Table of Contents


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017

March 31, 2024

or

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

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to

Commission File Number: 1-32731

CHIPOTLE MEXICAN GRILL, INC.

(Exact name of registrant as specified in its charter)

Delaware

84-1219301

Delaware

84-1219301

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

610 Newport Center Drive, Suite 1100 Newport Beach, CA

92660

1401 Wynkoop St., Suite 500 Denver, CO

80202

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (303) 595-4000(949) 524-4000

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareCMGNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has 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. x Yes o 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). x Yes ¨ No

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

Act (check one):

x

Large accelerated filer

oAccelerated filer

oNon-accelerated filer

☐  (Do not check if a smaller reporting company)

o

Smaller reporting company

o

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

As of October 20, 2017,April 22, 2024, there were 28,232,92327,467 shares of the registrant’s common stock, par value of $0.01 per share outstanding.



Table of Contents

TABLE OF CONTENTS

PART I

Item 1.

10 

14 

15 

15 

15 

16 

16 

16 

16 

17 

18 



Table of Contents

PART I

ITEM 1.FINANCIAL STATEMENTS

Chipotle Mexican Grill, Inc.

Condensed Consolidated Balance Sheet

CHIPOTLE MEXICAN GRILL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

 

 

 

 

 

 

 

 

September 30,

 

December 31,

2017

 

2016

(unaudited)

 

 

March 31,
2024
March 31,
2024
December 31,
2023
(unaudited)(unaudited) 

Assets

 

 

 

 

Current assets:

 

 

 

 

Current assets:
Current assets:

Cash and cash equivalents

$

113,480 

 

$

87,880 

Accounts receivable, net of allowance for doubtful accounts of $39 and $259 as of September 30, 2017 and December 31, 2016, respectively

 

23,870 

 

40,451 
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable, net

Inventory

 

21,634 

 

15,019 

Prepaid expenses and other current assets

 

49,089 

 

44,080 

Income tax receivable

 

12,986 

 

5,108 

Investments

 

434,877 

 

 

329,836 

Total current assets

 

655,936 

 

 

522,374 

Leasehold improvements, property and equipment, net

 

1,331,786 

 

1,303,558 

Long term investments

 

 -

 

125,055 
Long-term investments
Restricted cash
Operating lease assets

Other assets

 

54,716 

 

53,177 

Goodwill

 

21,939 

 

 

21,939 

Total assets

$

2,064,377 

 

$

2,026,103 

Liabilities and shareholders' equity

 

 

 

 

 

Current liabilities:

 

 

 

 

Current liabilities:
Current liabilities:
Accounts payable
Accounts payable

Accounts payable

$

86,705 

 

$

78,363 

Accrued payroll and benefits

 

108,120 

 

76,301 

Accrued liabilities

 

128,577 

 

127,129 
Unearned revenue
Current operating lease liabilities
Income tax payable

Total current liabilities

 

323,402 

 

 

281,793 

Deferred rent

 

309,446 

 

288,927 

Deferred income tax liability

 

7,577 

 

18,944 
Commitments and contingencies (Note 11)Commitments and contingencies (Note 11)
Long-term operating lease liabilities
Deferred income tax liabilities

Other liabilities

 

36,826 

 

 

33,946 

Total liabilities

 

677,251 

 

 

623,610 

Shareholders' equity:

 

 

 

 

 

Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of September 30, 2017 and December 31, 2016, respectively

 

 -

 

 -

Common stock $0.01 par value, 230,000 shares authorized, and 35,851 and 35,833 shares issued as of September 30, 2017 and December 31, 2016, respectively

 

359 

 

358 
Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of March 31, 2024 and December 31, 2023, respectively
Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of March 31, 2024 and December 31, 2023, respectively
Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of March 31, 2024 and December 31, 2023, respectively
Common stock, $0.01 par value, 230,000 shares authorized, 37,563 and 37,483 shares issued as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

 

1,294,315 

 

1,238,875 

Treasury stock, at cost, 7,564 and 7,019 common shares at September 30, 2017 and December 31, 2016, respectively

 

(2,257,174)

 

(2,049,389)

Accumulated other comprehensive income (loss)

 

(3,645)

 

(8,162)
Treasury stock, at cost, 10,096 and 10,057 common shares as of March 31, 2024 and December 31, 2023, respectively
Accumulated other comprehensive loss

Retained earnings

 

2,353,271 

 

 

2,220,811 

Total shareholders' equity

 

1,387,126 

 

 

1,402,493 

Total liabilities and shareholders' equity

$

2,064,377 

 

$

2,026,103 

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

Chipotle Mexican Grill, Inc.

Condensed Consolidated Statement of Income

(unaudited)

CHIPOTLE MEXICAN GRILL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands, except per share data)



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Revenue

$

1,128,074 

 

$

1,036,982 

 

$

3,366,312 

 

$

2,869,824 

Restaurant operating costs (exclusive of depreciation and amortization shown separately below):

 

 

 

 

 

 

 

 

 

 

 

Food, beverage and packaging

 

394,567 

 

 

363,900 

 

 

1,155,514 

 

 

999,968 

Labor

 

306,862 

 

 

286,144 

 

 

900,564 

 

 

820,751 

Occupancy

 

83,199 

 

 

74,201 

 

 

242,482 

 

 

217,147 

Other operating costs

 

162,312 

 

 

166,045 

 

 

476,606 

 

 

473,390 

General and administrative expenses

 

99,182 

 

 

78,405 

 

 

238,698 

 

 

211,171 

Depreciation and amortization

 

41,546 

 

 

37,434 

 

 

121,906 

 

 

108,296 

Pre-opening costs

 

2,792 

 

 

4,490 

 

 

9,764 

 

 

13,044 

Loss on disposal and impairment of assets

 

6,747 

 

 

16,637 

 

 

10,013 

 

 

22,040 

Total operating expenses

 

1,097,207 

 

 

1,027,256 

 

 

3,155,547 

 

 

2,865,807 

Income from operations

 

30,867 

 

 

9,726 

 

 

210,765 

 

 

4,017 

Interest and other income, net

 

1,275 

 

 

672 

 

 

3,512 

 

 

3,584 

Income before income taxes

 

32,142 

 

 

10,398 

 

 

214,277 

 

 

7,601 

Provision for income taxes

 

(12,532)

 

 

(2,599)

 

 

(81,817)

 

 

(638)

Net income

$

19,610 

 

$

7,799 

 

$

132,460 

 

$

6,963 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.69 

 

$

0.27 

 

$

4.63 

 

$

0.24 

Diluted

$

0.69 

 

$

0.27 

 

$

4.62 

 

$

0.23 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

28,415 

 

 

29,063 

 

 

28,604 

 

 

29,387 

Diluted

 

28,439 

 

 

29,171 

 

 

28,696 

 

 

29,792 
(unaudited)

Condensed Consolidated Statement of Comprehensive Income

(unaudited)

(in thousands)



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Net income

$

19,610 

 

$

7,799 

 

$

132,460 

 

$

6,963 

Other comprehensive income (loss), net of income taxes:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

1,778 

 

 

(203)

 

 

4,589 

 

 

961 

Unrealized gain (loss) on available-for-sale securities

 

272 

 

 

(882)

 

 

(99)

 

 

3,051 

Tax benefit (expense)

 

(104)

 

 

346 

 

 

27 

 

 

(1,185)

Other comprehensive income (loss), net of income taxes

 

1,946 

 

 

(739)

 

 

4,517 

 

 

2,827 

Comprehensive income

$

21,556 

 

$

7,060 

 

$

136,977 

 

$

9,790 
Three months ended March 31,
20242023
Food and beverage revenue$2,684,447 $2,351,009 
Delivery service revenue17,401 17,571 
Total revenue2,701,848 2,368,580 
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food, beverage and packaging779,076 692,559 
Labor659,450 583,794 
Occupancy135,699 121,931 
Other operating costs385,773 363,206 
General and administrative expenses204,625 148,340 
Depreciation and amortization83,243 76,585 
Pre-opening costs7,211 6,198 
Impairment, closure costs, and asset disposals5,479 8,361 
Total operating expenses2,260,556 2,000,974 
Income from operations441,292 367,606 
Interest and other income, net19,364 8,949 
Income before income taxes460,656 376,555 
Provision for income taxes101,369 84,911 
Net income$359,287 $291,644 
Earnings per share:
Basic$13.09 $10.56 
Diluted$13.01 $10.50 
Weighted-average common shares outstanding:
Basic27,44427,624
Diluted27,62427,788
Other comprehensive income/(loss), net of income taxes:
Foreign currency translation adjustments$(1,293)$457 
Comprehensive income$357,994 $292,101 

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

Chipotle Mexican Grill, Inc.

Condensed Consolidated Statement of Cash Flows

(unaudited)

CHIPOTLE MEXICAN GRILL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)



 

 

 

 

 



 

 

 

 

 



Nine months ended September 30,



2017

 

2016

Operating activities

 

 

 

 

 

Net income

$

132,460 

 

$

6,963 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

121,906 

 

 

108,296 

Deferred income tax (benefit) provision

 

(11,323)

 

 

380 

Loss on disposal and impairment of assets

 

10,013 

 

 

22,040 

Bad debt allowance

 

181 

 

 

99 

Stock-based compensation expense

 

54,596 

 

 

48,389 

Excess tax benefit on stock-based compensation

 

 -

 

 

(1,888)

Other

 

(126)

 

 

(224)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

16,477 

 

 

16,084 

Inventory

 

(7,023)

 

 

(3,442)

Prepaid expenses and other current assets

 

(4,890)

 

 

(5,362)

Other assets

 

(1,382)

 

 

1,509 

Accounts payable

 

14,771 

 

 

(11,938)

Accrued liabilities

 

35,514 

 

 

36,245 

Income tax payable/receivable

 

(7,810)

 

 

36,026 

Deferred rent

 

22,410 

 

 

27,319 

Other long-term liabilities

 

3,060 

 

 

576 

Net cash provided by operating activities

 

378,834 

 

 

281,072 

Investing activities

 

 

 

 

 

Purchases of leasehold improvements, property and equipment

 

(165,506)

 

 

(192,252)

Purchases of investments

 

(120,084)

 

 

 -

Maturities of investments

 

140,000 

 

 

45,000 

Proceeds from sale of investments

 

 -

 

 

540,648 

Net cash provided by (used in) investing activities

 

(145,590)

 

 

393,396 

Financing activities

 

 

 

 

 

Acquisition of treasury stock

 

(209,585)

 

 

(771,354)

Excess tax benefit on stock-based compensation

 

 -

 

 

1,888 

Stock plan transactions and other financing activities

 

10 

 

 

23 

Net cash used in financing activities

 

(209,575)

 

 

(769,443)

Effect of exchange rate changes on cash and cash equivalents

 

1,931 

 

 

1,098 

Net change in cash and cash equivalents

 

25,600 

 

 

(93,877)

Cash and cash equivalents at beginning of period

 

87,880 

 

 

248,005 

Cash and cash equivalents at end of period

$

113,480 

 

$

154,128 
(unaudited)

Common StockTreasury Stock
SharesAmountAdditional
Paid-In
Capital
SharesAmountRetained
Earnings
Accumulated Other Comprehensive LossTotal
Balance, December 31, 202237,320$373 $1,829,304 9,693$(4,282,014)$4,828,248 $(7,888)$2,368,023 
Stock-based compensation-20,670 -20,670 
Stock plan transactions and other99(291)-(290)
Acquisition of treasury stock-125(198,819)(198,819)
Net income--291,644 291,644 
Other comprehensive income/(loss), net of income taxes--457 457 
Balance, March 31, 202337,419$374 $1,849,683 9,818$(4,480,833)$5,119,892 $(7,431)$2,481,685 
Balance, December 31, 202337,483$375 $1,956,160 10,057$(4,944,656)$6,056,985 $(6,657)$3,062,207 
Stock-based compensation-36,681 -36,681 
Stock plan transactions and other802,109 -2,110 
Acquisition of treasury stock-39(97,663)(97,663)
Net income--359,287 359,287 
Other comprehensive income/(loss), net of income taxes--(1,293)(1,293)
Balance, March 31, 202437,563$376 $1,994,950 10,096$(5,042,319)$6,416,272 $(7,950)$3,361,329 
See accompanying notes to condensed consolidated financial statements.

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Table of Contents

Chipotle Mexican Grill, Inc.

Notes

CHIPOTLE MEXICAN GRILL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three months ended March 31,
20242023
Operating activities
Net income$359,287 $291,644 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization83,243 76,585 
Deferred income tax provision(4,890)(486)
Impairment, closure costs, and asset disposals4,209 8,152 
Provision for credit losses(412)500 
Stock-based compensation expense36,003 20,084 
Other835 (2,810)
Changes in operating assets and liabilities:
Accounts receivable26,146 39,659 
Inventory1,331 1,086 
Prepaid expenses and other current assets16,291 (14,569)
Operating lease assets64,797 59,135 
Other assets1,561 3,277 
Accounts payable12,588 (2,732)
Accrued payroll and benefits(85,289)(53,428)
Accrued liabilities25,322 17,009 
Unearned revenue(19,358)(22,653)
Income tax payable/receivable97,960 85,400 
Operating lease liabilities(51,537)(51,584)
Other long-term liabilities1,147 767 
Net cash provided by operating activities569,234 455,036 
Investing activities
Purchases of leasehold improvements, property and equipment(132,703)(120,369)
Purchases of investments(366,798)(214,819)
Maturities of investments198,462 99,639 
Net cash used in investing activities(301,039)(235,549)
Financing activities
Acquisition of treasury stock(27,005)(126,709)
Tax withholding on stock-based compensation awards(72,654)(67,185)
Other financing activities(415)11 
Net cash used in financing activities(100,074)(193,883)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(752)290 
Net change in cash, cash equivalents, and restricted cash167,369 25,894 
Cash, cash equivalents, and restricted cash at beginning of period586,163 408,966 
Cash, cash equivalents, and restricted cash at end of period$753,532 $434,860 
Supplemental disclosures of cash flow information
Income taxes paid (refunded)$7,859 $(245)
Purchases of leasehold improvements, property and equipment accrued in accounts payable and accrued liabilities$64,207 $63,745 
Acquisition of treasury stock accrued in accounts payable and accrued liabilities$3,646 $9,422 
See accompanying notes to Condensed Consolidated Financial Statements

(unaudited)

 (dollarcondensed consolidated financial statements.

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Table of Contents
CHIPOTLE MEXICAN GRILL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, unless otherwise specified)

(unaudited)
1. Basis of Presentation

and Update to Accounting Policies

In this quarterly report on Form 10-Q, Chipotle Mexican Grill, Inc., a Delaware corporation, together with its subsidiaries, is collectively referred to as “Chipotle,” “we,” “us,” or “our.”

We develop and operate restaurants that serve a focusedrelevant menu of burritos, tacos, burrito bowls, quesadillas, tacos, and salads, made using fresh, high-quality ingredients. As of September 30, 2017,March 31, 2024, we operated 2,3303,479 restaurants including 3,411 Chipotle restaurants throughoutwithin the United States as well as 36and 68 international Chipotle restaurants and 8 non-Chipotle restaurants. We managedmanage our U.S. operations based on 11nine regions during the third quarter of 2017 and have aggregatedaggregate our operations to one reportable segment.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of our financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by U.S. generally accepted accounting principles for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements, footnotes and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2016.

2023.

2. Recent Accounting Standards

Recently Issued Accounting Standards

In February 2016,November 2023, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standards Update (“ASU”) 2016-02, “LeasesASU No. 2023-07, “Segment Reporting (Topic 842).280): Improvements to Reportable Segment Disclosure.” The pronouncement requires lessees to recognize a liability for lease obligations, which represent the discounted obligation to make future minimum lease payments,ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements which are intended to give financial statement users the abilityused to assess the amount, timing, and potential uncertainty of cash flows related to leases. We expect to adopt the requirements of the new lease standardsegment performance. The ASU is effective January 1, 2019, using a modified retrospectivefor fiscal years beginning after December 15, 2023, with early adoption method. permitted. We are currently evaluating the provisionsimpact of the new lease standard, including optional practical expedients, and assessing our existing lease portfolio in order to determine the impact to our accounting systems, processes and internal control over financial reporting. The adoption ofadopting this ASU 2016-02 will have a significant impact on our consolidated balance sheet because we will record material assets and obligations for current operating leases. We are still assessing the expected impact on our consolidated statements of income and cash flows.

disclosures.

In May 2014,December 2023, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers2023-09, “Income Taxes (Topic 606),740): Improvements to Income Tax Disclosures.as amendedThe ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by multiple standards updates. Thisjurisdiction. The guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance will require us to enhance our disclosures, including disclosing performance obligations to customers arising from gift cards and certain promotional activity. The pronouncement is effective for reporting periodsfiscal years beginning after December 15, 2017. The2024, with early adoption is not expected to have anpermitted, and should be applied either prospectively or retrospectively. We are currently evaluating the impact of adopting this ASU on our consolidated financial position or results of operations. 

disclosures.

We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact onto the condensed consolidated financial statements.

Recently Adopted Accounting Standards

3. Revenue Recognition
Gift Cards
We sell gift cards, which do not have expiration dates, and we do not deduct non-usage fees from outstanding gift card balances. Gift card balances are initially recorded as unearned revenue. We recognize revenue from gift cards when the gift card is redeemed by the customer. Historically, the majority of gift cards are redeemed within one year. In March 2016,addition, a portion of gift cards are not expected to be redeemed and will be recognized as breakage over time in proportion to gift card redemptions (“gift card breakage rate”). The gift card breakage rate is based on company and program specific information, including historical redemption patterns, and expected remittance to government agencies under unclaimed property laws, if applicable.We evaluate our gift card breakage rate estimate annually, or more frequently as circumstances warrant, and apply that rate to gift card redemptions. Gift card liability balances are typically highest at the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718).” end of each calendar year following increased gift card sales during the holiday season; accordingly, revenue recognized from gift card liability balances is highest in the first quarter of each calendar year.
The pronouncement was issued to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classificationgift card liability included in unearned revenue on the condensed consolidated statementbalance sheets was as follows:
March 31,
2024
December 31,
2023
Gift card liability$139,993 $164,930 
5

Table of cash flows.

Contents

Revenue recognized from the redemption of gift cards that was included in unearned revenue at the beginning of the year was as follows:
Three months ended March 31,
20242023
Revenue recognized from gift card liability balance at the beginning of the year$44,812 $38,878 
Chipotle Rewards
We adopted ASU 2016-09have a loyalty program called Chipotle Rewards. Customers who enroll in the program generally earn points for every dollar spent. We may also periodically offer promotions, which typically provide the customer with the opportunity to earn bonus points or other rewards. Customers may redeem earned points for various rewards, which are primarily comprised of free food and beverage items. Earned rewards generally expire one month to two months after they are issued, and points generally expire if an account is inactive for a period of six months.
We defer revenue associated with the estimated selling price of points or rewards earned by customers as each point or reward is earned, net of points or rewards we do not expect to be redeemed. The estimated selling price of each point or reward earned is based on January 1, 2017, prospectively (prior periods have not been restated).the estimated value of the product for which the reward is expected to be redeemed. Our estimate of points and rewards we expect to be redeemed is based on historical and other company specific data. The primary impactcosts associated with rewards redeemed are primarily included in food, beverage, and packaging on our condensed consolidated statements of adoption was the recognition during the three months ended September 30, 2017, of a $77 tax deficiency, which increases our provision for income taxes and for the nine months ended September 30, 2017, an excess tax benefit of $587, which reduces our provision for income taxescomprehensive income. We evaluate Chipotle Rewards point breakage annually, or more frequently as circumstances warrant.
We recognize revenue associated with Chipotle Rewards within food and the classification of these excess tax benefits in operating activities inbeverage revenue on the condensed consolidated statementstatements of cash flows instead of financing activities.  

income and comprehensive income when a customer redeems an earned reward. Deferred revenue associated with Chipotle Rewards is included in unearned revenue on our condensed consolidated balance sheets.

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Table of Contents

The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presentedChanges in our Chipotle Rewards liability included in unearned revenue on the condensed consolidated statement of cash flows, since such cash flows have historically been presented in financing activities. We also elected to continue estimating forfeitures when determining the amount of stock-based compensation costs to be recognized in each period. No other provisions of ASU 2016-09 had a material impact on our financial statements or disclosures.

3.balance sheets were as follows:

Three months ended March 31,
20242023
Chipotle Rewards liability, beginning balance$44,750 $38,057 
Revenue deferred39,005 31,057 
Revenue recognized(36,431)(29,900)
Chipotle Rewards liability, ending balance$47,324 $39,214 
4. Fair Value of Financial Instruments

Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carryingvalue of our cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value because of their short-term nature. Investments
Our held-to-maturity investments are carriedcomprised of U.S. Treasury securities and corporate debt securities, which are held at amortized cost. We also have investments in convertible notes receivable which are held at fair-value. Additionally, we maintain a deferred compensation plan with related assets held in a rabbi trust.
6

Table of Contents
The following tables show our cash, cash equivalents, and debt investments by significant investment category as of March 31, 2024 and December 31, 2023:
March 31, 2024
Adjusted costUnrealized GainsUnrealized LossesFair ValueCash and Cash EquivalentsCurrent InvestmentsLong-term Investments
Cash$158,314$-$-$158,314$158,314$-$-
Level 1(1)
Money market funds492,228 492,228 492,228 
Time deposits76,852 76,852 76,852 
U.S. Treasury securities1,357,606 639 4,041 1,354,204 691,274 666,332 
Corporate debt securities34,469 168 34,301 34,469 
Subtotal1,961,155 639 4,209 1,957,585 569,080 691,274 700,801 
Level 3
Corporate debt security(2)
17,201 275 17,476 1,200 16,001 
Notes receivable(3)
12,001 1,289 141 13,149 13,149 
Subtotal29,202 1,564 141 30,625 1,200 29,150 
Total$2,148,671 $2,203 $4,350 $2,146,524 $727,394 $692,474 $729,951 
December 31, 2023
Adjusted costUnrealized GainsUnrealized LossesFair ValueCash and Cash EquivalentsCurrent InvestmentsLong-term Investments
Cash$128,458$-$-$128,458$128,458$-$-
Level 1(1)
Money market funds355,872 355,872 355,872 
Time deposits76,279 76,279 76,279 
U.S. Treasury securities1,200,658 4,352 4,083 1,200,927 731,339 469,319 
Corporate debt securities19,755 13 19,761 19,755 
Subtotal1,652,564 4,365 4,090 1,652,839 432,151 731,339 489,074 
Level 3
Corporate debt security(2)
17,401 27 17,374 999 16,402 
Notes receivable(3)
14,500 1,289 141 15,648 2,500 13,148 
Subtotal31,901 1,289 168 33,022 3,499 29,550 
Total$1,812,923 $5,654 $4,258 $1,814,319 $560,609 $734,838 $518,624 
(1)Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
(2)The fair value and are classified as available-for-sale.  Investments consist of U.S. treasury notes with maturities up to approximately one year.  Fair value of investmentsthe corporate debt security is measured using Level 1 inputs (quoted prices for identical assets in active markets).

The following is a summary of available-for-sale securities:



 

 

 

 

 



 

 



September 30,

 

December 31,



2017

 

2016

Amortized cost

$

435,193 

 

$

455,109 

Unrealized gains (losses)

 

(316)

 

 

(218)

Fair market value

$

434,877 

 

$

454,891 

The following is a summary of unrealized gains (losses) on available-for-sale securities recorded in other comprehensive income (loss) in3 (unobservable) inputs. We determined the condensed consolidated statement of comprehensive income:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Unrealized gains (losses) on available-for-sale securities

$

272 

 

$

(882)

 

$

(99)

 

$

3,051 

Unrealized gains (losses) on available-for-sale securities, net of tax

$

168 

 

$

(536)

 

$

(72)

 

$

1,866 

Realized gains and losses on available-for-sale securities are recorded in interest and other income, net on the condensed consolidated statement of income. We had no realized gains or lossesfair value for the threecorporate debt security using an internally-developed valuation model and nine months ended September 30, 2017,unobservable inputs include credit and we had $0liquidity spreads and $547effective maturity.

7

Table of realized gains on available-for-sale securitiesContents
(3)We have elected to measure our investment in convertible notes receivable of private companies at fair value under the fair value option. The fair value of the notes receivable are measured using Level 3 (unobservable) inputs. We determined the fair value for the threenotes receivable using an internally-developed valuation model and nine months ended September 30, 2016.

unobservable inputs include estimates of the equity value of the underlying business and the timing and probability of future financing events.

Rabbi Trust
We also maintainhave elected to fund certain deferred compensation plan obligations through a rabbi trust, the assets of which are designated as trading securities. The rabbi trust is subject to fund obligations under a deferred compensation plan.creditor claims in the event of insolvency, but the assets held in the rabbi trust are not available for general corporate purposes. Amounts in the rabbi trust are invested in mutual funds, consistent with the investment choices selected by participants in their Deferred Plan accounts, which are designated as trading securities, and carried at fair value and are included in other assets inon the condensed consolidated balance sheet. Fair value of mutual funds is measured using Level 1 inputs. The fair value of the investments in the rabbi trust was $19,157 and $17,843 as of September 30, 2017, and December 31, 2016, respectively.sheets. We record trading gains and losses, in general and administrative expenses in the condensed consolidated statement of income, along with the offsetting amount related to the increase or decrease in deferred compensation to reflect our exposure to liabilities for payment under the deferred plan.

plan in general and administrative expenses on the condensed consolidated statements of income and comprehensive income.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets recognized or disclosed at fair value on the condensed consolidated financial statements on a nonrecurring basis include items such as leasehold improvements, property and equipment, certain long-term investments, operating lease assets, other assets, and goodwill. These assets are measured at fair value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or if there has been an observable price change of a non-marketable equity security.
During the three months ended March 31, 2024 and 2023, nonrecurring fair value measurements resulting in asset impairments were not material.
5. Equity Investments
The following table sets forth unrealized gains (losses) on trading securities held insummarizes our equity investments as of March 31, 2024, and December 31, 2023:
March 31,
2024
December 31,
2023
Equity method investments$8,376 $8,896 
Other investments46,864 45,864 
Total$55,240 $54,760 
Equity Method Investments
As of March 31, 2024, we owned 4,325 shares of common stock of Tractor Beverages, Inc. (“Tractor”). Our investment represents ownership of approximately 10.2% of Tractor, and we have invested total cash consideration of $10,000. As we are a significant customer of Tractor and maintain board representation, we are accounting for our investment under the rabbi trust:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Unrealized gains (losses) on trading securities held in rabbi trust

$

335 

 

$

391 

 

$

1,157 

 

$

677 

4. Impairment of Long-Lived Assets

Duringequity method. There were no impairment charges for the three and nine months ended September 30, 2017, we recognized non-cash impairment charges of $2,427 and $4,441  ($1,475 and $2,699 net of tax, respectively), representing substantially all of the value of the long-lived assets of a small number of underperforming Chipotle restaurants,March 31, 2024 or 2023, associated with this equity method investment. The investment in loss on disposal and impairment ofcommon stock is included within other assets on the condensed consolidated statement of income ($0.05 and $0.09 per basic and diluted earnings per share). The fairbalance sheets with a carrying value of the impaired restaurants was determined using Level 3 inputs (unobservable inputs) based on a discounted cash flow method.

5


5. Shareholders’ Equity

Through September 30, 2017,

Other Investments
As of March 31, 2024, we had announced authorizations by our Board of Directors of repurchases ofhold warrants (the “Tractor Warrants”) to purchase 2,162 shares of common stock which inof Tractor. Tractor is a privately held company, and as such, the aggregate authorized expendituresTractor Warrants represent non-marketable equity securities. The investment is included within long-term investments on the condensed consolidated balance sheets with a carrying value of up to $2.3 billion. On October 24, 2017,$8,675 as of March 31, 2024 and December 31, 2023, respectively.
As of March 31, 2024, we announced that our Board of Directors authorized the expenditure of an additional $100,000 to repurchaseowned 766 shares of the Series C Preferred Stock of Nuro, Inc. (“Nuro”). Our investment represents a minority interest and we have determined that we do not have significant influence over Nuro. Nuro is a privately held company, and as such, the preferred shares comprising our investment are illiquid and fair value is not readily determinable. As of March 31, 2024, we have recognized a cumulative gain of $5,968 related to our investment in Nuro due to observable transactions in prior periods. The investment is included within long-term investments on the condensed consolidated balance sheets with a carrying value of $15,968 as of March 31, 2024 and December 31, 2023, respectively.
8

As of March 31, 2024, we held additional investments in other entities through the Cultivate Next Fund. These additional investments are included within long-term investments on the condensed consolidated balance sheets with a carrying value of $22,221 and $21,221 as of March 31, 2024 and December 31, 2023, respectively.
6. Shareholders’ Equity
We have had a stock repurchase program in place since 2008. As of March 31, 2024, we had $399,098 authorized for repurchasing shares of our common stock. Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions.

During the nine months ended September 30, 2017,Shares we repurchased 545 shares of common stock under authorized programs, for a total cost of $207,159. The cumulative shares repurchased under authorized programs as of September 30, 2017, were 7,408 for a total cost of $2,204,968. As of September 30, 2017, $95,425 was available to repurchase shares under the announced repurchase authorizations.Shares repurchased are being held in treasury stock until such time as they are reissued or retired at the discretion of theour Board of Directors.

6. Stock-based Compensation

During the ninethree months ended September 30, 2017,March 31, 2024, 28 shares of common stock at a total cost of $72,654 were netted and surrendered as payment for minimum statutory withholding obligations in connection with the vesting of outstanding stock awards. During the three months ended March 31, 2023, 40 shares of common stock at a total cost of $67,185 were netted and surrendered as payment for minimum statutory withholding obligations in connection with the vesting of outstanding stock awards. Shares surrendered by the participants in accordance with the applicable award agreements and plan are deemed repurchased by us but are not part of publicly announced share repurchase programs.
7. Stock-Based Compensation
Pursuant to the 2022 Stock Incentive Plan, we granted stock onlygrant stock-only stock appreciation rights (“SOSARs”("SOSARs") on 304 shares of our common stock to eligible employees. The weighted average grant date fair value of the SOSARs was $105.97 per share with a weighted average exercise price of $426.70 per share based on the closing price of common stock on the date of grant. The SOSARs vest in two equal installments on the second and third anniversary of the grant date. During the nine months ended September 30, 2017, 32 SOSARs were exercised and 124 SOSARs were forfeited.

During the nine months ended September 30, 2017, we granted, restricted stock units (“RSUs”("RSUs"), and performance stock units ("PSUs") on 89 shares of our common stock to eligible employees. The weighted average grant date fair value of the RSUs was $427.30 per share. Theemployees and non-employee directors. SOSARs and RSUs generally vest in two equal installments on the second and third anniversary of the grant date.

During the first quarter of 2017, we awarded 36 performance shares (“PSUs”) that PSUs are subject to service, market and performance vesting conditions. Two-thirds of the PSUs had a grant date fair value of $485.53 per share and vest based on the price of our common stock reaching certain targets for a consecutive number of days during the three-year period starting on the grant dateconditions, and the quantity of shares that will vest range from 0% to 350% of the targeted number of shares. The remaining one-third of PSUs had a grant date fair value of $427.61 and vest based on reaching certain comparable restaurant sales increases during the three-year period starting on January 1, 2017, and the quantity of shares that will vest range from 0% to 300% of the targeted number of shares.  If

Total stock-based compensation expense was as follows:
Three months ended March 31,
20242023
Stock-based compensation$36,681 $20,670 
Stock-based compensation, net of income taxes$31,286 $16,696 
Total capitalized stock-based compensation included in leasehold improvements, property and equipment, net on the condensed consolidated balance sheets$678 $586 
Excess tax benefit on stock-based compensation recognized in provision for income taxes on the condensed consolidated statements of income and comprehensive income$13,255 $10,162 
.
SOSARs
A summary of SOSAR award activity was as follows (in thousands, except per share data):
SharesWeighted-Average Exercise Price per
Share
Weighted-Average Remaining
Contractual Life (Years)
Aggregate Intrinsic Value
Outstanding, January 1, 2024295$1,302.60$290,156
Granted462,638.35
Exercised(34)1,102.31
Forfeited(3)1,662.64
Outstanding, March 31, 20243041,526.404.65419,723
Exercisable, March 31, 20241421,090.163.21257,430
Vested and expected to vest, March 31, 20242871,500.904.57403,335
9


RSUs
A summary of RSU award activity was as follows (in thousands, except per share data):
SharesWeighted-Average Grant Date Fair Value
per Share
Outstanding, January 1, 202460$1,604.25 
Granted232,638.35 
Vested(17)1,538.11 
Forfeited(2)1,743.95 
Outstanding, March 31, 2024641,984.14 
Vested and expected to vest, March 31, 2024521,961.14 

PSUs
A summary of PSU award activity was as follows (in thousands, except per share data):
SharesWeighted-Average Grant Date Fair
Value per Share
Outstanding, January 1, 202456$1,562.14
Granted172,638.35
Vested(15)1,479.55
Forfeited(1)1,594.08
Outstanding, March 31, 2024571,906.32
Vested and expected to vest, March 31, 2024*891,783.72
*The vested and expected to vest total above represents outstanding base PSUs, adjusted for expected payout amounts in line with current and future estimated performance levels.
8. Income Taxes
The effective income tax rate for the defined minimum targets are not met, then no shares will vest.

During the ninethree months ended September 30, 2017,March 31, 2024, was 22.0%, a decrease from an effective income tax rate of 22.5% for the three months ended March 31, 2023. The decrease is primarily due to an increase in tax benefits related to option exercises and equity vesting.

9. Leases
The majority of our operating leases consist of restaurant locations and office space. We determine if a contract contains a lease at inception. Our leases generally have remaining terms of 1-20 years and most include options to extend the leases for additional 5-year periods. Generally, the lease term is the minimum of the non-cancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 stock awards thatyears.
10

Supplemental disclosures of cash flow information related to leases were subject to service and performance or market conditions were forfeited.

as follows:

Three months ended March 31,
20242023
Cash paid for operating lease liabilities$113,496 $102,487 
Operating lease assets obtained in exchange for operating lease liabilities$157,806 $90,654 
Derecognition of operating lease assets due to terminations or impairment$1,425 $1,223 
10. Earnings Per Share
The following table sets forth total stock based compensation expense:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Stock based compensation expense

$

18,069 

 

$

18,636 

 

$

55,545 

 

$

49,357 

Stock based compensation expense, net of tax

$

10,983 

 

$

10,971 

 

$

33,760 

 

$

29,056 

Stock based compensation expense recognized as capitalized development

$

319 

 

$

285 

 

$

949 

 

$

968 

Excess tax benefit (deficiency) on stock based compensation recognized in provision for income taxes

$

(77)

 

$

 -

 

$

587 

 

$

 -

7. Earnings Per Share

Basicthe computations of basic and diluted earnings per share is calculated by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings(in thousands, except per share (“diluted EPS”) is calculated using income available to common shareholders divided by diluted weighted-average shares of common stock outstanding during each period. Potentially dilutive securities include common shares related to SOSARs and non-vested stock awards (collectively “stock awards”). Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect. Stock awards are excluded from the calculation of diluted EPS in the event they are subject to performance conditions or are antidilutive.

data):

6

Three months ended March 31,
20242023
Net income$359,287 $291,644 
Shares:
Weighted-average number of common shares outstanding (for basic calculation)27,444 27,624 
Dilutive stock awards180 164 
Weighted-average number of common shares outstanding (for diluted calculation)27,624 27,788 
Basic earnings per share$13.09 $10.56 
Diluted earnings per share$13.01 $10.50 

The following stock awards were excluded from the calculation of diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

2017

 

2016

 

2017

 

2016

Three months ended March 31,
Three months ended March 31,
Three months ended March 31,
2024
2024
2024
Stock awards subject to performance conditions
Stock awards subject to performance conditions

Stock awards subject to performance conditions

 

245 

 

 

226 

 

 

244 

 

 

276 

Stock awards that were antidilutive

 

1,738 

 

 

1,356 

 

 

1,567 

 

 

1,312 
Stock awards that were antidilutive
Stock awards that were antidilutive

Total stock awards excluded from diluted earnings per share

 

1,983 

 

 

1,582 

 

 

1,811 

 

 

1,588 
Total stock awards excluded from diluted earnings per share
Total stock awards excluded from diluted earnings per share

The following table sets forth the computations of basic and diluted earnings per share:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Net income

$

19,610 

 

$

7,799 

 

$

132,460 

 

$

6,963 

Shares:

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

28,415 

 

 

29,063 

 

 

28,604 

 

 

29,387 

Dilutive stock awards

 

24 

 

 

108 

 

 

92 

 

 

405 

Diluted weighted average number of common shares outstanding

 

28,439 

 

 

29,171 

 

 

28,696 

 

 

29,792 

Basic earnings per share

$

0.69 

 

$

0.27 

 

$

4.63 

 

$

0.24 

Diluted earnings per share

$

0.69 

 

$

0.27 

 

$

4.62 

 

$

0.23 

8.

11. Commitments and Contingencies

Data Security Incident

In April 2017, our information security team detected unauthorized activity on the network that supports payment processing for our restaurants, and immediately began an investigation with the help of leading computer security firms.

Purchase Obligations
We also self-reported the issue to payment card processors and law enforcement. Our investigation detected malware designed to access payment card data from cards used at point-of-sale devices at most Chipotle restaurants, primarilyenter into various purchase obligations in the period from March 24, 2017 through April 18, 2017. The malware searchedordinary course of business, generally of a short-term nature. Those that are binding primarily relate to commitments for track data, which may include cardholder name, card number, expiration date,food purchases and internal verification codes; however, no other customersupplies, capital projects, corporate assets, information was affected. We have removed the malware from our systemstechnology, marketing initiatives and continue to evaluate ways to enhance our security measures. We expect that substantially all of our investigation costs will be covered by insurance; however, we may incur legal expenses in excess of our insurance coverage limits associated with the data security incident in future periods. We will recognize these expenses as services are received.

 During the three months ended September 30, 2017, we recorded an expense of $30,000 ($18,234 after tax), or $0.64 per basic and diluted earnings per share, as an estimate of potential liabilities associated with anticipated claims and assessments by payment card networks in connection with the data security incident. We may ultimately be subject to liabilities greater than or less than the amount accrued. The expense is recorded in general and administrative expenses in our condensed consolidated statement of income and a corresponding liability in accrued liabilities on our condensed consolidated balance sheet.

Litigation Arising from Security Incident

On May 4, 2017, Bellwether Community Credit Union filed a purported class action complaint in the United States District Court for the District of Colorado alleging that we negligently failed to provide adequate security to protect the payment card information of customers of the plaintiffs and those of other similarly situated credit unions, bankscorporate sponsorships, and other financial institutions alleged to be part of the putative class, causing those institutions to suffer financial losses.  The complaint also claims we were negligent per se based on alleged violations of Section 5 of the Federal Trade Commission Act and similar state laws.  The plaintiff seeks monetary damages, injunctive relief and attorneys’ fees.  On May 26, 2017, Alcoa Community Credit Union filed a purported class action complaint in the U. S. District Court for the District of Colorado making substantially the same allegations as the Bellwether complaint and seeking substantially the same relief. The Bellwether and Alcoa cases have been consolidated and will proceed as a single action.

On June 9, 2017, Todd Gordon filed a purported class action complaint in the U. S. District Court for the District of Colorado alleging that we negligently failed to provide adequate security to protect the payment card information of the plaintiff and other similarly situated customers alleged to be part of the putative class, causing such customers to suffer financial losses.  The complaint also claims we were negligent per se

miscellaneous items.

7

Litigation

Table of Contents

based on alleged violations of Section 5 of the Federal Trade Commission Act and similar state laws, and also alleges breach of contract, unjust enrichment, and violations of the Arizona Consumer Fraud Act. Additionally, on August 21, 2017, Greg Lawson and Judy Conard filed a purported class action complaint in the U. S. District Court for the District of Colorado making allegations substantially similar to those in the Gordon complaint, and stating substantially similar claims as well as claims under the Colorado Consumer Protection Act. The plaintiffs in the Gordon case and the Lawson and Conard case have notified the court of their agreement to consolidate their cases and file an amended consolidated complaint for the consolidated matter.

We intend to vigorously defend each of the aforementioned cases, but it is not possible at this time to reasonably estimate the outcome of or any potential liability from these cases.  Although certain fees and costs associated with the data security incident and the aforementioned litigation to date have been paid or reimbursed by our cyber liability insurer, the ultimate amount of liabilities arising from the litigation may be in excess of the limits of our applicable insurance coverage.

Receipt of Grand Jury Subpoenas

On January 28, 2016, we were served with a Federal Grand Jury Subpoena from the U.S. District Court for the Central District of California in connection with an official criminal investigation being conducted by the U.S. Attorney’s Office for the Central District of California, in conjunction with the U.S. Food and Drug Administration’s Office of Criminal Investigations.  The subpoena requires the production of documents and information related to company-wide food safety matters dating back to January 1, 2013.  We received a follow-up subpoena on July 19, 2017 requesting information related to illness incidents associated with a single Chipotle restaurant in Sterling, Virginia. We intend to continue to fully cooperate in the investigation.  It is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any fines or penalties in connection with the investigation pursuant to which the subpoena was issued.

Shareholder Derivative Actions

On April 6, 2016, Uri Skorski filed a shareholder derivative action in Colorado state court in Denver, Colorado, alleging that our Board of Directors and officers breached their fiduciary duties in connection with our alleged failure to disclose material information about our food safety policies and procedures, and also alleging that our Board of Directors and officers breached their fiduciary duties in connection with allegedly excessive compensation awarded from 2011 to 2015 under our stock incentive plan. On April 14, 2016, Mark Arnold and Zachary Arata filed a shareholder derivative action in Colorado state court in Denver, Colorado, making largely the same allegations as the Skorski complaint. On May 26, 2016, the court issued an order consolidating the Skorski and Arnold/Arata actions into a single case. On August 8, 2016, Sean Gubricky filed a shareholder derivative action in the U.S. District Court for the District of Colorado, alleging that our Board of Directors and certain officers failed to institute proper food safety controls and policies, issued materially false and misleading statements in violation of federal securities laws, and otherwise breached their fiduciary duties to us.  On September 1, 2016, Ross Weintraub filed a shareholder derivative action in Colorado state court in Denver, Colorado, making largely the same allegations as the Gubricky complaint.  On March 27, 2017, the Weintraub case was consolidated with the Skorski and Arnold/Arata action into a single case.  On December 27, 2016, Cyrus Lashkari filed a shareholder derivative action in the U.S. District Court for the District of Colorado, making largely the same allegations as the foregoing shareholder derivative complaints.  Each of these actions purports to state a claim for damages on our behalf, and is based on statements in our SEC filings and related public disclosures, as well as media reports and company records. We have reached an agreement to settle the foregoing actions, and the proposed settlement has been preliminarily approved by the U.S. District Court for the District of Colorado. 

On July 28, 2017, Mark Blau filed a shareholder derivative action in the U.S. District Court for the District of Colorado, making allegations similar to those of the several shareholder derivative actions described above, and adding further allegations related to the Board’s investigation of the foregoing matters, as well as customer illnesses and operational issues associated with two Chipotle restaurants in July 2017.  The action purports to state claims for damages on our behalf, and is based on statements in our SEC filings and related public disclosures, as well as media reports and company records.  We intend to defend this case vigorously, but it is not possible at this time to reasonably estimate the outcome of or any potential liability from the case.

Shareholder Class Actions

On January 8, 2016, Susie Ong filed a complaint in the U.S. District Court for the Southern District of New York on behalf of a purported class of purchasers of shares of our common stock between February 4, 2015 and January 5, 2016.  The complaint purports to state claims against us, each of the co-Chief Executive Officers serving during the claimed class period and the Chief Financial Officer under Sections 10(b) and 20(a) of the Exchange Act and related rules, based on our alleged failure during the claimed class period to disclose material information about our quality controls and safeguards in relation to consumer and employee health. The complaint asserts that those failures and related public statements were false and misleading and that, as a result, the market price of our stock was artificially inflated during the claimed class period. The complaint seeks damages on behalf of the purported class in an unspecified amount, interest, and an award of reasonable attorneys’ fees, expert fees and other costs.  On March 8, 2017, the court granted our motion to dismiss the complaint, with leave to amend.  The plaintiff filed an amended complaint on April 7, 2017. Additionally, on July 20, 2017, Elizabeth Kelly filed a complaint in the U.S. District Court for the District of Colorado on behalf of a purported class of purchasers of shares of our common stock between February 5, 2016 and July 19, 2017,

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with claims and factual allegations similar to the Ong complaint, based primarily on media reports regarding illnesses associated with a Chipotle restaurant in Sterling, Virginia.  We intend to defend these cases vigorously, but it is not possible at this time to reasonably estimate the outcome of or any potential liability from the cases.

Miscellaneous

We are involved in various other claims and legal actions, such as wage and hour, wrongful termination and other employment-related claims, slip and fall and other personal injury claims, advertising and consumer claims, privacy claims, and lease, construction and other commercial disputes, that arise in the ordinary course of business. Webusiness, some of which may be covered by insurance. The outcomes of these actions are not predictable, but we do not believe that the ultimate resolution of any pending or threatened actions of these actionstypes will have a material adverse effect on our financial position, results of operations, liquidity, or capital resources. However, if there is a significant increase in the number of these claims, or one or more successful claims under whichif we incur greater liabilities than we currently anticipate under one or more claims, it could materially and adversely affect our business, financial condition, results of operations and cash flows.

9

Accrual for Estimated Liability
In relation to various legal matters, we had an accrued legal liability balance of $21,587 and $7,640 included within accrued liabilities on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively.
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12. Debt
As of March 31, 2024, we had a $500,000 revolving credit facility with JPMorgan Chase Bank (“JPMorgan”) as administrative agent. Borrowings on the credit facility bear interest at a rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 1.475%, which is subject to increase due to changes in our total leverage ratio as defined in the credit agreement. We are also obligated to pay a commitment fee of 0.175% per year for unused amounts under the credit facility, which also may increase due to changes in our total leverage ratio. Further, we are subject to certain covenants defined in the credit agreement, which include maintaining a total leverage ratio of less than 3.0x, maintaining a consolidated fixed charge coverage ratio of greater than 1.5x, and limiting us from incurring additional indebtedness in certain circumstances. We had no outstanding borrowings under the credit facility and were in compliance with all covenants as of March 31, 2024 and December 31, 2023, respectively.
13. Related Party Transactions
As of March 31, 2024, we owned approximately 10.2% of the common stock outstanding of Tractor. As we are a significant customer of Tractor and maintain board representation, we are accounting for our investment under the equity method. Accordingly, we have identified Tractor as a related party. We purchase product from the supplier for sale to customers in our restaurants. During the three months ended March 31, 2024 and 2023, purchases from the supplier were $11,554 and $9,228, respectively.
We are an investor in Vebu Inc. (“Vebu”), a developer of restaurant automation technology. As we are a significant customer of Vebu and maintain board representation, we have determined that we maintain significant influence over Vebu. During the three months ended March 31, 2024 and 2023, purchases from Vebu were $0 and $248, respectively.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this report including projections of our expected comparable restaurant sales increases for 2017, projected new restaurant openings for 2017 and 2018, discussion of the potential impacts of our roll-out of queso and of menu price increases, projections of expected changes in food, beverage and packaging costs and marketing and promotional spend, estimates of our effective tax rates, and discussion of liabilities associated with the recent data security incident, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.1995, including statements about the number of new restaurants we expect to open and the number with Chipotlanes, our expectation to generate positive cash flow for the foreseeable future, our ability to manage risks in our supply chain, our plans for continuing stock buybacks and the period of time during which our cash and short-term investment will fund our operations. We use words such as “anticipate”, “believe”, “could”, “should”, “may”, “approximately”, “estimate”, “expect”, “intend”, “may”, “predict”, “project”, “target”, and similar terms and phrases, including references to assumptions, to identify forward-looking statements. TheseThe forward-looking statements in this report are based on currently available operating, financial and competitive information available to us as of the date any such statements are made,of this filing and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include,statements, including but are not limited to: increasing wage inflation, including as a result of regulations such as California AB 1228, and the competitive labor market, which impacts our ability to attract and retain qualified employees and has resulted in occasional staffing shortages; the impact of any union organizing efforts and our responses to such efforts; increasing supply costs; risks of food safety incidents and food-borne illnesses; risks associated with our reliance on certain information technology systems and potential material failures or interruptions; privacy and cyber security risks, including risk of breaches, unauthorized access, theft, modification or destruction of guest or employee personal or confidential information stored on our network or the network of third party providers; the impact of competition, including from sources outside the restaurant industry; the financial impact of increasing our average hourly wages; the impact of federal, state or local government regulations relating to our employees, employment practices, restaurant design and construction, and the sale of food or alcoholic beverages; our ability to achieve our planned growth, such as the costs and availability of suitable new restaurant sites, construction materials and contractors; the expected costs and risks related to our international expansion through franchise restaurants in the Middle East; increases in ingredient and other operating costs due to inflation, global conflicts, climate change, our Food with Integrity philosophy, tariffs or trade restrictions; intermittent supply shortages relating to our Food with Integrity philosophy, rapid expansion and supply industry challenges; the uncertainty of our ability to achieve expected levels of comparable restaurant sales due to factors such as changes in consumers' perceptions of our brand, including as a result of actual or rumored food safety concerns or other negative publicity, decreased consumer spending (including as a result of higher inflation, mass layoffs, fear of possible recession and higher energy prices), or the inability to increase menu prices or realize the benefits of menu price increases; risks associated with our digital business, including risks arising from our reliance on third party delivery services; risks relating to litigation, including possible governmental actions and potential class action litigation related to food safety incidents, cybersecurity incidents, employment or privacy laws, advertising claims or other matters; and other risk factors described from time to time in our annual reportSEC reports, including our Annual Report on Form 10-K for the year ended December 31, 2016, as updated2023, and in Part II, Item 1A. of this report.

Overview

Steve Ells, our founder, Chairman and CEO, started Chipotleother reports filed with the idea that food served fast did not haveSEC, all of which are available on the investor relations page of our website at ir.Chipotle.com.

As of March 31, 2024, we operated 3,411 Chipotle restaurants throughout the United States and 68 international Chipotle restaurants. We manage our U.S. operations based on nine regions and aggregate our operations to be a typical fast food experience. Today, Chipotle continuesone reportable segment.
Throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” we commonly discuss the following key operating metrics which we believe will drive our financial results and long-term growth model. We believe these metrics are useful to offer a focused menuinvestors because management uses these metrics to assess the growth of burritos, tacos, burrito bowls,our business and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methodsthe effectiveness of our marketing and served in an interactive style allowing our customers to get what they want. Chipotle seeks out extraordinary ingredients that are not only fresh, but that are raised responsibly, with respect for the animals, land, and people who produce them. Chipotle prepares its food using real, whole ingredients and without the use of added colors, flavors or other additives typically found in fast food.

Throughout our historyoperational strategies:

Comparable restaurant sales
Restaurant operating costs as a public company, we have pursued a missionpercentage of total revenue
New restaurant openings
First Quarter 2024 Financial Highlights, year-over-year:
Total revenue increased 14.1% to change the way people think about and eat fast food. We have expanded our mission to: Ensure that better food, prepared from whole, unprocessed ingredients is accessible to everyone. Additionally, our focus during 2017 is to return to sales and profitability growth and restore our restaurant economic model.  To do so, we have a renewed focus on ensuring that every guest in every one of our restaurants is provided with an excellent customer experience.

2017 Highlights

Sales Trends. $2.7 billion

Comparable restaurant sales increases were 1.0% and 8.3%increased 7.0%
Diluted earnings per share was $13.01, a 23.9% increase from $10.50, which includes a $0.36 after-tax impact from an increase in legal reserves.
Sales Trends. Comparable restaurant sales increased 7.0% for the three and nine months ended September 30, 2017, respectively.  Our sales comparisons for the first nine months of 2017 were lapping an easier comparison dueMarch 31, 2024. The increase is primarily attributable to lower sales levels in the first six months of 2016. Additionally, sales comparisons for the three and nine months ended September 30, 2017, benefitted from lower revenue in the comparable periods of 2016 due to revenue deferrals for outstanding rewards under our limited-time Chiptopia Summer Rewards program (though the first quarter 2017 also benefitted from the recognition of a portion of the deferred revenue).  During the third quarter of 2017, increases in comparable restaurant sales were offset by adverse company-wide sales impacts resulting from news regarding a norovirus incident in Sterling, Virginia,higher transactions and, to a lesser extent, due to restaurant closures and lower customer traffic resulting from Hurricanes Harvey and Irma. We expect full year 2017 comparable restaurant sales increases to be around 6.5% including impacts from a menu pricean increase planned for the fourth quarter of 2017 and the roll-out of queso.in average check. Comparable restaurant sales represent the change in period-over-period sales for restaurants beginning in their 13th full calendar month of operation.  Average restaurant sales were $1.948 million as of September 30, 2017, increasing from $1.914 million as of September 30, 2016, but a decrease from $1.957 million as of June 30, 2017.  We define average restaurant sales as the average trailing 12-month salestotal revenue for restaurants in operation for at least 1213 full calendar months.

Digital sales represented 36.5% of total food and beverage revenue.

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Restaurant Operating Costs.  Our During the three months ended March 31, 2024, our restaurant operating costs (food, beverage and packaging; labor; occupancy; and other operating costs) aswere 72.5% of total revenue, a percentage of revenue decreased to 82.4% indecrease from 74.4% during the first ninethree months of 2017, as compared to 87.5% in the first nine months of 2016.ended March 31, 2023. The decrease was primarily due to lower marketing and promotional spend,driven by the benefit of sales leverage, labor efficiencies,partially offset by wage inflation and, lowerto a lesser extent, inflation across several food costs. Food costs were lower in the first nine months of 2017 despite significantly higher pricing of avocados during the third quarter of 2017.    

Restaurant Development. As of September 30, 2017, we had 2,374 restaurants in operation, including 2,330 Chipotle restaurants throughout the United States, 36 international Chipotle restaurants and 8 non-Chipotle restaurants. We opened 145 restaurants and we closed or relocated 21 restaurants during the nine months ended September 30, 2017, including the closure of all 15 ShopHouse Southeast Asian Kitchen restaurants. We expect new restaurant openings for the full year 2017 to be slightly below the low end of our previously-disclosed range of 195 to 210.  For 2018, we expect new restaurant openings in a range of approximately 130 to 150, as we focus our resources for the next 12 to 18 months on improving our operations and delivering an outstanding experience to every one of our guests.

Data Security Incident. As previously reported, in April 2017, our information security team detected unauthorized activity on the network that supports payment processing for our restaurants, and immediately began an investigation with the help of leading computer security firms. The investigation detected malware designed to access payment card data from cards used at point-of-sale devices at most Chipotle restaurants.

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The malware searched for track data, which may include cardholder name, card number, expiration date, and internal verification codes; however, no other customer information was affected. We have removed the malware from our systems and continue to evaluate ways to enhance our security measures.

Development. During the three months ended September 30, 2017,March 31, 2024, we recordedopened 47 new restaurants, which included 43 restaurants with a liabilityChipotlane. We are on track to open approximately 285-315 new restaurants in 2024. We expect that at least 80% of $30.0our new restaurants will include a Chipotlane.

Cultivate Next Fund. Our Cultivate Next Fund is a venture formed to make early-stage investments into strategically aligned companies that further our mission to Cultivate a Better World. The Fund has a size of $100.0 million, ($18.2which is financed almost entirely by Chipotle. As of March 31, 2024, we have made $34.0 million after tax) or $0.64 per basic and diluted earnings per share, as an estimate of potential losses associated with anticipated claims and assessments by payment card networks.  We may ultimately be subject to liabilities greater or less than the amount accrued.  In addition, legal claims have been made against us related toin investments through this matter, and are further discussed in Note8. “Commitments and Contingencies” withinItem 1. “Financial Statements.”

Fund.

Restaurant Activity

The following table details restaurant unit data for the periods indicated:

indicated.



 

 

 

 

 

 

 



 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Beginning of period

2,339 

 

2,124 

 

2,250 

 

2,010 

Openings

38 

 

55 

 

145 

 

171 

Relocations/closures

(3)

 

(1)

 

(6)

 

(3)

ShopHouse closures

 -

 

 -

 

(15)

 

 -

Total restaurants at end of period

2,374 

 

2,178 

 

2,374 

 

2,178 
Three months ended March 31,
20242023
Beginning of period3,437 3,187 
Chipotle openings47 40 
Non-Chipotle openings
Chipotle permanent closures(3)
Chipotle relocations(2)(4)
Total restaurants at end of period3,479 3,224 

Results of Operations

Our results of operations as a percentage of total revenue and period-over-period changeschange are discussed in the following section. As our business grows and we open more restaurants and hire more employees, our aggregate
Revenue
Three months ended March 31,Percentage
20242023change
(dollars in millions)
Food and beverage revenue$2,684.4 $2,351.0 14.2 %
Delivery service revenue17.4 17.6 (1.0 %)
Total revenue$2,701.8 $2,368.6 14.1 %
Average restaurant sales (1)
$3.082 $2.892 6.6 %
Comparable restaurant sales increase7.0%10.9%
Transactions5.4%4.1%
Average check1.6%6.8%
Menu price increase2.7%10.1%
Check mix(1.1 %)(3.3 %)
(1)Average restaurant operating costs and depreciation and amortization generally increase.

Revenue



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

%



2017

 

2016

 

increase

 

2017

 

2016

 

increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Revenue

$

1,128.1 

 

$

1,037.0 

 

8.8% 

 

$

3,366.3 

 

$

2,869.8 

 

17.3% 

Average restaurant sales

$

1.948 

 

$

1.914 

 

1.8% 

 

$

1.948 

 

$

1.914 

 

1.8% 

Comparable restaurant sales increases (decreases)

 

1.0% 

 

 

(21.9%)

 

 

 

 

8.3% 

 

 

(24.9%)

 

 

Number of restaurants as of the end of the period

 

2,374 

 

 

2,178 

 

9.0% 

 

 

2,374 

 

 

2,178 

 

9.0% 

Number of restaurants opened in the period

 

38 

 

 

55 

 

 

 

 

145 

 

 

171 

 

 

The most significant factor contributingsales refer to the increaseaverage trailing 12-month food and beverage sales for restaurants in operation for at least 12 full calendar months.

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The following is a summary of the change in restaurant sales for the period indicated:
Three months ended
(dollars in millions)
For the period ending March 31, 2023$2,368.6 
Change from:
Comparable restaurant sales155.7 
Restaurant not yet in comparable base opened in 202413.5 
Restaurant not yet in comparable base opened in 2023164.9 
Other(0.9)
For the period ending March 31, 2024$2,701.8 
Food, Beverage and Packaging Costs
Three months ended March 31,Percentage
20242023change
(dollars in millions)
Food, beverage and packaging$779.1 $692.6 12.5 %
As a percentage of total revenue28.8 %29.2 %(0.4 %)
Food, beverage and packaging costs decreased 0.4% as a percentage of total revenue for the three months ended September 30, 2017, was $84.9 million in revenueMarch 31, 2024 compared to the three months ended March 31, 2023, including a 0.9% benefit from restaurants not yetmenu price increases in the comparable base,prior year. This benefit was partially offset by inflation across several ingredient costs, primarily beef and produce, and higher incidence of which $46.1 million was attributable to restaurants opened in 2017. Comparable restaurant sales increased $6.2 million. For the nine months ended September 30, 2017, revenuebeef from restaurants not yet in the comparable restaurant base contributed $268.0 million to the revenue increase, of which $91.3 million was attributable to restaurants opened in 2017, and comparable restaurant sales increased $228.4 million. For the nine months ended September 30, 2017, the increase in comparable restaurant sales was attributable to an increase in the number of paid transactions and an increase in paid average check due to fewer promotions during the first nine months of 2017. 

Food, Beverage and Packaginga Braised Beef Barbacoa marketing initiative.

Labor Costs



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Food, beverage and packaging

$

394.6 

 

$

363.9 

 

8.4% 

 

$

1,155.5 

 

$

1,000.0 

 

15.6% 

As a percentage of revenue

 

35.0% 

 

 

35.1% 

 

 

 

 

34.3% 

 

 

34.8% 

 

 

Three months ended March 31,Percentage
20242023change
(dollars in millions)
Labor costs$659.5 $583.8 13.0 %
As a percentage of total revenue24.4 %24.6 %(0.2 %)

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Food, beverage and packagingLabor costs remained consistentdecreased 0.2% as a percentage of total revenue for the three months ended September 30, 2017. The benefit of the menu price increases taken in select restaurants during the second quarter of 2017 and decreased paper cost and usage were offset by higher avocado and beef prices, as well as steak making up a higher portion of our product mixMarch 31, 2024 compared to the third quarterthree months ended March 31, 2023, including 1.1% from sales leverage, partially offset by 0.6% due to restaurant wage inflation and, to a lesser extent, increased performance-based compensation.

In April 2024, the minimum wage for restaurants like Chipotle in California increased to $20 per hour, resulting in a nearly 20% increase of 2016.  The decreaseour labor costs in food, beverage and packingCalifornia. Subsequently, we increased menu prices by 6 to 7% in our California restaurants to mitigate our increased costs in dollar terms.
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Table of Contents
Occupancy Costs
Three months ended March 31,Percentage
20242023change
(dollars in millions)
Occupancy costs$135.7 $121.9 11.3 %
As a percentage of total revenue5.0 %5.1 %(0.1 %)
Occupancy costs decreased 0.1% as a percentage of total revenue for the three months ended March 31, 2024 compared to the ninethree months ended September 30, 2017, wasMarch 31, 2023, respectively, primarily due primarily bringing the preparation of lettuce and bell peppers back into our restaurants after using pre-cut produce during portions of 2016, reduced testing and waste costs, and the benefit of the menu price increase that went into effect during the second quarter of 2017.  The decrease wasto sales leverage, partially offset by higher avocado prices. Lower projected avocado prices are expected to driveincreased occupancy expense associated with existing restaurants.
Other Operating Costs
Three months ended March 31,Percentage
20242023change
(dollars in millions) 
Other operating costs$385.8 $363.2 6.2 %
As a percentage of total revenue14.3 %15.3 %(1.0 %)
Other operating costs decreased food costs1.0% as a percentage of total revenue during the fourth quarter of 2017, and we expect food costs for the full yearthree months ended March 31, 2024 compared to be consistent with the first ninethree months ended March 31, 2023, including 0.6% of 2017.

Labor Costs

sales leverage, 0.2% of lower delivery expenses and 0.2% of lower advertisement and marketing promotions expense.



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Labor costs

$

306.9 

 

$

286.1 

 

7.2% 

 

$

900.6 

 

$

820.8 

 

9.7% 

As a percentage of revenue

 

27.2% 

 

 

27.6% 

 

 

 

 

26.8% 

 

 

28.6% 

 

 

Labor costs

General and Administrative Expenses
Three months ended March 31,Percentage
20242023change
(dollars in millions) 
General and administrative expenses$204.6 $148.3 37.9 %
As a percentage of total revenue7.6 %6.3 %1.3 %
Following is a summary of the change in general and administrative expense for the period indicated:
Three months ended
(dollars in millions)
For the period ending March 31, 2023$148.3 
Change from:
Conferences, primarily biennial All Managers’ Conference18.5 
Stock-based compensation, primarily performance-based awards15.1 
Legal contingencies13.4 
Outside services related to corporate initiatives4.1 
Wages3.0 
Other2.2 
For the period ending March 31, 2024$204.6 
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Table of Contents
Depreciation and Amortization
Three months ended March 31,Percentage
20242023change
(dollars in millions)
Depreciation and amortization$83.2 $76.6 8.7 %
As a percentage of total revenue3.1 %3.2 %(0.1 %)
Depreciation and amortization decreased 0.1% as a percentage of total revenue decreased for the three months ended September 30, 2017,March 31, 2024 compared to the three months ended March 31, 2023, primarily due to labor efficiencies resulting from more efficient crew deployment and fewer managers in each of our restaurants, partially offset by wage inflation. Labor costs as a percentage of revenue decreased for the nine months ended September 30, 2017 due to labor efficiencies from more efficient crew deployment and fewer managers in each of our restaurants, as well as sales leverage, partially offset by wage inflation. Labor efficienciesincreased depreciation expense associated with new restaurants.
Interest and Other Income, Net
Three months ended March 31,Percentage
20242023change
(dollars in millions)
Interest and other income, net$19.4 $8.9 116.4 %
As a percentage of total revenue0.7 %0.4 %0.3 %
Interest and other income, net increased in dollar terms for the three and nine months ended September 30, 2017 benefitted from abnormally high labor expensesMarch 31, 2024 compared to the three months ended March 31, 2023, primarily due to increased interest income on our investments in the comparable 2016 periods asU.S. Treasury securities, money market funds and time deposits due to a result of being fully staffed during the heavy sales promotional activity we were conducting during those periods.

Occupancy Costs

higher average investment balance and higher interest rates.



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Occupancy costs

$

83.2 

 

$

74.2 

 

12.1% 

 

$

242.5 

 

$

217.1 

 

11.7% 

As a percentage of revenue

 

7.4% 

 

 

7.2% 

 

 

 

 

7.2% 

 

 

7.6% 

 

 

Occupancy costs as a percentage of revenue increased

Provision for Income Taxes
Three months ended March 31,Percentage
20242023change
(dollars in millions) 
Provision for income taxes$101.4 $84.9 19.4 %
Effective income tax rate22.0 %22.5 %n/m*
*Not meaningful
The effective income tax rate decreased 0.5% for the three months ended September 30, 2017, primarily due to lower average daily restaurant sales due to new restaurants opening at lower sales volumes than restaurants in the comparable base, and those sales volumes being applied across a partially fixed-cost base. Occupancy costs as a percentage of revenue decreased for the nine months ended September 30, 2017, primarily due to sales leverage on a partially fixed-cost base.

Other Operating Costs



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

decrease

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Other operating costs

$

162.3 

 

$

166.0 

 

(2.2%)

 

$

476.6 

 

$

473.4 

 

0.7% 

As a percentage of revenue

 

14.4%��

 

 

16.0% 

 

 

 

 

14.2% 

 

 

16.5% 

 

 

Other operating costs include, among other items, marketing and promotional costs, bank and credit card fees, and restaurant utilities and maintenance costs. Other operating costs as a percentage of revenue decreased for the three and nine months ended September 30, 2017 due primarily to decreased marketing and promotional spend, and decreased kitchen supplies expense. While marketing and promotional spend decreased to 3.4% of revenue for the first nine months of 2017, asMarch 31, 2024 compared to 5.2% for the first nine months of 2016, it remains above historical levels as we continue our efforts to drive customer traffic. We expect to increase marketing and advertising expenses in the fourth quarter of 2017 as we continue national television advertising, and as a result, we expect full year 2017 other operating costs as a percentage of revenue to be higher in the fourth quarter and the full year 2017 than they were in the first nine months of 2017, but lower than the full year 2016.

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Table of Contents

General and Administrative Expenses



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

General and administrative expense

$

99.2 

 

$

78.4 

 

26.5% 

 

$

238.7 

 

$

211.2 

 

13.0% 

As a percentage of revenue

 

8.8% 

 

 

7.6% 

 

 

 

 

7.1% 

 

 

7.4% 

 

 

General and administrative expense increased during the three and nine months ended September 30, 2017, due to recording a liability of $30.0 million, as an estimate of potential losses associated with anticipated claims and assessments by payment card networks, for the data security incident that occurred in the first six months of 2017. For the three months ended September 30, 2017, the increase was partially offset by a decrease in meeting costs because of the bi-annual All Managers Conference held in September 2016. Additionally, for the nine months ended September 30, 2017, higher non-cash stock-based compensation expense and increased bonus costs were more than offset by lower meeting and legal costs.  The increase in stock-based compensation expense during 2017 was primarily a result of a cumulative reduction of expense in the first quarter of 2016 for performance share awards that were no longer expected to vest.

Depreciation and Amortization



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Depreciation and amortization

$

41.5 

 

$

37.4 

 

11.0% 

 

$

121.9 

 

$

108.3 

 

12.6% 

As a percentage of revenue

 

3.7% 

 

 

3.6% 

 

 

 

 

3.6% 

 

 

3.8% 

 

 

For the three months ended September 30, 2017, depreciation and amortization remained relatively consistent as a percent of revenue. For the nine months ended September 30, 2017, depreciation and amortization decreased as a percentage of revenue due to sales leverage on a partially fixed-cost base. 

Loss on Disposal and Impairment of Assets



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

decrease

 

2017

 

2016

 

% decrease



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Loss on disposal and impairment of assets

$

6.7 

 

$

16.6 

 

(59.4%)

 

$

10.0 

 

$

22.0 

 

(54.6%)

As a percentage of revenue

 

0.6% 

 

 

1.6% 

 

 

 

 

0.3% 

 

 

0.8% 

 

 

Loss on disposal and impairment of assets decreased in dollar terms for the three and nine months ended September 30, 2017March 31, 2023, primarily due to a non-cash impairment chargean increase in the third quarter of 2016 to write-down substantially all of the value of the long-lived assets of our ShopHouse restaurants that occurred during the third quarter of 2016. In 2017, we recorded losses related to the closure of a small number of underperforming Chipotle restaurants, the replacement of certain kitchen equipment, and assets that were damaged by natural disasters occurring during the quarter.

Provision for Income Taxes



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Provision for income taxes

$

12.5 

 

$

2.6 

 

382.2% 

 

$

81.8 

 

$

0.6 

 

n/m*

Effective tax rate

 

39.0% 

 

 

25.0% 

 

 

 

 

38.2% 

 

 

8.4% 

 

 

*Not meaningful

 For the full year 2017, we estimate our effective tax rate will be approximately 39.1% compared to 40.8% for the full year 2016. The lower 2017 estimated annual effective tax rate is due to a decrease in the state tax rate. The effective tax rate for the nine months ended September 30, 2017, is lower than the estimated annual rate due to non-recurring adjustments related to state income taxes and excess tax

13


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deductions for stock compensation.  The adoption on January 1, 2017, of ASU 2016-09 will subject our tax rate to quarterly volatilitybenefits from the effect of stock awardoption exercises and vesting activities.

equity vesting.

Seasonality

Seasonal factors cause our profitability to fluctuate from quarter to quarter. Historically, our average daily restaurant sales are lower and net income has generally beenare lower in the first and fourth quarters due, in part, to the holiday season and because fewer people eat out during periods of inclement weather (the winter months) than during periods of mild or warm weather (the spring, summer and fall months). Other factors also have a seasonal effect on our results. For example, restaurants located near colleges and universities generally do more business during the academic year. Seasonal factors, however, might be moderated or outweighed by other factors that may influence our quarterly results, such as unexpected publicity impacting our business in a positive or negative way, as well asworldwide health pandemics, impact of inflation on consumer spending, fluctuations in food or packaging costs, or the timing of menu price increases.increases or promotional activities and other marketing initiatives. The number of trading days in a quarter can also affect our results, although, on an overall annual basis, changes in trading days do not have a significant impact.

Our quarterly results are also affected by other factors such as the amount and timing of non-cash stock-based compensation expense and related tax rate impacts, litigation, settlement costs and related legal expenses, impairment charges and non-operating costs, timing of marketing or promotional expenses, the number and timing of new restaurants opened in a quarter, and anticipated and unanticipated events.closure of restaurants. New restaurants typically have lower marginshigher operating costs following opening as a resultbecause of the expenses associated with their opening new restaurants and their operating inefficiencies in the months immediately following opening. Accordingly, results for a particular quarter are not necessarily indicative of results to be expected for any other quarter or for any year.

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Table of Contents
Liquidity and Capital Resources

Our primary liquidity

Cash and capital requirements are for new restaurant construction, working capital and general corporate needs. Investments
As of September 30, 2017, weMarch 31, 2024, we had a cash and short-term investmentmarketable investments balance of $548.4$2.1 billion, non-marketable investments of $76.0 million that and $26.1 million of restricted cash. After funding the current operations in our restaurants and support centers, the first planned use of our cash flow from operations is to provide capital for the continued investment in new restaurant construction. In addition to continuing to invest in our restaurant expansion, we expect to utilize along with cash flow from operations to provide capital to support the growth of our business (primarily through opening restaurants), toto: repurchase additional shares of our common stock subject to market conditions, toconditions; invest in, maintain, and refurbish our existing restaurantsrestaurants; and for general corporate purposes. As of September 30, 2017, $95.4March 31, 2024, $399.1 million remained available under previously-announced repurchase authorizations. On October 24, 2017, we announced that our Boardfor repurchases of Directors authorized the expenditure of an additional $100 million to repurchase shares of our common stock. Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions.
Borrowing Capacity
As of March 31, 2024, we had $500.0 million of undrawn borrowing capacity under a line of credit facility.
Use of Cash
We believe that cash from operations, together with our cash and investment balances, will be enoughsufficient to meet ongoing capital expenditures, working capital requirements and other cash needs for the foreseeable future.

future. Assuming no significant declines in comparable restaurant sales, we expect we will generate positive cash flow for the foreseeable future.

We haven’thave not required significant working capital because customers generally pay using cash or credit and debit cards and because our operations do not require significant receivables, nor do they require significant inventories due, in part, to our use of various fresh ingredients. In addition, we generally have the right to pay for the purchase of food, beveragebeverages and supplies some timesometime after the receipt of those items, generally within ten days, thereby reducing the need for incremental working capital to support our growth.

Off-Balance Sheet Arrangements

As

Cash Flows
Cash provided by operating activities was $569.2 million for the three months ended March 31, 2024, compared to $455.0 million for the three months ended March 31, 2023. The increase was primarily due to higher net earnings and, to a lesser extent, net cash changes in operating assets and liabilities.
Cash used in investing activities was $301.0 million for the three months ended March 31, 2024, compared to $235.5 million for the three months ended March 31, 2023. The change was primarily associated with a $53.2 million increase in investment purchases net of September 30, 2017, we had no off-balance sheet arrangements or obligations.

investment maturities.

Cash used in financing activities was $100.1 million for the three months ended March 31, 2024, compared to $193.9 million for the three months ended March 31, 2023. The change was primarily due to decreased treasury stock repurchases of $99.7 million.
Critical Accounting Estimates

Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or factors. We had no significant changes into our critical accounting estimates since our last annual report. Our critical accounting estimates are identified andas described in our annual report on Form 10-K for the year ended December 31, 2016.

2023.
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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURESDISCLOSURE ABOUT MARKET RISK

Commodity Price Risks

We are exposed to commodity price risks. Many of the ingredients we use to prepare our food, as well as our packaging materials as well asand utilities to run our restaurants, are commoditiesingredients or ingredientscommodities that are affected by the price of other commodities, exchange rates, foreign demand, weather, seasonality, production, availability and other factors outside our control. We work closely with our suppliers and use a mix of forward pricing protocols under which we agree with our supplier on fixed prices for deliveries at some time in the future, fixed pricing protocols under which we agree on a fixed price with our supplier for the duration of that protocol, and formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices. However,prices or based on changes in industry indices, and range forward protocols under which we agree on a majorityprice range for the duration of the dollar value of goods

14


Table of Contents

purchased by us is effectively at spot prices.that protocol. Generally, our pricing protocols with suppliers can remain in effect for periods ranging from one to 24 months, depending on the outlook for prices of the particular ingredient. In severalsome cases, we have minimum purchase obligations. We have tried to increase, where necessary,practical, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility. Wevolatility, and we follow industry news, trade issues, exchange rates, foreign demand, weather, crises and other world events that may affect our ingredient prices. Increases in ingredient prices could adversely affect our results if we choose for competitive or other reasons not to increase menu prices at the same rate at which ingredient costs increase, or if menu price increases result in customer resistance.

We also could experience shortages of key ingredients for many unforeseen reasons, such as crop damage due to inclement weather, if our suppliers need to close or restrict operations, or due to industry-wide shipping and freight delays.

Changing Interest Rates

We are also exposed to interest rate risk through fluctuations of interest rates on our investments. As of March 31, 2024, we had $2.2 billion in cash and cash equivalents, current and long-term investments, and restricted cash, of which the substantial majority are interest bearing. Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations. As of September 30, 2017, we had $475.4 million in investments and interest-bearing cash accounts, including insurance-related restricted trust accounts classified in other assets, and $66.8 million in accounts with an earnings credit we classify as interest income, which combined earned a weighted-average interest rate of 0.87%.

Foreign Currency Exchange Risk

A portion of our operations consistsconsist of activities outside of the U.S. and we have currency risk on the transactions in other currencies and translation adjustments resulting from the conversion of our international financial results into the U.S. dollar. However, a substantial majority of our operations and investment activities are transacted in the U.S., and therefore our foreign currency risk is not material at this date.

ITEM 4.CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial and Administrative Officer, as appropriate, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures
As of September 30, 2017,March 31, 2024, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial and Administrative Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial and Administrative Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting
There were no changes during the three monthsfiscal quarter ended September 30, 2017,March 31, 2024, in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II

ITEM 1.LEGAL PROCEEDINGS

For information regarding legal proceedings, see Note 8. “Commitments11. “Commitments and ContingenciesContingencies” in our notes to the condensed consolidated financial statements included in Item 1. Financial Statements”.  

“Financial Statements.”
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Table of Contents

ITEM 1A.RISK FACTORS

There have been no material changes from the risk factors previously disclosed in our risk factors since our annual reportAnnual Report on Form 10-K for the year ended December 31, 2016, except as set forth below.

We may be harmed by security risks we face in connection with our electronic processing and transmission of confidential customer and employee information.

We accept electronic payment cards for payment in our restaurants. During 2016 approximately 70% of our sales were attributable to credit and debit card transactions, and credit and debit card usage could continue to increase. A number of retailers have experienced actual or potential security breaches in which credit and debit card information may have been stolen, including a number of highly publicized incidents with well-known retailers in recent years.

In April 2017, our information security team detected unauthorized activity on the network that supports payment processing for our restaurants, and immediately began an investigation with the help of leading computer security firms.  We also self-reported the issue to payment card processors and law enforcement.  Our investigation detected malware designed to access payment card data from cards used at point-of-sale

2023.

15


Table of Contents

devices at most Chipotle restaurants, primarily in the period from March 24, 2017 through April 18, 2017.  We have removed the malware from our systems and continue to evaluate ways to enhance our security measures. However, we expect to be subject to payment card network assessments and may incur regulatory fines or penalties, for which our insurance coverage is limited, and as a result, we recorded a $30 million estimated liability. We may ultimately be subject to liabilities greater than or less than the amount accrued. See Note 8. “Commitments and Contingencies” within Item 1. “Financial Statements,” for further discussion of potential liabilities and pending litigation filed against us in connection with this incident.

We may be subject to additional lawsuits or other proceedings in the future relating to the incident or any future incidents in which payment card data may have been compromised. Proceedings related to theft of credit or debit card information may be brought by payment card providers, banks and credit unions that issue cards, cardholders (either individually or as part of a class action lawsuit), or federal and state regulators. Any such proceedings could distract our management from running our business and cause us to incur significant unplanned losses and expenses. Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects. 

We are also required to collect and maintain personal information about our employees, and we collect information about customers as part of some of our marketing programs as well. The collection and use of such information is regulated at the federal and state levels, by the European Union and its member states, and the regulatory environment related to information security and privacy is increasingly demanding. At the same time, we are increasingly relying on cloud computing and other technologies that result in third parties holding significant amounts of customer or employee information on our behalf. We have seen an increase over the past several years in the frequency and sophistication of attempts to compromise the security of several of these systems. If the security and information systems that we or our outsourced third party providers use to store or process such information are compromised or if we, or such third parties, otherwise fail to comply with these laws and regulations, we could face litigation and the imposition of penalties that could adversely affect our financial performance. Our reputation as a brand or as an employer could also be adversely affected from these types of security breaches or regulatory violations, which could impair our sales or ability to attract and keep qualified employees.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer

The table below reflects shares of common stock we repurchased during the thirdfirst quarter of 2017.



 

 

 

 

 

 

 

 

 

 

 



 

 

Total Number of Shares Purchased

 

Average Price Paid Per Share

 

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)

 

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2)

July

 

 

111,385 

 

$

375.36 

 

111,385 

 

$

156,117,762 



Purchased 7/1 through 7/31

 

 

 

 

 

 

 

 

 

 

August

 

 

156,772 

 

$

322.73 

 

156,772 

 

$

105,521,981 



Purchased 8/1 through 8/31

 

 

 

 

 

 

 

 

 

 

September

 

 

32,405 

 

$

311.59 

 

32,405 

 

$

95,424,817 



Purchased 9/1 through 9/30

 

 

 

 

 

 

 

 

 

 

Total

 

 

300,562 

 

$

341.03 

 

300,562 

 

$

95,424,817 

(1)

Shares were repurchased pursuant to repurchase programs announced on January 11, 2017 and May 23, 2017.

2024.

(2)

This column does not include an additional $100 million in authorized repurchases announced on October 24, 2017. Each repurchase program has no expiration date. Authorization of repurchase programs may be modified, suspended or discontinued at any time.

Total Number of Shares PurchasedAverage Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January9,270$2,272.439,270$403,041,527
Purchased 1/1 through 1/31
February1,509$2,613.411,509$399,097,896
Purchased 2/1 through 2/29
March-$--$399,097,896
Purchased 3/1 through 3/31
Total10,779$2,320.1610,779
(1)Shares were repurchased pursuant to repurchase programs announced on October 26, 2023.
(2)There is no expiration date for this program. The authorization to repurchase shares will end when we have repurchased the maximum amount of shares authorized, or we have determined to discontinue such repurchases.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

None.

16

Adoption or Termination of 10b5-1 Trading Plans

During the quarter ended March 31, 2024, no director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K.
20

ITEM 6.EXHIBITS

EXHIBIT INDEX



 

 

 

 

 

 



 

 

 

 

 

 



 

Description of Exhibit Incorporated Herein by Reference

Exhibit Number

Exhibit Description

Form

File No.

Filing Date

Exhibit Number

Filed Herewith

3.1 

Amended and Restated Certificate of Incorporation of Chipotle Mexican Grill, Inc.

10-Q

001-32731

October 26, 2016

3.1

 

3.2 

Chipotle Mexican Grill, Inc. Amended and Restated Bylaws

8-K

001-32731

October 6, 2016

3.1

 

4.1 

Form of Stock Certificate for Shares of Common Stock

10-K

001-32731

February 10, 2012

4.1

 

31.1 

Certification of Chief Executive Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

-

-

-

-

X

31.2 

Certification of Chief Financial Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

-

-

-

-

X

32.1 

Certification of Chief Executive Officer and Chief Financial Officer of Chipotle Mexican Grill, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

-

-

-

-

X

101 

The following financial statements, formatted in XBRL: (i) Condensed Consolidated Balance Sheet as of September 30, 2017 and December 31, 2016, (ii) Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2017 and 2016, (iii) Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016, (iv) Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 and 2016; and (v) Notes to the Condensed Consolidated Financial Statements

-

-

-

-

X



 

 

 

 

 

 

Description of Exhibit Incorporated Herein by Reference
Exhibit NumberExhibit DescriptionFormFile No.Filing DateExhibit NumberFiled Herewith
10.1†----X
10.2†----X
10.3†----X
10.4†----X
31.1----X
31.2----X
32.1----X
101.INSInline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)----X
101.SCHInline XBRL Taxonomy Extension Schema Document----X
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document----X
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document----X
101.LABInline XBRL Taxonomy Extension Label Linkbase Document----X
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document----X
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)----X

17

†- Management contracts and compensatory plans or arrangements required to be filed as exhibits.
21

Table of Contents

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.

CHIPOTLE MEXICAN GRILL, INC.

By:

/S/ JOHN R. HARTUNG

Name:

John R. Hartung

Title:

Chief Financial and Administrative Officer (principal financial
officer and duly authorized signatory for the registrant)

Date: October 24, 2017

April 25, 2024

18

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