Green Mountain Coffee Roasters (GMCR)

Pre-Acquisition Accounting for Keurig

Prior to our acquisition of Keurig on June 15, 2006, we used the equity method of accounting for our investment in Keurig (see Note 6 to the consolidated financial statements included in Item 8 of this Form 10-K). The net earnings/loss related to the Company’s equity investment in Keurig in fiscal 2006 was a loss of $963,000 or $0.04 per diluted share. This loss includes our equity interest in the earnings of Keurig amounting to a loss of $3,384,000 and an increase in the valuation of our preferred shares of $2,421,000. In fiscal 2005, the equity in the net earnings/loss related to our investment in Keurig was a net loss of $492,000, or $0.02 per diluted share.

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Through the merger date of June 15, 2006, the redemption value of Keurig’s preferred stock was calculated based on Keurig’s estimate of the amount the holders of the preferred shares would have received upon liquidation, as approved by Keurig’s Board of Directors. During fiscal 2006, ($3,502,000) of our equity interest in the earnings of Keurig was due to the accretion of preferred stock redemption rights. Both the increase in the valuation of our preferred shares and the accretion of preferred stock redemption rights reflect the most recent valuation determined by Keurig’s Board of Directors. During fiscal 2005, ($468,000) of the earnings related to the Keurig investment was due to the accretion of preferred stock redemption rights and there was no material adjustment in the carrying value of our preferred shares.

Pre-Acquisition Accounting for Keurig

Prior to our acquisition of Keurig on June 15, 2006, we used the equity method of accounting for our investment in Keurig (see Note 6 to the consolidated financial statements included in Item 8 of this Form 10-K). The net earnings/loss related to the Company’s equity investment in Keurig in fiscal 2006 was a loss of $963,000 or $0.12 per diluted share. This loss includes our equity interest in the earnings of Keurig amounting to a loss of $3,384,000 and an

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increase in the valuation of our preferred shares of $2,421,000. In fiscal 2005, the equity in the net earnings/loss related to our investment in Keurig was a net loss of $492,000, or $0.06 per diluted share.

Through the merger date of June 15, 2006, the redemption value of Keurig’s preferred stock was calculated based on Keurig’s estimate of the amount the holders of the preferred shares would have received upon liquidation, as approved by Keurig’s Board of Directors. During fiscal 2006, ($3,502,000) of our equity interest in the earnings of Keurig was due to the accretion of preferred stock redemption rights. Both the increase in the valuation of our preferred shares and the accretion of preferred stock redemption rights reflect the most recent valuation determined by Keurig’s Board of Directors. During fiscal 2005, ($468,000) of the earnings related to the Keurig investment was due to the accretion of preferred stock redemption rights and there was no material adjustment in the carrying value of our preferred shares.