Green Mountain Coffee Roasters (GMCR)

Selling, General and Administrative Expenses

Company selling, general and administrative expenses (S,G&A) increased 23% to $39.3 million in the second quarter of fiscal 2009 from $32.1 million in the prior-year period. As a percentage of sales, S,G&A improved to 20.3% in the second quarter of fiscal 2009 from 26.6% in the prior year period. This improvement in S,G&A margin was mainly due to leveraging selling and organizational resources on a higher sales base.

Selling, General and Administrative Expenses

Company selling, general and administrative expenses (S,G&A) increased 23.9% to $84.7 million in the 2009 YTD period from $68.4 million in the prior YTD period. As a percentage of sales, S,G&A improved to 21.7% in the 2009 YTD period from 27.6% in the prior YTD period. This improvement in S,G&A margin was the result of leveraging selling and organizational resources on a higher sales base.

Selling, General and Administrative Expenses

Company selling, general and administrative expenses (S,G&A) increased 25% to $45.4 million in the first quarter of fiscal 2009 from $36.3 million in the prior-year period. As a percentage of sales, S,G&A improved to 23.1% in the first quarter of fiscal 2009 from 28.7% in the prior year period. This improvement in S,G&A margin was mainly due to leveraging selling and organizational resources on a higher sales base.

Selling, General and Administrative Expenses

Fiscal 2008

Company selling, general and administrative expenses (S,G&A) increased by $31.1 million, or 30%, to $134.5 million in fiscal 2008 from $103.4 million in fiscal 2007. As a percent of net sales, S,G&A improved from 30% during fiscal 2007 to 27% during fiscal 2008. The improvement in S,G&A is mainly due to leveraging selling and organizational resources on a higher sales base.

Included in Corporate S,G&A in fiscal 2008 is $3.3 million of litigation expenses related to the Kraft Foods Inc., Kraft Food Global, Inc., and Tassimo Corporation, (collectively “Kraft”) patent infringement suit, up from $0.5 million recorded in fiscal 2007. The Company announced on October 23, 2008 that it had entered into a settlement and license agreement to settle its patent litigation with Kraft. Pursuant to the terms of the agreement, the Company received $17 million (gross of tax) in October 2008, which will be recorded as a non-recurring item in operating income in the first fiscal quarter of 2009.

Fiscal 2007

Company selling, general and administrative expenses (S,G&A) increased by $39.5 million, or 62%, to $103.4 million in fiscal 2007 from $63.9 million in the prior period. The increase in S,G&A was mainly due to the impact of consolidating a full year of Keurig’s S,G&A expenses into the Company’s financial results as compared to the 15 week period in the prior year and increased salary and promotional expenses to drive continued growth.

In fiscal 2007, total Company S,G&A expenses as a percentage of net sales increased 2% to 30% of net sales from 28% of net sales in the prior period. The increase in S,G&A as a percentage of net sales was primarily due to the increase in non-cash based compensation charges, the inclusion of non-cash amortization expenses related to identifiable intangibles as a result of the Keurig merger and increased salary and promotional expenses to support the rapid growth of our business.

Selling, General and Administrative Expenses

Company selling, general and administrative expenses (S,G&A) increased 29.4% to $101.0 million in the 2008 YTD period from $78.1 million in the prior-year period. As a percentage of sales, S,G&A improved to 27.6% in the 2008 YTD period from 31.4% in the prior YTD period. This improvement in S,G&A margin was the result of leveraging selling and organizational resources on a higher sales base.

For the GMC segment, S,G&A expenses improved to 22.3% as a percentage of sales in the 2008 YTD period compared to 24.7% in the prior YTD period.

For the Keurig segment, S,G&A expenses improved to 20.3% as a percentage of sales in the 2008 YTD period compared to 27.7% in the prior YTD period.

Corporate S,G&A expenses increased to $12.2 million in the 2008 YTD period from $7.9 million in the prior YTD period primarily due to approximately $2.3 million of litigation expenses incurred in the 2008 YTD period associated with the patent infringement lawsuit the Company has initiated against Kraft.

Selling, General and Administrative Expenses

Company selling, general and administrative expenses (S,G&A) increased 36.2% to $69.9 million in the 2008 YTD period from $51.3 million in the prior-year period. As a percentage of sales, S,G&A improved to 28.3% in the 2008 YTD period from 30.9% in the prior YTD period. This improvement in S,G&A margin was the result of leveraging selling and organizational resources on a higher sales base.

For the GMC segment, S,G&A expenses improved to 22.2% as a percentage of sales in the 2008 YTD period compared to 24.4% in the prior YTD period.

For the Keurig segment, S,G&A expenses improved to 21.3% as a percentage of sales in the 2008 YTD period compared to 27.6% in the prior YTD period.

Corporate S,G&A expenses increased to $8.0 million in the 2008 YTD period from $4.8 million in the prior YTD period primarily due to approximately $1.5 million of litigation expenses incurred in the 2008 YTD period associated with the patent infringement lawsuit the Company has initiated against Kraft.

Selling, General and Administrative Expenses

Company selling, general and administrative expenses (S,G&A) increased 42% to $36.8 million in the first quarter of fiscal 2008 from $25.9 million in the prior-year period. As a percentage of sales, S,G&A improved to 29.2% in the first quarter of fiscal 2008 from 31.0% in the prior year period.

For the GMC segment, S,G&A expenses improved to 23.2% as a percentage of sales in the first quarter of fiscal 2008 compared to 23.7% in the prior year period.

For the Keurig segment, S,G&A expenses improved to 24.1% as a percentage of sales in the first quarter of fiscal 2008 compared to 30.2% in the prior year period. This improvement was achieved even though the Keurig segment increased its selling and marketing expenses by $5.6 million or 76% as compared to the same quarter last year to support increased marketing programs focused on driving sales of Keurig single-cup At Home brewers during the holiday season.

Corporate S,G&A expenses increased to $3.3 million in the first quarter of fiscal 2008 from $2.4 million in the prior year period of which half of this increase was due to litigation expenses associated with the patent infringement lawsuit the Company has initiated against Kraft.

Selling, General and Administrative Expenses

Fiscal 2007

Company selling, general and administrative expenses (S,G&A) increased by $39.5 million, or 61.8%, to $103.4 million in fiscal 2007 from $63.9 million in fiscal 2006. The increase in S,G&A is mainly due to the impact of consolidating Keurig’s S,G&A expenses into the Company’s financial results for the full year and increased salary and promotional expenses to drive continued growth.

In fiscal 2007, total Company S,G&A expenses as a percentage of net sales increased 1.9% to 30.3% of net sales from 28.4% of net sales in fiscal 2006. The increase in S,G&A as a percentage of net sales is primarily due to the increase in non-cash based compensation charges, the inclusion of non-cash amortization expenses related to identifiable intangibles as a result of the Keurig merger and increased salary and promotional expenses to support the rapid growth of our business.

For the GMC segment, in fiscal 2007 S,G&A expenses increased to 26.6% as a percentage of sales compared to 26.4% in fiscal 2006.

For the Keurig segment, S,G&A expenses were $34.3 million compared to $7.7 million in fiscal 2006. The increase is primarily due to consolidating a full year of Keurig’s S,G&A expenses into the Company’s financial results. As a percentage of sales, Keurig S,G&A expenses were 25.5% in fiscal 2007.

Fiscal 2006

In fiscal 2006, total Company S,G&A expenses increased to 28.4% of net sales from 25.5% of net sales in fiscal 2005. The increase in S,G&A expenses as a percentage of net sales was primarily due to several factors including non-cash based compensation charge associated with the adoption of FAS 123R at the beginning of fiscal year 2006, the impact of consolidating Keurig’s higher S,G&A expenses into the total company’s financial results, and the inclusion of non-cash amortization expenses related to the Keurig identifiable intangibles acquired in fiscal 2006.

For the GMC segment, S,G&A expenses in fiscal 2006 increased to 26.4% from 25.4% in fiscal 2005, with the new stock compensation charge required by FAS123(R) being the primary reason for the increase.

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Selling, General and Administrative Expenses

Company S,G&A expenses for the 2007 YTD period increased by $34.9 million to $78.1 million from $43.2 million in the 2006 YTD period. The Company’s S,G&A expenses increased by $36.5 million, or 87.8%, from $41.6 million in the as-adjusted YTD prior period. The increase in S,G&A expenses is mainly due to the impact of consolidating Keurig’s S,G&A expenses into the Company’s financial results.

In the 2007 YTD period, total Company S,G&A expenses increased to 31.4% of net sales from 27.3% of net sales in the 2006 YTD period, and 27.1% of net sales in the as-adjusted YTD prior period. For 2007 YTD period, the increase in S,G&A as a percentage of net sales was primarily due to the inclusion of $3.6 million non-cash amortization expenses related to the identifiable intangibles in the 2007 YTD period as part of the purchase price accounting for the acquisition of Keurig, and an increase of $1.5 million in non-cash stock-based compensation charges over the as-adjusted YTD prior period.

Selling, General and Administrative Expenses

Company selling, general and administrative (“S,G&A”) expenses for the 2007 YTD period increased by $21.3 million to $51.3 million from $30.0 million in the 2006 YTD period. The Company’s S,G&A expenses increased by $23.0 million, or 81.4%, from $28.3 million in the as-adjusted YTD prior period. The increase in S,G&A expenses is mainly due to the impact of consolidating Keurig’s S,G&A expenses into the Company’s financial results. In the 2007 YTD period, total Company S,G&A expenses increased to 30.9% of net sales from 27.1% of net sales in the 2006 YTD period, and 27.5% of net sales in the as-adjusted YTD prior period.

For 2007 YTD period, the increase in S,G&A as a percentage of net sales was primarily due to the inclusion of $2.4 million non-cash amortization expenses related to the identifiable intangibles in the 2007 YTD period as part of the purchase price accounting for the acquisition of Keurig, and an increase of $924,000 in non-cash stock-based compensation charges over the comparable as-adjusted prior period.

For the GMCR segment, 2007 YTD S,G&A expenses were 26.4% of sales as compared to 2006 YTD period of 27.1%. The as-adjusted S,G&A margin was 27.5% in the as-adjusted YTD prior period. This improvement in S,G&A margin was the result of leveraging selling and organizational resources on a higher sales base.

For the Keurig segment, S,G&A expenses in the 2007 YTD period were $17.1 million.

Selling, General and Administrative Expenses

Company selling and operating expenses for the first quarter of fiscal 2007 increased by $6.0 million to $19.3 million from $13.3 million in the previously reported sixteen-week first quarter of fiscal 2006. Excluding the extra three weeks in the fiscal first quarter of 2006, the Company’s selling and operating expenses increased by $8.5 million, or 78.6%, from $10.8 million in the comparable period last year. Company general and administrative expenses for the first quarter of fiscal 2007 increased by $2.8 million to $6.6 million from $3.8 million in the previously reported sixteen-week first quarter of fiscal 2006. Excluding the extra three weeks in the fiscal first quarter of 2006, the Company’s general and administrative expenses increased by $3.4 million, or 106.1%, from $3.2 million in the comparable period last year. In the first quarter of fiscal 2007, total Company

selling, general and administrative (“S,G&A”) expenses increased to 31.0% of net sales from 26.8% of net sales in the previously reported sixteen-week first quarter of fiscal 2006 and 26.3% of net sales when excluding the extra three weeks in the first quarter of fiscal 2006.

For the first quarter of fiscal 2007, the increase in selling, general and administrative expenses as a percentage of net sales was primarily due to several factors including, the impact of consolidating Keurig’s higher S,G&A expenses into the total company’s financial results, the inclusion of $1.2 million non-cash amortization expenses related to the identifiable intangibles in the first quarter of fiscal 2007 as part of the purchase price accounting for the acquisition of Keurig, and an increase of $376,000 in non-cash stock-based compensation charges over the comparable prior year period.

For the GMCR segment, S,G&A expenses were 25.6% of sales as compared to the previously reported prior sixteen-week period of 26.9%. Excluding the extra three weeks in the first quarter of 2006, the as adjusted S,G&A margin was 26.3%. This improvement in S,G&A margin was the result of leveraging selling and organizational resources on a higher sales base.

For the Keurig segment, S,G&A expenses in the first quarter of fiscal 2007 were $9.0 million.

Selling, General and Administrative Expenses

Company selling and operating expenses increased by $15.3 million, or 48.5%, to $46.8 million in fiscal 2006 and by $1.8 million, or 6.0%, to $31.5 million in fiscal 2005. General and administrative expenses increased by $7.6 million, or 79.1%, to $17.1 million in fiscal 2006 and by $61,000, or 0.6%, to $9.6 million in fiscal 2005. In fiscal 2006, total Company selling, general and administrative (“S,G&A”) expenses increased to 28.4% of net sales from 25.5% of net sales in fiscal 2005. In fiscal 2005, total S,G&A expenses decreased to 25.5% of net sales from 28.5% of net sales in fiscal 2004.

For fiscal 2006, the increase in selling, general and administrative expenses as a percentage of net sales was primarily due to several factors including a $1.5 million non-cash stock-based compensation charge associated with the adoption of FAS 123R at the beginning of fiscal year 2006, the impact of consolidating Keurig’s higher S,G&A expenses into the total company’s financial results, and the inclusion of $1.4 million non-cash amortization expenses related to the identifiable intangibles in fiscal 2006, as part of the purchase price accounting for the acquisition of Keurig. In addition, S,G&A expenses increased due to increased promotional and marketing costs, higher variable compensation and personnel compensation to support the growth of the business and compliance costs associated with the federal Sarbanes-Oxley legislation.

For fiscal 2005, selling and operating expenses increased primarily due to compensation and benefits increases and higher marketing and promotional expenses. General and administrative expenses increased. This increase was primarily due to higher salaries and compliance costs associated with the federal Sarbanes-Oxley legislation, and was partially offset by decreases in performance-based bonuses and employee benefits costs. This improvement was primarily the result of leveraging selling and organizational resources on a higher sales base.

For the GMCR segment, S,G&A expenses in fiscal 2006 increased to 26.4% from 25.4% in fiscal 2005, with the new stock compensation charge being the primary reason for the increase as a percentage of sales.

For the Keurig segment, S,G&A expenses in fiscal 2006 were $7.7 million.