Green Mountain Coffee Roasters (GMCR)

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

At March 28, 2009, we had $118.7 million outstanding under our Credit Facility subject to variable interest rates. However, the interest rate on $75.7 million of this debt was fixed through interest rate swap agreements, as discussed further below. Therefore, $43.0 million outstanding under our Credit Facility remains subject to variable interest rates. Should interest rates (LIBOR and Prime rates) increase by 100 basis points, we would incur additional interest expense of $430,000 annually. At September 27, 2008 we had $45.0 million subject to variable interest rates.

On March 28, 2009, the effect of our interest rate swap agreements was to limit the interest rate exposure on the outstanding balance of the Credit Facility to a fixed rate versus the 30-day Libor rate as follows: 5.4% on $25.7 million; 2.4% on $30 million; and 3.9% on $20 million. The total notional amount covered by these swaps will decrease progressively in future periods and terminates on various dates from June 2010 through December 2012.

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

At December 27, 2008, we had $90.0 million outstanding under our Credit Facility subject to variable interest rates. However, the interest rate on $78.5 million of this debt was fixed through interest rate swap agreements, as discussed further below. Therefore, $11.5 million outstanding under our Credit Facility remains subject to variable interest rates. Should interest rates (LIBOR and Prime rates) increase by 100 basis points, we would incur additional interest expense of $115,000 annually. At September 27, 2008 we had $45.0 million subject to variable interest rates.

On December 27, 2008, the effect of our interest rate swap agreements was to limit the interest rate exposure on the outstanding balance of the Credit Facility to a fixed rate versus the 30-day Libor rate as follows: 5.4% on $28.5 million; 2.4% on $30 million; and 3.9% on $20 million. The total notional amount covered by these swaps will decrease progressively in future periods and terminates on various dates from June 2010 through December 2012.

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

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At September 27, 2008, we had $45.0 million outstanding under our Credit Facility subject to variable interest rates. Should interest rates (LIBOR and Prime rates) increase by 100 basis points, we would incur additional interest expense of $450,000 annually. At September 29, 2007 we had $24.5 million subject to variable interest rates. As discussed further under the heading “Liquidity and Capital Resources” the Company is party to interest rate swap agreements.

The total notional amounts of these swaps at September 27, 2008 and September 29, 2007 was $78.5 million and $65.5 million, respectively. On September 27, 2008, the effect of these swaps was to limit the interest rate exposure on the outstanding balance of the Credit Facility to a fixed rate versus the 30-day Libor rate as follows: 5.4% on $28.5 million; 2.4% on $30 million; and 3.9% on $20 million. The total notional amount covered by these swaps will decrease progressively in future periods and terminates on various dates from June 2010 through December 2012.

Interest rate risks

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

At June 28, 2008, we had $17.3 million subject to variable interest rates. Should interest rates (LIBOR and Prime rates) increase by 100 basis points, we would incur additional interest expense of $173,000 annually.

The Company has interest rate swap agreements with Bank of America N.A. (“Bank of America”) and Sovereign Bank. The total notional amount of the swap agreements at June 28, 2008 and September 29, 2007 was $78,466,667 and $65,466,667, respectively. The swap agreements terminate between June 2010 and December 2012.

On June 28, 2008, the combined effect of the swap agreements was to limit the interest rate exposure to an average fixed rate of 3.86% versus the 30-day LIBOR rate on $78,466,667of the Company’s debt.

At June 28, 2008 and September 29, 2007, the Company estimates it would have paid $440,000 and $871,000 (gross of tax), respectively, had it terminated its swap agreements. The Company designates the swap agreements as a cash flow hedges and the changes in the fair value of the swaps are classified in accumulated other comprehensive income.

For the thirteen weeks and thirty-nine weeks ended June 28, 2008, the Company paid $475,000 and $765,000, respectively, pursuant to the swap agreements, which increased interest expense. For the thirteen weeks and thirty-nine weeks ended June 30, 2007, the Company paid $20,000 and $58,000 pursuant to the swap agreement, which increased interest expense. The Company is exposed to credit loss in the event of nonperformance by the other party to the swap agreement; however, nonperformance is not anticipated.

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

At March 29, 2008, we had $32.3 million subject to variable interest rates. Should interest rates (LIBOR and Prime rates) increase by 100 basis points, we would incur additional interest expense of $323,000 annually.

The Company has interest rate swap agreements with Bank of America N.A. (“Bank of America”) and Sovereign Bank. The total notional amount of the swap agreements at March 29, 2008 and September 29, 2007 was $65,466,667. In the twenty-six weeks ended March 29, 2008, the effect of the swap agreements was to limit the interest rate exposure to an average fixed rate of 5.44% versus the 30-day LIBOR rate on $65,466,667 of the Company’s debt. The swap agreements terminate between June 2010 and December 2012.

At March 29, 2008 and September 29, 2007, the Company estimates it would have paid $2,749,000 and $871,000 (gross of tax), respectively, had it terminated its swap agreements. The Company designates the swap agreements as a cash flow hedges and the changes in the fair value of the swaps are classified in accumulated other comprehensive income.

For the thirteen weeks and twenty-six weeks ended March 29, 2008, the Company paid $232,000 and $290,000 pursuant to the swap agreement, which increased interest expense, respectively. For the thirteen weeks and twenty-six weeks ended March 31, 2007, the Company paid $18,000 and $38,000 pursuant to the swap agreement, which increased interest expense, respectively. The Company is exposed to credit loss in the event of nonperformance by the other party to the swap agreement; however, nonperformance is not anticipated.

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

At December 29, 2007, we had $41.8 million subject to variable interest rates. Should interest rates (LIBOR and Prime rates) increase by 100 basis points, we would incur additional interest expense of $418,000 annually.

The Company has an interest rate swap agreement with Bank of America. The notional amount of the swap at December 29, 2007 was $65,466,667. The effect of this swap is to limit the interest rate exposure on the outstanding balance of the Credit Facility to a fixed rate of 5.44% versus the 30-day LIBOR rate. The swap’s notional amount will decrease progressively in future periods and terminates on June 15, 2011.

The fair market value of the interest rate swap is the estimated amount that we would receive or pay to terminate the agreement at the reporting date, taking into account current interest rates and the credit worthiness of the counterparty. At December 29, 2007, we estimate we would have had to pay $1,428,000 (gross of tax), had we terminated the agreement. We designate the swap agreement as a cash flow hedge and the fair value of the swap is classified in accumulated other comprehensive income.

For the thirteen weeks ended December 29, 2007, we paid $58,000 pursuant to the swap agreement, which increased interest expense. For the thirteen weeks ended December 30, 2006, we paid $20,000 pursuant to the swap agreement, which increased interest expense. The Company is exposed to credit loss in the event of nonperformance by the other party to the swap agreement; however, nonperformance is not anticipated.

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

At September 29, 2007, we had $24.5 million subject to variable interest rates. Should interest rates (LIBOR and Prime rates) increase by 100 basis points, we would incur additional interest expense of $245,000 annually. At September 30, 2006 we had $33.7 million subject to variable interest rates.

On June 9, 2006, the Company entered into a swap agreement. The notional amount of the swap at September 29, 2007 was $65,467,000. The effect of this swap is to limit the interest rate exposure on the outstanding balance of the Company’s credit facility to a fixed rate of 5.44% versus the 30-day LIBOR rate. The swap’s notional amount will decrease progressively in future periods and terminates on June 15, 2011.

The fair market value of the interest rate swap is the estimated amount that we would receive or pay to terminate the agreement at the reporting date, taking into account current interest rates and the credit worthiness of the counterparty. At September 29, 2007, we estimate we would have to pay $871,000 (gross of tax), if we terminated the agreement on such date. We designate the swap agreement as a cash flow hedge and the fair value of the swap is classified in accumulated other comprehensive income.

At September 30, 2006, the notional amount of the swap was $69,133,333. We estimated we would have had to pay $793,000 (gross of tax), had we terminated the agreement.

In fiscal 2007 and fiscal 2006, we paid $66,000 and $8,000, respectively, in additional interest expense pursuant to interest rate swap agreements.

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