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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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        General and Administrative Expenses.    The increase in general and administrative expenses was mainly the result of hiring more employees as we grew and increased marketing expenses. As a percentage of total revenue, these expenses decreased to 10.8% in 2003 from 12.6% in 2002 as a result of our ability to further leverage our existing corporate infrastructure over more stores and the impact of higher average store sales.

        Depreciation and Amortization.    Depreciation and amortization increased primarily due to stores opened in 2003 and the full-year impact in 2003 of stores opened throughout 2002. As a percentage of total revenue, depreciation and amortization decreased to 4.8% in 2003 from 5.5% in 2002, largely as a result of the effect of higher average store sales.

        Pre-Opening Costs.    The increase in pre-opening costs was primarily a result of an increased number of store openings in 2003 compared to 2002, as well as an increase in average per-store opening costs in 2003 in order to promote brand awareness.

        Loss on Disposal of Assets.    A significant portion of the increase in loss on disposal of assets was attributable to having closed three stores in 2003 at a cost of $2.0 million compared to two stores in 2002 at a cost of $0.9 million.

        Net Interest Income.    The decrease in interest income (net of interest expense) was due to reduced earnings on average excess cash deposits in 2003 as compared to 2002.

Quarterly Financial Data

        The following table presents consolidated statements of operations data for each of the eleven quarters in the period ended September 30, 2005. The operating results for any quarter are not necessarily indicative of the results for any subsequent quarter.

 
  2003 Quarters Ended
  2004 Quarters Ended
  2005 Quarters Ended
 
  Mar. 31
  June 30
  Sept. 30
  Dec. 31
  Mar. 31
  June 30
  Sept. 30
  Dec. 31
  Mar. 31
  June 30
  Sept. 30
 
  (in millions)

Revenue   $ 64.7   $ 77.3   $ 85.4   $ 88.1   $ 101.4   $ 117.2   $ 124.6   $ 127.5   $ 133.4   $ 156.3   $ 164.7
Operating income (loss)     (4.0 )   (0.6 )   0.2     (3.5 )   0.7     4.9     4.2     (3.8 )   4.4     9.3     9.5
Net income (loss)     (3.9 )   (0.5 )   0.3     (3.5 )   0.5     5.0     4.3     (3.7 )   2.6     25.7     5.1
Number of stores opened in quarter     7     10     28     31     29     26     21     28     18     17     17

        Seasonal factors cause our revenue to fluctuate from quarter to quarter. Historically, our revenue is 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, stores located near colleges and universities generally do more business during the academic year. The number of trading days can also affect our results. For example, 2004 was a leap year, which contributed about 3 percentage points of the increase in our restaurant sales in February of that year. Overall, on a year-to-year basis, changes in trading days do not have a significant impact on our results.

        Our quarterly results are also affected by other factors such as the number of new stores opened in a quarter and unanticipated events. New stores have lower margins immediately following opening as a result of the expenses associated with opening new stores and their operating inefficiencies in the months immediately following opening. Because we tend to open more new stores later in the fiscal year, our fourth quarter net income may be lower than in other quarters. In addition, unanticipated events also impact our results. For example, in the second quarter 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, resulting in a net tax benefit of $16.7 million in that quarter. At December 31, 2004, we recorded charges of $4.0 million to establish a reserve for claims seeking reimbursement for purportedly fraudulent credit and debit card

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