Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions

Note 5.Related Party Transactions

Note Payable

In connection with our merger with Kona Brewing Company (“KBC”) in 2010, we assumed an obligation for a promissory note payable (“Related Party Note”) to a counterparty that was a significant KBC shareholder and remains a shareholder of Craft Brew Alliance, Inc. The Related Party Note is secured by the equipment comprising a photovoltaic cell generation system installed at our brewery located in Kailua-Kona, Hawaii. Accrued interest on the Related Party Note is due and payable monthly at a fixed interest rate of 4.75%, with monthly loan payments of $16,129. Any unpaid principal and unpaid accrued interest will be due and payable on November 15, 2014. The balance on the Related Party Note was $119,000 and $165,000 as of March 31, 2014 and December 31, 2013, respectively.

Transactions with Anheuser-Busch, LLC (“A-B”)

Transactions with A-B consisted of the following (in thousands):

	Three Months Ended March 31,
	2014		2013
Gross sales to A-B	$	38,452	$	32,266
Margin fee paid to A-B, classified as a reduction of Sales		600		404
Handling, inventory management, royalty and other fees paid to A-B, classified in Cost of sales		93		100

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

	March 31, 2014			December 31, 2013
Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement	$	7,980		$	8,457
Refundable deposits due to A-B		(1,999	)		(2,728	)
Amounts due to A-B for services rendered		(1,717	)		(1,852	)
Net amount due from A-B	$	4,264		$	3,877

Operating Leases

We lease our headquarters office space, restaurant and storage facilities located in Portland, Oregon, as well as the land and certain equipment, from two limited liability companies, both of whose members include our current Board Chair and a nonexecutive officer. Lease payments to these lessors were as follows (in thousands):

Three Months Ended March 31,
2014		2013
$	32	$	32

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):

Three Months Ended March 31,
2014		2013
$	110	$	106