Craft Beer Subscription Boxes The Perfect Pairing with Food

Leading craft brewer Craft Brew Alliance produces, brands, distributes some of the most esteemed and loved American craft beers worldwide Three of the first pioneers in craft beer are Redhook Ale Brewery, Washington's biggest craft brewery established in 1981; Widmer Brothers Brewing, Oregon's biggest craft brewery established in 1984; and Kona Brewing

Company, Hawaii's oldest and biggest craft brewery started in 1994. These craft brewing icons have spread over the United States and more than 15 foreign markets as part of Craft Brew Alliance Apart from cultivating unique brands anchored in local history, Craft Brew Alliance is dedicated to producing creative new category leaders like Omission Beer, the #1

beer in the gluten free beer market, and Square Mile Cider, honoring the early American colonists who bought the first Pacific Northwest land tracts Based in Portland, Oregon, Craft Brew Alliance publicly traded on NASDAQ under the ticker BREW runs five breweries and five pub restaurants in the United States. See "Availability Information" on page 12 for further

Information on and its brands Four

company-owned breweries in Portland, Oregon; the Seattle suburb of Woodinville, Washington; Portsmouth, New Hampshire; Kailua-Kona, Hawaii; and one brewery in Memphis, Tennessee operated by our brewing partner proudly produce our artisan beers. In Portland, Oregon and Portsmouth, New Hampshire, we also own and run two tiny innovation

breweries mostly utilized for creative brews and small batch manufacturing Our beers are delivered to stores via independent wholesalers connected to the AnheuserBusch, LLC (“A-B”) system. These sales are conducted under a Master Distributor Agreement—the "A-B Distributor Agreemen with A-B. This distribution arrangement leads us to assume that, should

the A-B Distributor Agreement expire or be canceled, these wholesalers would own the sole right to distribute our beers in their respective markets, under alcohol beverage regulations in most states Kona beers are sold in forty of the fifty states; Redhook and Widmer Brothers beers are sold in all fifty. Absence Beer keeps breaking through into fresh markets both

Domestically and abroad Right now Square

Mile is offered in ten Western states. Different from our A-B wholesalers, we keep an internal independent sales and marketing organization with resources throughout the primary areas of brand management, field marketing, field sales, and national retail sales Our two divisions are Beer Related operations and Pubs operations. Beer Related activities comprise both

domestic and international brewing and selling of craft beers and cider from our breweries.As we grew into more countries, the rise in international shipments of our beers which sell at a higher rate per barrel than contract brewing sales was mostly responsible for the growth in contract brewing and beer related revenues in 2014 over 2013. Contract brewing likewise

experienced a rise inOur financial statements are based on the choice and implementation of important accounting principles that demand management to make major projections and assumptions. Opinions and doubts about the implementation of these policies could lead to significantly different values under various conditions or with alternative presumptions. Our

Estimations and estimates are

derived from past experience, market trends and financial forecasts and projections as well as from several additional presumptions that management finds appropriate under the given conditions at different times. Real numbers could vary, maybe greatly, from these projections Other Indefinite-Lived Intangible Assets and Goodwil Annually, or as symptoms of impairment

are present, we test goodwill and other indefinite-lived intangible assets for impairment. We can decide whether the quantitative, two-step impairment test is required by first evaluating some qualitative elements for signs of impairment. We do the quantitative two-step impairment test either we decide that the fair value of the reporting unit is less than the

carrying amount or we opt not to first conduct the qualitative test. shipments as we started manufacturing for a 2014 new contract brewing customer. A $3.1 million decline linked to the mutually-agreed upon termination of our contract brewing arrangement with Fulton Street Brewery (“FSB”) effective September 1, 2012 accounted for the decline in contract brewing

Conclusion

beer related sales in 2013 compared to 2012. A $1.2 million rise in overseas beer shipments which sell more per barrel than contract brewing sales helped to somewhat offset this decline. Using remaining inventory on-hand, we phased out FSB branded beers by end of November 2012 in line with our agreement with FSB. Under the terms of the termination

agreement, FSB paid us $70,000 per month from September 2013; FSB agreed to a termination fee of $0.8 million that we recognized in Sales between September 1, 2012, and December 31, 2012. globally. Our five bars, four of which are situated next to our Beer Related operations, as well as other goods sales and direct beer sales to consumers define Pubs operations largely.tates and more than 15 foreign markets as part of Craft Brew Alliance