Basis of Presentation

9 Months Ended

Jun. 25, 2011

Basis of Presentation

Basis of Presentation

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 thirty-nine week periods ended June 25, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending September 24, 2011.

The September 25, 2010 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 25, 2010. Throughout this presentation, we refer to the consolidated company as the "Company" and, unless otherwise noted, the information provided is on a consolidated basis.

The Company has revised the classification of certain information presented in its fiscal 2010 audited consolidated financial statements to conform to its fiscal 2011 presentation.

After discussion with the Securities and Exchange Commission's Division of Corporation Finance related to a comment letter dated June 1, 2011, the Company has elected to revise its presentation of sales returns and bad debts in the cash flows from operating activities section of the Unaudited Consolidated Statement of Cash Flows for the thirty-nine weeks ended June 25, 2011 from the presentation in the Company's Form 10-Q filed for the twenty-six weeks ended March 26, 2011 (the "Q2'11 Form 10-Q") to conform to its previous presentation as reported in the Company's Form 10-K filed for the fiscal year ended September 25, 2010 (the "Fiscal 2010 Form 10-K") and in the Form 10-Q filed for the thirteen-weeks ended December 25, 2010 (the "Q1'11 Form 10-Q"). The presentation in the Fiscal 2010 Form 10-K and Q1'11 Form 10-Q includes separate adjustments for bad debts and sales returns in the reconciliation and represents the total provision charged against net income for the period with the deductions or usage reflected in the change in accounts receivable line item, net of the effects of acquisitions. In the Q2'11 Form 10-Q Unaudited Consolidated Statement of Cash Flows, the sales returns and bad debts line items to reconcile net income to net cash provided by operating activities reflected the change in reserve for sales returns and the allowance for doubtful accounts. The change in presentation had no impact on net cash provided by operating activities.

The Company has also revised its presentation of the line items for gains and losses on foreign currency and gains and losses on financial instruments in the cash flows from operating activities section of the Unaudited Consolidated Statement of Cash Flows. In the Q1'11 Form 10-Q and the Q2'11 Form 10-Q, the Company reported both realized and unrealized gains and losses on foreign currency transactions and financial instruments to reconcile net income to net cash provided by operating activities. Only unrealized gains and losses should be reflected as an adjustment to reconcile net income to net cash provided by operating activities. The adjustment for realized gains and losses resulted in a corresponding adjustment to changes in working capital items; accounts payable, other current assets and other current liabilities. The consolidated net cash provided by operating activities number in the Q1'11 Form 10-Q and Q2'11 Form 10-Q Unaudited Consolidated Statements of Cash Flows remains the same.

In addition, in the Unaudited Consolidated Statement of Cash Flows, the Company reclassified the write-off of $2.6 million in deferred financing fees related to the extinguishment of debt on its former credit facility, which was previously classified in the line item Amortization of deferred financing fees in the Q1'11 Form 10-Q and Q2'11 Form 10-Q to the line item Loss on extinguishment of debt to be consistent with the current quarter presentation. Due to the amount of the loss incurred this quarter on the extinguishment of debt, the Company is reporting as a separate line item the loss incurred on the extinguishment of debt. The change in presentation had no impact on net cash provided by operating activities.