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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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The effective tax rate differs from the statutory tax rates as follows:





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Year ended December 31,



 

2017

 

2016

 

2015

Statutory U.S. federal income tax rate

 

35.0 

%

 

35.0 

%

 

35.0 

%

State income tax, net of related federal income tax benefit

 

4.4 

 

 

13.3 

 

 

3.6 

 

Federal credits

 

(1.5)

 

 

(10.1)

 

 

(0.4)

 

Enhanced deduction for food donation

 

(0.2)

 

 

(2.4)

 

 

(0.2)

 

Valuation allowance

 

0.1 

 

 

6.0 

 

 

0.3 

 

Other

 

1.5 

 

 

6.2 

 

 

 -

 

Effects of the TCJA

 

(2.3)

 

 

 -

 

 

 -

 

Return to provision and other discrete items

 

(0.9)

 

 

(7.2)

 

 

(0.1)

 

Effective income tax rate

 

36.1 

%

 

40.8 

%

 

38.2 

%

The 2017 effective tax rate was lower than the 2016 rate due to the enactment of the TCJA and a lower state tax rate, partially offset by federal credits on overall higher pre-tax operating income. The 2016 effective tax rate was higher than 2015 due to a higher state tax rate, not qualifying for the federal research and development tax credit in 2016, and other federal credits on overall lower pre-tax operating income.

Deferred income tax liabilities are taxes we expect to pay in future periods. Similarly, deferred income tax assets are recorded for expected reductions in taxes payable in future periods. Deferred income taxes arise because of the differences in the book and tax bases of certain assets and liabilities.

Deferred income tax liabilities and assets consist of the following:



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

 

 

December 31,



 

 

 

2017

 

2016

Deferred income tax liability:

 

 

 

 

 

 

 

 

Leasehold improvements, property and equipment

 

 

 

$

140,908 

 

$

204,640 

Goodwill and other assets

 

 

 

 

1,339 

 

 

1,856 

Prepaid assets and other

 

 

 

 

5,191 

 

 

6,012 

Total deferred income tax liability

 

 

 

 

147,438 

 

 

212,508 

Deferred income tax asset:

 

 

 

 

 

 

 

 

Deferred rent

 

 

 

 

42,859 

 

 

63,159 

Gift card liability

 

 

 

 

4,580 

 

 

5,563 

Capitalized transaction costs

 

 

 

 

324 

 

 

500 

Stock-based compensation and other employee benefits

 

 

 

 

80,447 

 

 

101,628 

Foreign net operating loss carry-forwards

 

 

 

 

11,376 

 

 

9,580 

State credits

 

 

 

 

5,589 

 

 

4,595 

Allowances, reserves and other

 

 

 

 

13,719 

 

 

19,359 

Valuation allowance

 

 

 

 

(12,270)

 

 

(10,820)

Total deferred income tax asset

 

 

 

 

146,624 

 

 

193,564 

Net deferred income tax liability

 

 

 

$

814 

 

$

18,944 



The December 31, 2017, deferred tax liability was measured using a 21% U.S. federal tax rate because of the enactment of TCJA, which reduced the rate from 35%.



As of December 31, 2017, we have $8,468 of deferred tax assets related to outstanding non-vested stock awards that contain market conditions. If market conditions are not achieved, then we may not realize the benefit of these deferred tax assets, which would result in a higher effective tax rate in future periods.

53

 


 

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