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SEC Filings

S-1/A
CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/23/2005
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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 stores, 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.

        As discussed in "Certain Relationships and Related Party Transactions—Services Agreement," we expect to enter into an agreement with McDonald's pursuant to which McDonald's will continue to provide us, for a mutually agreed-upon fee, with certain services it has historically provided. In addition, we may in the future repurchase Chipotle franchises from our franchisees in connection with their obligation to dispose of either that franchise or their McDonald's franchise within 24 months after relevant triggering events. We are not obligated to repurchase any of these franchises. See "Certain Relationships and Related Party Transactions—Agreements With Franchisees."

Off-Balance Sheet Arrangements

        At December 31, 2004 and September 30, 2005, we had no off-balance sheet arrangements or obligations.

Quantitative and Qualitative Disclosure about Market Risk

        We're exposed to interest rate risk in two ways. First, we've invested our excess cash under an agreement with McDonald's. Under that agreement, McDonald's has agreed to pay us interest on those cash investments at the 30-day commercial paper rate plus 50 basis points. Changes in interest rates affect the interest income we earn and, therefore, impact our cash flows and results of operations. At December 31, 2004, we had deposited $0.7 million with McDonald's under this agreement, bearing interest at 2.66% on that date. We're also exposed to interest rate risk as a result of our interest-bearing obligations. Such exposures currently are limited to borrowings we've made under our $30 million line of

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