1. (NYSE: BREW) TEAM MEMBERS: Purvi Mittal Leiyi Huang Harout Sahakian
Rakesh Venkatayogi

2. AGENDA
Business Overview
Macro-Economic & Industry Overview
Technical Analysis
Financial Ratios
Valuation
Recommendation

3. CRAFT BREW ALLIANCE – INTRODUCTION
Business:
A craft beer brewing company with a unique alliance between three craft beer brands
Operates two segments:
Beer related operations: Brewing and sale of craft beers and cider from six breweries
Pubs operations: Operates 5 pubs for brand building
Has master distribution partnership with Anheuser–Busch
Market Cap
$281mm
Employees
~725
Annual production Capacity (000’s)
1,075 barrels
Source: Company website and 10K_2013

4. GID Presentation to NBWA Board (DRAFT 1)
December 7
DEVELOPMENT STRATEGY
Merger Integration
and Building Business
Model Foundation
National Portfolio Strategy
Development and Initial Market
Introduction
National Portfolio
Strategy Growth and
Value Creation
Volume Growth
2008
2009
2010
2011
2012
2013
2014
2015
Kona
Merger
Sale of FSB
Omission Launch
Square Mile Launch
Redhook / Widmer Merger
Source: CBA Investor Presentation

5. GID Presentation to NBWA Board (DRAFT 1)
December 7
BRANDS
Launched in 1981 in Seattle
Distributed in all 50 states
Launched in 1984 in Portland
Distributed in all 50 states
Launched in 1994 in Hawaii
Distributed in 36 states
Launched in 2012 in Portland
First gluten free beer
Launched in 2013
Distributed in 10 states and expanding
Source: Company website and 10K_2013

6. GID Presentation to NBWA Board (DRAFT 1)
December 7
BREWING FACILITIES
Washington Brewery
Annual / Max Capacity (000’s)
220 / 280
New Hampshire Brewery
Annual / Max Capacity (000’s)
215 / 280
Oregon Brewery
Annual / Max Capacity (000’s)
630 / 650
Hawaii Brewery
Annual / Max Capacity (000’s)
10 / 10
Source: Company website and 10K_2013

7. GID Presentation to NBWA Board (DRAFT 1)
December 7
ANHEUSER–BUSCH PARTNERSHIP
Ownership Structure
Master Distribution Agreement
Distribution of Kona, Widmer Brothers, Redhook, Omission and Square Mile in all states, territories and possessions of the US
Distributor Agreement has a term that expires on December 31, 2018, subject to automatic renewal
CBA pays margin fees, invoicing, staging and cooperage handling fees, and inventory manager fees
Source: Company website and 10K_2013

8. GID Presentation to NBWA Board (DRAFT 1)
December 7
HISTORICAL FINANCIAL ANALYSIS
Net Sales
Gross Margin
Compounded growth of ~11% , primarily because of shift in mix towards packaged, which has a higher selling price per barrel than draft
During 2012 and 2013, product mix, variable costs, supply chain challenges and pubs pressured gross margin
Expected 5‐year gross margin expansion of 500 to 700 basis points
Source: 10K_2013 and investor presentation
Note: does not include alternating proprietorship revenue

9. MACRO & INDUSTRY OVERVIEW

10. BEER INDUSTRY CHARACTERISTICS
Success Factors
Global Beer Market Distribution By Volume
Effective Quality Control
Marketing of Products
Control of distribution networks
Establishment of brand names
Differentiation Factors
Packaging
Price
Taste
Ingredients
Source: IBISWorld. Craft Beer Production in the US. August 2013; MarketLine Industry Profile: Global Beer. August 2013.

11. CONSUMER EXPENDITURE ON BEER – % CHANGE YOY
Source: Passport. Euromonitor International. Consumer Expenditure on Alcoholic Drinks. February 2014.

12. THE CRAFT
Growth In Craft Breweries
2011 – 1,970
2012 – 2,347
2013 – 2,483
Growth in Volume of Craft Beer
2012 – 15%
2013 – 18%
Source: MarketLine. Craft Beer: A Fast Growing Market. September 2013;

13. SWOT ANALYSIS FOR BREW Strengths Weaknesses Opportunities Threats
Distribution to retailers through A-B agreement
Ability to test products in pubs before new launches
Quality control by using local suppliers
Weaknesses
Majority ownership by Anheuser Busch limits some activities
Shipping costs associated with Kona brand products
Concentration in the Pacific Northwest
Opportunities
New product launches
Expansion in domestic and international markets
Consolidation in the industry
Threats
Changes in consumer preferences
Increases in regulation or taxes, especially the excise tax
Public relations and brand image

14. FINANCIAL ANALYSIS

15. TECHNICAL ANALYSIS
Source: Yahoo Finance

16. FINANCIAL RATIOS COMPARABLE COMPANIES RATIOS* CRAFT BREW RATIOS
*Ratios calculated by taking averages of our comparable companies
Source: Brew 10K

17. FINANCIAL RATIOS COMPARABLE COMPANIES RATIOS CRAFT BREW RATIOS
*Ratios calculated by taking averages of our comparable companies
Source: Brew 10K

18. Anheuser-Busch 20% Boston Beer Co. Inc. 30% Carlsberg 20%
COMPARABLE COMPANIES
Anheuser-Busch 20%
Boston Beer Co. Inc. 30%
Carlsberg 20%
Molson Coors Co. 15%
Heineken 15%

19. Estimated Share Price $15.21 COMPARABLE VALUATION P/E – 15%
Forward P/E – 20%
EV/Revenue – 15%
EV/EBITDA – 15%
Forward EV/EBITDA – 20%
P/B – 15%
Estimated Share Price
$15.21

20. ASSUMPTIONS Assumptions 2009A 2010A 2011A 2012A 2013A 2014P 2015P
2009A
2010A
2011A
2012A
2013A
2014P
2015P
2016P
2017P
2018P
Sales Growth %
5.6%
13.3%
13.5%
5.8%
13.0%
10.0%
8.0%
Excise Tax Rate ( % of Sales)
6.4%
6.5%
7.3%
7.0%
6.9%
Gross Margin (% Sales)
20.6%
23.9%
28.1%
27.5%
26.1%
27.1%
29.1%
30.1%
31.1%
SG&A Margin (% Sales)
18.7%
21.3%
24.7%
24.1%
23.5%
23.0%
CapEx
5.5%
4.0%
3.8%
D&A ($)
5.0%
4.5%
4.2%
5.3%
6.0%
6.2%
Interest Expenses
9.5%
6.1%
3.9%
4.3%
4.1%

21. DISCOUNTED CASH FLOW ANALYSIS
WACC
Cost of debt
6.0%
Marginal tax rate
40.0%
Cost of debt after tax shield
3.6%
Cost of equity
Risk-Free Rate (rf)
2.7%
Market Risk Premium (rm-rf)
7.0%
CAPM Beta
1.24
CAPM Cost of Equity
11.4%
BREW Realized Return
21.1%
Cost of Equity
12.4%
Capital structure
Debt
4.0%
Market Cap
96.0%
Total
100.0%
Weighted average cost of capital
12.0%
Business risk premium
1.0%
Discount Rate
13.0%
FCF Build
2014P
2015P
2016P
2017P
2018P
EBIT
7,868.9
12,243.7
15,806.5
19,861.0
24,916.0
Less: Taxes
(2,918.0)
(4,645.0)
(6,049.9)
(7,649.8)
(9,642.4)
Less: Capex
(8,698.0)
(9,089.4)
(9,816.5)
(11,159.8)
(11,662.0)
Less: Change in NWC
81.9
(1,314.9)
(1,157.1)
(1,249.7)
(1,687.1)
Plus: D&A
10,872.5
12,677.3
14,466.5
16,739.8
19,027.5
Unleveled FCF
7,207.3
9,871.7
13,249.4
16,541.4
20,952.1
Terminal Value Assumptions
4.0%
Discounted rate (WACC)
13.01%
Terminal Value
Discounted period (t)
1.00
2.00
3.00
4.00
5.00
Discount Factor
0.88
0.78
0.69
0.61
0.54
PV of FCFs (in thousands)
6,377.4
7,729.3
9,179.4
10,140.6
11,365.6
131,150.8
% of Total EV
3.6%
4.4%
5.2%
5.8%
6.5%
74.5%
PV of FCFs
Enterprise Value
Net Debt
Equity Value
($ thousands)
Shares
Perpetuity Method
44,792.3
175,943.1
3,357.6
172,585.5
18,
Price
$ 9.10

22. Perpetuity Growth Rate
SENSITIVITY
Enterprise Value - WACC vs. Perpetuity Growth Rate
Perpetuity Growth Rate
9.1
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
WACC
10.0%
11.8
12.5
13.3
14.3
15.4
16.8
18.5
11.0%
10.2
10.8
11.4
12.1
12.9
13.8
14.9
12.0%
9.0
9.4
9.9
10.4
11.0
11.7
12.4
13.0%
8.0
8.4
8.7
9.6
10.1
10.6
14.0%
7.2
7.5
7.8
8.1
8.8
9.2
15.0%
6.6
6.8
7.0
8.2
16.0%
6.0
6.2
6.3
6.5
7.3

23. Add to Watch List RECOMMENDATION Price Weight DCF $9.10 75% Comparable
$15.21
25%
Estimated Price
$10.62
Current Price
$14.64
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