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S-1/A
CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/05/2005
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        Financing Activities.    Net cash provided by financing activities was $2.7 million for the nine months ended September 30, 2005 compared to $41.2 million for the nine months ended September 30, 2004. The decrease in cash provided by financing activities in the 2005 period was attributable to decreased financing requirements as a result of improvements in our net cash provided by operating activities and fewer store openings in the nine months ended September 30, 2005 compared to the comparable period in 2004. Net cash provided by financing activities was $55.9 million for 2004 compared to $64.0 million for 2003. The decrease in cash provided by financing activities in 2004 was attributable to decreased financing requirements as a result of our strong improvement in net cash provided by operating activities, which was partially offset by more store openings in 2004. Our net cash provided by financing activities in 2002 was $42.6 million. We used about $21.4 million more cash for financing activities in 2003 compared to 2002 as a result of increased financing requirements resulting from more store openings in 2003.

        Liquidity and Capital Expenditures.    We will use the proceeds from this offering to repay the $4.6 million balance outstanding at September 30, 2005 under our $30 million revolving line of credit with McDonald's, to provide additional long-term capital to support the growth of our business (primarily through opening new stores), to continue to maintain our existing stores and for general corporate purposes. We do not expect McDonald's to continue to provide us with financing in the future. Therefore, we expect to maintain our business, expand our store base and further implement our growth strategy primarily using cash flow from operations, the proceeds from this offering and third-party financing. We currently expect that our total capital expenditures for 2005 will be about $75 million, and we expect to incur capital expenditures of about $95 million in 2006, relating primarily to our construction of new stores in both periods. We believe that our cash flow from operations, together with the net proceeds from this offering, will be enough to meet our ongoing capital expenditure, working capital and other cash needs over at least the next 24 months.

        In connection with the repayment of our revolving line of credit from McDonald's, we're in the process of negotiating with several banks to establish a revolving credit facility. We intend to use this facility for general corporate purposes including future capital expenditures and working capital needs.

Contractual Obligations

        Our contractual obligations at December 31, 2004 were as follows:

 
  Payments Due by Period
 
  Total
  Less than
1 year

  2-3 years
  4-5 years
  After 5 years
 
  (in millions)

Operating leases   $ 724.1   $ 39.6   $ 79.6   $ 78.9   $ 526.0
   
 
 
 
 
Total contractual cash obligations   $ 724.1   $ 39.6   $ 79.6   $ 78.9   $ 526.0

        We're obligated under non-cancelable leases for our stores and our administrative offices. Our leases generally have initial terms of either five to ten years with two or more five-year extensions, for end-cap and in-line leases, or 15 to 20 years with several five-year extensions, for free-standing stores. Our leases generally have renewal options and generally require us to pay a proportionate share of real estate taxes, insurance, common charges and other operating costs. Some store leases provide for contingent rental payments based on sales thresholds, although we generally do not expect to pay significant contingent rent on these properties based on the thresholds in those leases. See "Risk Factors—Risks Related to Our Business and Industry—Substantially all of our stores are located in leased space that is subject to long-term non-cancelable leases, and we're also subject to all of the risks associated with owning real estate with respect to the real property that we own." At September 30, 2005, there were no material differences in our outstanding contractual obligations, except that as of that date we had $4.6 million outstanding under our revolving line of credit with McDonald's and $2.4 million of deemed landlord financing.

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