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SEC Filings

10-Q
CHIPOTLE MEXICAN GRILL INC filed this Form 10-Q on 07/26/2017
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Depreciation and Amortization  





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended June 30,

 

%

 

Six months ended June 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Depreciation and amortization

$

41.1 

 

$

36.1 

 

13.9% 

 

$

80.4 

 

$

70.9 

 

13.4% 

As a percentage of revenue

 

3.5% 

 

 

3.6% 

 

 

 

 

3.6% 

 

 

3.9% 

 

 



For the three and six months ended June 30, 2017, depreciation and amortization decreased as a percentage of revenue due to sales leverage on a partially fixed-cost base.

Gain / Loss on Disposal and Impairment of Assets







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended June 30,

 

%

 

Six months ended June 30,

 

 



2017

 

2016

 

decrease

 

2017

 

2016

 

% decrease



(dollars in millions)

 

 

 

(dollars in millions)

 

 

(Gain) loss on disposal and impairment of assets

$

(0.4)

 

$

3.2 

 

(112.0%)

 

$

3.3 

 

$

5.4 

 

(39.6%)

As a percentage of revenue

 

0.0% 

 

 

0.3% 

 

 

 

 

0.1% 

 

 

0.3% 

 

 



During the second quarter of 2017, we recorded a gain on disposal and impairment of assets as a result of the completion of the assignment and termination of all the ShopHouse leases, including the sale of leasehold improvements and equipment. For the three and six months ended June 30, 2017, the gain was offset (though in the three month period, the offset was only partial) by costs associated with the closure of Chipotle restaurants, as well as fire damage at a restaurant.

Provision for Income Taxes  





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended June 30,

 

%

 

Six months ended June 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Benefit (provision) for income taxes

$

(41.0)

 

$

(16.1)

 

155.2% 

 

$

(69.3)

 

$

2.0 

 

n/m*

Effective tax rate

 

38.1% 

 

 

38.6% 

 

 

 

 

38.0% 

 

 

70.1% 

 

 

*Not meaningful

 For the full year 2017, we estimate our effective tax rate will be approximately 38.4% 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 rates for the three and six months ended June 30, 2017 are lower than the estimated annual rate due to non-recurring adjustments related to state income taxes and excess tax deductions for stock compensation.  The adoption on January 1, 2017, of ASU 2016-09 will subject our tax rate to quarterly volatility from the effect of stock award exercises and vesting activities.

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 been 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 as fluctuations in food or packaging costs or the timing of menu price increases. 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, the number of new restaurants opened in a quarter, and anticipated and unanticipated events. New restaurants typically have lower margins following opening as a result of the expenses associated with opening new restaurants and their operating inefficiencies in the months immediately following opening. In addition, unanticipated events also impact our results. Accordingly, results for a particular quarter are not necessarily indicative of results to be expected for any other quarter or for any year.  

12

 


 

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