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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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The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in the condensed consolidated statement of cash flows, since such cash flows have historically been presented in financing activities. We also elected to continue estimating forfeitures when determining the amount of stock-based compensation costs to be recognized in each period. No other provisions of ASU 2016-09 had a material impact on our financial statements or disclosures.

3. Fair Value of Financial Instruments

The carrying value of our cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of their short-term nature. Investments are carried at fair value and are classified as available-for-sale.  Investments consist of U.S. treasury notes with maturities up to approximately one year.  Fair value of investments is measured using Level 1 inputs (quoted prices for identical assets in active markets).

The following is a summary of available-for-sale securities:



 

 

 

 

 



 

 



September 30,

 

December 31,



2017

 

2016

Amortized cost

$

435,193 

 

$

455,109 

Unrealized gains (losses)

 

(316)

 

 

(218)

Fair market value

$

434,877 

 

$

454,891 

The following is a summary of unrealized gains (losses) on available-for-sale securities recorded in other comprehensive income (loss) in the condensed consolidated statement of comprehensive income:





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Unrealized gains (losses) on available-for-sale securities

$

272 

 

$

(882)

 

$

(99)

 

$

3,051 

Unrealized gains (losses) on available-for-sale securities, net of tax

$

168 

 

$

(536)

 

$

(72)

 

$

1,866 

Realized gains and losses on available-for-sale securities are recorded in interest and other income, net on the condensed consolidated statement of income. We had no realized gains or losses for the three and nine months ended September 30, 2017, and we had $0 and $547 of realized gains on available-for-sale securities for the three and nine months ended September 30, 2016.



We also maintain a rabbi trust to fund obligations under a deferred compensation plan. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities and carried at fair value, and are included in other assets in the condensed consolidated balance sheet. Fair value of mutual funds is measured using Level 1 inputs. The fair value of the investments in the rabbi trust was $19,157 and $17,843 as of September 30, 2017, and December 31, 2016, respectively. We record trading gains and losses in general and administrative expenses in the condensed consolidated statement of income, along with the offsetting amount related to the increase or decrease in deferred compensation to reflect our exposure to liabilities for payment under the deferred plan.

The following table sets forth unrealized gains (losses) on trading securities held in the rabbi trust:

















 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Unrealized gains (losses) on trading securities held in rabbi trust

$

335 

 

$

391 

 

$

1,157 

 

$

677 







4. Impairment of Long-Lived Assets

During the three and nine months ended September 30, 2017, we recognized non-cash impairment charges of $2,427 and $4,441  ($1,475 and $2,699 net of tax, respectively), representing substantially all of the value of the long-lived assets of a small number of underperforming Chipotle restaurants, in loss on disposal and impairment of assets on the condensed consolidated statement of income ($0.05 and $0.09 per basic and diluted earnings per share). The fair value of the impaired restaurants was determined using Level 3 inputs (unobservable inputs) based on a discounted cash flow method.  



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