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SEC Filings

10-K
CHIPOTLE MEXICAN GRILL INC filed this Form 10-K on 02/08/2018
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During 2018, we expect to use a portion of the savings from the lower federal corporate income tax rate to provide enhanced benefits to our employees, including by making all restaurant managers and crew eligible for a one-time cash bonus, awarding one-time stock bonuses to a broad group of staff employees, and enhancing a number of other benefits such as parental leave and short-term disability.  Additionally, we will use a portion of the savings by investing in our existing restaurants.  We expect these initiatives to increase labor, other operating, and general and administrative expenses, and to result in higher capital expenditures than we have typically incurred.    



Management and Governance. During the second quarter of 2017, we announced that we hired Scott Boatwright as Chief Restaurant Officer, and Scott has assumed oversight of operations for all North American Chipotle restaurants. In the fourth quarter of 2017, we announced that Steve Ells, our Chairman and CEO, will become Executive Chairman following the completion of a search to identify a new CEO.  For risks associated with our planned installation of a new CEO, see “Risks Related to our Unique Business Strategy – Our success may depend on the continued service and availability of key personnel, and upcoming changes in our management team may not provide the benefits we expect” in Item 1A. “Risk Factors.”

Data Security Incident.  In April 2017, we detected malware on the network that supports payment processing for our restaurants, and subsequently determined that the malware searched for track data, which may include cardholder name, card number, expiration date, and internal verification codes. We removed the malware from our systems and continue to evaluate ways to enhance our security measures. See “General Business RisksWe may be harmed by security risks we face in connection with our electronic processing and transmission of confidential customer and employee information” in Item 1A. “Risk Factors,” as well as Note 10. “Commitments and Contingencies” in Item 8. “Financial Statements and Supplementary Data,” for further discussion of the payment card security incident and related legal proceedings.

During the year ended December 31, 2017, we recorded a liability of $30.0 million ($18.2 million after tax), or $0.64 per basic and diluted earnings per share, as an estimate of potential losses associated with anticipated claims and assessments by payment card networks.  We may ultimately be subject to liabilities greater or less than the amount accrued.  

 Restaurant Openings, Relocations and Closures

The following table details restaurant unit data for the years indicated.





 

 

 

 

 



 

 

 

 

 



Year ended December 31,



2017

 

2016

 

2015

Beginning of period

2,250 

 

2,010 

 

1,783 

Openings

183 

 

243 

 

229 

Relocations/closures

(10)

 

(3)

 

(2)

ShopHouse closures

(15)

 

 -

 

 

Total restaurants at end of period

2,408 

 

2,250 

 

2,010 

Results of Operations

Our results of operations as a percentage of revenue and period-over-period variances are discussed in the following section. As we open more restaurants and hire more employees, our aggregate restaurant operating costs and depreciation and amortization generally increase.



Revenue



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Year ended December 31,

 

% increase

 

% increase/ (decrease)



2017

 

2016

 

2015

 

2017 over 2016

 

2016 over 2015



(dollars in millions)

 

 

 

 

Revenue

$

4,476.4 

 

$

3,904.4 

 

$

4,501.2 

 

14.7% 

 

(13.3%)

Average restaurant sales

$

1.940 

 

$

1.868 

 

$

2.424 

 

3.9% 

 

(22.9%)

Comparable restaurant sales increases (decreases)

 

6.4% 

 

 

(20.4%)

 

 

0.2% 

 

 

 

 

Number of restaurants as of the end of the year

 

2,408 

 

 

2,250 

 

 

2,010 

 

7.0% 

 

11.9% 

Number of restaurants opened in the year

 

183 

 

 

243 

 

 

229 

 

 

 

 

32

 


 

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