U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q

(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | ----------------------------------------------------------------------------------------



| | For the thirteen weeks ended March 28, 2009
| | -------------------------------------------

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | -----------------------------------------------------------------------------------------



| | For the transition period
from    to
| | ------------------------------------

Commission file number
1-12340





GREEN MOUNTAIN COFFEE ROASTERS, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 03-0339228                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|33 Coffee Lane, Waterbury, Vermont       |  | 05676     
|(Address of principal executive offices) |  | (zip code)



(802) 244-5621

(Registrants telephone number, including area code)





(Former name, former address and former fiscal year, if changed since last report.)





Indicate by check mark whether the registrant
has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

YES  x                                NO   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files).

YES   ̈                                NO   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  | x
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller Reporting Company |  |  ̈

Indicate by check mark whether the Registrant is a shell company (as defined in rule 12b-2 of the Exchange Act)

YES   ̈                                NO  x

As of April 30, 2009, 25,049,061 shares of common stock of the registrant were outstanding.









---

Part I. Financial Information

Item 1. Financial Statements

GREEN MOUNTAIN COFFEE ROASTERS, INC.

Unaudited Consolidated Balance Sheets

(Dollars in thousands)



|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                                            |  | March 28,2009 |         |   | September 27,2008 |  
|Assets                                                                                                                                                      |  |               |         |   |                   |   |         |  
|Current assets:                                                                                                                                             |  |               |         |   |                   |   |         |  
|Cash and cash equivalents                                                                                                                                   |  | $             | 2,639   |   |                   | $ | 804     |  
|Restricted cash and cash equivalents                                                                                                                        |  |               | 414     |   |                   |   | 161     |  
|Receivables, less uncollectible accounts and return allowances of $5,116 and $3,002 at March 28, 2009 and September 27, 2008,
respectively                  |  |               | 71,135  |   |                   |   | 54,782  |  
|Inventories                                                                                                                                                 |  |               | 71,597  |   |                   |   | 85,311  |  
|Other current assets                                                                                                                                        |  |               | 4,783   |   |                   |   | 4,886   |  
|Deferred income taxes, net                                                                                                                                  |  |               | 9,899   |   |                   |   | 6,146   |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total current assets                                                                                                                                        |  |               | 160,467 |   |                   |   | 152,090 |  
|                                                                                                                                                            |  |              
|Fixed assets, net                                                                                                                                           |  |               | 105,152 |   |                   |   | 97,678  |  
|Intangibles, net                                                                                                                                            |  |               | 39,390  |   |                   |   | 29,396  |  
|Goodwill                                                                                                                                                    |  |               | 99,727  |   |                   |   | 73,953  |  
|Other long-term assets                                                                                                                                      |  |               | 4,172   |   |                   |   | 4,531   |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total assets                                                                                                                                                |  | $             | 408,908 |   |                   | $ | 357,648 |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|                                                                                                                                                            |  |              
|Liabilities and Stockholders Equity                                                                                                                        |  |               |         |   |                   |   |         |  
|Current liabilities:                                                                                                                                        |  |               |         |   |                   |   |         |  
|Current portion of long-term debt                                                                                                                           |  | $             | 93      |   |                   | $ | 33      |  
|Accounts payable                                                                                                                                            |  |               | 49,542  |   |                   |   | 43,821  |  
|Accrued compensation costs                                                                                                                                  |  |               | 10,658  |   |                   |   | 11,669  |  
|Accrued expenses                                                                                                                                            |  |               | 20,614  |   |                   |   | 14,645  |  
|Income tax payable                                                                                                                                          |  |               | 5,427   |   |                   |   | 2,079   |  
|Other short-term liabilities                                                                                                                                |  |               | 4,147   |   |                   |   | 673     |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total current liabilities                                                                                                                                   |  |               | 90,481  |   |                   |   | 72,920  |  
|                                                                                                                                                            |  |              
|Long-term debt                                                                                                                                              |  |               | 118,650 |   |                   |   | 123,517 |  
|Deferred income taxes, net                                                                                                                                  |  |               | 22,292  |   |                   |   | 21,691  |  
|                                                                                                                                                            |  |              
|Commitments and contingencies                                                                                                                               |  |               |         |   |                   |   |         |  
|                                                                                                                                                            |  |              
|Stockholders equity:                                                                                                                                       |  |               |         |   |                   |   |         |  
|Preferred stock, $0.10 par value: Authorized1,000,000 shares; No shares issued or outstanding                                                              |  |               |        |   |                   |   |        |  
|Common stock, $0.10 par value: Authorized60,000,000 shares; Issued26,096,888 and 25,478,536 shares at March 28, 2009 and
September 27, 2008, respectively |  |               | 2,612   |   |                   |   | 2,549   |  
|Additional paid-in capital                                                                                                                                  |  |               | 76,335  |   |                   |   | 63,607  |  
|Retained earnings                                                                                                                                           |  |               | 108,647 |   |                   |   | 81,280  |  
|Accumulated other comprehensive loss                                                                                                                        |  |               | (2,612  | ) |                   |   | (419    | )
|ESOP unallocated shares, at cost18,129 shares                                                                                                              |  |               | (161    | ) |                   |   | (161    | )
|Treasury shares, at cost1,157,554 shares                                                                                                                   |  |               | (7,336  | ) |                   |   | (7,336  | )
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total stockholders equity                                                                                                                                  |  |               | 177,485 |   |                   |   | 139,520 |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total liabilities and stockholders equity                                                                                                                  |  | $             | 408,908 |   |                   | $ | 357,648 |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial
statements.



2



---

GREEN MOUNTAIN COFFEE ROASTERS, INC.

Unaudited Consolidated Statements of Operations

(Dollars in thousands except
per share data)



|                                       |  |                                  |            |   |                                  |   |            |  
|-------------------------------------- |  | -------------------------------- | ---------- | - | -------------------------------- | - | ---------- | -
|                                       |  | Thirteenweeks endedMarch 28,2009 |            |   | Thirteenweeks endedMarch 29,2008 |  
|Net sales                              |  | $                                | 193,351    |   |                                  | $ | 120,877    |  
|Cost of sales                          |  |                                  | 131,370    |   |                                  |   | 76,164     |  
|                                       |  |                                 
|Gross profit                           |  |                                  | 61,981     |   |                                  |   | 44,713     |  
|                                       |  |                                 
|Selling and operating expenses         |  |                                  | 28,094     |   |                                  |   | 21,841     |  
|General and administrative expenses    |  |                                  | 11,245     |   |                                  |   | 10,246     |  
|Patent litigation (settlement) expense |  |                                  |           |   |                                  |   | 1,030      |  
|                                       |  |                                  |            |   |                                  |   |            |  
|Operating income                       |  |                                  | 22,642     |   |                                  |   | 11,596     |  
|                                       |  |                                 
|Other expense                          |  |                                  | (242       | ) |                                  |   | (89        | )
|Interest expense                       |  |                                  | (1,032     | ) |                                  |   | (1,495     | )
|                                       |  |                                 
|Income before income taxes             |  |                                  | 21,368     |   |                                  |   | 10,012     |  
|                                       |  |                                 
|Income tax expense                     |  |                                  | (8,385     | ) |                                  |   | (4,055     | )
|                                       |  |                                  |            |   |                                  |   |            |  
|Net income                             |  | $                                | 12,983     |   |                                  | $ | 5,957      |  
|                                       |  |                                  |            |   |                                  |   |            |  
|                                       |  |                                 
|Basic income per share:                |  |                                  |            |   |                                  |   |            |  
|Weighted average shares outstanding    |  |                                  | 24,750,025 |   |                                  |   | 23,856,362 |  
|Net income                             |  | $                                | 0.52       |   |                                  | $ | 0.25       |  
|                                       |  |                                 
|Diluted income per share:              |  |                                  |            |   |                                  |   |            |  
|Weighted average shares outstanding    |  |                                  | 26,013,372 |   |                                  |   | 25,467,448 |  
|Net income                             |  | $                                | 0.50       |   |                                  | $ | 0.23       |  

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial
statements.



3



---

GREEN MOUNTAIN COFFEE ROASTERS, INC.

Unaudited Consolidated Statements of Operations

(Dollars in thousands except
per share data)



|                                       |  |                                    |            |   |                                    |   |            |  
|-------------------------------------- |  | ---------------------------------- | ---------- | - | ---------------------------------- | - | ---------- | -
|                                       |  | Twenty-sixweeks endedMarch 28,2009 |            |   | Twenty-sixweeks endedMarch 29,2008 |  
|Net sales                              |  | $                                  | 390,331    |   |                                    | $ | 247,322    |  
|Cost of sales                          |  |                                    | 275,000    |   |                                    |   | 159,320    |  
|                                       |  |                                   
|Gross profit                           |  |                                    | 115,331    |   |                                    |   | 88,002     |  
|                                       |  |                                   
|Selling and operating expenses         |  |                                    | 64,275     |   |                                    |   | 48,875     |  
|General and administrative expenses    |  |                                    | 20,456     |   |                                    |   | 19,505     |  
|Patent litigation (settlement) expense |  |                                    | (17,000    | ) |                                    |   | 1,495      |  
|                                       |  |                                    |            |   |                                    |   |            |  
|Operating income                       |  |                                    | 47,600     |   |                                    |   | 18,127     |  
|                                       |  |                                   
|Other expense                          |  |                                    | (285       | ) |                                    |   | (203       | )
|Interest expense                       |  |                                    | (2,414     | ) |                                    |   | (3,039     | )
|                                       |  |                                   
|Income before income taxes             |  |                                    | 44,901     |   |                                    |   | 14,885     |  
|                                       |  |                                   
|Income tax expense                     |  |                                    | (17,534    | ) |                                    |   | (6,003     | )
|                                       |  |                                    |            |   |                                    |   |            |  
|Net income                             |  | $                                  | 27,367     |   |                                    | $ | 8,882      |  
|                                       |  |                                    |            |   |                                    |   |            |  
|                                       |  |                                   
|Basic income per share:                |  |                                    |            |   |                                    |   |            |  
|Weighted average shares outstanding    |  |                                    | 24,601,756 |   |                                    |   | 23,737,160 |  
|Net income                             |  | $                                  | 1.11       |   |                                    | $ | 0.37       |  
|                                       |  |                                   
|Diluted income per share:              |  |                                    |            |   |                                    |   |            |  
|Weighted average shares outstanding    |  |                                    | 25,882,738 |   |                                    |   | 25,445,994 |  
|Net income                             |  | $                                  | 1.06       |   |                                    | $ | 0.35       |  

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial
statements.



4



---

GREEN MOUNTAIN COFFEE ROASTERS, INC.

Unaudited Condensed Consolidated Statements of Comprehensive Income

(Dollars
in thousands)



|                                                                            |  |                                  |        |                                  |   |       |                                    |  |   |                                    |   |  |   |        |  
|--------------------------------------------------------------------------- |  | -------------------------------- | ------ | -------------------------------- | - | ----- | ---------------------------------- |  | - | ---------------------------------- | - |  | - | ------ | -
|                                                                            |  | Thirteenweeks endedMarch 28,2009 |        | Thirteenweeks endedMarch 29,2008 |   |       | Twenty-sixweeks endedMarch 28,2009 |  |   | Twenty-sixweeks endedMarch 29,2008 |  
|Net income                                                                  |  | $                                | 12,983 |                                  | $ | 5,957 |                                    |  | $ | 27,367                             |   |  | $ | 8,882  |  
|Other comprehensive loss, net of tax:                                       |  |                                  |        |                                  |   |       |                                    |  |   |                                    |   |  |   |        |  
|Deferred gain (losses) on derivatives designated as cash flow hedges        |  |                                  | 127    |                                  |   | (788  | )                                  |  |   | (2,282                             | ) |  |   | (1,128 | )
|Losses on derivatives designated as cash flow hedges included in net income |  |                                  | 79     |                                  |   |      |                                    |  |   | 89                                 |   |  |   |       |  
|                                                                            |  |                                  |        |                                  |   |       |                                    |  |   |                                    |   |  |   |        |  
|Other comprehensive gain (loss)                                             |  |                                  | 206    |                                  |   | (788  | )                                  |  |   | (2,193                             | ) |  |   | (1,128 | )
|                                                                            |  |                                  |        |                                  |   |       |                                    |  |   |                                    |   |  |   |        |  
|Comprehensive income                                                        |  | $                                | 13,189 |                                  | $ | 5,169 |                                    |  | $ | 25,174                             |   |  | $ | 7,754  |  
|                                                                            |  |                                  |        |                                  |   |       |                                    |  |   |                                    |   |  |   |        |  

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial
statements.



5



---

GREEN MOUNTAIN COFFEE ROASTERS, INC.

Unaudited Consolidated Statement Of Changes In Stockholders Equity

For
the Period Ended March 28, 2009 (Dollars in thousands)



|                                                            |  |              |  |                          |       |                  |   |                                        |        |   |                |        |   |                        |        |  |                     |        |  |   |        |   |  |         |   |  |   |      |   |  |   |         |  
|----------------------------------------------------------- |  | ------------ |  | ------------------------ | ----- | ---------------- | - | -------------------------------------- | ------ | - | -------------- | ------ | - | ---------------------- | ------ |  | ------------------- | ------ |  | - | ------ | - |  | ------- | - |  | - | ---- | - |  | - | ------- | -
|                                                            |  | Common stock |  | Additionalpaid-incapital |       | Retainedearnings |   | Accumulatedother compre-hensive (loss) |        |   | Treasury stock |        |   | ESOP unallocatedshares |        |  | StockholdersEquity |       
|                                                            |  | Shares       |  | Amount                   |       |                  |   |                                        | Shares |   |                | Amount |   |                        | Shares |  |                     | Amount |  |  
|Balance at September 27, 2008                               |  | 25,478,536   |  | $                        | 2,549 |                  | $ | 63,607                                 |        | $ | 81,280         |        | $ | (419                   | )      |  | (1,157,554          | )      |  | $ | (7,336 | ) |  | (18,129 | ) |  | $ | (161 | ) |  | $ | 139,520 |  
|Options exercised                                           |  | 577,333      |  |                          | 58    |                  |   | 2,980                                  |        |   |               |        |   |                       |        |  |                    |        |  |   |       |   |  |        |   |  |   |     |   |  |   | 3,038   |  
|Issuance of common stock under employee stock purchase plan |  | 41,019       |  |                          | 5     |                  |   | 1,329                                  |        |   |                |        |   |                        |        |  |                     |        |  |   |        |   |  |         |   |  |   |      |   |  |   | 1,334   |  
|Stock compensation expense                                  |  |             |  |                          |      |                  |   | 2,956                                  |        |   |               |        |   |                       |        |  |                    |        |  |   |       |   |  |        |   |  |   |     |   |  |   | 2,956   |  
|Tax benefit from exercise of options                        |  |             |  |                          |      |                  |   | 5,392                                  |        |   |               |        |   |                       |        |  |                    |        |  |   |       |   |  |        |   |  |   |     |   |  |   | 5,392   |  
|Deferred compensation                                       |  |             |  |                          |      |                  |   | 71                                     |        |   |               |        |   |                       |        |  |                    |        |  |   |       |   |  |        |   |  |   |     |   |  |   | 71      |  
|Other comprehensive loss, net of tax                        |  |             |  |                          |      |                  |   |                                       |        |   |               |        |   | (2,193                 | )      |  |                    |        |  |   |       |   |  |        |   |  |   |     |   |  |   | (2,193  | )
|Net income                                                  |  |             |  |                          |      |                  |   |                                       |        |   | 27,367         |        |   |                       |        |  |                    |        |  |   |       |   |  |        |   |  |   |     |   |  |   | 27,367  |  
|                                                            |  |              |  |                          |       |                  |   |                                        |        |   |                |        |   |                        |        |  |                     |        |  |   |        |   |  |         |   |  |   |      |   |  |   |         |  
|Balance at March 28, 2009                                   |  | 26,096,888   |  | $                        | 2,612 |                  | $ | 76,335                                 |        | $ | 108,647        |        | $ | (2,612                 | )      |  | (1,157,554          | )      |  | $ | (7,336 | ) |  | (18,129 | ) |  | $ | (161 | ) |  | $ | 177,485 |  
|                                                            |  |              |  |                          |       |                  |   |                                        |        |   |                |        |   |                        |        |  |                     |        |  |   |        |   |  |         |   |  |   |      |   |  |   |         |  

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial
statements.



6



---

GREEN MOUNTAIN COFFEE ROASTERS, INC.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)



|                                                                                                                      |  |                                    |         |   |                                    |   |         |  
|--------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------- | ------- | - | ---------------------------------- | - | ------- | -
|                                                                                                                      |  | Twenty-sixweeks endedMarch 28,2009 |         |   | Twenty-sixweeks endedMarch 29,2008 |  
|Cash flows from operating activities:                                                                                 |  |                                    |         |   |                                    |   |         |  
|Net income                                                                                                            |  | $                                  | 27,367  |   |                                    | $ | 8,882   |  
|Adjustments to reconcile net income to net cash provided by operating activities:                                     |  |                                    |         |   |                                    |   |         |  
|Depreciation and amortization                                                                                         |  |                                    | 8,477   |   |                                    |   | 6,423   |  
|Amortization of intangibles                                                                                           |  |                                    | 2,406   |   |                                    |   | 2,406   |  
|Loss on disposal of fixed assets                                                                                      |  |                                    | 144     |   |                                    |   | 124     |  
|Provision for doubtful accounts                                                                                       |  |                                    | 131     |   |                                    |   | 346     |  
|Loss on futures derivatives                                                                                           |  |                                    | 89      |   |                                    |   |        |  
|Tax expense (benefit) from exercise of non-qualified options and disqualified dispositions of incentive stock options |  |                                    | 21      |   |                                    |   | (86     | )
|Deferred income taxes                                                                                                 |  |                                    | (1,960  | ) |                                    |   | 138     |  
|Deferred compensation and stock compensation                                                                          |  |                                    | 3,027   |   |                                    |   | 2,934   |  
|Changes in assets and liabilities:                                                                                    |  |                                    |         |   |                                    |   |         |  
|Receivables                                                                                                           |  |                                    | (16,484 | ) |                                    |   | (4,481  | )
|Inventories                                                                                                           |  |                                    | 16,001  |   |                                    |   | (11,501 | )
|Income tax payable                                                                                                    |  |                                    | 3,348   |   |                                    |   | 876     |  
|Other current assets                                                                                                  |  |                                    | (150    | ) |                                    |   | (880    | )
|Other long-term assets, net                                                                                           |  |                                    | 359     |   |                                    |   | 179     |  
|Accounts payable                                                                                                      |  |                                    | 5,576   |   |                                    |   | (2,047  | )
|Accrued compensation costs                                                                                            |  |                                    | (1,011  | ) |                                    |   | 1,588   |  
|Accrued expenses                                                                                                      |  |                                    | 5,642   |   |                                    |   | 1,840   |  
|                                                                                                                      |  |                                    |         |   |                                    |   |         |  
|Net cash provided by operating activities                                                                             |  |                                    | 52,983  |   |                                    |   | 6,741   |  
|                                                                                                                      |  |                                   
|Cash flows from investing activities:                                                                                 |  |                                    |         |   |                                    |   |         |  
|Acquisition of Tullys Coffee Corporation                                                                             |  |                                    | (41,451 | ) |                                    |   |        |  
|Capital expenditures for fixed assets                                                                                 |  |                                    | (14,516 | ) |                                    |   | (21,816 | )
|Proceeds from disposal of fixed assets                                                                                |  |                                    | 93      |   |                                    |   | 129     |  
|                                                                                                                      |  |                                    |         |   |                                    |   |         |  
|Net cash used for investing activities                                                                                |  |                                    | (55,874 | ) |                                    |   | (21,687 | )
|                                                                                                                      |  |                                   
|Cash flows from financing activities:                                                                                 |  |                                    |         |   |                                    |   |         |  
|Net change in revolving line of credit                                                                                |  |                                    | (5,000  | ) |                                    |   | 7,800   |  
|Proceeds from issuance of common stock                                                                                |  |                                    | 4,372   |   |                                    |   | 3,024   |  
|Windfall tax benefit                                                                                                  |  |                                    | 5,371   |   |                                    |   | 2,687   |  
|Deferred financing fees                                                                                               |  |                                    |        |   |                                    |   | (794    | )
|Repayment of long-term debt                                                                                           |  |                                    | (17     | ) |                                    |   | (42     | )
|                                                                                                                      |  |                                    |         |   |                                    |   |         |  
|Net cash provided by financing activities                                                                             |  |                                    | 4,726   |   |                                    |   | 12,675  |  
|                                                                                                                      |  |                                   
|Net increase (decrease) in cash and cash equivalents                                                                  |  |                                    | 1,835   |   |                                    |   | (2,271  | )
|Cash and cash equivalents at beginning of period                                                                      |  |                                    | 804     |   |                                    |   | 2,818   |  
|                                                                                                                      |  |                                    |         |   |                                    |   |         |  
|Cash and cash equivalents at end of period                                                                            |  | $                                  | 2,639   |   |                                    | $ | 547     |  
|                                                                                                                      |  |                                    |         |   |                                    |   |         |  
|                                                                                                                      |  |                                   
|Fixed asset purchases included in accounts payable and not disbursed at the end of each period:                       |  | $                                  | 5,348   |   |                                    | $ | 2,016   |  
|                                                                                                                      |  |                                   
|Noncash financing activity:                                                                                           |  |                                    |         |   |                                    |   |         |  
|Debt assumed in conjunction with acquisition                                                                          |  | $                                  | 210     |   |                                    | $ |        |  

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial
statements.



7



---

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements



|1. | Basis of Presentation
|-- | ---------------------

The accompanying unaudited
consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements.

In
the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial data have been included. Results from operations for the thirteen and twenty-six week periods ended March 28, 2009 are not
necessarily indicative of the results that may be expected for the fiscal year ending September 26, 2009.

The September 27, 2008
balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. For further information, refer to the consolidated financial
statements and the footnotes included in the Annual Report on Form 10-K for Green Mountain Coffee Roasters, Inc. for the fiscal year ended September 27, 2008. Throughout this presentation, we refer to the consolidated company as the
Company.

The Company has revised the classification of certain information presented in its fiscal 2008 Consolidated Statement
of Operations to conform to its fiscal 2009 presentation.



|2. | Segment Reporting
|-- | -----------------

The Company manages its
operations through two operating segments: Specialty Coffee Business Unit (SCBU) formerly referred to as Green Mountain Coffee (GMC) and Keurig Business Unit (Keurig). SCBU sells whole bean and ground coffee,
coffee, hot cocoa and tea in K-Cups, Keurig single-cup brewers and other accessories mainly in domestic wholesale and retail channels. Keurig sells their single-cup brewers, coffee, hot cocoa and tea in K-Cups produced by a variety of licensed
roasters and related accessories mainly in domestic wholesale and retail channels. Throughout this report, unless otherwise noted, the information provided is on a consolidated basis.

The Company evaluates performance based on several factors, including business segment income before taxes. The operating segments do not share
manufacturing or distribution facilities, except for brewer fulfillment at our Knoxville facility, and most administrative functions such as accounting and information services are decentralized. In the event any materials and/or services are
provided to one segment by the other, the transaction is valued at market price and eliminated in consolidation. The costs of the Companys manufacturing operations are captured within the SCBU segment while the Keurig segment does not have
manufacturing facilities and purchases their saleable products from third parties, including the SCBU. The Companys property, plant and equipment, inventory and accounts receivable are captured and reported discretely within each operating
segment.

Expenses not specifically related to either operating segment are shown separately as Corporate. Corporate expenses
are comprised mainly of the compensation and other related expenses of the Companys Chief Executive Officer, Chief Financial Officer, Chief Information Officer, General Counsel and Secretary, Vice President Human Resources and Vice President
of Corporate Social Responsibility and other selected employees who perform duties related to our entire enterprise. Corporate expenses also include interest expense, amortization of identifiable intangibles, as well as certain corporate legal
expenses and compensation of the board of directors. All of the Companys goodwill and intangible assets are included in Corporate assets.



8



---

Selected financial data for segment disclosures for the thirteen weeks ended March 28, 2009 and March 29, 2008
are as follows:



|                                |  |                                     |         |        |   |           |  |   |              |   |  |              |          |   |  |   |        
|------------------------------- |  | ----------------------------------- | ------- | ------ | - | --------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | -------
|                                |  | Thirteen weeks ended March 28, 2009
|                                |  | (Dollars in thousands)             
|                                |  | SCBU                                |         | Keurig |   | Corporate |  |   | Eliminations |   |  | Consolidated
|Sales to unaffiliated customers |  | $                                   | 91,177  |        | $ | 102,174   |  | $ |             |   |  | $            |         |   |  | $ | 193,351
|Intersegment sales              |  | $                                   | 22,088  |        | $ | 17,590    |  | $ |             |   |  | $            | (39,678  | ) |  | $ |       
|Net sales                       |  | $                                   | 113,265 |        | $ | 119,764   |  | $ |             |   |  | $            | (39,678  | ) |  | $ | 193,351
|Income before taxes             |  | $                                   | 12,835  |        | $ | 14,725    |  | $ | (5,956       | ) |  | $            | (236     | ) |  | $ | 21,368 
|Total assets                    |  | $                                   | 331,134 |        | $ | 88,115    |  | $ | 139,117      |   |  | $            | (149,458 | ) |  | $ | 408,908
|Stock compensation              |  | $                                   | 498     |        | $ | 458       |  | $ | 570          |   |  | $            |         |   |  | $ | 1,526  
|Interest expense                |  | $                                   | 17      |        | $ |          |  | $ | 1,015        |   |  | $            |         |   |  | $ | 1,032  
|Property additions              |  | $                                   | 10,592  |        | $ | 258       |  | $ |             |   |  | $            |         |   |  | $ | 10,850 
|Depreciation and amortization   |  | $                                   | 3,801   |        | $ | 518       |  | $ | 1,203        |   |  | $            |         |   |  | $ | 5,522  



|                                |  |                                     |         |        |   |           |  |   |              |   |  |              |         |   |  |   |        
|------------------------------- |  | ----------------------------------- | ------- | ------ | - | --------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | -------
|                                |  | Thirteen weeks ended March 29, 2008
|                                |  | (Dollars in thousands)             
|                                |  | SCBU                                |         | Keurig |   | Corporate |  |   | Eliminations |   |  | Consolidated
|Sales to unaffiliated customers |  | $                                   | 69,651  |        | $ | 51,226    |  | $ |             |   |  | $            |        |   |  | $ | 120,877
|Intersegment sales              |  | $                                   | 11,374  |        | $ | 9,513     |  | $ |             |   |  | $            | (20,887 | ) |  | $ |       
|Net sales                       |  | $                                   | 81,025  |        | $ | 60,739    |  | $ |             |   |  | $            | (20,887 | ) |  | $ | 120,877
|Income before taxes             |  | $                                   | 7,158   |        | $ | 10,102    |  | $ | (6,213       | ) |  | $            | (1,035  | ) |  | $ | 10,012 
|Total assets                    |  | $                                   | 185,396 |        | $ | 57,377    |  | $ | 105,642      |   |  | $            | (60,259 | ) |  | $ | 288,156
|Stock compensation              |  | $                                   | 426     |        | $ | 620       |  | $ | 488          |   |  | $            |        |   |  | $ | 1,534  
|Interest expense                |  | $                                   |        |        | $ |          |  | $ | 1,495        |   |  | $            |        |   |  | $ | 1,495  
|Property additions              |  | $                                   | 7,364   |        | $ | 1,033     |  | $ |             |   |  | $            |        |   |  | $ | 8,397  
|Depreciation and amortization   |  | $                                   | 2,845   |        | $ | 442       |  | $ | 1,203        |   |  | $            |        |   |  | $ | 4,490  



9



---

Selected financial data for segment disclosures for the twenty-six weeks ended March 28, 2009 and March 29, 2008 are as
follows:



|                                |  |                                       |         |        |   |           |  |              |         |  |              |          |   |  |   |        
|------------------------------- |  | ------------------------------------- | ------- | ------ | - | --------- |  | ------------ | ------- |  | ------------ | -------- | - |  | - | -------
|                                |  | Twenty-six weeks ended March 28, 2009
|                                |  | (Dollars in thousands)               
|                                |  | SCBU                                  |         | Keurig |   | Corporate |  | Eliminations |         |  | Consolidated
|Sales to unaffiliated customers |  | $                                     | 182,802 |        | $ | 207,529   |  | $            |        |  | $            |         |   |  | $ | 390,331
|Intersegment sales              |  | $                                     | 36,271  |        | $ | 33,171    |  | $            |        |  | $            | (69,442  | ) |  | $ |       
|Net sales                       |  | $                                     | 219,073 |        | $ | 240,700   |  | $            |        |  | $            | (69,442  | ) |  | $ | 390,331
|Income before taxes             |  | $                                     | 22,365  |        | $ | 17,429    |  | $            | 6,151   |  | $            | (1,044   | ) |  | $ | 44,901 
|Total assets                    |  | $                                     | 331,134 |        | $ | 88,115    |  | $            | 139,117 |  | $            | (149,458 | ) |  | $ | 408,908
|Stock compensation              |  | $                                     | 1,031   |        | $ | 883       |  | $            | 1,042   |  | $            |         |   |  | $ | 2,956  
|Interest expense                |  | $                                     | 17      |        | $ |          |  | $            | 2,397   |  | $            |         |   |  | $ | 2,414  
|Property additions              |  | $                                     | 15,185  |        | $ | 1,003     |  | $            |        |  | $            |         |   |  | $ | 16,188 
|Depreciation and amortization   |  | $                                     | 7,469   |        | $ | 1,008     |  | $            | 2,406   |  | $            |         |   |  | $ | 10,883 



|                                |  |                                       |         |        |   |           |  |   |              |   |  |              |         |   |  |   |        
|------------------------------- |  | ------------------------------------- | ------- | ------ | - | --------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | -------
|                                |  | Twenty-six weeks ended March 29, 2008
|                                |  | (Dollars in thousands)               
|                                |  | SCBU                                  |         | Keurig |   | Corporate |  |   | Eliminations |   |  | Consolidated
|Sales to unaffiliated customers |  | $                                     | 141,866 |        | $ | 105,456   |  | $ |             |   |  | $            |        |   |  | $ | 247,322
|Intersegment sales              |  | $                                     | 16,993  |        | $ | 19,130    |  | $ |             |   |  | $            | (36,123 | ) |  | $ |       
|Net sales                       |  | $                                     | 158,859 |        | $ | 124,586   |  | $ |             |   |  | $            | (36,123 | ) |  | $ | 247,322
|Income before taxes             |  | $                                     | 13,344  |        | $ | 13,835    |  | $ | (11,099      | ) |  | $            | (1,195  | ) |  | $ | 14,885 
|Total assets                    |  | $                                     | 185,396 |        | $ | 57,377    |  | $ | 105,642      |   |  | $            | (60,259 | ) |  | $ | 288,156
|Stock compensation              |  | $                                     | 905     |        | $ | 1,164     |  | $ | 818          |   |  | $            |        |   |  | $ | 2,887  
|Interest expense                |  | $                                     |        |        | $ |          |  | $ | 3,039        |   |  | $            |        |   |  | $ | 3,039  
|Property additions              |  | $                                     | 13,707  |        | $ | 2,298     |  | $ |             |   |  | $            |        |   |  | $ | 16,005 
|Depreciation and amortization   |  | $                                     | 5,577   |        | $ | 846       |  | $ | 2,406        |   |  | $            |        |   |  | $ | 8,829  



10



---

|3. | Acquisition of Tullys Coffee Corporation
|-- | -----------------------------------------

On
September 15, 2008, the Company entered into an Asset Purchase Agreement (the Agreement) with Tullys Coffee Corporation, a Washington corporation, and its wholly-owned subsidiary, Tullys Bellaccino, LLC, a Washington
limited liability company (collectively Tullys) to acquire the Tullys coffee brand and certain assets of its wholesale business. The transaction was completed on March 27, 2009.

Tullys wholesale business division distributes handcrafted coffees and related products via office coffee services, food service distributors, and
over 5,000 supermarkets located primarily in the western states. The Company expects the geographic region encompassed by the Tullys brand to create an advantaged opportunity for the Company to accelerate growth in the west coast by
capitalizing on Tullys brand recognition and the loyalty of its customer base.

Total consideration under the terms of the Agreement
amounted to approximately $40,300,000 in cash. The Agreement contained customary representations, warranties and covenants given by the parties. Under the terms of the Agreement, $3,500,000 of the purchase price was placed in escrow at the closing
and will be available to satisfy indemnification claims by the Company under the Agreement for a period of up to 12 months from the completion date.

The total net cash disbursement associated with the Agreement was $41,451,000. This includes $40,300,000 of cash consideration paid to Tullys for the assets associated with its wholesale business and brand and
direct acquisition costs of approximately $1,151,000. The Company also assumed approximately $210,000 in debt which was recorded as a noncash transaction.

The unaudited Consolidated Balance Sheets of the Company as of March 28, 2009 reflect the acquisition of Tullys under the purchase method of accounting. Since the Agreement was consummated concurrent to the
end of Companys interim reporting period, Tullys results of operations are not included in the Consolidated Statements of Operations for this interim report.

The preliminary allocation of the purchase price based on fair value of the acquired assets less liabilities assumed is as follows:



|                  |  |   |           
|----------------- |  | - | ----------
|Inventories       |  | $ | 2,287,000 
|Fixed assets      |  |   | 1,527,000 
|Intangible assets |  |   | 12,400,000
|Goodwill          |  |   | 25,237,000
|                  |  |   |           
|Total             |  | $ | 41,451,000
|                  |  |   |           

In addition, the Company recorded goodwill related to assumed debt of $210,000 and exit and
transition related accruals of $327,000. Exit and transition related accruals include the costs associated with the plan to relocate the Tullys manufacturing facility to a new location which is expected to be completed no later than one year
from the acquisition date.

The purchase price and its allocation could change as a result of changes in the estimates and assumptions used
in determining certain acquisition related accruals. Any change to these estimates and assumptions in the year following the acquisition would result in an offsetting adjustment to the acquired goodwill.

This acquisition was recorded in accordance with Statements of Financial Accounting Standards No. 141 (SFAS 141) Business
Combinations and No. 142 (SFAS 142) Goodwill and Other Intangibles. In December 2007, the FASB issued SFAS No. 141 (Revised 2007), (SFAS 141R) effective for the Company beginning in fiscal year
2010. The guidance proposed by SFAS 141R applies prospectively, except that acquisitions consummated prior to adoption are required to adjust changes in deferred tax asset valuation allowances and acquired income tax uncertainties through earnings
rather than as an adjustment to the cost of the acquisition.



11



---

Amortizable intangible assets acquired on March 27, 2009 include approximately $10,300,000 for
identifiable customer relationships with an average life of 13 years, approximately $2,000,000 for the Tullys trade name with an average life of 10 years and approximately $100,000 for non-compete agreements with an average life of 5 years.
The weighted-average amortization period for these assets is 12.5 years and will be amortized on a straight-line basis over their respective useful lives. Amortization of intangibles expense (gross of tax) is anticipated to be approximately $506,000
in fiscal 2009 and $1,012,000 in each of the fiscal years 2010 through fiscal 2014.

The cost of the acquisition in excess of the fair
market value of assets acquired less liabilities assumed represents acquired goodwill of approximately $25,774,000. Goodwill is reported in the Corporate segment of the Company.

Under the terms of the Agreement, the Company has granted to the remaining retail operations of the former Tullys business an exclusive,
world-wide, perpetual, fully paid up, non-transferable license for use of the acquired trademarks in association with the operation of retail locations and the sale of related retail products. In addition, as defined in the Agreement, the Company
entered into a Supply Agreement to provide Tullys with all coffee requirements for use in the operation of Tullys retail locations.



|4. | Warranty Reserve
|-- | ----------------

The Company offers a one-year
warranty from the date of the consumer purchase on all Keurig brewers it sells. Keurig provides for the estimated cost of product warranties, primarily using historical information and repair or replacement costs, at the time product revenue is
recognized.

The changes in the carrying amount of product warranties for the twenty-six weeks ended March 28, 2009 and March 29,
2008 are as follows:

Twenty-six weeks ended March 28, 2009

|                              |  |   |            |  
|----------------------------- |  | - | ---------- | -
|Balance at September 27, 2008 |  | $ | 648,000    |  
|Provision charged to income   |  |   | 2,087,000  |  
|Usage                         |  |   | (1,711,000 | )
|                              |  |   |            |  
|Balance at March 28, 2009     |  | $ | 1,024,000  |  
|                              |  |   |            |  

Twenty-six weeks ended March 29, 2008

|                              |  |   |            |  
|----------------------------- |  | - | ---------- | -
|Balance at September 29, 2007 |  | $ | 815,000    |  
|Provision charged to income   |  |   | 892,000    |  
|Usage                         |  |   | (1,090,000 | )
|                              |  |   |            |  
|Balance at March 29, 2008     |  | $ | 617,000    |  
|                              |  |   |            |  



|5. | Inventories
|-- | -----------

Inventories consisted of the following
at:



|                           |  |               |            |                   |   |           
|-------------------------- |  | ------------- | ---------- | ----------------- | - | ----------
|                           |  | March 28,2009 |            | September 27,2008
|Raw materials and supplies |  | $             | 18,118,000 |                   | $ | 19,494,000
|Finished goods             |  |               | 53,479,000 |                   |   | 65,817,000
|                           |  |               |            |                   |   |           
|                           |  | $             | 71,597,000 |                   | $ | 85,311,000
|                           |  |               |            |                   |   |           

Inventory values above are presented net of $852,000 and $440,000 of obsolescence reserves at
March 28, 2009 and September 27, 2008, respectively.

At March 28, 2009, the Company had approximately $50.0 million in
green coffee purchase commitments, of which approximately 61% had a fixed price. These commitments extend through 2011. The value of the variable portion of these commitments was calculated using an average c



12



---

price of coffee (the price per pound quoted by the Coffee, Sugar and Cocoa Exchange) of $1.20 per pound. In addition to its green coffee commitments, the
Company had approximately $103.7 million in fixed-priced brewer inventory purchase commitments and $73.2 million in variable-priced production raw materials commitments at March 28, 2009. The Company believes based on relationships established
with its suppliers that the risk of non-delivery on such purchase commitments is remote.



13



---

|6. | Earnings Per Share
|-- | ------------------

The following table illustrates
the reconciliation of the numerator and denominator of basic and diluted earnings per share computations as required by Statement of Financial Accounting Standards No. 128 Earnings per Share(dollars in thousands, except per share data):



|                                                               |  |                                  |            |                                  |   |                                    |  |                                    |            |  |   |           
|-------------------------------------------------------------- |  | -------------------------------- | ---------- | -------------------------------- | - | ---------------------------------- |  | ---------------------------------- | ---------- |  | - | ----------
|                                                               |  | Thirteenweeks endedMarch 28,2009 |            | Thirteenweeks endedMarch 29,2008 |   | Twenty-sixweeks endedMarch 28,2009 |  | Twenty-sixweeks endedMarch 29,2008
|Numeratorbasic and diluted earnings per share:                |  |                                  |            |                                  |   |                                    |  |                                    |            |  |   |           
|Net income                                                     |  | $                                | 12,983     |                                  | $ | 5,957                              |  | $                                  | 27,367     |  | $ | 8,882     
|Denominator:                                                   |  |                                  |            |                                  |   |                                    |  |                                    |            |  |   |           
|Basic earnings per shareweighted average shares outstanding   |  |                                  | 24,750,025 |                                  |   | 23,856,362                         |  |                                    | 24,601,756 |  |   | 23,737,160
|Effect of dilutive securitiesstock options                    |  |                                  | 1,263,347  |                                  |   | 1,611,086                          |  |                                    | 1,280,982  |  |   | 1,708,834 
|                                                               |  |                                  |            |                                  |   |                                    |  |                                    |            |  |   |           
|Diluted earnings per shareweighted average shares outstanding |  |                                  | 26,013,372 |                                  |   | 25,467,448                         |  |                                    | 25,882,738 |  |   | 25,445,994
|                                                               |  |                                  |            |                                  |   |                                    |  |                                    |            |  |   |           
|                                                               |  |                                  |            |                                 
|Basic earnings per share                                       |  | $                                | 0.52       |                                  | $ | 0.25                               |  | $                                  | 1.11       |  | $ | 0.37      
|Diluted earnings per share                                     |  | $                                | 0.50       |                                  | $ | 0.23                               |  | $                                  | 1.06       |  | $ | 0.35      

For the thirteen and twenty-six weeks ended March 28, 2009, options to purchase 461,000 and
525,000 shares of common stock, respectively, were excluded in the calculation of diluted earnings per share because they were antidilutive.

For the thirteen and twenty-six weeks ended March 29, 2008, options to purchase 103,000 and 59,000 shares of common stock, respectively, were excluded in the calculation of diluted earnings per share because they were antidilutive.



|7. | Financial Instruments
|-- | ---------------------

In March of 2008, the FASB
issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 requires entities to provide greater
transparency about how and why the entity uses derivative instruments, how the instruments and related hedged items are accounted for under SFAS 133, and how the instruments and related hedged items affect the financial position, results of
operations, and cash flows of the entity. The Company adopted SFAS 161 effective March 28, 2009.

The Company is exposed to
certain risks relating to ongoing business operations. The primary risks that are mitigated by financial instruments are interest rate risk and commodity price risk. The Company uses interest rate swaps to mitigate interest rate risk associated with
the Companys variable-rate borrowings and regularly enters into coffee futures contracts to hedge price-to-be-established coffee purchase commitments of green coffee with the objective of minimizing cost risk due to market fluctuations. The
Company does not hold or issue derivative financial instruments for trading purposes.

The Company designates the swap agreements and
coffee futures contracts as cash flow hedges in accordance with Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activity (SFAS 133). The Company measures the
effectiveness of these derivative instruments at each balance sheet date. The changes in the fair value of these instruments are classified in accumulated other comprehensive income (AOCI). Gains and losses on these instruments are
reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. If it is determined that a derivative is not highly effective, the gains and losses will be reclassified into earnings upon determination.



14



---

The Company has interest rate swap agreements with Bank of America N.A. (Bank of America) and
Sovereign Bank. For the thirteen and twenty-six weeks ended March 28, 2009, the Company paid $632,000 and $813,000, respectively, pursuant to the swap agreements, which increased interest expense.

The following table summarizes the interest rate swaps outstanding at March 28, 2009:



|                   |  |                                   |            |                    |      |   |          |      |                   |   |            |  
|------------------ |  | --------------------------------- | ---------- | ------------------ | ---- | - | -------- | ---- | ----------------- | - | ---------- | -
|Hedged Transaction |  | Notional Amount ofUnderlying Debt |            | Fixed RateReceived |      |   | Maturity |      | Fair Value ofSwap |  
|30-day LIBOR       |  | $                                 | 30,000,000 |                    | 2.35 | % |          | 2010 |                   | $ | (557,000   | )
|30-day LIBOR       |  | $                                 | 25,700,000 |                    | 5.44 | % |          | 2011 |                   | $ | (2,030,000 | )
|30-day LIBOR       |  | $                                 | 20,000,000 |                    | 3.87 | % |          | 2013 |                   | $ | (1,536,000 | )
|                   |  |                                   |            |                    |      |   |          |      |                   |   |            |  
|                   |  | $                                 | 75,700,000 |                    |      |   |          |      |                   | $ | (4,123,000 | )
|                   |  |                                   |            |                    |      |   |          |      |                   |   |            |  

The following table summarized the coffee futures contracts outstanding at March 28, 2009:



|              |  |  |  |  |  |                       |      |           |   |          |  |                               |  |   |         |  
|------------- |  |  |  |  |  | --------------------- | ---- | --------- | - | -------- |  | ----------------------------- |  | - | ------- | -
|Coffee Pounds |  |  |  |  |  | AverageContract Price |      | C Price |   | Maturity |  | Fair Value ofFutures Contract | 
|750,000       |  |  |  |  |  | $                     | 1.23 |           | $ | 1.18     |  | July 2009                     |  | $ | (41,000 | )
|750,000       |  |  |  |  |  | $                     | 1.20 |           | $ | 1.23     |  | December 2009                 |  | $ | 17,000  |  
|              |  |  |  |  |  |                       |      |           |   |          |  |                               |  |   |         |  
|1,500,000     |  |  |  |  |  |                       |      |           |   |          |  |                               |  | $ | (24,000 | )
|              |  |  |  |  |  |                       |      |           |   |          |  |                               |  |   |         |  

The following table discloses the fair value of the Companys financial instruments included
in the Consolidated Balance Sheets:

Fair Value of Derivative Instruments



|                    |  |               |            |   |                   |   |          |                              |  |                             
|------------------- |  | ------------- | ---------- | - | ----------------- | - | -------- | ---------------------------- |  | ----------------------------
|                    |  | March 28,2009 |            |   | September 27,2008 |   |          | Balance Sheet Classification
|Coffee Futures      |  | $             | (24,000    | ) |                   | $ | (39,000  | )                            |  | Other short-term liabilities
|Interest Rate Swaps |  | $             | (4,123,000 | ) |                   | $ | (634,000 | )                            |  | Other short-term liabilities
|                    |  |               |            |   |                   |   |          |                              |  |                             
|Total               |  | $             | (4,147,000 | ) |                   | $ | (673,000 | )                            |  |                             
|                    |  |               |            |   |                   |   |          |                              |  |                             



15



---

The following table discloses the effect of the Companys financial instruments included in the
Consolidated Statement of Operations:

Effect of Derivatives Instruments on Earnings (Gross of Tax)

for the Twenty-Six Weeks Ended March 28, 2009



|                    |  |                                |            |   |                                                           |                  |                                                         |   |          |  
|------------------- |  | ------------------------------ | ---------- | - | --------------------------------------------------------- | ---------------- | ------------------------------------------------------- | - | -------- | -
|                    |  | Amount ofGain or (Loss)in AOCI |            |   | Location ofGain or (Loss)Reclassifiedfrom AOCI intoIncome |                  | Amount of Gainor (Loss)Reclassifiedfrom AOCI intoIncome |  
|Coffee Futures      |  | $                              | (186,000   | ) |                                                           | Cost of Sales    |                                                         | $ | (145,000 | )
|Interest Rate Swaps |  | $                              | (3,676,000 | ) |                                                           | Interest Expense |                                                         | $ |         |  
|                    |  |                                |            |   |                                                           |                  |                                                         |   |          |  
|Total Derivatives   |  | $                              | (3,862,000 | ) |                                                           |                  |                                                         | $ | (145,000 | )
|                    |  |                                |            |   |                                                           |                  |                                                         |   |          |  

The Company estimates the deferred losses of coffee futures will be reclassified to net income
within the next nine months, which is consistent with the period over which the Company hedges its exposure to the variability in future cash flows. The Company hedges a portion of its exposure to the variability in interest rates through the
maturity date of its credit facility.



|8. | Fair Value Measurements
|-- | -----------------------

On September 28,
2008, the Company adopted Financial Accounting Standards No. 157 Fair Value Measurement (SFAS 157) for financial assets and liabilities. This standard defines fair value and establishes a hierarchy for reporting the
reliability of input measurements used to access fair value for all assets and liabilities. SFAS 157 defines fair value as the selling price that would be received for an asset, or paid to transfer a liability, in the principal or most advantageous
market on the measurement date. The hierarchy established prioritizes fair value measurements based on the types of inputs used in the valuation technique. The inputs are categorized into the following levels:

Level 1  Observable inputs such as quoted prices in active markets for identical assets or liabilities

Level 2  Directly or indirectly observable inputs for quoted and other than quoted prices for identical or similar assets and liabilities in active
or non-active markets

Level 3  Unobservable inputs not corroborated by market data, therefore requiring the entity to use the best
available information, including managements assumptions



|            |  |                               |   |                              |   |            |         |  |   |   |  |                             
|----------- |  | ----------------------------- | - | ---------------------------- | - | ---------- | ------- |  | - | - |  | ----------------------------
|            |  | Fair Value Measurements Using |   | Balance Sheet Classification
|            |  | Level 1                       |   | Level 2                      |   |            | Level 3 | 
|Derivatives |  | $                             |  |                              | $ | (4,147,000 | )       |  | $ |  |  | Other short-term liabilities
|            |  |                               |   |                              |   |            |         |  |   |   |  |                             
|Total       |  | $                             |  |                              | $ | (4,147,000 | )       |  | $ |  |  |                             
|            |  |                               |   |                              |   |            |         |  |   |   |  |                             

Derivative financial instruments include coffee futures contracts and interest rate swap
agreements. To determine fair value, the Company utilizes the market approach valuation technique for the coffee futures contracts and the income approach for the interest rate swap agreements. The Company uses Level 2 inputs that are based on
market data of identical (or similar) instruments that are in observable markets. All derivatives on the balance sheet are recorded at fair value with changes in fair value recorded in accumulated other comprehensive income for temporary valuation
adjustments and in the statement of operations for settlement of contracts.



16



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|9. | Compensation Plans
|-- | ------------------

The Company accounts for stock
compensation under Statement of Financial Accounting Standards No. 123 (revised 2004) Share-Based Payments (FAS123R). The grant-date fair value of employee share options and similar instruments is estimated using the
Black-Scholes option-pricing model with the following assumptions for grants issued in the twenty-six weeks ended March 28, 2009: an expected life averaging 6 years; an average volatility of 52%; no dividend yield; and a risk-free interest rate
averaging 2.0%. The weighted-average fair value of options granted during the twenty-six ended March 28, 2009 was $20.29 per share.

For grants issued in the twenty-six weeks ended March 29, 2008, the following assumptions were used: an expected life averaging 6 years; an average volatility of 45%; no dividend yield; and a risk-free interest rate averaging 3.1%. The
weighted-average fair value of options granted during the twenty-six weeks ended March 29, 2008 was $13.27 per share.

The grant-date
fair value of employees purchase rights under the Companys Employee Stock Purchase Plan is estimated using the Black-Scholes option-pricing model with the following assumptions for the purchase rights granted in the twenty-six weeks
ended March 28, 2009: an expected life averaging 6 months; an average volatility of 59%; no dividend yield; and a risk-free interest rate averaging 1.5%. The weighted-average fair values of purchase rights granted during the twenty-six weeks
ended March 28, 2009 was $12.05 per share.

For the purchase rights granted in the twenty-six weeks ended March 29, 2008, the
following assumptions were used: an expected life averaging 6 months; an average volatility of 60%; no dividend yield; and a risk-free interest rate averaging 4.2%. The weighted-average fair values of purchase rights granted during the twenty-six
weeks ended March 29, 2008 was $10.01 per share.

For the thirteen and twenty-six weeks ended March 28, 2009, income before
income taxes was reduced by a stock compensation expense of $1,526,000 and $2,956,000 (gross of tax), respectively.

For the thirteen and
twenty-six weeks ended March 29, 2008, income before income taxes was reduced by a stock compensation expense of $1,534,000 and $2,887,000 (gross of tax), respectively.

The Company maintains an Employee Stock Ownership Plan (the ESOP). The ESOP is qualified under sections 401(a) and 4975(e)(7) of the Internal
Revenue Code. In the twenty-six week periods ended March 28, 2009 and March 29, 2008, the Company recorded compensation costs of $118,000 and $110,000 to accrue for anticipated stock distributions under the ESOP, respectively. On
March 28, 2009, the ESOP held 18,129 unearned shares at an average cost of $9.03.

The Company also maintains a Deferred Compensation
Plan, which is not subject to the qualification requirements of Section 401(a) of the Internal Revenue Code and which allows participants to defer compensation until a future date. Only non-employee directors and certain highly compensated
employees of the Company selected by the Companys board of directors are eligible to participate in the Plan. In the twenty-six week periods ended March 28, 2009 and March 29, 2008, $70,500 and $47,000 of compensation expense was
recorded under this Plan, respectively.



|10. | Income Taxes
|--- | ------------

The Company utilizes the asset and
liability method of accounting for income taxes, as set forth in Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109). SFAS 109 requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.



17



---

The Company is currently under audit by the Internal Revenue Service for its fiscal year ending
September 30, 2006. However, the Company does not expect a significant change to its FIN 48 reserve within the next 12 months. FIN 48 relates to the accounting for uncertainty in income taxes and is an interpretation of SFAS 109.



|11. | Fixed Assets
|--- | ------------

Fixed assets consist of the
following:



|                                         |  |                                                    |  |               |             |   |                   |   |             |  
|---------------------------------------- |  | -------------------------------------------------- |  | ------------- | ----------- | - | ----------------- | - | ----------- | -
|                                         |  | Useful Life in Years                               |  | March 28,2009 |             |   | September 27,2008 |  
|Production equipment                     |  | 1-15                                               |  | $             | 77,487,000  |   |                   | $ | 68,783,000  |  
|Equipment on loan to wholesale customers |  | 3-7                                                |  |               | 12,236,000  |   |                   |   | 12,269,000  |  
|Computer equipment and software          |  | 1-10                                               |  |               | 29,038,000  |   |                   |   | 24,020,000  |  
|Land                                     |  | Indefinite                                         |  |               | 1,391,000   |   |                   |   | 1,391,000   |  
|Building and building improvements       |  | 4-30                                               |  |               | 15,134,000  |   |                   |   | 14,744,000  |  
|Furniture and fixtures                   |  | 1-15                                               |  |               | 6,946,000   |   |                   |   | 6,598,000   |  
|Vehicles                                 |  | 4-5                                                |  |               | 1,123,000   |   |                   |   | 1,070,000   |  
|Leasehold improvements                   |  | 1-20 or remaining life of
lease, whichever is less |  |               | 7,702,000   |   |                   |   | 7,135,000   |  
|Construction-in-progress                 |  |                                                    |  |               | 12,005,000  |   |                   |   | 11,843,000  |  
|                                         |  |                                                    |  |               |             |   |                   |   |             |  
|Total fixed assets                       |  |                                                    |  |               | 163,062,000 |   |                   |   | 147,853,000 |  
|Accumulated depreciation                 |  |                                                    |  |               | (57,910,000 | ) |                   |   | (50,175,000 | )
|                                         |  |                                                    |  |               |             |   |                   |   |             |  
|                                         |  |                                                    |  | $             | 105,152,000 |   |                   | $ | 97,678,000  |  
|                                         |  |                                                    |  |               |             |   |                   |   |             |  

Total depreciation expense relating to all fixed assets was $4,319,000 and $8,477,000 for the
thirteen and twenty-six weeks ended March 28, 2009, respectively. Total depreciation expense relating to all fixed assets was $3,287,000 and $6,423,000 for the thirteen and twenty-six weeks ended March 29, 2008.

Assets classified as construction-in-progress are not depreciated, as they are not ready for production use. All assets classified as
construction-in-progress on March 28, 2009 are expected to be in production use in the next twelve months.

In the thirteen and
twenty-six weeks ended March 28, 2009, the Company capitalized $80,000 and $153,000 of interest expense, respectively.

In the
thirteen and twenty-six weeks ended March 29, 2008, the Company capitalized $122,000 and $217,000 of interest expense, respectively



|12. | Patent Litigation Settlement
|--- | ----------------------------

On October 23,
2008, Keurig entered into a Settlement and License Agreement with Kraft Foods, Inc., Kraft Foods Global, Inc., and Tassimo Corporation (collectively Kraft) providing for a complete settlement of Keurigs previously filed lawsuit
against Kraft. Pursuant to the terms of the Settlement and License Agreement, Kraft paid to Keurig a lump sum of $17,000,000 and Keurig grants to Kraft and its affiliates a limited, non-exclusive, perpetual, worldwide, fully paid up license of
certain Keurig patents. The settlement is recorded as a non-recurring item in operating income in the first quarter of fiscal 2009.



|13. | Related Party Transactions
|--- | --------------------------

The Company uses travel
services provided by Heritage Flight, a charter air services company owned by Mr. Stiller, the Companys former CEO and current Chairman of the Board. During the twenty-six weeks ended March 28, 2009 and March 29, 2008, Heritage
Flight billed the Company the amount of $73,000 and $173,000, respectively, for travel services to various employees of the Company.



18



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|14. | Recent pronouncements
|--- | ---------------------

In December 2007, the FASB
issued SFAS No. 141 (Revised 2007), Business Combinations (SFAS 141R). This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method)
be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at
the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the Statement. This replaces Statement 141s cost-allocation process, which required the cost of an acquisition to be allocated to the
individual assets acquired and liabilities assumed based on their estimated fair values. The Statement retains the guidance in Statement 141 for identifying and recognizing intangible assets separately from goodwill. SFAS 141R will now require
acquisition costs to be expensed as incurred, restructuring costs associated with a business combination must generally be expensed prior to the acquisition date and changes in deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date generally will affect income tax expense. Statement 141 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, which is fiscal year 2010 for the Company. For acquisitions completed prior to September 27, 2009, the new standard requires that changes in deferred tax asset valuation allowances and acquired income tax uncertainties
after the measurement period must be recognized in earnings rather than as an adjustment to the cost of the acquisition. We do not expect this new guidance to have a significant impact on our consolidated financial statements.

In February 2008, the FASB issued FASB Staff Position No. FAS 157-2 (FSP 157-2). FSP 157-2 delays the implementation of Statement of
Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157) for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements
on a recurring basis. This statement defers the effective date to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years, which is fiscal year 2010 for the Company. The Company adopted SFAS 157 for
financial assets and liabilities for the first quarter of fiscal 2009. The Company is currently reviewing FSP 157-2 but does not expect it to have a material impact on its financial statements.

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements  An amendment of ARB
No. 51. SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of
the income statement. Statement 160 clarifies that changes in a parents ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition,
this Statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008,
which is fiscal 2010 for this Company. The effect of adoption on the Companys financial statements will depend primarily on the materiality of non-controlling interests arising in future transactions.



19



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Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to help you understand the results of operations and financial condition of Green
Mountain Coffee Roasters, Inc. (together with its subsidiary, the Company). You should read the following discussion and analysis in conjunction with our consolidated financial statements and related notes included elsewhere in this
report.

Overview

We are a leader in the specialty coffee industry and the overall coffee maker industry. We roast
high-quality Arabica coffees and offer over 100 coffee selections, including single-origins, estates, certified organics, Fair Trade CertifiedTM,
proprietary blends, and flavored coffees that sell under the Green Mountain Coffee Roasters®,Newmans Own® Organics and as of March 27, 2009, Tullys® brands. We also sell hot cocoa, teas and
coffees in K-Cup® portion packs, Keurig® single-cup brewers and other accessories. In recent years, a significant driver of the
Companys growth has been the sale of K-Cups and Keurig brewing systems.

Business Segments

The Company manages its operations through two operating segments, Specialty Coffee business unit (SCBU) formerly referred to as Green
Mountain Coffee (GMC) and Keurig business unit (Keurig). We evaluate performance primarily based on segment operating income. Expenses not specifically related to either operating segment are recorded as
Corporate.

SCBU sells whole bean and ground coffee, hot cocoa, teas and coffees in K-Cups, and to a lesser extent, Keurig
single-cup brewers and other accessories mainly in domestic wholesale and retail channels, and directly to consumers. The majority of SCBUs revenue is derived from its North American wholesale channels.

Additionally, on March 27, 2009, we acquired certain assets of the Tullys Coffee Corporation (Tullys) which will be included
in the SCBU. We began selling whole bean and ground coffee and coffee in K-Cups under the Tullys brand in the third quarter of fiscal 2009.

Keurig is a pioneer and leading manufacturer of gourmet single-cup brewing systems and markets its premium patented single-cup brewing systems for consumers at home (AH) or away-from-home (AFH) mainly in North
America. Keurig sells its AFH single-cup brewers to distributors for offices and its AH single-cup brewers to select retailers such as department stores and club stores. Keurig sells coffee, tea and hot cocoa in K-Cups produced by a variety of
roasters, including the SCBU, and related accessories to select retailers such as department stores and club stores and also directly to consumers. Keurig earns royalty income from K-Cups shipped by its licensed roasters. Keurig also earns income
from the K-Cups manufactured and sold under its trademark license arrangement with Caribou.

Cost of sales for the Company consists of the
cost of raw materials including coffee beans, flavorings and packaging materials; a portion of our rental expense; the salaries and related expenses of production; distribution and merchandising personnel; depreciation on production equipment; the
cost of brewers manufactured by suppliers, and freight, duties and delivery expenses. Selling and operating expenses consist of expenses that directly support sales, including media and advertising expenses; a portion of the rental expense; and the
salaries and related expenses of employees directly supporting sales and marketing as well as research and development. General and administrative expenses consist of expenses incurred for corporate support and administration, including a portion of
the rental expense and the salaries and related expenses of personnel not elsewhere categorized.

Historically, the SCBU and Keurig
operating segments have not shared manufacturing or distribution facilities, and administrative functions such as accounting and information services have been decentralized. Throughout this presentation, we refer to the consolidated company as
the Company and we refer to our operating segments as SCBU and Keurig. Expenses not specifically related to



20



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either operating segment are shown separately as Corporate. Corporate expenses are comprised mainly of the compensation and other related
expenses of the Companys Chief Executive Officer, Chief Financial Officer, Chief Information Officer, General Counsel and Secretary, Vice President Human Resources and Vice President of Corporate Social Responsibility and other selected
employees who perform duties related to our entire enterprise. Corporate expenses also include interest expense, amortization of identifiable intangibles, as well as certain corporate legal expenses and compensation of the board of directors. All of
the Companys goodwill and intangible assets are included in Corporate assets.

Basis of Presentation

Included in this presentation are discussions and reconciliations of net income in accordance with generally accepted accounting principles
(GAAP) to net income excluding certain expenses and losses, which we refer to as non-GAAP net income. These non-GAAP measures exclude amortization of identifiable intangibles and one time operating income related to the Companys
patent litigation settlement and the related legal expenses. Non-GAAP net income is not in accordance with, or an alternative to, GAAP. The Companys management uses these non-GAAP measures in discussing and analyzing its results of operations
because it believes the non-GAAP measures provide investors with greater transparency by helping to illustrate the underlying financial and business trends relating to the Companys results of operations and financial condition and
comparability between current and prior periods. Management uses the non-GAAP measures to establish and monitor budgets and operational goals and to evaluate the performance of the Company.

These non-GAAP financial measures should be considered in addition to, and not as a substitute or superior to, the other measures of financial
performance prepared in accordance with GAAP. Using only the non-GAAP financial measures to analyze our performance would have material limitations because their calculation is based on the subjective determination of management regarding the nature
and classification of events and circumstances that investors may find significant. Management compensates for these limitations by presenting both the GAAP and non-GAAP measures of its results.

Results of Operations

Summary financial data of the Company

The following table presents certain financial
data of the Company expressed as a percentage of net sales for the periods denoted below:



21



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|                                       |  |                                  |   |  |                                  |   |  |                                    |   |  |                                    |  
|-------------------------------------- |  | -------------------------------- | - |  | -------------------------------- | - |  | ---------------------------------- | - |  | ---------------------------------- | -
|                                       |  | Thirteenweeks endedMarch 28,2009 |   |  | Thirteenweeks endedMarch 29,2008 |   |  | Twenty-sixweeks endedMarch 28,2009 |   |  | Twenty-sixweeks endedMarch 29,2008 |  
|Net sales                              |  | 100.0                            | % |  | 100.0                            | % |  | 100.0                              | % |  | 100.0                              | %
|Cost of sales                          |  | 68.0                             | % |  | 63.0                             | % |  | 70.5                               | % |  | 64.4                               | %
|                                       |  |                                  |   | 
|Gross profit                           |  | 32.0                             | % |  | 37.0                             | % |  | 29.5                               | % |  | 35.6                               | %
|Selling and operating expenses         |  | 14.5                             | % |  | 18.1                             | % |  | 16.5                               | % |  | 19.8                               | %
|General and administrative expenses    |  | 5.8                              | % |  | 8.5                              | % |  | 5.2                                | % |  | 7.9                                | %
|Patent litigation (settlement) expense |  |                                 |   |  | 0.9                              | % |  | -4.4                               | % |  | 0.6                                | %
|                                       |  |                                  |   |  |                                  |   |  |                                    |   |  |                                    |  
|Operating income                       |  | 11.7                             | % |  | 9.5                              | % |  | 12.2                               | % |  | 7.3                                | %
|Other expense                          |  | -0.1                             | % |  | -0.1                             | % |  | -0.1                               | % |  | -0.1                               | %
|Interest expense                       |  | -0.6                             | % |  | -1.1                             | % |  | -0.6                               | % |  | -1.2                               | %
|                                       |  |                                  |   |  |                                  |   |  |                                    |   |  |                                    |  
|                                       |  |                                  |   | 
|Income before income taxes             |  | 11.0                             | % |  | 8.3                              | % |  | 11.5                               | % |  | 6.0                                | %
|Income tax expense                     |  | -4.3                             | % |  | -3.4                             | % |  | -4.5                               | % |  | -2.4                               | %
|                                       |  |                                  |   |  |                                  |   |  |                                    |   |  |                                    |  
|Net income                             |  | 6.7                              | % |  | 4.9                              | % |  | 7.0                                | % |  | 3.6                                | %
|                                       |  |                                  |   |  |                                  |   |  |                                    |   |  |                                    |  



22



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Segment Summary

Net sales and income before taxes for each of our operating segments are summarized in the tables below:



|                           |  |                                   |       |   |                                  |   |       |                                    |  |   |                                    |   |  |   |       |  
|-------------------------- |  | --------------------------------- | ----- | - | -------------------------------- | - | ----- | ---------------------------------- |  | - | ---------------------------------- | - |  | - | ----- | -
|                           |  | Net sales (in millions)           |      
|                           |  | Thirteenweeks endedMarch 28,2009  |       |   | Thirteenweeks endedMarch 29,2008 |   |       | Twenty-sixweeks endedMarch 28,2009 |  |   | Twenty-sixweeks endedMarch 29,2008 |  
|SCBU                       |  | $                                 | 113.3 |   |                                  | $ | 81.0  |                                    |  | $ | 219.1                              |   |  | $ | 158.9 |  
|Keurig                     |  | $                                 | 119.8 |   |                                  | $ | 60.7  |                                    |  | $ | 240.7                              |   |  | $ | 124.5 |  
|Corporate                  |  | $                                 |      |   |                                  | $ |      |                                    |  | $ |                                   |   |  | $ |      |  
|Inter-company eliminations |  | $                                 | (39.7 | ) |                                  | $ | (20.8 | )                                  |  | $ | (69.5                              | ) |  | $ | (36.1 | )
|                           |  |                                   |       |   |                                  |   |       |                                    |  |   |                                    |   |  |   |       |  
|Total Company              |  | $                                 | 193.4 |   |                                  | $ | 120.9 |                                    |  | $ | 390.3                              |   |  | $ | 247.3 |  
|                           |  |                                   |       |   |                                  |   |       |                                    |  |   |                                    |   |  |   |       |  
|                           | 
|                           |  | Income before taxes (in millions) |      
|                           |  | Thirteenweeks endedMarch 28,2009  |       |   | Thirteenweeks endedMarch 29,2008 |   |       | Twenty-sixweeks endedMarch 28,2009 |  |   | Twenty-sixweeks endedMarch 29,2008 |  
|SCBU                       |  | $                                 | 12.8  |   |                                  | $ | 7.1   |                                    |  | $ | 22.4                               |   |  | $ | 13.3  |  
|Keurig                     |  | $                                 | 14.8  |   |                                  | $ | 10.1  |                                    |  | $ | 17.4                               |   |  | $ | 13.8  |  
|Corporate                  |  | $                                 | (6.0  | ) |                                  | $ | (6.2  | )                                  |  | $ | 6.2                                |   |  | $ | (11.1 | )
|Inter-company eliminations |  | $                                 | (0.2  | ) |                                  | $ | (1.0  | )                                  |  | $ | (1.0                               | ) |  | $ | (1.1  | )
|                           |  |                                   |       |   |                                  |   |       |                                    |  |   |                                    |   |  |   |       |  
|Total Company              |  | $                                 | 21.4  |   |                                  | $ | 10.0  |                                    |  | $ | 44.9                               |   |  | $ | 14.9  |  
|                           |  |                                   |       |   |                                  |   |       |                                    |  |   |                                    |   |  |   |       |  

Thirteen weeks ended March 28, 2009 versus thirteen weeks ended March 29, 2008

Revenue

Company Summary

Net sales for the second quarter of fiscal 2009 increased 60% to $193.4 million, up from $120.9
million reported in the prior fiscal years second quarter. Total K-Cup shipments of coffee, hot cocoa and tea increased 62% in the second quarter of fiscal 2009 as compared to the second quarter of fiscal 2008 (the prior year
period).

SCBU

SCBU segment net sales increased by $32.3 million or 40%, to $113.3 million in the second quarter of fiscal 2009 (including $22.1 million of inter-company K-Cup sales) as compared to $81.0 million reported in the second quarter of fiscal
2008 (including $11.4 million of inter-company K-Cup sales). The primary driver for the increase in sales is the continued growth in K-Cup sales. Coffee, tea and hot cocoa pounds shipped by the SCBU segment increased 19% over the prior year period.

As previously announced, the Company increased prices in May 2008 by 8% to 12% on average across business channels and package types for
coffee products sold by the SCBU segment. The net impact of the price increase in the second quarter of fiscal 2009 was an increase in net sales of approximately 10% over the prior year period.

Keurig

Keurig segment net
sales increased by $59.0 million, or 97%, to $119.8 million in the second quarter of fiscal 2009 (including $17.6 million of inter-company brewer sales and royalty revenue) as compared to $60.7 million reported in the prior year period (including
$9.5 million of inter-company



23



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brewer sales and royalty revenue). The increase in Keurig segment net sales was primarily due to higher
K-Cup sales of approximately $29.7 million which increased 129.1% over the prior year period as well as an increase in brewer and accessories sales of approximately $18.0 million or 72.0% over the prior year period. Royalty income from K-Cups
shipped by licensed roasters increased approximately $12.1 million or 85.2% over the prior year period.

Keurig announced a royalty rate
increase of a penny on all system-wide K-Cup portion packs that went into effect on August 1, 2008. This increase contributed to an approximate $4.0 million or 5% increase in Keurig segments second quarter of fiscal 2009 net sales over
the prior year period.

Company-wide Keurig brewer and K-Cup portion pack shipments

(In thousands)



|                                     |  |                            |  |                            |  |                |  |                  |   |  |                          |  |                          |  |                   |  |                    |  
|------------------------------------ |  | -------------------------- |  | -------------------------- |  | -------------- |  | ---------------- | - |  | ------------------------ |  | ------------------------ |  | ----------------- |  | ------------------ | -
|                                     |  | Q2 FY0913 wksended03/28/09 |  | Q2 FY0813 wksended03/29/08 |  | Q2 Y/YIncrease |  | Q2 % Y/YIncrease |   |  | FY 0926 wksended03/28/09 |  | FY 0826 wksended03/29/08 |  | FY 09 Y/YIncrease |  | FY 09% Y/YIncrease |  
|Total Keurig brewers shipped(1)      |  | 479                        |  | 193                        |  | 286            |  | 148              | % |  | 1,190                    |  | 515                      |  | 675               |  | 131                | %
|Total K-Cups shipped(system-wide)(2) |  | 432,341                    |  | 266,694                    |  | 165,647        |  | 62               | % |  | 785,942                  |  | 496,887                  |  | 289,055           |  | 58                 | %



|(1) | Total Keurig brewers shipped means brewers shipped by Keurig to customers in the U.S./Canada.
|--- | ---------------------------------------------------------------------------------------------

|(2) | Total K-Cups shipped (system-wide) means K-Cup shipments by all Keurig licensed roasters to customers in the
U.S./Canada. These shipments form the basis upon which royalties are calculated by licensees for payments to Keurig.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit

Company gross profit for the second quarter of fiscal 2009 totaled $62.0 million, or 32.1% of net
sales, as compared to $44.7 million, or 37.0% of net sales, in the prior year period. The margin decline is due primarily to the increase in sales of AH single-cup brewers, which are sold approximately at cost as part of the Companys strategy
to increase the installed base of Keurig brewers.

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.

Interest Expense

Company interest expense decreased to $1.0 million in the second quarter of fiscal 2009, down from $1.5 million in the prior year period.

Income before taxes

Company
income before taxes increased to $21.4 million in the second quarter of fiscal 2009, up from $10.0 million in the prior year period, and, as a percentage of net sales, 11.1% and 8.3%, respectively.

Excluding the non-cash amortization expenses related to the identifiable intangibles of $1.2 million in each period and $1.0 million of patent litigation
expense in the prior year period, the Companys non-GAAP income before taxes was $22.6 million, or 11.7% of net sales as compared to $12.2 million, or 10.1% of net sales in the prior year period.



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The SCBU segment contributed $12.8 million in income before taxes in the second quarter of fiscal 2009,
up from $7.2 million in the prior year period.

The Keurig segment contributed $14.7 million in income before taxes in the second quarter
of fiscal 2009, up from $10.1 million in the prior year period.

The Corporate segment accounted for a reduction of $(6.0) million from
income before taxes in the second quarter of fiscal 2009, as compared to a reduction of ($6.2) million in the prior year period.

Taxes

The effective income tax rate for the Company was 39.2% in the second quarter of fiscal 2009, as compared to
40.5% in the prior year period. The difference was primarily due to higher research and development tax credits.

Net Income and
Diluted EPS

Company net income in the second quarter of fiscal 2009 was $13.0 million, up 118% from $6.0 million in the prior year
period.

Company diluted EPS increased $0.27 to $0.50 per share in the second quarter of fiscal 2009, as compared to $0.23 per share in the
prior year period.

Twenty-six weeks ended March 28, 2009 versus twenty-six weeks ended March 29, 2008

Revenue

Company Summary

Net sales for the twenty-six weeks ended March 28, 2009 (the 2009 YTD period)
totaled $390.3 million as compared to $247.3 million reported for the twenty-six weeks ended March 29,2008 (the prior YTD period).

SCBU

SCBU segment net sales increased to $219.1 million, or 38%, in the 2009 YTD period
(including $36.3 million of inter-company K-cup sales) as compared to $158.9 million reported in the prior YTD period (including $17.0 million of inter-company K-cup sales). The primary driver for the increase in sales is the continued growth in
K-Cup sales. Coffee, tea and hot cocoa pounds shipped by the SCBU segment increased 16.6% over the prior YTD period.

As previously
announced, the Company increased prices in May 2008 by 8% to 12% on average across business channels and package types for coffee products sold by the SCBU segment. The net impact of the price increase in the 2009 YTD period was an increase in net
sales of approximately 10.5% over the prior YTD period.

Keurig

Keurig segment net sales increased to $240.7 million, or 93%, in the 2009 YTD period (including $33.2 million of inter-company brewer sales and royalty
revenue) as compared to $124.6 million reported in the prior YTD period (including $19.1 million of inter-company brewer sales and royalty revenue). The increase in Keurig segment net sales was primarily due to higher K-Cup sales of



25



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approximately $49.6 million which increased 129.0% over the prior YTD period as well as an increase in brewer and accessories sales of approximately $48.1
million or 77.6% over the prior YTD period. In addition, royalty income from K-Cups shipped by licensed roasters increased approximately $21.3 million or 80.5% over the prior YTD period.

Keurig announced a royalty rate increase of a penny on all system-wide K-Cup portion packs that went into effect on August 1, 2008. This increase
contributed to an approximate $7.1 million or 5.7% increase in Keurig segments 2009 YTD net sales over the prior YTD period. Shipments of AFH single-cup brewers declined from the prior YTD period due to the downturn in the economy.

Gross Profit

Company gross
profit for the 2009 YTD period totaled $115.3 million, or 29.5% of net sales, as compared to $88.0 million, or 35.6% of net sales, in the prior YTD period. The margin decline is due primarily to the increase in sales of AH single-cup brewers, which
are sold approximately at cost as part of the Companys strategy to increase the installed base of Keurig brewers.

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.

Patent Litigation Settlement

On October 23, 2008, Keurig entered into a Settlement and License Agreement with Kraft Foods, Inc., Kraft Foods Global, Inc., and Tassimo Corporation
(collectively Kraft) providing for a complete settlement of Keurigs previously filed lawsuit against Kraft during the first quarter of fiscal 2009. Accordingly, the Company recognized the receipt of a patent litigation settlement
of $17.0 million as a non-recurring item included in operating income for the Companys first quarter of fiscal 2009. The Company incurred $1.5 million in litigation expenses during the comparable prior YTD period.

Interest Expense

Company
interest expense decreased to $2.4 million in the 2009 YTD period, down from $3.0 million in the prior YTD period, due to a decrease in interest rates.

Income before taxes

Company income before taxes increased to $44.9 million in the 2009 YTD
period, up from $14.9 million in the prior YTD period, and, as a percentage of net sales, 11.5% and 6.0%, respectively. This increase is mainly attributable to the $17.0 million (pretax) patent litigation settlement as described above.

Excluding the non-cash intangibles amortization expense of $2.4 million in each period, the patent litigation income of $17.0 million in the 2009 YTD
period, and the patent litigation expense of $1.5 million in the prior YTD period, non-GAAP income before taxes increased to $30.3 million in the 2009 YTD period from $18.8 million in the prior YTD period.

The SCBU segment contributed $22.4 million in income before taxes in the 2009 YTD period, up from $13.3 million in the prior YTD period.

The Keurig segment contributed $17.4 million in income before taxes in the 2009 YTD period, up from $13.8 million in the prior YTD period.



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The Corporate segment contributed $6.2 million in income before taxes in the 2009 YTD period, as compared
to a reduction of $(11.1) million in the prior YTD period. This increase is mainly attributable to the $17.0 million (pretax) patent litigation settlement as described above.

Taxes

The effective income
tax rate for the Company was 39.1% in the 2009 YTD period, as compared to 40.3% in the prior YTD period.

Net Income and Diluted EPS

Company net income in the 2009 YTD period was $27.4 million, up 208% from $8.9 million in the prior YTD period.

Company diluted EPS increased $0.71 to $1.06 per share in the 2009 YTD period, as compared to $0.35 per share in the prior YTD period.

Liquidity and Capital Resources

Working capital decreased to $70.0 million at March 28, 2009, down from $79.2 million at September 27, 2008. The decrease was primarily due to lower inventory levels following strong holiday sales.

Net cash provided by operating activities was $53.0 million in the 2009 YTD period as compared to $6.7 million in the prior YTD period. The increase in
operating cash flow was primarily due to a decrease in inventory of $27.0 million and an improvement in net income of $18.5 million as described above.

During the 2009 YTD period we had capital expenditures of $14.5 million, as compared to $21.8 million in the prior YTD period.

In the 2009 YTD period, cash flows from financing activities included $4.4 million generated from the exercise of employee stock options and the issuance of shares under the employee stock purchase plan, up from $3.0
million in the prior YTD period. In addition, cash flows from operating and financing activities included a $5.4 million tax benefit from the exercise of non-qualified options and disqualifying dispositions of incentive stock options, up from $2.6
million in the prior YTD period. As stock options we have granted are exercised, we will continue to receive proceeds and a tax deduction where applicable; however, we cannot predict either the amounts or the timing of any such proceeds or tax
benefits.

On March 27, 2009, we purchased certain assets of the Tullys Coffee Corporation for $40.3 million. Total cash
disbursed was $41.5 million which includes direct acquisition costs of $1.2 million. We financed this transaction through our existing senior revolving credit facility. Despite the cash outflow from the Tullys acquisition, long-term debt
decreased to $118.7 million at March 28, 2009 from $123.5 million at September 27, 2008 reflecting strong free cash flows during that period.

We are party to 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 28, 2009 and September 27,
2008 was $75.7 million and $78.5 million, respectively. The swap agreements terminate between June 2010 and December 2012.

At
March 28, 2009 and September 27, 2008, we estimate that we would have paid $4.1 million and $0.6 million (gross of tax), respectively, had we terminated our swap agreements. We designate 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.



27



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The credit facility is subject to the following financial covenants: a funded debt to adjusted EBITDA
ratio, a fixed charge coverage ratio, and a capital expenditures covenant. We were in compliance with these covenants at March 28, 2009.

We expect to spend between $55.0 million and $60.0 million in capital expenditures in fiscal 2009. Capital expenditures are anticipated to be funded from operating cash flows and availability under our credit facility.

We believe that our cash flows from operating activities, existing cash and our credit facility will provide sufficient liquidity to pay all liabilities
in the normal course of business, fund anticipated capital expenditures and service debt requirements through the next 12 months. However, several risks and uncertainties could cause us to need to raise additional capital through equity and/or debt
financing. From time to time we consider acquisition opportunities which, if pursued, could also result in the need for additional financing. We also may consider from time to time engaging in stock buyback plans or programs. The availability and
terms of any such financing would be subject to prevailing market conditions and other factors at that time.

A summary of cash
requirements related to our outstanding long-term debt, future minimum lease payments and inventory purchase commitments is as follows:



|            |  |                    |             |                            |   |                     |  |       |             |  |   |            
|----------- |  | ------------------ | ----------- | -------------------------- | - | ------------------- |  | ----- | ----------- |  | - | -----------
|Fiscal Year |  | Long-Term Debt (1) |             | Operating LeaseObligations |   | PurchaseObligations |  | Total
|2009        |  | $                  | 49,000      |                            | $ | 2,475,000           |  | $     | 150,808,000 |  | $ | 153,332,000
|2010        |  |                    | 86,000      |                            |   | 4,552,000           |  |       | 41,241,000  |  | $ | 45,879,000 
|2011        |  |                    | 67,000      |                            |   | 4,128,000           |  |       | 35,421,000  |  | $ | 39,616,000 
|2012        |  |                    | 41,000      |                            |   | 3,438,000           |  |       |            |  | $ | 3,479,000  
|2013        |  |                    | 118,500,000 |                            |   | 2,611,000           |  |       |            |  | $ | 121,111,000
|Thereafter  |  |                    |            |                            |   | 7,583,000           |  |       |            |  | $ | 7,583,000  
|Total       |  | $                  | 118,743,000 |                            | $ | 24,787,000          |  | $     | 227,470,000 |  | $ | 371,000,000

| | 
| | 

| | (1) | Fiscal 2009 and fiscal 2010 long-term debt obligations are comprised of capital lease obligations.
| | --- | --------------------------------------------------------------------------------------------------

Critical Accounting Policies

This
discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which we prepare in accordance with accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting period (see Note 2 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the period ended September 27, 2008). Actual results could differ from
those estimates. We believe the following accounting policies and estimates require us to make the most difficult judgments in the preparation of our consolidated financial statements and accordingly are critical.

We have identified the following as critical accounting policies based on the significant judgment and estimates used in determining the amounts reported
in our consolidated financial statements:

Cash and cash equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents
include overnight repurchase agreements which are carried at cost and approximate market value. The Company does not believe that it is subject to any unusual credit or market risk.



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Inventories

Inventories are stated at the lower of cost or market. Cost is being measured using an adjusted standard cost method which approximates FIFO (first-in first-out). We regularly review whether the realizable value of
our inventory is lower than its book value. If our valuation shows that the realizable value is lower than book value, we take a charge to expense and directly reduce the value of the inventory.

The Company estimates its reserves for inventory obsolescence by examining its inventories on a quarterly basis to determine if there are indicators that
the carrying values exceed net realizable value. Indicators that could result in additional inventory write downs include age of inventory, damaged inventory, slow moving products and products at the end of their life cycles. While management
believes that the reserve for obsolete inventory is adequate, significant judgment is involved in determining the adequacy of this reserve.

Inventories consist primarily of green and roasted coffee, including coffee in portion packs, purchased finished goods such as coffee brewers and packaging materials.

Financial Instruments

The Company
enters into various types of financial instruments in the normal course of business. Fair values are estimated based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees
of perceived risk. The fair values of cash, cash equivalents, accounts receivable, accounts payable, accrued expenses and debt approximate their carrying value at March 28, 2009 and September 27, 2008.

Fair Value of Financial Instruments

The Company adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157) during the first quarter of fiscal 2009. This standard provides guidance for using fair value to measure all
assets and liabilities. SFAS 157 applies where other standards require, or permit, assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. Under SFAS 157, fair value refers to the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market. In accordance with Financial Accounting Standards Board (FASB)
Staff Position FAS 157-2 (FSP 157-2), the effective date for fair value measurement of nonfinancial assets and liabilities, except for items recognized at fair value on a recurring basis, was deferred until the Companys 2010 fiscal
year. The Company is currently reviewing this accounting standard for nonfinancial assets and liabilities, however does not expect it to have a material impact on its financial statements.

During the first quarter of fiscal 2009, the Company also adopted Statement of Financial Accounting Standards No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities Including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 permits entities to choose to measure certain financial instruments and certain other items at fair value. As of
December 27, 2008, the Company has not elected the fair value option for any additional assets and liabilities.

Hedging

We enter into coffee futures contracts to hedge against price increases in price-to-be-fixed coffee purchase commitments and
anticipated coffee purchases. The Company also enters into interest rate swaps to hedge against unfavorable changes in interest rates. These derivative instruments qualify for hedge accounting under SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. Hedge accounting is permitted if the hedging relationship is expected to be highly effective. Effectiveness is determined by how closely the changes in the fair value of the derivative instrument offset the
changes in the fair value of the hedged item. If the derivative is determined to qualify for hedge accounting, the effective portion of the change in the fair value of the derivative instrument is recorded in other comprehensive income and
recognized in earnings when the related hedged item is sold. The ineffective portion of the change in the fair value of the derivative



29



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instrument is recorded directly to earnings. If these derivative instruments do not qualify for hedge
accounting, we would record the changes in the fair value of the derivative instruments directly to earnings. See Item 3. Quantitative and Qualitative Disclosures about Market Risk and Note 7 in the Notes to Consolidated Financial
Statements, included elsewhere in this report.

The Company formally documents hedging instruments and hedged items, and measures at
each balance sheet date the effectiveness of its hedges. When it is determined that a derivative is not highly effective, the derivative expires, or is sold or terminated, or the derivative is discontinued because it is unlikely that a forecasted
transaction will occur, the Company discontinues hedge accounting prospectively for that specific hedge instrument.

The Company does not
engage in speculative transactions, nor does it hold derivative instruments for trading purposes.

Other long-term assets

Other long-term assets consist of deposits and debt issuance costs. Debt issuance costs are being amortized over the respective life of
the applicable debt.

Goodwill and intangibles

In accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS 142), goodwill and indefinite-lived intangibles are tested for impairment annually
using a market capitalization approach, and more frequently if indication of impairment arises. Based on the impairment tests performed, there was no impairment of goodwill in fiscal 2008, 2007 and 2006. All intangible assets are being amortized
using the straight-line method over their useful lives.

Impairment of Long-Lived Assets

When facts and circumstances indicate that the carrying values of long-lived assets, including fixed assets, may be impaired, an evaluation of
recoverability is performed by comparing the carrying value of the assets to projected future cash flows in addition to other quantitative and qualitative analyses. Upon indication that the carrying value of such assets may not be recoverable, the
Company recognizes an impairment loss as a charge against current operations. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value, less estimated costs to sell. The Company makes judgments related to
the expected useful lives of long-lived assets and its ability to realize undiscounted cash flows in excess of the carrying amounts of such assets which are affected by factors such as the ongoing maintenance and improvements of the assets, changes
in economic conditions and changes in operating performance. As the Company assesses the ongoing expected cash flows and carrying amounts of its long-lived assets, these factors could cause the Company to realize a material impairment charge.

Provision for Doubtful Accounts

Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts
receivable. The Company does not require collateral from customers as ongoing credit evaluations of customers payment histories are performed. Additionally, the Company may identify additional allowance requirements based on indications that a
specific customer may be experiencing financial difficulties. Bad debt expense and changes in the provision for doubtful accounts are reported as a component of selling and operating expenses. Actual bad debts could differ materially from the
recorded estimates.

Advertising costs

The Company expenses the costs of advertising the first time the advertising takes place, except for direct mail campaigns targeted directly at consumers, which are expensed over the period during which they are
expected to generate sales.



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Fixed assets

Fixed assets are carried at cost, net of accumulated depreciation. Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Depreciation is calculated using the straight-line method
over the assets estimated useful lives. The cost and accumulated depreciation for fixed assets sold, retired, or otherwise disposed of are relieved from the accounts, and the resultant gains and losses are reflected in income.

The Company follows an industry-wide practice of purchasing and loaning coffee brewing and related equipment to wholesale customers. These assets are
also carried at cost, net of accumulated depreciation.

Depreciation costs of manufacturing and distribution assets are included in cost of
sales. Depreciation costs of other assets, including equipment on loan to customers, are included in selling and operating expenses.

Revenue recognition

Revenue from wholesale and consumer direct sales is recognized upon product delivery, and in some cases
upon product shipment. The Company has no contractual obligation to accept returns for damaged product nor does it guarantee product sales. Title, risk of loss, damage and insurance responsibility for the products pass from the Company to the buyer
upon accepted delivery of the products from the Companys contracted carrier. The Company will at times agree to accept returns or issue credits for products that are clearly damaged in transit.

Sales of single-cup coffee brewers are recognized net of an estimated allowance for returns. Royalty revenue is recognized upon shipment of K-Cups by
roasters as set forth under the terms and conditions of various licensing agreements.

In addition, the Companys customers can earn
certain incentives, which are netted against sales in the consolidated income statements. These incentives include, but are not limited to, cash discounts, funds for promotional and marketing activities, and performance based incentive programs.

Warranty

We provide
for the estimated cost of product warranties, primarily using historical information and repair or replacement costs, at the time product revenue is recognized.

Cost of Sales

The Company records external shipping and handling expenses in cost of sales.

Income taxes

The
Company utilizes the asset and liability method of accounting for income taxes, as set forth in Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109). SFAS 109 requires the
recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

In July, 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48).
This statement clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a companys financial statements. FIN 48 prescribes a recognition threshold of
more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return in order for those tax positions to be recognized in the financial statements. The Company adopted the provisions of FIN 48 in its
first quarter of fiscal 2008.



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Stock-based compensation

The Company accounts for transactions in which it exchanges its equity instruments for goods or services in accordance with Statement of Financial
Accounting Standards No. 123 (revised 2004) Share-Based Payments (FAS123(R)). FAS123(R) requires us to measure the cost of employee services received in exchange for an award of equity instruments (usually stock options) based on
the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

The Company measures the fair value of stock options using the Black-Scholes model and certain assumptions, including the expected life of the stock options, an expected forfeiture rate and the expected volatility of
its common stock. The expected life of options is estimated based on options vesting periods, contractual lives and an analysis of the Companys historical experience. The expected forfeiture rate is based on the Companys historical
experience. The Company uses a blended historical volatility to estimate expected volatility at the measurement date.

Research & Development

Research and development expenses are charged to income as incurred. These costs primarily
consist of salary and consulting expenses and are recorded in selling and operating expenses in the Keurig segment of the Company.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141 (Revised 2007), Business Combinations (SFAS 141R). This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for
all business combinations and for an acquirer to be identified for each business combination. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited exceptions specified in the Statement. That replaces Statement 141s cost-allocation process, which required the cost of an acquisition to be allocated to the
individual assets acquired and liabilities assumed based on their estimated fair values. The Statement retains the guidance in Statement 141 for identifying and recognizing intangible assets separately from goodwill. SFAS 141R will now require
acquisition costs to be expensed as incurred, restructuring costs associated with a business combination must generally be expensed prior to the acquisition date and changes in deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date generally will affect income tax expense. Statement 141 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, which is fiscal year 2010 for the Company. We are not able to predict the impact this guidance will have on the accounting for acquisitions we may complete in future periods. For acquisitions completed prior to
September 27, 2009, the new standard requires that changes in deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period must be recognized in earnings rather than as an adjustment to the cost of
the acquisition. We do not expect this new guidance to have a significant impact on our consolidated financial statements.

In February
2008, the FASB issued FASB Staff Position No. FAS 157-2 (FSP 157-2). FSP 157-2 delays the implementation of Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157) for
nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. This statement defers the effective date to fiscal years beginning after
November 15, 2008 and interim periods within those fiscal years, which is fiscal year 2010 for the Company. The Company adopted SFAS 157 for financial assets and liabilities for the first quarter of fiscal 2009. The Company is currently
reviewing FSP 157-2 but does not expect it to have a material impact on its financial statements.

In December 2007, the FASB issued SFAS
160, Noncontrolling Interests in Consolidated Financial Statements  An amendment of ARB No. 51. SFAS 160 amends ARB 51 to establish accounting and



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reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The amount of net income attributable to the
noncontrolling interest will be included in consolidated net income on the face of the income statement. Statement 160 clarifies that changes in a parents ownership interest in a subsidiary that do not result in deconsolidation are equity
transactions if the parent retains its controlling financial interest. In addition, this Statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008, which is fiscal 2010 for this Company. The effect of adoption on the Companys financial statements will depend primarily on the materiality of non-controlling
interests arising in future transactions.

Factors Affecting Quarterly Performance

Historically, the Company has experienced variations in sales and earnings from quarter to quarter due to the holiday season and a variety of other
factors, including, but not limited to, general economic trends, the cost of green coffee, competition, marketing programs, weather and special or unusual events. Because of the seasonality our business, results for any quarter are not necessarily
indicative of the results that may be achieved for the full fiscal year.

Forward-Looking Statements

Certain statements contained herein are not based on historical fact and are forward-looking statements within the meaning of the applicable
securities laws and regulations. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those stated here. Factors that could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, the impact on sales and profitability of consumer sentiment in this difficult economic environment, the Companys success in efficiently expanding operations and capacity to meet
growth, the Companys success in efficiently and effectively integrating Tullys wholesale operations and capacity into its Specialty Coffee business unit, the ability of our lenders to honor their commitments under our credit facility,
competition and other business conditions in the coffee industry and food industry in general, fluctuations in availability and cost of high-quality green coffee, any other increases in costs including fuel, Keurigs ability to continue to grow
and build profits with its roaster partners in the office and at home businesses, the impact of the loss of major customers for the Company or reduction in the volume of purchases by major customers, delays in the timing of adding new locations with
existing customers, the Companys level of success in continuing to attract new customers, sales mix variances, weather and special or unusual events, as well as other risks described more fully in the Companys filings with the SEC.
Forward-looking statements reflect managements analysis as of the date of this press release. The Company does not undertake to revise these statements to reflect subsequent developments, other than in its regular, quarterly earnings releases.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Market risks relating to our operations result primarily from changes in interest rates and the commodity c price of coffee (the price per
pound quoted by the Coffee, Sugar and Cocoa Exchange). To address these risks, we enter into hedging transactions as described below. We do not use financial instruments for trading purposes.

For purposes of specific risk analysis, we use sensitivity analysis to determine the impacts that market risk exposures may have on our financial
position or earnings.



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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.



|                             |  |                        |     |   |      |   |     |      |  |   |      |   |  |      |      |   |       |   |        |   |  |   |        |  
|---------------------------- |  | ---------------------- | --- | - | ---- | - | --- | ---- |  | - | ---- | - |  | ---- | ---- | - | ----- | - | ------ | - |  | - | ------ | -
|                             |  | Expected maturity date |    
|                             |  | 2009                   |     |   | 2010 |   |     | 2011 |  |   | 2012 |   |  | 2013 |      |   | Total |  
|Long-term debt:              |  |                        |     |   |      |   |     |      |  |   |      |   |  |      |      |   |       |   |        |   |  |   |        |  
|Variable rate (in thousands) |  | $                      |    |   |      | $ |    |      |  | $ |     |   |  | $    |     |   |       | $ | 42,800 |   |  | $ | 42,800 |  
|Average interest rate        |  |                        |    |   |      |   |    |      |  |   |     |   |  |      |     |   |       |   | 1.6    | % |  |   | 1.6    | %
|Fixed rate (in thousands)    |  | $                      | 49  |   |      | $ | 86  |      |  | $ | 67   |   |  | $    | 41   |   |       | $ | 75,700 |   |  | $ | 75,943 |  
|Average interest rate        |  |                        | 7.2 | % |      |   | 7.8 | %    |  |   | 10.9 | % |  |      | 10.9 | % |       |   | 4.8    | % |  |   | 4.8    | %

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.

Commodity price risks

The c price of coffee is subject to substantial price fluctuations caused by multiple factors, including weather and political and economic
conditions in coffee-producing countries. Our gross profit margins can be significantly impacted by changes in the c price of coffee. We enter into fixed coffee purchase commitments in an attempt to secure an adequate supply of coffee.
These agreements are tied to specific market prices (defined by both the origin of the coffee and the time of delivery) but we have significant flexibility in selecting the date of the market price to be used in each contract. We generally fix the
price of our coffee contracts three to nine months prior to delivery, so that we can adjust our sales prices to the market. At March 28, 2009, the Company had approximately $50.0 million in green coffee purchase commitments, of which
approximately 61% had a fixed price. At September 27, 2008, the Company had approximately $73.2 million in green coffee purchase commitments, of which approximately 59% had a fixed price.

In addition, we regularly use commodity-based financial instruments to hedge price-to-be-established coffee purchase commitments with the objective of
minimizing cost risk due to market fluctuations. These hedges generally qualify as cash flow hedges. Gains and losses are deferred in other comprehensive income until the hedged inventory sale is recognized in earnings, at which point they are added
to cost of sales. At March 28, 2009 we held outstanding futures contracts covering 1,500,000 pounds of coffee with a fair market value of ($24,000), gross of tax. At September 27, 2008, we held outstanding futures contracts covering
1,162,500 pounds of coffee with a fair market value of $(39,000), gross of tax. If we had terminated these contracts on March 27, 2009, we estimate that we would have incurred a loss of $24,000, gross of tax, which represented the fair market
value on such date. The average contract price used to calculate the fair value of the contracts outstanding was $1.22 per pound as compared to the weighted average c price of $1.21 at March 28, 2009. If the c price were
to drop on average by 10%, the loss incurred in fiscal 2009 will be approximately $180,000, gross of tax. However, this loss, if realized, would be offset by lower costs of coffee purchased during fiscal 2010.



34



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Item 4.  Controls and Procedures

As of March 28, 2009, the Companys management with the participation of its Chief Executive Officer and Chief Financial Officer conducted an
evaluation of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the Exchange Act). Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures (as defined in Rule 13a-15 of the Exchange Act) are effective.

Part II. Other Information

Item 1A. Risk
Factors.

There have been no material changes from the risk factors disclosed in our fiscal 2008 Form 10-K.

Item 4. Submission of Matters to a Vote of Security Holders



|(a) | The Registrant held its 2009 Annual Meeting of Stockholders on March 12, 2009 at the Companys offices located at 81 Demerrit Place in Waterbury, Vermont. The Board of
Directors of the Registrant solicited proxies for this meeting pursuant to a proxy statement filed under regulation 14A.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b-c) At the Annual
Meeting the stockholders voted as follows on the following matters:

VOTES

Proposal 1  Election of Directors



|                               |  |            |  |         
|------------------------------ |  | ---------- |  | --------
|Nominee                        |  | For        |  | Withheld
|William D. Davis (Class I)     |  | 21,985,716 |  | 602,247 
|Jules A. del Vecchio (Class I) |  | 21,887,469 |  | 700,494 
|Robert P. Stiller (Class I)    |  | 21,885,080 |  | 702,883 

The term of office of the following directors continued after the Meeting: Lawrence J. Blanford,
Barbara D. Carlini, Hinda Miller, David E. Moran and Michael J. Mardy.

Proposal 2  To ratify the appointment of PricewaterhouseCoopers LLP as our
independent public accounting firm for 2009.



|           |  |         |  |        
|---------- |  | ------- |  | -------
|For        |  | Against |  | Abstain
|22,306,082 |  | 250,728 |  | 31,153 



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|Item 6.  Exhibits | 
|----------------- | 



|              |  |                                                                                                                                                                                                                             
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             
|(a) Exhibits:
|              | 
|10.1          |  | Offer Letter between Green Mountain Coffee Roasters, Inc. and Howard Malovany dated as of January 8, 2009. *                                                                                                                
|              | 
|10.2          |  | Offer Letter between Green Mountain Coffee Roasters, Inc. and Michelle Stacy dated as of September 23, 2008 and revised as March 16, 2009. *                                                                                
|              | 
|10.3          |  | Letter Amendment between Green Mountain Coffee Roasters, Inc. and R. Scott McCreary dated as December 29, 2008, to comply with Section 409(A) of the Internal Revenue Code of 1984, as
amended. *                           
|              | 
|10.4          |  | Letter Amendment between Green Mountain Coffee Roasters, Inc. and Kathy Brooks dated December 29, 2008, to comply with Section 409(A) of the Internal Revenue Code of 1984, as amended. *                                   
|              | 
|10.5          |  | Letter Amendment between Green Mountain Coffee Roasters, Inc. and Steve Sabol dated December 30, 2008, to comply with Section 409(A) of the Internal Revenue Code of 1984, as amended.
*                                    
|              | 
|10.6          |  | Employment Agreement between Green Mountain Coffee Roasters, Inc. and Frances Rathke dated October 31, 2003 and amended as of May 7, 2009, to comply with Section 409(A) of the Internal Revenue
Code of 1984, as amended. *
|              | 
|31.1          |  | Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of
2002.                                             
|              | 
|31.2          |  | Principal Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of
2002.                                             
|              | 
|32.1          |  | Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                          
|              | 
|32.2          |  | Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                          



|* | Management contract or compensatory plan.
|- | -----------------------------------------



36



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                 |  |                                      |  |     |  |                                      
|---------------- |  | ------------------------------------ |  | --- |  | -------------------------------------
|                 |  | GREEN MOUNTAIN COFFEE ROASTERS, INC.
|                 |  |                                      | 
|Date: 05/07/2009 |  |                                      |  | By: |  | /s/ Lawrence J. Blanford             
|                 |  |                                      |  |     |  | Lawrence J. Blanford,                
|                 |  |                                      |  |     |  | President and Chief Executive Officer
|                 |  |                                      | 
|Date: 05/07/2009 |  |                                      |  | By  |  | /s/ Frances G. Rathke                
|                 |  |                                      |  |     |  | Frances G. Rathke,                   
|                 |  |                                      |  |     |  | Chief Financial Officer              



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