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SEC Filings

10-Q
CHIPOTLE MEXICAN GRILL INC filed this Form 10-Q on 10/25/2017
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General and Administrative Expenses



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

General and administrative expense

$

99.2 

 

$

78.4 

 

26.5% 

 

$

238.7 

 

$

211.2 

 

13.0% 

As a percentage of revenue

 

8.8% 

 

 

7.6% 

 

 

 

 

7.1% 

 

 

7.4% 

 

 



General and administrative expense increased during the three and nine months ended September 30, 2017, due to recording a liability of $30.0 million, as an estimate of potential losses associated with anticipated claims and assessments by payment card networks, for the data security incident that occurred in the first six months of 2017. For the three months ended September 30, 2017, the increase was partially offset by a decrease in meeting costs because of the bi-annual All Managers Conference held in September 2016. Additionally, for the nine months ended September 30, 2017, higher non-cash stock-based compensation expense and increased bonus costs were more than offset by lower meeting and legal costs.  The increase in stock-based compensation expense during 2017 was primarily a result of a cumulative reduction of expense in the first quarter of 2016 for performance share awards that were no longer expected to vest.

Depreciation and Amortization  





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Depreciation and amortization

$

41.5 

 

$

37.4 

 

11.0% 

 

$

121.9 

 

$

108.3 

 

12.6% 

As a percentage of revenue

 

3.7% 

 

 

3.6% 

 

 

 

 

3.6% 

 

 

3.8% 

 

 



For the three months ended September 30, 2017, depreciation and amortization remained relatively consistent as a percent of revenue. For the nine months ended September 30, 2017, depreciation and amortization decreased as a percentage of revenue due to sales leverage on a partially fixed-cost base. 

Loss on Disposal and Impairment of Assets







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

decrease

 

2017

 

2016

 

% decrease



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Loss on disposal and impairment of assets

$

6.7 

 

$

16.6 

 

(59.4%)

 

$

10.0 

 

$

22.0 

 

(54.6%)

As a percentage of revenue

 

0.6% 

 

 

1.6% 

 

 

 

 

0.3% 

 

 

0.8% 

 

 



Loss on disposal and impairment of assets decreased in dollar terms for the three and nine months ended September 30, 2017 primarily due to a non-cash impairment charge in the third quarter of 2016 to write-down substantially all of the value of the long-lived assets of our ShopHouse restaurants that occurred during the third quarter of 2016. In 2017, we recorded losses related to the closure of a small number of underperforming Chipotle restaurants, the replacement of certain kitchen equipment, and assets that were damaged by natural disasters occurring during the quarter.

Provision for Income Taxes  





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

%

 

Nine months ended September 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Provision for income taxes

$

12.5 

 

$

2.6 

 

382.2% 

 

$

81.8 

 

$

0.6 

 

n/m*

Effective tax rate

 

39.0% 

 

 

25.0% 

 

 

 

 

38.2% 

 

 

8.4% 

 

 

*Not meaningful

 For the full year 2017, we estimate our effective tax rate will be approximately 39.1% 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 rate for the nine months ended September 30, 2017, is lower than the estimated annual rate due to non-recurring adjustments related to state income taxes and excess tax

13

 


 

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