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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 following stock awards were excluded from the calculation of diluted earnings per share:





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Stock awards subject to performance conditions

 

245 

 

 

226 

 

 

244 

 

 

276 

Stock awards that were antidilutive

 

1,738 

 

 

1,356 

 

 

1,567 

 

 

1,312 

Total stock awards excluded from diluted earnings per share

 

1,983 

 

 

1,582 

 

 

1,811 

 

 

1,588 



The following table sets forth the computations of basic and diluted earnings per share:









 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended September 30,

 

Nine months ended September 30,



2017

 

2016

 

2017

 

2016

Net income

$

19,610 

 

$

7,799 

 

$

132,460 

 

$

6,963 

Shares:

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

28,415 

 

 

29,063 

 

 

28,604 

 

 

29,387 

Dilutive stock awards

 

24 

 

 

108 

 

 

92 

 

 

405 

Diluted weighted average number of common shares outstanding

 

28,439 

 

 

29,171 

 

 

28,696 

 

 

29,792 

Basic earnings per share

$

0.69 

 

$

0.27 

 

$

4.63 

 

$

0.24 

Diluted earnings per share

$

0.69 

 

$

0.27 

 

$

4.62 

 

$

0.23 





8. Commitments and Contingencies

Data Security Incident 

In April 2017, our information security team detected unauthorized activity on the network that supports payment processing for our restaurants, and immediately began an investigation with the help of leading computer security firms. We also self-reported the issue to payment card processors and law enforcement. Our investigation detected malware designed to access payment card data from cards used at point-of-sale devices at most Chipotle restaurants, primarily in the period from March 24, 2017 through April 18, 2017. The malware searched for track data, which may include cardholder name, card number, expiration date, and internal verification codes; however, no other customer information was affected. We have removed the malware from our systems and continue to evaluate ways to enhance our security measures. We expect that substantially all of our investigation costs will be covered by insurance; however, we may incur legal expenses in excess of our insurance coverage limits associated with the data security incident in future periods. We will recognize these expenses as services are received.  



 During the three months ended September 30, 2017, we recorded an expense of $30,000 ($18,234 after tax), or $0.64 per basic and diluted earnings per share, as an estimate of potential liabilities associated with anticipated claims and assessments by payment card networks in connection with the data security incident. We may ultimately be subject to liabilities greater than or less than the amount accrued. The expense is recorded in general and administrative expenses in our condensed consolidated statement of income and a corresponding liability in accrued liabilities on our condensed consolidated balance sheet.



Litigation Arising from Security Incident 

On May 4, 2017, Bellwether Community Credit Union filed a purported class action complaint in the United States District Court for the District of Colorado alleging that we negligently failed to provide adequate security to protect the payment card information of customers of the plaintiffs and those of other similarly situated credit unions, banks and other financial institutions alleged to be part of the putative class, causing those institutions to suffer financial losses.  The complaint also claims we were negligent per se based on alleged violations of Section 5 of the Federal Trade Commission Act and similar state laws.  The plaintiff seeks monetary damages, injunctive relief and attorneys’ fees.  On May 26, 2017, Alcoa Community Credit Union filed a purported class action complaint in the U. S. District Court for the District of Colorado making substantially the same allegations as the Bellwether complaint and seeking substantially the same relief. The Bellwether and Alcoa cases have been consolidated and will proceed as a single action.

On June 9, 2017, Todd Gordon filed a purported class action complaint in the U. S. District Court for the District of Colorado alleging that we negligently failed to provide adequate security to protect the payment card information of the plaintiff and other similarly situated customers alleged to be part of the putative class, causing such customers to suffer financial losses.  The complaint also claims we were negligent per se

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