ended	3 Months Ended
	Mar. 07, 2008	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Convertible Senior Notes Due 2013 [Member]
Debt Instrument [Line Items]
Debt instrument issuance amount	$ 310,000,000
Interest rate percentage on issued debt	3.00%
Year of maturity of debt	2013
Initial conversion rate shares	14.7113
Principal amount of initial conversion rate	1,000
Accrued interest		400,000		2,700,000
Pre tax non-cash interest expense recognized in consolidated statement of operations		1,100,000	1,100,000
Annual pre-tax increase in non-cash interest expense		3,200,000
Accumulated amortization related to debt discount		$ 16,500,000	$ 12,200,000

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Other Financial Income, Net (Components Of Other Financial Income, Net) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Other Financial Income, Net [Abstract]
Foreign exchange impact related to foreign currency financing	$ 98,681	$ 31,651
Other gains / (losses)	(759)	(605)
Total other financial income / (expense), net	$ 97,922	$ 31,046

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current Assets
Cash and cash equivalents	$ 107,798	$ 94,410
Accounts receivable, net of allowance for doubtful accounts at March 31, 2012 of $26,221 and at December 31, 2011 of $23,112	280,761	466,317
Inventories	121,324	116,897
Prepaid expenses	23,594	16,982
Other current assets	19,341	20,007
Deferred income taxes	6,572	8,455
Debt issuance costs	2,959	2,962
Total Current Assets	562,349	726,030
Intangible assets, net	508,605	463,848
Goodwill	731,675	666,653
Property, plant and equipment, net	193,838	179,478
Deferred income taxes, net	22,811	22,295
Debt issuance costs	12,789	13,550
Non-current assets held for sale	675	675
Total Non-Current Assets	1,470,393	1,346,499
Total Assets	2,032,742	2,072,529
Current Liabilities
Trade accounts payable	69,868	144,801
Bank loans and overdraft facilities	66,708	85,762
Short-term obligations under Convertible Senior Notes	305,977	0
Income taxes payable	7,208	8,766
Taxes other than income taxes	99,863	188,307
Other accrued liabilities	70,715	44,501
Current portions of obligations under capital leases	1,159	1,109
Total Current Liabilities	621,498	473,246
Long-term obligations under capital leases	728	532
Long-term obligations under Convertible Senior Notes	0	304,645
Long-term obligations under Senior Secured Notes	950,643	932,764
Long-term accruals	2,221	2,027
Deferred income taxes	99,199	92,945
Commitments and contingent liabilities (Note 13)
Total Long-Term Liabilities	1,052,791	1,332,913
Stockholders' Equity
Common Stock ($0.01 par value, 120,000,000 shares authorized, 73,125,230 and 72,740,302 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively)	731	727
Preferred Stock ($0.01 par value, 1,000,000 shares authorized, none issued and outstanding)	0	0
Additional paid-in-capital	1,370,335	1,369,471
Accumulated deficit	(1,069,070)	(1,131,566)
Accumulated other comprehensive income	56,607	27,888
Less Treasury Stock at cost (246,037 shares at March 31, 2012 and December 31, 2011)	(150)	(150)
Total Stockholders' Equity	358,453	266,370
Total Liabilities and Stockholders' Equity	$ 2,032,742	$ 2,072,529

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Inventories (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2012 D	Mar. 31, 2011 D	Dec. 31, 2011 D
Inventories [Abstract]
Inventory rotation days	123	127	80
Total balance of inventory	$ 121,324	$ 137,500	$ 116,897

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Organization And Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Organization And Significant Accounting Policies [Abstract]

Organization And Significant Accounting Policies

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and description of business

Central European Distribution Corporation ("CEDC") and its subsidiaries (collectively referred to as "we," "us," "our," or the "Company") operate primarily in the alcohol beverage industry. We are one of the largest producers of vodka in the world and are Central and Eastern Europe's largest integrated spirit beverages business, measured by total volume, with approximately 33.2 million nine-liter cases produced and distributed in 2011. Our business primarily involves the production and sale of our own spirit brands (principally vodka), and the importation on an exclusive basis of a wide variety of spirits, wines and beers. Our primary operations are conducted in Poland, Russia, Ukraine and Hungary. We have six operational manufacturing facilities located in Poland and Russia.

In Poland, we are one of the largest vodka producers with a brand portfolio that includes Absolwent, ubrówka, ubrówka Biaa, Bols, Palace and Soplica brands, each of which we produce at our Polish distilleries. We produce and sell vodkas primarily in three of four vodka sectors: premium, mainstream and economy. In Poland, we also own and produce Royal, the top-selling vodka in Hungary.

We are also the largest vodka producer in Russia, the world's largest vodka market. Our Green Mark brand is the top-selling mainstream vodka in Russia and the second-largest vodka brand by volume in the world, and our Parliament and Zhuravli brands are two top-selling sub-premium vodkas in Russia.

As well as sales and distribution of its own branded spirits, the Company is a leading exclusive importer of wines and spirits in Poland, Russia and Hungary.

Liquidity

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As discussed further in Note 5, certain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, our Convertible Senior Notes (the "Convertible Notes") are due on March 15, 2013. Our current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment on Convertible Notes and, unless the transaction with Russian Standard Corporation is completed as scheduled, the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at March 31, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern unless the transaction with Russian Standard described below is completed as scheduled.

As discussed further in Note 16, on April 23, 2012, the Company announced that definitive agreements had been signed with Russian Standard Corporation (via Roust Trading Limited) for a strategic transaction. Pursuant to these agreements, on May 4, 2012 Roust Trading Limited and its affiliates invested $100 million in the Company by purchasing a combination of newly issued shares of the Company's common stock and notes exchangeable into the Company's common shares following shareholder approval. In addition, Roust Trading Limited has agreed to purchase from the Company up to $210 million principal amount of newly issued, Unsecured Senior Notes due July 31, 2016 at a blended interest rate of 6.00%. While we believe that this transaction would allow the Company to settle the Convertible Notes before March 15, 2013, the transaction is subject to certain risks, including shareholder approval which may not be obtained. The Company's annual general meeting (AGM) is scheduled for June 29, 2012 at which time the final vote of the shareholders will be known. We believe that if the transaction is completed as scheduled, the Convertible Notes will be repaid by their maturity date which would substantially reduce doubts about the Company's ability to continue as a going concern.

Basis of presentation

These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

CEDC's subsidiaries maintain their books of account and prepare their statutory financial statements in their respective local currencies. The subsidiaries' financial statements have been adjusted to reflect U.S. GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present our financial condition, results of operations and comprehensive income and cash flows for the interim periods presented have been included. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012.

The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2011, filed on February 29, 2012.

The significant interim accounting policies include the recognition of a pro-rata share of certain estimated annual sales incentives, marketing, promotion and advertising costs, generally in proportion to sales, and the recognition of income taxes using an estimated annual effective tax rate adjusted for tax amendments related to prior years and changes in estimate.

On February 7, 2011, the Company acquired full voting and economic control over Whitehall Group and changed the accounting treatment for its interest in Whitehall from the equity method of accounting to consolidation beginning on February 7, 2011.

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Commitments And Contingent Liabilities (Future Minimum Lease Payments For Assets Under Capital Lease) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012
Commitments And Contingent Liabilities [Abstract]
2012	$ 1,194
2013	522
2014	171
Gross payments due	1,887
Less interest	(132)
Net payments due	$ 1,755

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Organization And Significant Accounting Policies (Narrative) (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011 l
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of cases produced and distributed (in liters)		33,200,000
Number of liters per case		9
Number of operational manufacturing facilities		6
Maturity of senior notes	Mar. 15, 2013
Credit and factoring facilities maturity, year	2012
Russian Standard Corporation [Member] | Forecasted Strategic Transaction [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Investment from other companies	100,000,000
Roust Trading [Member] | Forecasted Strategic Transaction [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Maturity of senior notes	Jul. 31, 2016
Debt instrument percentage	6.00%
Roust Trading [Member] | Forecasted Strategic Transaction [Member] | Maximum [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Debt instrument issuance amount	210,000,000

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Recently Issued Accounting Pronouncements

3 Months Ended

Mar. 31, 2012

Recently Issued Accounting Pronouncements [Abstract]

Recently Issued Accounting Pronouncements

17. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs" ("ASU 2011-04"), which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity's use of a nonfinancial asset that is different from the asset's highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. The Company adopted ASU 2011-04 during the first quarter of the current fiscal year. The adoption of ASU 2011-04 did not have a material impact on the Company's consolidated financial statements other than disclosures related to fair value measurements.

In June 2011, the FASB issued ASU 2011-05, "Presentation of Comprehensive Income" ("ASU 2011-05"), which was issued to enhance comparability between entities that report under U.S. GAAP and IFRS, and to provide a more consistent method of presenting non-owner transactions that affect an entity's equity. ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders' equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. However, in December 2011, the FASB issued ASU 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05" ("ASU 2011-12"), which deferred the guidance on whether to require entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. ASU 2011-12 reinstated the requirements for the presentation of reclassifications that were in place prior to the issuance of ASU 2011-05 and did not change the effective date for ASU 2011-05. For public entities, the amendments in ASU 2011-05 and ASU2011-12 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. The Company adopted both ASU 2011-05 and ASU 2011-12 during the first quarter of the current fiscal year. The adoption of ASU 2011-05 and ASU 2011-12 did not have a material impact on the Company's consolidated financial statements, other than presentation of comprehensive income.

In September 2011, the FASB issued ASU 2011-08, "Testing Goodwill for Impairment" ("ASU 2011-08"), which simplifies testing for impairment by allowing an entity to first assess qualitative factors and determine if it is more likely than not (defined as 50% or more) that the fair value of the reporting unit is less than its carrying amount. That determination can then be used to decide if it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, which corresponds to the Company's first quarter of current fiscal year. The Company will adopt ASU 2011-08 during the current fiscal year and this adoption is not expected to have a material impact on the Company's consolidated financial statements.

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Sale Of Accounts Receivable (Details) In Millions, unless otherwise specified	3 Months Ended						3 Months Ended
	Mar. 31, 2012 USD ($)	Mar. 31, 2012 PLN	Mar. 01, 2012 USD ($)	Mar. 01, 2012 PLN	Jan. 02, 2012 USD ($)	Jan. 02, 2012 PLN	Mar. 31, 2012 ING Polska [Member] USD ($)	Mar. 31, 2012 ING Polska [Member] PLN	Feb. 24, 2011 ING Polska [Member] USD ($)	Feb. 24, 2011 ING Polska [Member] PLN
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum sale under factoring agreement								220.0	$ 93.0	290.0
Factoring agreements, reduced limit	64.1	200.0	70.5	220.0	80.2	250.0
Factoring agreements maturity date	Apr. 30, 2012	Apr. 30, 2012
Factoring agreements extended maturity date	Sep. 30, 2012	Sep. 30, 2012
Total balance of accounts receivable under factoring							56.8	177.3
Accounts receivable sold during the period							97.1	302.8
Non-recourse factoring loss							1.0	3.2
Liability for recourse from factored receivables	$ 1.4

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Computation Of Basic And Diluted Earnings Per Share

	Three months ended March 31,
	2012		2011
Net income / (loss)	$	62,496	$	1,121
Weighted average shares of common stock outstanding (used to calculate basic EPS)		72,885		71,208
Net effect of dilutive employee stock options based on the treasury stock method		63		93
Weighted average shares of common stock outstanding (used to calculate diluted EPS)		72,948		71,301
Net income / (loss) per common share - basic	$	0.86	$	0.02
Net income / (loss) per common share - diluted	$	0.86	$	0.02

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Sale Of Accounts Receivable

3 Months Ended

Mar. 31, 2012

Sale Of Accounts Receivable [Abstract]

Sale Of Accounts Receivable

2. SALE OF ACCOUNTS RECEIVABLE

On February 24, 2011, two subsidiaries of the Company, namely CEDC International sp. z o.o. ("CEDC International") and Polmos Biaystok S.A. ("Polmos Bialystok"), entered into factoring arrangements ("Factoring Agreements") with ING Commercial Finance Polska ("ING Polska") for the sale up to 290.0 million Polish zlotys (approximately $93.0 million) of receivables. On January 1, 2012, the total limit under the Factoring Agreements was reduced from 290.0 million Polish zlotys ($93.0 million) to 250.0 Polish zlotys ($80.2 million) and from March 1, 2012 it was further reduced to 220.0 million Polish zlotys ($70.5 million). The Factoring Agreements were to mature on April 30, 2012, however on April 25, 2012 the Company extended these agreements until September 30, 2012 with further decrease of the total limit from April 25, 2012 to 200.0 million Polish zlotys (approximately $64.1 million).

As of March 31, 2012, the total balance of receivables under factoring amounted to 177.3 million Polish zlotys (approximately $56.8 million) of the 220.0 million Polish zlotys limit available.

For the three months ended March 31, 2012, the Company sold receivables in the amount of 302.8 million Polish zlotys ($97.1 million) and recognized a loss on the sale in the statement of operations and comprehensive income in the amount of 3.2 million Polish zlotys ($1.0 million) in respect of the non-recourse factoring. The Company has no continuing involvement with the sold non-recourse receivables.

As of March 31, 2012, the liabilities from factoring with recourse amounted to $1.4 million and are included in the short term bank loans in the balance sheet. Corresponding receivables from factoring with recourse are presented under accounts receivable in the balance sheet.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheet [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 26,221	$ 23,112
Common Stock, par value	$ 0.01	$ 0.01
Common Stock, shares authorized	120,000,000	120,000,000
Common Stock, shares issued	73,125,230	72,740,302
Common Stock, shares outstanding	73,125,230	72,740,302
Preferred Stock, par value	$ 0.01	$ 0.01
Preferred Stock, shares authorized	1,000,000	1,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Treasury Stock at cost, shares	246,037	246,037

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Stock Option Plans And Warrants

3 Months Ended

Mar. 31, 2012

Stock Option Plans And Warrants [Abstract]

Stock Option Plans And Warrants

12. STOCK BASED COMPENSATION PLANS AND WARRANTS

During the three months ended March 31, 2012, the range of exercise prices for outstanding options was $2.00 to $60.92. During the three months ended March 31, 2012, the weighted average remaining contractual life of options outstanding is 4.9 years. Exercise prices for options exercisable as of March 31, 2012 ranged from $2.00 to $60.92. The Company has also granted 51,761 restricted stock units at an average price of $4.38 and 399,415 restricted stock at an average price of $4.38 during the first quarter of 2012.

The Company has issued stock options to employees under stock based compensation plans. Stock options are issued at the current market price, subject to a vesting period, which varies from one to three years. As of March 31, 2012, the Company has not changed the terms of any outstanding awards.

During the three months ended March 31, 2012, the Company recognized compensation cost of $0.86 million.

As of March 31, 2012, there was $3.4 million of total unrecognized compensation cost related to non-vested stock options, restricted stock units and restricted stock granted under the Company's Stock Incentive Plan. The costs are expected to be recognized over period through 2012 - 2015.

The following weighted-average assumptions were used in the calculation of fair value for options granted during 2011. For the three months ended March 31, 2012 the Company did not grant any options to its employees.

	December 31, 2011
	2011
Fair Value	$	7.60
Dividend Yield		0	%
Expected Volatility		66.1	%
Weighted Average Volatility		66.1	%
Risk Free Interest Rate		3	%
Expected Life of Options from Grant		3.2

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Document And Entity Information	3 Months Ended
	Mar. 31, 2012	May 08, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	cedc
Entity Registrant Name	CENTRAL EUROPEAN DISTRIBUTION CORP
Entity Central Index Key	0001046880
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		78,842,022

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Commitments And Contingent Liabilities

3 Months Ended

Mar. 31, 2012

Commitments And Contingent Liabilities [Abstract]

Commitments And Contingent Liabilities

13. COMMITMENTS AND CONTINGENT LIABILITIES

Supply contracts

The Company has various agreements covering its sources of supply, which, in some cases, may be terminated by either party on relatively short notice. Thus, there is a risk that a portion of the Company's supply of products could be curtailed at any time.

Bank Guarantees

In accordance with current legislation in Russia each producer of spirit beverages must acquire excise stamps and must pay excise tax in full before buying spirit for production purposes. For each lot of stamps purchased the alcohol producer must provide the relevant body with a bank guarantee in the full amount of payment for the excise tax to secure the legality of usage of the excise stamps. This bank guarantee serves as insurance against the illegal usage of excise stamps by an alcohol producer.

In addition, under new legislation effective since August 1, 2011 the producer purchasing spirit alcohol must a) prepay the excise tax in full or b) provide the relevant tax body with a bank guarantee in the full amount of the excise tax before purchasing to secure payment of the excise tax. This bank guarantee serves as insurance that the excise tax is paid in time.

Russian Alcohol signed a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 18.2 billion Russian rubles (approximately $620.8 million) for a period from 1 to 4 years, Bravo Premium signed a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 600.0 million Russian rubles (approximately $20.5 million) for a period from 1 to 2 years and Whitehall signed a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 1.7 billion Russian rubles (approximately $58.0 million) as insurance against the illegal usage of excise stamps.

According to the agreements, companies have the right to obtain bank guarantees during the agreement term for each purchase of excise stamps and for the purchase of spirit. The guarantees for excise stamps are held by Rosalkoregulirovanie (the Federal Service for Alcohol Market Regulation), during the whole production period for which the excise stamps were purchased. The guarantee for excise tax is held by the beneficiary (the tax body) for 6 months after the end of month the spirit was purchased.

As of March 31, 2012, the Company has bank guarantees related to customs duties on imported goods in Poland of $2.0 million.

Operating Leases and Rent Commitments

The Company makes rental payments for real estate, vehicles, office, computer, and manufacturing equipment under operating leases. The following is a schedule by years of the future rental payments under the non-cancelable operating lease as of March 31, 2012:

2012	$	8,753
2013		9,130
2014		8,722
2015		8,148
2016		5,536
Thereafter		2,976
Total	$	43,265

During the first quarter of 2012, the Company continued its policy of renewing its transportation fleet by way of capital leases. The future minimum lease payments for the assets under capital lease as of March 31, 2012 are as follows:

2012	$	1,194
2013		522
2014		171
Gross payments due	$	1,887
Less interest		(132	)
Net payments due	$	1,755

Legal proceedings

From time to time we are involved in legal proceedings arising in the normal course of our business, including opposition and cancellation proceedings with respect to trademarks similar to some of our brands, and other proceedings, both in the United States and elsewhere. Except as set forth below, we are not currently involved in or aware of any pending or threatened proceedings that we reasonably expect, either individually or in the aggregate, will result in a material adverse effect on our consolidated financial statements.

On October 24, 2011, a class action complaint titled Steamfitters Local 449 Pension Fund vs. Central European Distribution Corporation, et al., was filed in the United States District Court, District of New Jersey on behalf of a putative class of all purchasers of our common stock from August 5, 2010 through February 28, 2011 against us and certain of our officers. The complaint seeks unspecified money damages and alleges violations of federal securities law in connection with alleged materially false and misleading statements and/or omissions regarding our business, financial results and prospects in our public statements and public filings with the U.S. Securities & Exchange Commission for the second and third quarters of 2010, relating to declines in our vodka portfolio, our need to take an impairment charge relating to the deterioration in fair value of certain of our brands in Poland and negative financial results from the launch of ubrówka Biaa. Subsequent to the above complaint, a second, substantially identical class action complaint titled Tim Schuler v. Central European Distribution Corporation, et al., was filed in the same court. Motions to consolidate the two cases and for the appointment of lead plaintiff and lead counsel have been filed and are awaiting decision. As a result, no response to the complaints has yet been filed. The Company intends to mount a vigorous defense to the claims asserted. As of March 31, 2012 the original plaintiffs, Steamfitters Pension Fund and Tim Schuler, no longer remain in the lawsuits and the current plaintiffs are now the Prosperity Group and the Arkansas Pension Fund, however the names of the lawsuits have remained unchanged.

On November 11, 2011, a purported shareholder derivative action, titled Ying Yeung v. William V. Carey, et al., was filed in the United States District Court, District of New Jersey against the current members of our board of directors (and against the Company as the nominal defendant), seeking unspecified damages on behalf of the Company. A second, substantially identical shareholder derivative complaint, titled Russell Partch v. William V. Carey, et al., was subsequently filed in the same court. Plaintiff alleges that our directors breached their fiduciary duties of care, good faith and loyalty to the Company by failing to establish and maintain adequate internal controls and by failing to exercise proper oversight over management, which would have prevented the Company from disseminating the allegedly false and misleading statements to shareholders that are the subject of the securities class action litigation described above. The derivative actions are at a very preliminary stage, and no response to the complaints has yet been filed.

Although we believe the allegations in the class and derivative complaints are without merit, these types of lawsuits can be protracted, time-consuming, distracting to management and expensive and, whether or not the claims are ultimately successful, could ultimately have an adverse effect on our business.

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Condensed Consolidated Statements Of Operations And Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Condensed Consolidated Statements Of Operations And Comprehensive Income [Abstract]
Sales	$ 323,975	$ 336,139
Excise taxes	(175,767)	(179,428)
Net sales	148,208	156,711
Cost of goods sold	89,529	97,374
Gross profit	58,679	59,337
Selling, general and administrative expenses	61,770	57,877
Gain on remeasurement of previously held equity interests	0	(7,898)
Operating income / (loss)	(3,091)	9,358
Non operating income / (expense), net
Interest income / (expense), net	(26,224)	(26,852)
Other financial income / (expense), net	97,922	31,046
Other non operating income / (expense), net	(2,598)	(976)
Income before income taxes and equity in net losses from unconsolidated investments	66,009	12,576
Income tax expense	(3,513)	(2,641)
Equity in net losses of affiliates	0	(8,814)
Net income attributable to the company	62,496	1,121
Net income from operations per share of common stock, basic	$ 0.86	$ 0.02
Net income from operations per share of common stock, diluted	$ 0.86	$ 0.02
Other comprehensive income, net of tax:
Foreign currency translation adjustments	28,719	137,016
Comprehensive income attributable to the company	$ 91,215	$ 138,137

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

Income Taxes

7. INCOME TAXES

Our tax charge for the three months ended March 31, 2012 was $3.5 million which represents an effective tax rate for this period of 5.3%. The underlying tax rates in our key jurisdictions are 19% in Poland, 20% in Russia, 21% in Ukraine, 16% in Hungary and 35% in the United States. Changes in the Company's uncertain income tax position, excluding the related accrual for interest and penalties, for the three months ended March 31, 2012 relate to reductions, additions for prior and current year tax positions. There were no reductions for prior year tax positions, settlements or lapses in statutes of limitations. As of March 31, 2012 and December 31, 2011, the uncertain income tax position balance was $6.7 million and $6.4 million, respectively.

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Inventories

3 Months Ended

Mar. 31, 2012

Inventories [Abstract]

Inventories

6. INVENTORIES

The following table summarizes our inventories:

	March 31,		December 31,
	2012		2011
Raw materials and supplies	$	22,926	$	22,237
In-process inventories		8,046		2,655
Finished goods and goods for resale		90,352		92,005
Total	$	121,324	$	116,897

Because of the nature of the products supplied by the Company, great attention is paid to inventory rotation. The number of days in inventory increased from at approximately 80 days as of December 31, 2011 to approximately 123 days as of March 31, 2012. As a comparison, the number of days in inventory as of March 31, 2011 amounted to 127 days with total balance of $137.5 million.

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Organization And Significant Accounting Policies (Policy)

3 Months Ended

Mar. 31, 2012

Organization And Significant Accounting Policies [Abstract]

Organization And Description Of Business

Organization and description of business

Central European Distribution Corporation ("CEDC") and its subsidiaries (collectively referred to as "we," "us," "our," or the "Company") operate primarily in the alcohol beverage industry. We are one of the largest producers of vodka in the world and are Central and Eastern Europe's largest integrated spirit beverages business, measured by total volume, with approximately 33.2 million nine-liter cases produced and distributed in 2011. Our business primarily involves the production and sale of our own spirit brands (principally vodka), and the importation on an exclusive basis of a wide variety of spirits, wines and beers. Our primary operations are conducted in Poland, Russia, Ukraine and Hungary. We have six operational manufacturing facilities located in Poland and Russia.

In Poland, we are one of the largest vodka producers with a brand portfolio that includes Absolwent, ubrówka, ubrówka Biaa, Bols, Palace and Soplica brands, each of which we produce at our Polish distilleries. We produce and sell vodkas primarily in three of four vodka sectors: premium, mainstream and economy. In Poland, we also own and produce Royal, the top-selling vodka in Hungary.

We are also the largest vodka producer in Russia, the world's largest vodka market. Our Green Mark brand is the top-selling mainstream vodka in Russia and the second-largest vodka brand by volume in the world, and our Parliament and Zhuravli brands are two top-selling sub-premium vodkas in Russia.

As well as sales and distribution of its own branded spirits, the Company is a leading exclusive importer of wines and spirits in Poland, Russia and Hungary.

Liquidity

Liquidity

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As discussed further in Note 5, certain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, our Convertible Senior Notes (the "Convertible Notes") are due on March 15, 2013. Our current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment on Convertible Notes and, unless the transaction with Russian Standard Corporation is completed as scheduled, the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at March 31, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern unless the transaction with Russian Standard described below is completed as scheduled.

As discussed further in Note 16, on April 23, 2012, the Company announced that definitive agreements had been signed with Russian Standard Corporation (via Roust Trading Limited) for a strategic transaction. Pursuant to these agreements, on May 4, 2012 Roust Trading Limited and its affiliates invested $100 million in the Company by purchasing a combination of newly issued shares of the Company's common stock and notes exchangeable into the Company's common shares following shareholder approval. In addition, Roust Trading Limited has agreed to purchase from the Company up to $210 million principal amount of newly issued, Unsecured Senior Notes due July 31, 2016 at a blended interest rate of 6.00%. While we believe that this transaction would allow the Company to settle the Convertible Notes before March 15, 2013, the transaction is subject to certain risks, including shareholder approval which may not be obtained. The Company's annual general meeting (AGM) is scheduled for June 29, 2012 at which time the final vote of the shareholders will be known. We believe that if the transaction is completed as scheduled, the Convertible Notes will be repaid by their maturity date which would substantially reduce doubts about the Company's ability to continue as a going concern.

Basis Of Presentation

Basis of presentation

These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

CEDC's subsidiaries maintain their books of account and prepare their statutory financial statements in their respective local currencies. The subsidiaries' financial statements have been adjusted to reflect U.S. GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present our financial condition, results of operations and comprehensive income and cash flows for the interim periods presented have been included. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012.

The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2011, filed on February 29, 2012.

The significant interim accounting policies include the recognition of a pro-rata share of certain estimated annual sales incentives, marketing, promotion and advertising costs, generally in proportion to sales, and the recognition of income taxes using an estimated annual effective tax rate adjusted for tax amendments related to prior years and changes in estimate.

On February 7, 2011, the Company acquired full voting and economic control over Whitehall Group and changed the accounting treatment for its interest in Whitehall from the equity method of accounting to consolidation beginning on February 7, 2011.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

14. FAIR VALUE MEASUREMENTS

The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed financial statements on a recurring basis or on a nonrecurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels of inputs used to measure fair value are as follows:

Level 1 —	Quoted prices in active markets for identical assets or liabilities.
Level 2 —	Observable inputs other than quoted prices included in Level 1. We value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.
Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

As of March 31, 2012, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of cash and cash equivalents. The monetary assets represented by these financial instruments are primarily located in Poland, Hungary and Russia. Consequently, they are subject to currency translation risk when reporting in U.S. Dollars. The fair values of the cash and cash equivalents, Convertible Senior Notes and Secured Senior Notes is determined based on quoted market prices in public markets and is categorized as Level 1. The Company does not have any financial assets measured at fair value on a recurring basis as Level 3 and there were no transfers in or out of Level 1, Level 2 or Level 3 during the three months ended March 31, 2012.

Non-financial assets and liabilities, such as goodwill and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment on the occurrence of a triggering event or in the case of goodwill, on at least an annual basis. Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual depletion of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related net book value. As of the balance sheet date, the carrying value of its long-lived assets are recoverable and no impairment existed.

The following table sets forth by level, within the fair value hierarchy, the Company's financial assets accounted for at fair value on a recurring and nonrecurring basis as of March 31, 2012, and December 31, 2011.

			Assets at Fair Value Using
			Quoted Prices in Activated Markets for Identical Assets		Significant Other Observable Inputs		Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
March 31, 2012
Recurring items
Cash and cash equivalents	$	107,798	$	107,798	$	0	$	0
Convertible Senior Notes	$	272,800	$	272,800	$	0	$	0
Secured Senior Notes	$	731,350	$	731,350	$	0	$	0
Nonrecurring items
Assets held for sale	$	675	$	0	$	0	$	675
December 31, 2011
Recurring items
Cash and cash equivalents	$	94,410	$	94,410	$	0	$	0
Convertible Senior Notes	$	248,000	$	248,000	$	0	$	0
Secured Senior Notes	$	702,700	$	702,700	$	0	$	0
Nonrecurring items
Assets held for sale	$	675	$	0	$	0	$	675

The Company has other financial instruments, such as receivables, accounts payable, overdrafts, short term bank loans and other liabilities which have been excluded from the tables above. Due to the short-term nature of these instruments, the carrying value approximate their fair values. The Company did not have any other financial instruments with the scope of the fair value disclosure requirements as of March 31, 2012.

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Other Financial Income, Net

3 Months Ended

Mar. 31, 2012

Other Financial Income, Net [Abstract]

Other Financial Income, Net

10. OTHER FINANCIAL INCOME, NET

The following items are included in Other financial income, net:

	Three months ended March 31,
	2012			2011
Foreign exchange impact related to foreign currency financing	$	98,681		$	31,651
Other gains / (losses)		(759	)		(605	)
Total other financial income / (expense), net	$	97,922		$	31,046

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Fair Value Measurements (Fair Value Of Assets Measured On A Recurring And Nonrecurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Recurring Items [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Cash and cash equivalents	$ 107,798	$ 94,410
Recurring Items [Member] | Quoted Prices In Activated Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Cash and cash equivalents	107,798	94,410
Recurring Items [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Cash and cash equivalents	0	0
Recurring Items [Member] | Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Cash and cash equivalents	0	0
Nonrecurring Items [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Assets held for sale	675	675
Nonrecurring Items [Member] | Quoted Prices In Activated Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Assets held for sale	0	0
Nonrecurring Items [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Assets held for sale	0	0
Nonrecurring Items [Member] | Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Assets held for sale	675	675
Convertible Senior Notes [Member] | Recurring Items [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	272,800	248,000
Convertible Senior Notes [Member] | Recurring Items [Member] | Quoted Prices In Activated Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	272,800	248,000
Convertible Senior Notes [Member] | Recurring Items [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	0	0
Convertible Senior Notes [Member] | Recurring Items [Member] | Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	0	0
Secured Senior Notes [Member] | Recurring Items [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	731,350	702,700
Secured Senior Notes [Member] | Recurring Items [Member] | Quoted Prices In Activated Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	731,350	702,700
Secured Senior Notes [Member] | Recurring Items [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	0	0
Secured Senior Notes [Member] | Recurring Items [Member] | Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Senior Notes	$ 0	$ 0

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Operating Segments

3 Months Ended

Mar. 31, 2012

Operating Segments [Abstract]

Operating Segments

8. OPERATING SEGMENTS

The Company operates and manages its business based upon three primary geographic segments: Poland, Russia and Hungary. Selected financial data split based upon this segmentation assuming elimination of intercompany revenues and profits is shown below: Segment information represents only continuing operations.

	Segment Net Sales
	Three months ended March 31,
	2012		2011
Segment
Poland	$	47,178	$	45,895
Russia		95,602		105,658
Hungary		5,428		5,158
Total Net Sales	$	148,208	$	156,711

	Operating income / (loss)
	Three months ended March 31,
	2012			2011
Segment
Poland before fair value adjustments	$	6,523		$	3,369
Gain on remeasurement of previously held equity interests		0			7,898
Poland after fair value adjustments		6,523			11,267
Russia		(7,778	)		(634	)
Hungary		720			661
Corporate Overhead
General corporate overhead		(1,692	)		(1,243	)
Option Expense		(864	)		(693	)
Total Operating income / (loss)	($	3,091	)	$	9,358

	Identifiable Operating Assets
	March 31,		December 31,
	2012		2011
Segment
Poland	$	599,163	$	601,966
Russia		1,382,192		1,424,529
Hungary		22,957		20,265
Corporate		28,430		25,769
Total Identifiable Assets	$	2,032,742	$	2,072,529

	Goodwill
	March 31,		December 31,
	2012		2011
Segment
Poland	$	276,188	$	252,080
Russia		448,794		408,464
Hungary		6,693		6,109
Total Goodwill	$	731,675	$	666,653

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Interest Expense, Net

3 Months Ended

Mar. 31, 2012

Interest Expense, Net [Abstract]

Interest Expense, Net

9. INTEREST EXPENSE, NET

The following items are included in Interest expense, net:

	Three months ended March 31,
	2012			2011
Interest income	$	245		$	525
Interest expense		(26,469	)		(27,377	)
Total interest expense, net	($	26,224	)	($	26,852	)

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Other Non-Operating Expense

3 Months Ended

Mar. 31, 2012

Other Non-Operating Expense [Abstract]

Other Non-Operating Expense

11. OTHER NON-OPERATING EXPENSE

The following items are included in Other Non-Operating Expense:

	Three months ended March 31,
	2012			2011
Factoring costs and bank fees		(2,262	)		(671	)
Other gains / (losses)		(336	)		(305	)
Total other non operating income / (expense), net	($	2,598	)	($	976	)

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Subsequent Events (Details) (USD $)	3 Months Ended	0 Months Ended			3 Months Ended	0 Months Ended		0 Months Ended
	Mar. 31, 2012	Apr. 23, 2012 Senior Notes Due 2013 [Member]	Apr. 23, 2012 Forecasted Strategic Transaction [Member] Senior Notes Due 2013 [Member]	May 04, 2012 Roust Trading [Member] Forecasted Strategic Transaction [Member]	Mar. 31, 2012 Roust Trading [Member] Forecasted Strategic Transaction [Member]	Apr. 23, 2012 Roust Trading [Member] Forecasted Strategic Transaction [Member] Senior Notes Due 2013 [Member]	May 04, 2012 Roust Trading [Member] Forecasted Strategic Transaction [Member] Senior Notes Due 2013 [Member]	Apr. 23, 2012 Roust Trading [Member] Forecasted Strategic Transaction [Member] Senior Rollover Notes Due 2016 [Member]	Apr. 23, 2012 Roust Trading [Member] Forecasted Strategic Transaction [Member] Senior Backstop Notes Due 2016 [Member]	Apr. 23, 2012 Roust Trading [Member] Forecasted Strategic Transaction [Member] Senior Rollover And Backstop Notes Due 2016 [Member]
Subsequent Event [Line Items]
Company common stock to be purchased, shares			13,333,333	5,714,286
Company common stock to be purchased, value				$ 30,000,000
Company common stock to be purchased, price per share		$ 5.25		$ 5.25
Debt instrument issuance amount							$ 70,000,000	$ 102,600,000	$ 107,500,000
Debt instrument maturity date	Mar. 15, 2013				Jul. 31, 2016	Mar. 18, 2013		Jul. 31, 2016	Jul. 31, 2016
Interest rate percentage on issued debt					6.00%	3.00%				6.00%

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Effects Of Foreign Currency Movements (Tables)

3 Months Ended

Mar. 31, 2012

Effects Of Foreign Currency Movements [Abstract]

Exchange Rates Used For Translation Of Balance Sheet And Statement Of Operations

	Balance sheet rate as of March 31, 2012		Balance sheet rate as of December 31, 2011		Average rate for the three months ended March 31, 2012		Average rate for the three months ended March 31, 2011
PLN / US$		3.1191		3.4174		3.2249		2.8800
RUR / US$		29.3148		32.2092		30.1674		29.2089
HUF / US$		221.2128		240.6620		225.5175		198.6207

Schedule Of Foreign Currency Exchange Rate Effect Before Tax

Exchange Rate	Value of notional amount	Pre-tax impact of a 1% movement in exchange rate
USD-Polish zloty	$426 million	$4.3 million gain/loss
USD-Russian ruble	$264 million	$2.6 million gain/loss
EUR-Polish zloty	€430 million or approximately $574 million	$5.7 million gain/loss

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Operating Segments (Segment Information On Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Segment Reporting Information [Line Items]
Total Goodwill	$ 731,675	$ 666,653
Poland [Member]
Segment Reporting Information [Line Items]
Total Goodwill	276,188	252,080
Russia [Member]
Segment Reporting Information [Line Items]
Total Goodwill	448,794	408,464
Hungary [Member]
Segment Reporting Information [Line Items]
Total Goodwill	$ 6,693	$ 6,109

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Subsequent Events

3 Months Ended

Mar. 31, 2012

Subsequent Events [Abstract]

Subsequent Events

16. SUBSEQUENT EVENTS

On April 23, 2012, the Company announced that definitive agreements had been signed with Russian Standard Corporation (via Roust Trading Limited) for a strategic transaction. Pursuant to a securities purchase agreement, Roust Trading Limited has agreed to make an investment in the Company in three stages, subject to typical closing conditions. First, on May 4, 2012 Roust Trading Limited acquired 5,714,286 newly issued shares of the Company's common stock for an aggregate purchase price of $30 million, or $5.25 per share, and JSC "Russian Standard Bank," an affiliate of Roust Trading Limited, purchased $70 million aggregate principal amount of senior notes due March 18, 2013, bearing an interest rate of 3.00% (the "New Debt") issued by the Company. Subject to the consummation of the Second Closing (as defined in the securities purchase agreement), the Company (on or after January 30, 2013) or Roust Trading Limited (on or after the completion of the Second Closing) may cause the New Debt to effectively be exchanged for newly issued shares of the Company's common stock equal to the then-outstanding principal amount of the New Debt, plus accrued and unpaid interest thereon as of the Second Closing, divided by $5.25. The total amount of shares of the Company's common stock expected to be issued in relation to the New Debt is approximately 13,333,333 shares of the Company's common stock plus any additional shares representing accrued and unpaid interest under the New Debt as of the Second Closing. Second, if shareholder approval is obtained, then (subject to typical closing conditions), Roust Trading Limited will purchase $102.6 million aggregate principal amount of senior rollover notes due July 31, 2016 (the "Rollover Notes"), from the Company. The Company must use the proceeds (net of fees and expenses) from the issuance of the Rollover Notes to repurchase the Convertible Senior Notes held by Roust Trading Limited or its affiliates, in the same principal amount as the Rollover Notes, at par. Third, the Company, at its option, may issue to Roust Trading Limited senior backstop notes in an aggregate principal amount of up to $107.5 million due July 31, 2016 (the "Backstop Notes") to be used by the Company to pay the remaining principal amount of the Convertible Senior Notes then outstanding. Each of the Rollover Notes and Backstop Notes will bear a blended interest rate of 6.00% over the term of each note.

The Company and Roust Trading Limited also entered into a governance agreement in support of this investment. In accordance with this governance agreement, Roust Trading Limited may nominate up to three directors to the Company's Board of Directors depending on the amount of the Company's common stock held by Roust Trading Limited. In addition, Roust Trading Limited received various minority protection rights.

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Inventories (Tables)

3 Months Ended

Mar. 31, 2012

Inventories [Abstract]

Components Of Inventories

	March 31,		December 31,
	2012		2011
Raw materials and supplies	$	22,926	$	22,237
In-process inventories		8,046		2,655
Finished goods and goods for resale		90,352		92,005
Total	$	121,324	$	116,897

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Operating Segments (Segment Information On Operating Income / (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Segment Reporting Information [Line Items]
Gain on remeasurement of previously held equity interests	$ 0	$ 7,898
Option Expense	(864)	(693)
Total Operating income / (loss)	(3,091)	9,358
Poland [Member]
Segment Reporting Information [Line Items]
Poland before fair value adjustments	6,523	3,369
Gain on remeasurement of previously held equity interests	0	7,898
Total Operating income / (loss)	6,523	11,267
Russia [Member]
Segment Reporting Information [Line Items]
Total Operating income / (loss)	(7,778)	(634)
Hungary [Member]
Segment Reporting Information [Line Items]
Total Operating income / (loss)	720	661
Corporate [Member]
Segment Reporting Information [Line Items]
General corporate overhead	(1,692)	(1,243)
Option Expense	$ (864)	$ (693)

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Borrowings (Senior Secured Notes Due 2016) (Details)	0 Months Ended				0 Months Ended
	Jan. 04, 2010 Senior Secured Notes Due 2016 [Member] USD ($)	Jan. 04, 2010 Senior Secured Notes Due 2016 [Member] EUR (€)	Mar. 31, 2012 Senior Secured Notes Due 2016 [Member] USD ($)	Dec. 31, 2011 Senior Secured Notes Due 2016 [Member] USD ($)	Dec. 02, 2009 9.125% Senior Secured Notes Due 2016 [Member] USD ($)	Dec. 02, 2009 8.875% Senior Secured Notes Due 2016 [Member] USD ($)	Dec. 02, 2009 8.875% Senior Secured Notes Due 2016 [Member] EUR (€)	Dec. 09, 2010 Additional Debt [Member] 8.875% Senior Secured Notes Due 2016 [Member] USD ($)	Dec. 09, 2010 Additional Debt [Member] 8.875% Senior Secured Notes Due 2016 [Member] EUR (€)
Debt Instrument [Line Items]
Face value of debt issued					$ 380,000,000	$ 507,000,000	€ 380,000,000	$ 66,700,000	€ 50,000,000
Interest rate percentage on issued debt					9.125%	8.875%	8.875%	8.875%	8.875%
Debt instrument maturity year					2016	2016	2016	2016	2016
Redemption of senior secured notes	327,400,000	245,400,000
Accrued interest			$ 28,500,000	$ 7,000,000

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Condensed Consolidated Statements Of Cash Flow (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities
Net income	$ 62,496	$ 1,121
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,815	5,131
Deferred income taxes	121	725
Unrealized foreign exchange gains	(98,681)	(31,651)
Stock options fair value expense	864	693
Equity loss in affiliates	0	8,814
Gain on fair value remeasurement of previously held equity interest	0	(6,397)
Other non cash items	(26)	1,780
Changes in operating assets and liabilities:
Accounts receivable	226,728	268,051
Inventories	6,964	(5,197)
Prepaid expenses and other current assets	(3,114)	(16,860)
Trade accounts payable	(89,358)	(83,645)
Other accrued liabilities and payables (including taxes)	(87,043)	(58,176)
Net cash provided by operating activities	23,766	84,389
Cash flows from investing activities
Purchase of fixed assets	(1,329)	(505)
Proceeds from the disposal of fixed assets	127	0
Purchase of trademarks	0	(17,473)
Acquisitions of subsidiaries, net of cash acquired	0	(23,475)
Net cash used in investing activities	(1,202)	(41,453)
Cash flows from financing activities
Borrowings on bank loans and overdraft facility	8,594	0
Payment of bank loans, overdraft facility and other borrowings	(26,872)	(4,104)
Decrease in short term capital leases payable	90	(102)
Proceeds from options exercised	0	66
Net cash used in financing activities	(18,188)	(4,140)
Currency effect on brought forward cash balances	9,012	6,992
Net increase in cash	13,388	45,788
Cash and cash equivalents at beginning of period	94,410	122,324
Cash and cash equivalents at end of period	107,798	168,112
Supplemental Schedule of Non-cash Investing Activities
Common stock issued in connection with investment in subsidiaries	$ 0	$ 23,131

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Borrowings

3 Months Ended

Mar. 31, 2012

Borrowings [Abstract]

Borrowings

5. BORROWINGS

Bank Facilities

As of March 31, 2012, the Company has outstanding liability of €25.0 million ($33.4 million) from the term loans from Zenit Bank, Alfa Bank and Raiffeisen Bank drawn by Whitehall:

• The loan agreement with Zenit Bank, dated March 29, 2011, matures on June 6, 2012. The credit limit under this loan agreement is €10.0 million ($13.3 million) and the loan is released in tranches maturing in 365 days, no later than June 6, 2012. The loan was released in four tranches between April 21, 2011 and September 13, 2011, and is repayable between April 20, 2012 and May 18, 2012. As of March 31, 2012, the Company had outstanding liability of €5.0 million ($6.7 million) from this term loan;

• The loan agreement with Alfa Bank, dated July 22, 2008, matures on October 18, 2014. The credit limit under this agreement is €20.0 million ($26.7 million) and the loan is released in tranches maturing within three, six or nine months, depending if they are pledged by inventory. The loan was released in eight tranches between September 14, 2011 and March 30, 2012, and is repayable between April 28, 2012 and October 30, 2012. As of March 31, 2012, the Company had outstanding liability of €15.1 million ($20.1 million) from this term loan;

• The loan agreement with Raiffeisen Bank, dated July 6, 2010, matures on July 6, 2012. The credit limit under this agreement is €10.0 million ($13.3 million) and the loan is released in tranches maturing within one to 12 months, not later than July 6, 2012. The loan was released in five tranches between September 12, 2011 and October 26, 2011, and is repayable between May 18, 2012, and July 6, 2012. As of March 31, 2012, the Company had outstanding liability of €4.9 million ($6.5 million) from this term loan.

The aforementioned loans drawn by Whitehall are guaranteed by Whitehall companies. The loans from Zenit Bank and Alfa Bank are secured by the Company's inventory.

As of March 31, 2012, the Company has outstanding term loans of 879.6 million Russian rubles ($30.0 million) from Unicredit and JSC Grand Invest Bank, both drawn by Russian Alcohol, as well as, an overdraft facility from Sberbank drawn by Bravo Premium:

• The loan agreement with Unicredit, dated May 24, 2011, matures on November 23, 2012. This loan has no financial covenants and is secured by inventory of up to 720 million Russian rubles ($24.6 million) and guarantees given by companies of Russian Alcohol. As of March 31, 2012, the Company has outstanding liability of 600.0 million Russian rubles ($20.5 million) from this term loan;

• The loan agreement with JSC Grand Invest Bank, dated November 25, 2011, matures on November 23, 2012. This loan has no financial covenants that need to be met. As of March 31, 2012, the Company has outstanding liability of 279.6 million Russian rubles ($9.5 million) from this term loan;

• The overdraft agreement with Sberbank, dated February 6, 2012, matures on February 5, 2013. The credit limit under this agreement is 60.0 million Russian rubles ($2.0 million). This loan is secured by fixed assets. As of March 31, 2012, the Company has outstanding liability of 52.5 million Russian rubles ($1.8 million) from this overdraft facility.

As of March 31, 2012, the Company had available to use under existing overdraft facility in Hungary 100.0 million Hungarian forints ($0.5 million).

Convertible Senior Notes due 2013

On March 7, 2008, the Company completed the issuance of $310 million aggregate principal amount of 3% Convertible Senior Notes due 2013 (the "Convertible Senior Notes"). Interest is due semi-annually on the 15^th of March and September, beginning on September 15, 2008. The Convertible Senior Notes are convertible in certain circumstances into cash and, if applicable, shares of our common stock, based on an initial conversion rate of 14.7113 shares per $1,000 principal amount, subject to certain adjustments. Upon conversion of the notes, the Company will deliver cash up to the aggregate principal amount of the notes to be converted and, at the election of the Company, cash and/or shares of common stock in respect to the remainder, if any, of the conversion obligation. The proceeds from the Convertible Senior Notes were used to fund the cash portions of the acquisition of Copecresto Enterprises Limited and Whitehall.

As of March 31, 2012 and December 31, 2011, the Company had accrued interest of $0.4 million and $2.7 million, respectively, related to the Convertible Senior Notes, with the next coupon due for payment on September 15, 2012. Total obligations under the Convertible Senior Notes are shown net of deferred finance costs, amortized over the life of the borrowings using the effective interest rate method as shown in the table below:

	March 31,			December 31,
	2012			2011
Convertible Senior Notes	$	310,000		$	310,000
Unamortized debt discount		(851	)		(1,070	)
Debt discount related to ASC 470-20		(3,172	)		(4,285	)
Total	$	305,977		$	304,645

For the three months ended March 31, 2012 and March 31, 2011, the additional pre-tax non-cash interest expense recognized in the consolidated statement of operations was $1.1 million each. Accumulated amortization related to the debt discount was $16.5 million and $12.2 million as of March 31, 2012 and March 31, 2011, respectively. Pre-tax increase in non-cash interest expense on our consolidated statements of operations and comprehensive income to be recognized until 2013, the maturity date of the CSNs, amounts to $3.2 million.

Senior Secured Notes due 2016

On December 2, 2009, the Company issued $380 million 9.125% Senior Secured Notes due 2016 and €380 million ($507.0 million) 8.875% Senior Secured Notes due 2016 (the "2016 Notes") in an unregistered offering to institutional investors. The Company used a portion of the net proceeds from the 2016 Notes to redeem the Company's outstanding 2012 Notes, having an aggregate principal amount of €245.4 million ($327.4 million) on January 4, 2010. The remainder of the net proceeds from the 2016 Notes was used to (i) purchase Lion Capital's remaining equity interest in Russian Alcohol by exercising the Lion Option and the Co-Investor Option, pursuant to the terms and conditions of the Lion Option Agreement and the Co-Investor Option Agreement, respectively (ii) repay all amounts outstanding under Russian Alcohol credit facilities; and (iii) repay certain other indebtedness.

On December 9, 2010, the Company issued an additional €50.0 million ($66.7 million) 8.875% Senior Secured Notes due 2016 (the "2016 Notes") in an unregistered offering to institutional investors. The Company used the net proceeds from the additional 2016 Notes to repay its term loans and overdraft facilities with Bank Handlowy w Warszawie S.A and Bank Zachodni WBK S.A.

As of March 31, 2012 and December 31, 2011 the Company had accrued interest of $28.5 million and $7.0 million respectively, related to the Senior Secured Notes due 2016, with the next coupon due for payment on June 1, 2012.

	March 31,			December 31,
	2012			2011
Senior Secured Notes due 2016	$	953,705		$	935,971
Unamortized debt discount		(3,062	)		(3,207	)
Total	$	950,643		$	932,764

	March 31,
	2012
Principal repayments for the following years
2012	$	43,215
2013		327,912
2014		0
2015		0
2016 and beyond		950,643
Total	$	1,321,770

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Commitments And Contingent Liabilities (Future Rental Payments Under Non-Cancelable Operating Lease) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012
Commitments And Contingent Liabilities [Abstract]
2012	$ 8,753
2013	9,130
2014	8,722
2015	8,148
2016	5,536
Thereafter	2,976
Total	$ 43,265

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Operating Segments (Tables)

3 Months Ended

Mar. 31, 2012

Operating Segments [Abstract]

Segment Information On Net Sales

	Segment Net Sales
	Three months ended March 31,
	2012		2011
Segment
Poland	$	47,178	$	45,895
Russia		95,602		105,658
Hungary		5,428		5,158
Total Net Sales	$	148,208	$	156,711

Segment Information On Operating Income / (Loss)

	Operating income / (loss)
	Three months ended March 31,
	2012			2011
Segment
Poland before fair value adjustments	$	6,523		$	3,369
Gain on remeasurement of previously held equity interests		0			7,898
Poland after fair value adjustments		6,523			11,267
Russia		(7,778	)		(634	)
Hungary		720			661
Corporate Overhead
General corporate overhead		(1,692	)		(1,243	)
Option Expense		(864	)		(693	)
Total Operating income / (loss)	($	3,091	)	$	9,358

Segment Information On Identifiable Assets

	Identifiable Operating Assets
	March 31,		December 31,
	2012		2011
Segment
Poland	$	599,163	$	601,966
Russia		1,382,192		1,424,529
Hungary		22,957		20,265
Corporate		28,430		25,769
Total Identifiable Assets	$	2,032,742	$	2,072,529

Segment Information On Goodwill

	Goodwill
	March 31,		December 31,
	2012		2011
Segment
Poland	$	276,188	$	252,080
Russia		448,794		408,464
Hungary		6,693		6,109
Total Goodwill	$	731,675	$	666,653

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Earnings Per Share (Computation Of Basic And Diluted Earnings Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Earnings Per Share [Abstract]
Net income / (loss)	$ 62,496	$ 1,121
Weighted average shares of common stock outstanding (used to calculate basic EPS)	72,885	71,208
Net effect of dilutive employee stock options based on the treasury stock method	63	93
Weighted average shares of common stock outstanding (used to calculate diluted EPS)	72,948	71,301
Net income / (loss) per common share - basic	$ 0.86	$ 0.02
Net income / (loss) per common share - diluted	$ 0.86	$ 0.02

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Effects Of Foreign Currency Movements

3 Months Ended

Mar. 31, 2012

Effects Of Foreign Currency Movements [Abstract]

Effects Of Foreign Currency Movements

15. EFFECTS OF FOREIGN CURRENCY MOVEMENTS

Substantially all of the Company's operating cash flows and assets are denominated in Polish zloty, Russian ruble and Hungarian forint. This means that the Company is exposed to translation movements both on its balance sheet and statement of operations and comprehensive income. The impact on working capital items is demonstrated on the cash flow statement as the movement in exchange on cash and cash equivalents. The impact on the statement of operations is by the movement of the average exchange rate used to restate the statement of operations from Polish zloty, Russian ruble and Hungarian forint to U.S. dollars. The amounts shown as exchange rate gains or losses on the face of the statements of operations relate only to realized gains or losses on transactions that are not denominated in Polish zloty, Russian ruble or Hungarian forint. Table below presents the exchange rates used for translation of our balance sheet and statement of operations and comprehensive income balances as of and for the three months ended March 31, 2012:

	Balance sheet rate as of March 31, 2012		Balance sheet rate as of December 31, 2011		Average rate for the three months ended March 31, 2012		Average rate for the three months ended March 31, 2011
PLN / US$		3.1191		3.4174		3.2249		2.8800
RUR / US$		29.3148		32.2092		30.1674		29.2089
HUF / US$		221.2128		240.6620		225.5175		198.6207

Because the Company's reporting currency is the U.S. dollar, the translation effects of fluctuations in the exchange rate of our functional currencies have impacted the Company's financial condition and results of operations and have affected the comparability of our results between financial periods.

The Company has borrowings including its Convertible Notes due 2013 and Senior Secured Notes due 2016 that are denominated in U.S. dollars and euros, which have been lent to its operations where the functional currency is the Polish zloty and Russian ruble. The effect of having debt denominated in currencies other than the Company's functional currencies is to increase or decrease the value of the Company's liabilities on that debt in terms of the Company's functional currencies when those functional currencies depreciate or appreciate in value respectively. As a result of this, the Company is exposed to gains and losses on the re-measurement of these liabilities. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rate which could result in a significant impact in the results of the Company's operations.

Exchange Rate	Value of notional amount	Pre-tax impact of a 1% movement in exchange rate
USD-Polish zloty	$426 million	$4.3 million gain/loss
USD-Russian ruble	$264 million	$2.6 million gain/loss
EUR-Polish zloty	€430 million or approximately $574 million	$5.7 million gain/loss