Related Party Transactions

As of both March 31, 2018 and December 31, 2017, Anheuser-Busch, LLC ("A-B") owned approximately 31.4% of our outstanding common stock.

Transactions with A-B, Ambev and Anheuser-Busch Worldwide Investments, LLC (“ABWI”)

In December 2015, we partnered with Ambev, the Brazilian subsidiary of Anheuser-Busch InBev SA, to distribute Kona beers into Brazil. In August 2016, we also entered into an International Distribution Agreement with ABWI, an affiliate of A-B, pursuant to which ABWI distributes our malt beverage products in jurisdictions outside the United States, subject to the terms and conditions of our prior agreement with our other international distributor, CraftCan Travel LLC, and certain other limitations.

Contract Brewing Arrangement with Anheuser-Busch Companies, LLC ("ABC")

On January 30, 2018, we entered into a Contract Brewing Agreement (the “Brewing Agreement”) with ABC, an affiliate of A-B, pursuant to which we brew, package, and palletize certain malt beverage products of A-B's craft breweries at our Portland, Oregon, and Portsmouth, New Hampshire, breweries as selected by ABC. Under the terms of the Brewing Agreement, ABC pays us a per barrel fee that varies based on the annual volume of the specified product brewed by us, plus (a) our actual incremental costs of brewing the product and (b) certain capital costs and costs of graphics and labeling that we incur in connection with the brewed products.

The Brewing Agreement will expire on December 31, 2018, unless the arrangement is extended at the mutual agreement of the parties. The Brewing Agreement contains specified termination rights, including, among other things, the right of either party to terminate the Brewing Agreement if (i) the other party fails to perform any material obligation under the Brewing Agreement or any other agreement between the parties, subject to certain cure rights, or (ii) the Master Distributor Agreement is terminated.

Transactions with A-B, Ambev, ABWI and ABC consisted of the following (in thousands):



	Three Months Ended March 31,
	2018		2017
Gross sales to A-B and Ambev	$	37,568	$	32,641
International distribution fee earned from ABWI	850		850
International distribution fee from ABWI, recorded in Deferred revenue	650		400
Contract Brewing fee earned from ABC	463		—
Margin fee paid to A-B, classified as a reduction of Sales	518		488
Inventory management and other fees paid to A-B, classified in Cost of sales	90		91

Amounts due to or from A-B and ABWI were as follows (in thousands):



	March 31, 2018			December 31, 2017
Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement	$	19,587		$	15,663
Amounts due from ABWI and A-B related to international distribution fee	1,500			5,000
Refundable deposits due to A-B	(1,345		)	(1,619		)
Amounts due to A-B for services rendered	(6,636		)	(4,836		)
Net amount due from A-B	$	13,106		$	14,208

Transactions with Wynwood

As of March 31, 2018 and December 31, 2017, we owned a 24.5% interest in Wynwood. The carrying value of our investment was $2.0 million as of March 31, 2018.

Transactions with Wynwood consisted of the following (in thousands):



	Three Months Ended March 31,
	2018		2017
Master distributor fee earned	$	7	$	—
Share of loss, classified as a component of Other income (expense), net	23		—
Refund of investment, classified as a reduction in the carrying value of the equity method investment	23		—

Amounts due to or from Wynwood were as follows (in thousands):



	March 31, 2018			December 31, 2017
Amounts receivable related to raw materials and alternating proprietorship fees	$	186		$	148
Amounts receivable related to Brewery representative reimbursements	—			32
Amounts due related to purchases of beer pursuant to the distributor agreement	(97		)	(116		)
Amounts due related to Royalty fees	—			(4		)
Net amount receivable	$	89		$	60

Operating Leases

We lease our headquarters office space, restaurant and storage facilities located in Portland, land and certain equipment from two limited liability companies, both of whose members include our former Board Chair, who is also a significant shareholder, and his brother, who continues to be employed by us. Lease payments to these lessors were as follows (in thousands) and are included in the Rent expense under all operating leases above:

We hold lease and sublease obligations for certain office space and the land underlying the brewery and pub location in Kona, Hawaii, with a company whose owners include a shareholder who owns more than 5% of our common stock. The sublease contracts expire on various dates through 2020, with an extension at our option for two five-year periods. Lease payments to this lessor were as follows (in thousands) and are included in the Rent expense under all operating leases above:

Three Months Ended
March 31,