Green Mountain Coffee Roasters (GMCR)

Other Income, Interest Expense and Taxes

Company interest expense increased by $3.3 million to $3.4 million in the 2007 YTD period, up from $123,000 in the 2006 YTD period, and from $100,000 in the as-adjusted YTD prior period. The increase is mainly due to increased borrowings under our $125 million revolving credit agreement used to fund the acquisition of Keurig. The average effective interest rate was 7.2% in the 2007 YTD period. We capitalized $155,000 of interest expense in the 2007 YTD period, up from $97,000 of interest expense in the 2006 YTD period.

The effective income tax rate for the Company was 41.4% in the 2007 YTD period, down from 42.2% in the 2006 YTD period.

Other Income, Interest Expense and Taxes

Company interest expense increased by $1.7 million to $1.8 million in the first quarter of fiscal 2007, up from $84,000 in the previously reported sixteen-week first quarter of fiscal 2006, and from $49,000 when excluding the extra three weeks in the first quarter of fiscal 2006. The increase is mainly due to increased borrowings under our new $125 million revolving credit agreement to fund the acquisition of Keurig. The average effective interest rate was 7.1% and we capitalized $70,000 of interest expense in the first quarter of fiscal 2007.

The effective income tax rate for the Company was 39.9% in the fiscal 2007 quarter, down from 42.2% in the fiscal 2006 quarter. The change was primarily due to a decrease in income tax rates in the state of Vermont.

Other Income, Interest Expense and Taxes

Company interest expense increased by $1.8 million to $2.3 million in fiscal 2006, up from $498,000 in fiscal 2005 and $282,000 in fiscal 2004. The increase in fiscal 2006 is mainly due to increased borrowings under our new $125 million revolving credit agreement to fund the acquisition of Keurig. The average effective interest rate was approximately 6.7% in fiscal 2006 as compared to 5.4% in fiscal 2005 and 4.0% in fiscal 2004. In fiscal 2006, fiscal 2005 and fiscal 2004, the Company capitalized $164,000, $226,000 and $282,000 of interest expense, respectively.

The effective income tax rate for the Company was 41.4% in fiscal 2006, up from 39.3% in fiscal 2005 and 39.2% in fiscal 2004. The increase in fiscal 2006 primarily related to the impact of the new stock option expense accounting implemented in the first quarter of 2006 (see Note 5 to the consolidated financial statements included in Item 8 of this Form 10-K).