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SEC Filings

S-1/A
CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/05/2005
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opening of stores in more expensive locations such as New York City. As a percentage of total revenue, occupancy costs remained flat at 7.6%.

        Other Operating Costs.    The $13.3 million period-to-period increase in other operating costs resulted primarily from the opening of new stores in the last three months of 2004 and the first nine months of 2005. As a percentage of total revenue, other operating costs declined to 13.1% in the first nine months of 2005 from 13.4% in the prior period, primarily due to the effect of higher average store sales on a partially fixed-cost base and improvements in store operations over time.

        General and Administrative Expenses.    The increase in general and administrative expenses primarily resulted from hiring more employees as we grew. As a percentage of total revenue, these expenses decreased to 8.2% in the first nine months of 2005 from 8.5% in the comparable 2004 period, due primarily to the effect of higher average store sales on a partially fixed-cost base.

        Depreciation and Amortization.    Depreciation and amortization increased primarily due to stores opened in the last three months of 2004 and the first nine months of 2005. As a percentage of total revenue, depreciation and amortization decreased from 4.6% to 4.5%.

        Pre-Opening Costs.    Pre-opening costs decreased principally because there were fewer store openings in the first nine months of 2005 than in the comparable 2004 period.

        Loss on Disposal of Assets.    The increase of $0.4 million in loss on disposal of assets was largely due to additional write-offs associated with investigating potential store sites that we considered but subsequently rejected, as well as write-offs of obsolete equipment as a result of software upgrades.

        Net Interest Expense.    The increase in interest expense (net of interest income) was due to higher average borrowings from McDonald's in the first nine months of 2005 than in the comparable 2004 period, as McDonald's did not make any equity contributions in the first nine months of 2005.

        Benefit for Income Taxes.    During the first nine months of 2005, we determined that it was more likely than not that we would realize our deferred tax assets and we reversed our valuation allowance. The benefit from the reduction of the valuation allowance, excluding the allowance on SRLY losses, was partially offset by our current tax expense, which resulted in the realization of a net tax benefit of $10.8 million. The reduction of the valuation allowance for the SRLY losses during the first nine months of 2005 reduced goodwill recorded in conjunction with McDonald's acquisition of us.

    Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

        The table below presents our operating results for the years ended December 31, 2003 and 2004 and the related year-to-year changes:

 
  Year Ended December 31,
   
   
 
 
  Increase/
(Decrease)

  % Increase/
(Decrease)

 
 
  2003
  2004
 
 
  (in millions, except percentages)

 
Restaurant sales   $ 314.0   $ 468.6   $ 154.6   49.2 %
Food, beverage and packaging costs     104.9     154.1     49.2   46.9  
Labor costs     94.0     139.5     45.5   48.4  
Occupancy costs     25.6     36.2     10.6   41.5  
Other operating costs     43.5     64.3     20.8   47.7  
General and administrative expenses     34.2     44.8     10.6   31.1  
Depreciation and amortization.     15.1     21.8     6.7   44.5  
Pre-opening costs     1.6     2.2     0.6   34.4  
Loss on disposal of assets     4.5     1.7     (2.8 ) (62.7 )
Net interest income     0.2         (0.2 ) n/a  

43


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