# EDGAR Filing Document

**Accession Number:** 0001058090
**File Stem:** 0001058090-23-000005
**Filing Date:** 2023-2
**Character Count:** 65190
**Document Hash:** d1ba576c0ae3ecae3f7b5a2cc9b4f50e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001058090-23-000005.hdr.sgml**: 20230207

**ACCESSION NUMBER**: 0001058090-23-000005

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230207

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230207

**DATE AS OF CHANGE**: 20230207

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CHIPOTLE MEXICAN GRILL INC
- **CENTRAL INDEX KEY:** 0001058090
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-EATING PLACES [5812]
- **IRS NUMBER:** 841219301
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32731
- **FILM NUMBER:** 23595182

**BUSINESS ADDRESS:**
- **STREET 1:** 610 NEWPORT CENTER DR
- **STREET 2:** SUITE 1100
- **CITY:** NEWPORT BEACH
- **STATE:** CA
- **ZIP:** 92660
- **BUSINESS PHONE:** 949-524-4000

**MAIL ADDRESS:**
- **STREET 1:** 610 NEWPORT CENTER DR
- **STREET 2:** SUITE 1100
- **CITY:** NEWPORT BEACH
- **STATE:** CA
- **ZIP:** 92660

?xml version="1.0" encoding="utf-8"? cmg-20230207x8k

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**FORM 8-K** 

**CURRENT REPORT ‎Pursuant to Section 13 or 15(d) of the** 

**Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported): February 07, 2023** 

**CHIPOTLE MEXICAN GRILL, INC.** 

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Delaware** <br>‎(State or other <br>‎jurisdiction of <br>‎incorporation)  | **1-32731** <br>‎(Commission File Number)  | **84-1219301** <br>‎(I.R.S. Employer <br>‎Identification No.)  |

---

**610 Newport Center Drive, Suite 1100 ‎Newport Beach, CA 92660** 

‎(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: **(949) 524-4000** 

**Not Applicable** 

‎(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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| |
|:---|
| ◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |

---

Securities registered pursuant to Section 12(b) of the Act:

---

| | |
|:---|:---|
| &nbsp;&nbsp;Title of each class | &nbsp;&nbsp;Name of each exchange on which registered |
| &nbsp;&nbsp;Common stock, par value $0.01 per share<br> &nbsp;&nbsp;CMG | &nbsp;&nbsp;New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

 **‎** 

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**Item 2.02 Results of Operations and Financial Condition.** 

On February 07, 2023, Chipotle Mexican Grill, Inc. issued a press release announcing earnings and other financial results for our fourth quarter and fiscal year ended December 31, 2022, and announcing that management would review these results in a conference call at 4:30 pm Eastern time on February 07, 2023. A copy of the press release is being filed as Exhibit 99.1 to this Form 8-K.

**Item 8.01 Other Events.** 

On February 07, 2023, we announced that our Board of Directors has authorized repurchases of common stock with a total aggregate purchase price of $200 million, exclusive of commissions. This repurchase authorization is in addition to previously announced repurchase authorizations. The repurchase program may be modified, suspended, or discontinued at any time.

**Item 9.01 Financial Statements and Exhibits.** 

**Exhibit Index** 

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| 99.1  | [<u>Chipotle Mexican Grill, Inc. Press Release, dated February 07, 2023</u>](cmg-20230207xex99_1.htm) |
| 104 | Cover Pager Interactive Data File (embedded within the Inline XBRL document) |

---

‎

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**SIGNATURE** 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Chipotle Mexican Grill, Inc. | Chipotle Mexican Grill, Inc. |
| *February 07, 2023* | *By:*  | /s/ John R. Hartung |
|  |  | *Name: John R. Hartung* |
|  |  | *Title: Chief Financial and Adiminstrative Officer* |

---

## Exhibit 99.1

**Exhibit 99.1**

---

| |
|:---|
| &nbsp;&nbsp; **EARNINGS RELEASE** |
| &nbsp;&nbsp; PR Contact: Laurie Schalow |
| &nbsp;&nbsp; (949) 524-4035 |
| &nbsp;&nbsp; MediaRelations@chipotle.com<br>IR Contact: Cindy Olsen, CFA<br> (949) 524-4205<br> Cindy.Olsen@chipotle.com |

---

Chipotle ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 RESULTS

FY22 Operating income increases 44.2% and comparable restaurant sales increase 8.0% as margins expand

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NEWPORT BEACH, Calf. – February 7, 2023 – Chipotle Mexican Grill, Inc. (NYSE: CMG) today reported financial results for its fourth quarter and fiscal year ended December 31, 2022.

**Fourth quarter highlights, year over year:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Total r evenue increased 11.2% to $2.2 billion

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Comparable restaurant sales increased 5.6%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· In-restaurant sales increased 17.5 %, while digital sales <sup>1</sup> represented 37. 4 % of food and beverage revenue

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Operating margin was 13.6 %, an increase from 8.1 %

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Restaurant level operating margin was 24.0% <sup>2</sup> , an increase of 380 b asis points

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Diluted earnings per share was $8.02 , compared to $4.69. Adjusted diluted earnings per share, which exclude s a $0. 27 after-tax impact from expenses related to certain legal proceedings , t he 2018 performance share COVID-19 related modification , and corporate restructuring, was $8.29 , a 48.6 % increase from $5.58 . <sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Opened 100 new restaurants with 90 locations including a Chipotlane

**Full year 2022 highlights, year over year:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Total r evenue increased 14.4% to $8.6 billion

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Comparable restaurant sales increased 8.0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· In-restaurant sales increased 26.4 %, while digital sales <sup>1</sup> represented 39.4 % of food and beverage revenue

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Operating margin was 13.4 %, an increase from 10.7 %

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Restaurant level operating margin was 23. 9 % <sup>2</sup> , a n increase of 13 0 basis points

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Diluted earnings per share was $32.04 , a 39.9 % increase from $2 2.90 . Adjusted diluted earnings per share, which e xclud e s a $0 . 74 after-tax impact from expenses related to certain legal proceedings , the 2018 performance share COVID-19 related modification , corporate restructuring, employee separation costs, restaurant asset impairment and closure costs, and certain other costs, partially offset by an unrealized gain on investments , was $32.78 , a 29.0 % in crease from $25.42 . <sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Opened 23 6 new restaurants with 202 locations including a Chipotlane

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<sup>1</sup> *Refer to definition of digital sales below. We updated the definition of digital sales in the first quarter of 2022 to include revenue deferrals related to Chipotle Rewards. We made this change to allow for a reconciliation to total food and beverage revenue as we now present In-restaurant sales.*

<sup>2</sup> *Restaurant level operating margin, adjusted diluted earnings per share, adjusted net income, non-GAAP general and administrative expenses, and non-GAAP effective income tax rate are non-GAAP financial measures. Reconciliations to GAAP measures and further information are set forth in the table at the end of this press release.*

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"We delivered strong growth in 2022, expanding average unit volumes and restaurant level margin, while opening the highest number of new restaurants in six years, despite facing a challenging and fluid macro environment," said Brian Niccol, Chairman and CEO, Chipotle. "Our continued focus on recruiting and retaining the best people, delivering Chipotle's operational standards with delicious food prepared fresh daily uniquely positions Chipotle to successfully expand to 7,000 restaurants over the long term."

**Results for the three months ended December 31, 2022:**

Total revenue in the fourth quarter was $2.2 billion, an increase of 11.2% compared to the fourth quarter of 2021. The increase in total revenue was driven by a 5.6% increase in comparable restaurant sales and new restaurant openings. Our in-restaurant sales increased 17.5% in the three months ended December 31, 2022, as compared to the three months ended December 31, 2021, while digital sales represented 37.4% of total food and beverage revenue.

We opened 100 new restaurants during the fourth quarter with 90 locations including a Chipotlane. These formats continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins, and returns.

Food, beverage and packaging costs in the fourth quarter were 29.3% of total revenue, a decrease of 230 basis points compared to the fourth quarter of 2021. Food costs benefited from menu price increases and, to a lesser extent, lower avocado prices. These benefits were partially offset by inflation across the menu primarily due to higher costs for dairy and tortillas.

Restaurant level operating margin was 24.0%, an increase from 20.2% in the fourth quarter of 2021. The improvement was primarily due to the benefit of sales leverage and, to a lesser extent, lower delivery fees associated with a lower volume of delivery transactions, partially offset by wage inflation and higher food costs.

General and administrative expenses for the fourth quarter were $135.1 million on a GAAP basis, or $129.4 million<sup>2</sup> on a non-GAAP basis, excluding $3.7 million related to certain legal proceedings, $1.1 million for a COVID-19 related modification to our 2018 performance shares made in December 2020, and $0.9 million related to corporate restructuring. General and administrative expenses for the fourth quarter of 2022 also include $118.9 million of underlying general and administrative expenses, $18.3 million of non-cash stock compensation and an $8.5 million benefit from lower performance-based bonus accruals.

The GAAP effective income tax rate was 26.3% in the fourth quarter of 2022, compared to 20.3% in the fourth quarter of 2021. The increase in the tax rate was primarily due to lower excess tax benefits from equity vesting and exercises, and a net increase in uncertain tax position reserves in 2022 compared to 2021. On a non-GAAP basis, the 2022 fourth quarter effective income tax rate was 25.1%<sup>2</sup>.

Net income for the fourth quarter of 2022 was $223.7 million, or $8.02 per diluted share, compared to $133.5 million, or $4.69 per diluted share, in the fourth quarter of 2021. Excluding the after-tax impact of expenses related to certain legal proceedings, the 2018 performance share COVID-19 related modification, and corporate restructuring, adjusted net income for the fourth quarter 2022 was $231.4 million<sup>2</sup> and adjusted diluted earnings per share was $8.29<sup>2</sup>.

During the fourth quarter, our Board of Directors approved the investment of up to an additional $200 million, exclusive of commissions, to repurchase shares of our common stock, subject to market conditions. Including this repurchase authorization, $413.9 million was available as of December 31, 2022. The repurchase authorization may be modified, suspended, or discontinued at any time. We repurchased $198.9 million of stock at an average price per share of $1,486.74 during the fourth quarter.

**Results for the full year ended December 31, 2022:**

Total revenue for 2022 was $8.6 billion, an increase of 14.4% compared to 2021. The increase in total revenue was driven by an 8.0% increase in comparable restaurant sales and new restaurant openings. Our in-restaurant sales increased 26.4% for the year ended December 31, 2022, as compared to the year ended December 31, 2021, while digital sales represented 39.4% of total food and beverage revenue.

We opened 236 new restaurants during the year, bringing the total restaurant count at year-end to 3,187. Of the 236 new restaurants opened during the year, 202 locations included a Chipotlane. We had a total of 571 Chipotlanes as of year-end.

<sup>2</sup> *Restaurant level operating margin, adjusted diluted earnings per share, adjusted net income, non-GAAP general and administrative expenses, and non-GAAP effective income tax rate are non-GAAP financial measures. Reconciliations to GAAP measures and further information are set forth in the table at the end of this press release.*

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Food, beverage and packaging costs for 2022 were 30.1% of total revenue, a decrease of 50 basis points compared to 2021. The benefit of menu price increases was partially offset by inflation across the menu primarily due to higher costs for avocados, packaging, dairy, beef and chicken.

Restaurant level operating margin for 2022 was 23.9%, an increase from 22.6% in 2021. The improvement was primarily due to the benefit of sales leverage and, to a lesser extent, lower delivery fees associated with a lower volume of delivery transactions, partially offset by higher food costs and wage inflation.

General and administrative expenses for 2022 were $564.2 million on a GAAP basis, or $539.8 million<sup>2</sup> on a non-GAAP basis, excluding $9.5 million related to certain legal proceedings, $7.4 million for a COVID-19 related modification to our 2018 performance shares made in December 2020, $3.9 million related to corporate restructuring, and $3.5 million of employee separation costs. General and administrative expenses for full year 2022 also include $440.9 million of underlying general and administrative expenses, $84.9 million of non-cash stock compensation, $13.8 million related to the biennial all-manager conference, $7.7 million of employer taxes from equity vesting and exercises, and a $10.3 million benefit from lower performance-based accruals.

The GAAP effective income tax rate was 23.9% in 2022, compared to 19.7% in 2021. The increase in the tax rate was primarily due to lower excess tax benefits from equity vesting and exercises, and a decrease in tax benefits related to return to provision adjustments in 2022 compared to 2021. On a non-GAAP basis, the 2022 full year effective income tax rate was 23.2%<sup>2</sup>.

Net income for 2022 was $899.1 million, or $32.04 per diluted share, compared to net income of $653.0 million, or $22.90 per diluted share for 2021. Excluding a $0.74 per share after-tax impact from expenses related to certain legal proceedings, the 2018 performance share COVID-19 related modification, corporate restructuring, employee separation costs, restaurant asset impairment and closure costs, and certain other costs, partially offset by an unrealized gain on investments, adjusted net income for 2022 was $919.8 million<sup>2</sup> and adjusted diluted earnings per share was $32.78<sup>2</sup>.

More information will be available in our Annual Report on Form 10-K, which we expect to file with the SEC in early February 2023.

**Outlook**

For 2023, management is anticipating the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Based on January comparable restaurant sales growth in the low-double-digits, we anticipate first quarter comparable restaurant sales growth in the high-single-digits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· 255 to 285 new restaurant openings (including 10 to 15 relocations to add a Chipotlane), which assumes utilit y , construction, permit and material supply delays do no t worsen

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· An estimated underlying effective full year tax rate between 25% and 27% before discrete items

**Definitions**

The following definitions apply to these terms as used throughout this release:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Comparable restaurant sales, or sales comps, and comparable restaurant transactions,** represent the change in period-over-period total revenue or transactions for restaurants in operation for at least 13 full calendar months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Average restaurant sales** refer to the average trailing 12-month food and beverage revenue for restaurants in operation for at least 12 full calendar months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Restaurant level operating margin** represents total revenue less direct restaurant operating costs, expressed as a percent of total revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Digital sales** represent food and beverage revenue generated through the Chipotle website, Chipotle app or third-party delivery aggregators. Digital sales in clude s revenue deferrals associated with Chipotle Rewards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **In-restaurant sales** represent food and beverage revenue generated on-premise. In-restaurant sales includes revenue deferrals associated with Chipotle Rewards.

<sup>2</sup> *Restaurant level operating margin, adjusted diluted earnings per share, adjusted net income, non-GAAP general and administrative expenses, and non-GAAP effective income tax rate are non-GAAP financial measures. Reconciliations to GAAP measures and further information are set forth in the table at the end of this press release.*

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**Conference Call Details**

Chipotle will host a conference call on Tuesday, February 7, 2023, at 4:30 PM Eastern time to discuss fourth quarter and full year 2022 financial results, as well as provide a business update for the 2023 first quarter.

The conference call can be accessed live over the phone by dialing 1-888-317-6003, or for international callers by dialing 1-412-317-6061, and use code: 4324468. The call will be webcast live from the company's website on the investor relations page at ir.chipotle.com/events. An archived webcast will be available approximately one hour after the end of the call.

**About Chipotle**

Chipotle Mexican Grill, Inc. (NYSE: CMG) is cultivating a better world by serving responsibly sourced, classically-cooked, real food with wholesome ingredients without artificial colors, flavors or preservatives. Chipotle had nearly 3,200 restaurants as of December 31, 2022, in the United States, Canada, the United Kingdom, France and Germany and is the only restaurant company of its size that owns and operates all its restaurants. Chipotle is ranked on the Fortune 500 and is recognized on the 2022 list for Fortune's Most Admired Companies. With over 100,000 employees passionate about providing a great guest experience, Chipotle is a longtime leader and innovator in the food industry. Chipotle is committed to making its food more accessible to everyone while continuing to be a brand with a demonstrated purpose as it leads the way in digital, technology and sustainable business practices. For more information or to place an order online, visit WWW.CHIPOTLE.COM.

**Forward-Looking Statements** 

*Certain statements in this press release and in the February 7, 2023, conference call are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements under "Outlook" about our goals for number of future Chipotle restaurants, restaurants with Chipotlanes and rate of expansion, future comparable restaurant sales growth, future estimated tax rates, future cash flow, and future long-term prospects. We use words such as "anticipate", "believe", "could", "should", "may", "approximately", "estimate", "expect", "intend", "project", "target", and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this press release are based on currently available operating, financial and competitive information available to us as of the date of this release and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: uncertainty regarding the resurgence of COVID-19 infections, the circulation of novel variants of COVID-19 and its ultimate impact on our business, including supply chain disruptions and difficulties in acquiring restaurant equipment, impact on guest traffic, restaurant sales and operating costs and the ability of our third-party suppliers and business partners to fulfill their responsibilities and commitments; increasing wage inflation and the competitive labor market, which impacts our ability to attract and retain qualified employees and has resulted in occasional staffing shortages; the impact of any union organizing efforts and our responses to such efforts; increasing supply costs (including beef, avocados and packaging); risks of food safety incidents and food-borne illnesses; risks associated with our reliance on certain information technology systems and potential material failures or interruptions; privacy and cyber security risks related to our acceptance of electronic payments or electronic processing of confidential customer or employee information, including through our digital app; the impact of competition, including from sources outside the restaurant industry; the financial impact of increasing our average hourly wages; the impact of federal, state or local government regulations relating to our employees, employment practices, restaurant design and construction, and the sale of food or alcoholic beverages; our ability to achieve our planned growth, such as the availability of suitable new restaurant sites and the availability of construction materials and contractors; increases in ingredient and other operating costs due to our Food With Integrity philosophy, tariffs or trade restrictions and supply shortages; the uncertainty of our ability to achieve expected levels of comparable restaurant sales due to factors such as changes in consumers' perceptions of our brand, including as a result of actual or rumored food safety concerns or other negative publicity, decreased consumer spending (including as a result of higher inflation, mass layoffs, fear of possible recession and higher energy prices), or the inability to increase menu prices or realize the benefits of menu price increases; risks associated with our digital business, including risks arising from our reliance on third party delivery services; risks relating to litigation, including possible governmental actions related to food safety incidents and potential class action litigation regarding employment laws, advertising claims or other matters; and other risk factors described from time to time in our SEC reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q, all of which are available on the investor relations page of our website at ir.Chipotle.com.* 

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**CHIPOTLE MEXICAN GRILL, INC.**

**CONSOLIDATED STATEMENTS OF INCOME**

**(in thousands, except per share data)**

**(unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **2022** | **2021** | **2021** |
| Food and beverage revenue | $2163907 | 99.2% | $1939405 | 98.9% |
| Delivery service revenue | 16692 | 0.8 | 21228 | 1.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total revenue | 2180599 | 100.0 | 1960633 | 100.0 |
| Restaurant operating costs (exclusive of depreciation and amortization shown separately below): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food, beverage and packaging | 638851 | 29.3 | 620150 | 31.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Labor | 558914 | 25.6 | 516829 | 26.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Occupancy | 118648 | 5.4 | 107184 | 5.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other operating costs | 341644 | 15.7 | 320452 | 16.3 |
| General and administrative expenses | 135073 | 6.2 | 159777 | 8.1 |
| Depreciation and amortization | 74012 | 3.4 | 66262 | 3.4 |
| Pre-opening costs | 11341 | 0.5 | 6984 | 0.4 |
| Impairment, closure costs, and asset disposals | 5785 | 0.3 | 4699 | 0.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 1884268 | 86.4 | 1802337 | 91.9 |
| Income from operations | 296331 | 13.6 | 158296 | 8.1 |
| Interest and other income, net | 7057 | 0.3 | 9263 | 0.5 |
| Income before income taxes | 303388 | 13.9 | 167559 | 8.5 |
| Benefit/(provision) for income taxes | (79661) | (3.7) | (34084) | (1.7) |
| Net income | $223727 | 10.3% | $133475 | 6.8% |
| Earnings per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $8.08 |  | $4.75 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $8.02 |  | $4.69 |  |
| Weighted-average common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | 27684 |  | 28119 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 27899 |  | 28485 |  |

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**CHIPOTLE MEXICAN GRILL, INC.**

**CONSOLIDATED STATEMENTS OF INCOME**

**(in thousands, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2022** | **2021** | **2021** |
|  | **(unaudited)** |  |  |  |
| Food and beverage revenue | $8558001 | 99.1% | $7457169 | 98.8% |
| Delivery service revenue | 76651 | 0.9 | 89892 | 1.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total revenue | 8634652 | 100.0 | 7547061 | 100.0 |
| Restaurant operating costs (exclusive of depreciation and amortization shown separately below): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food, beverage and packaging | 2602245 | 30.1 | 2308631 | 30.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Labor | 2197958 | 25.5 | 1917761 | 25.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Occupancy | 460425 | 5.3 | 416606 | 5.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other operating costs | 1311905 | 15.2 | 1197054 | 15.9 |
| General and administrative expenses | 564191 | 6.5 | 606854 | 8.0 |
| Depreciation and amortization | 286826 | 3.3 | 254657 | 3.4 |
| Pre-opening costs | 29560 | 0.3 | 21264 | 0.3 |
| Impairment, closure costs, and asset disposals | 21139 | 0.2 | 19291 | 0.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 7474249 | 86.6 | 6742118 | 89.3 |
| Income from operations | 1160403 | 13.4 | 804943 | 10.7 |
| Interest and other income, net | 21128 | 0.2 | 7820 | 0.1 |
| Income before income taxes | 1181531 | 13.7 | 812763 | 10.8 |
| Benefit/(provision) for income taxes | (282430) | (3.3) | (159779) | (2.1) |
| Net income | $899101 | 10.4% | $652984 | 8.7% |
| Earnings per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $32.28 |  | $23.21 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $32.04 |  | $22.90 |  |
| Weighted-average common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | 27851 |  | 28132 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 28062 |  | 28511 |  |

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**CHIPOTLE MEXICAN GRILL, INC.**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except per share data)**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
|  | **(unaudited)** |  |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $384000 | $815374 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable, net | 106880 | 99599 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory | 35668 | 32826 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | 86412 | 78756 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax receivable | 47741 | 94064 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments | 515136 | 260945 |
| Total current assets | 1175837 | 1381564 |
| Leasehold improvements, property and equipment, net | 1951147 | 1769278 |
| Long-term investments | 388055 | 274311 |
| Restricted cash | 24966 | 30856 |
| Operating lease assets | 3302402 | 3118294 |
| Other assets | 63158 | 56716 |
| Goodwill | 21939 | 21939 |
| Total assets | $6927504 | $6652958 |
| **Liabilities and shareholders' equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $184566 | $163161 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued payroll and benefits | 170456 | 162405 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | 147539 | 173052 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unearned revenue | 183071 | 156351 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current operating lease liabilities | 236248 | 218713 |
| Total current liabilities | 921880 | 873682 |
| Long-term operating lease liabilities | 3495162 | 3301601 |
| Deferred income tax liabilities | 98623 | 141765 |
| Other liabilities | 43816 | 38536 |
| Total liabilities | 4559481 | 4355584 |
| Shareholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of December 31, 2022 and December 31, 2021, respectively | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.01 par value, 230,000 shares authorized, 37,320 and 37,132 shares issued as of December 31, 2022 and December 31, 2021, respectively | 373 | 371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | 1829304 | 1729312 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treasury stock, at cost, 9,693 and 9,052 common shares as of December 31, 2022 and December 31, 2021, respectively | (4282014) | (3356102) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (7888) | (5354) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 4828248 | 3929147 |
| Total shareholders' equity | 2368023 | 2297374 |
| Total liabilities and shareholders' equity | $6927504 | $6652958 |

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**CHIPOTLE MEXICAN GRILL, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2021** |
|  | **(unaudited)** |  |
| **Operating activities** |  |  |
| Net income  | $899101 | $652984 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 286826 | 254657 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax provision | (43195) | (12357) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment, closure costs, and asset disposals | 20738 | 17086 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for credit losses | (760) | 493 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation expense | 98030 | 176392 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | (16202) | (4599) |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | (14026) | (1687) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory | (3011) | (6392) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | (14660) | (26826) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease assets | 234273 | 223837 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | (346) | 3993 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable  | 18208 | 21440 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued payroll and benefits | 9864 | (44555) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | (27964) | 10997 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unearned revenue | 33374 | 34387 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax payable/receivable | 46262 | 193379 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities | (207186) | (207164) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities | 3853 | (3984) |
| Net cash provided by operating activities | 1323179 | 1282081 |
| **Investing activities** |  |  |
| Purchases of leasehold improvements, property and equipment | (479164) | (442475) |
| Purchases of investments | (614416) | (429350) |
| Maturities of investments | 263548 | 345748 |
| Proceeds from sale of equipment  | &nbsp;&nbsp;&nbsp;&nbsp;- | 4035 |
| Net cash used in investing activities | (830032) | (522042) |
| **Financing activities** |  |  |
| Acquisition of treasury stock | (830140) | (466462) |
| Tax withholding on stock-based compensation awards | (98970) | (79870) |
| Other financing activities | (294) | (2274) |
| Net cash used in financing activities | (929404) | (548606) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1007) | (1039) |
| Net change in cash, cash equivalents, and restricted cash | (437264) | 210394 |
| Cash, cash equivalents, and restricted cash at beginning of year | 846230 | 635836 |
| Cash, cash equivalents, and restricted cash at end of year | $408966 | $846230 |
| **Supplemental disclosures of cash flow information** |  |  |
| Income taxes paid (refunded) | $275796 | $(17831) |
| Purchases of leasehold improvements, property, and equipment accrued in accounts payable and accrued liabilities | $72021 | $63802 |
| Acquisition of treasury stock accrued in accounts payable and accrued liabilities | $4497 | $7695 |

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------

**CHIPOTLE MEXICAN GRILL, INC.**

**SUPPLEMENTAL FINANCIAL AND OTHER DATA**

**(dollars in thousands)**

**(unaudited)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** |
|  | **Dec. 31,** | **Dec. 31,** | **Sep. 30,** | **Sep. 30,** | **Jun. 30,** | **Jun. 30,** | **Mar. 31,** | **Mar. 31,** | **Dec. 31,** | **Dec. 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** |
| Number of restaurants opened |  | 100 |  | 43 |  | 42 |  | 51 |  | 78 |
| Restaurant closures |  | &nbsp;&nbsp;&nbsp;&nbsp;- |  | (1) |  | (1) |  | (1) |  | &nbsp;&nbsp;&nbsp;&nbsp;- |
| Restaurant relocations |  | (3) |  | (4) |  | (3) |  | (2) |  | (4) |
| Number of restaurants at end of period  |  | 3187 |  | 3090 |  | 3052 |  | 3014 |  | 2966 |
| Average restaurant sales | $| 2824 | $| 2796 | $| 2747 | $| 2684 | $| 2641 |
| Average restaurant sales, excluding delivery MPD<sup>(1)</sup> | $| 2719 | $| 2701 | $| 2657 | $| 2598 | $| 2562 |
| Comparable restaurant sales increase |  | 5.6% |  | 7.6% |  | 10.1% |  | 9.0% |  | 15.2% |
| (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  | (1) Average restaurant sales, excluding delivery menu price differential ("MPD") represents average restaurant sales, as defined above, adjusted to remove the impact of higher menu prices for delivery. This is intended to illustrate our underlying food and beverage sales per restaurant.  |

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**CHIPOTLE MEXICAN GRILL, INC.**

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES**

The following tables provide a reconciliation of non-GAAP financial measures presented in the text above to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Adjusted net income is net income excluding expenses related to restaurant asset impairment, corporate restructuring, certain legal proceedings, stock-based compensation modification expense, unrealized gains on equity investments, separation costs, and certain other costs. Adjusted general and administrative expense is general and administrative expense excluding transformation expenses, certain legal proceedings, stock-based compensation modification expense, separation costs, and certain other costs. The adjusted effective income tax rate is the effective income tax rate adjusted to reflect the after tax impact of non-GAAP adjustments. Restaurant Level Operating Margin, a non-GAAP financial measure, is equal to the revenues generated by our restaurants less their direct operating costs which consist of food, beverage and packaging, labor, occupancy and other operating costs. This performance measure primarily includes the costs that restaurant level managers can directly control and excludes other costs that are essential to conduct our business. Management uses restaurant level operating margin as a measure of restaurant performance. Management believes restaurant level operating margin is useful to investors in that it highlights trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures. We present these non-GAAP measures in order to facilitate meaningful evaluation of our operating performance across periods. These adjustments are intended to provide greater transparency of underlying performance and to allow investors to evaluate our business on the same basis as our management, which uses these non-GAAP measures in evaluating the company's performance. Our adjusted net income, adjusted diluted earnings per share, adjusted general and administrative expenses, adjusted effective income tax rate and restaurant level operating margin measures may not be comparable to other companies' adjusted measures. These adjustments are not necessarily indicative of what our actual financial performance would have been during the periods presented and should be viewed in addition to, and not as an alternative to, our results prepared in accordance with GAAP. Further details regarding these adjustments are included in the tables below.

------

**CHIPOTLE MEXICAN GRILL, INC.**

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES**

**Adjusted Net Income and Adjusted Diluted Earnings per Share**

**(in thousands, except per share amounts)**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Net income | 223727 | 133475 | 899101 | 652984 |
| *Non-GAAP adjustments:* |  |  |  |  |
| &nbsp;&nbsp; Restaurant costs: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating lease asset impairment and other restaurant costs<sup>(1)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | 1090 | 1738 | 3722 |
| &nbsp;&nbsp;&nbsp;&nbsp; Duplicate rent expense<sup>(2)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | 12 | &nbsp;&nbsp;&nbsp;&nbsp;- | 152 |
| &nbsp;&nbsp; Corporate Restructuring: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating lease asset impairment and other office closure costs<sup>(3)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | 332 |
| &nbsp;&nbsp;&nbsp;&nbsp; Duplicate rent expense<sup>(2)</sup> | 881 | 1237 | 3937 | 4964 |
| &nbsp;&nbsp;&nbsp;&nbsp; Employee related restructuring costs<sup>(4)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | 54 | &nbsp;&nbsp;&nbsp;&nbsp;- | 449 |
| &nbsp;&nbsp; Legal proceedings<sup>(5)</sup> | 3718 | 18025 | 9516 | 20117 |
| &nbsp;&nbsp; Stock-based compensation modification expense<sup>(6)</sup> | 1117 | 7619 | 7411 | 63077 |
| &nbsp;&nbsp; Unrealized gain on equity investments<sup>(7)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | (10410) | &nbsp;&nbsp;&nbsp;&nbsp;- |
| &nbsp;&nbsp; Separation costs<sup>(8)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | 3538 | &nbsp;&nbsp;&nbsp;&nbsp;- |
| &nbsp;&nbsp; Other adjustments<sup>(9)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | 961 | 897 |
| Total non-GAAP adjustments | 5716 | 28037 | 16691 | 93710 |
| Tax effect of non-GAAP adjustments above<sup>(10)</sup> | 1951 | (2434) | 4003 | (6492) |
| Other tax non-GAAP adjustments<sup>(11)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | (15423) |
| After tax impact of non-GAAP adjustments | 7667 | 25603 | 20694 | 71795 |
| Adjusted net income | 231394 | 159078 | 919795 | 724779 |
| Diluted weighted-average number of common shares outstanding | 27899 | 28485 | 28062 | 28511 |
| Diluted earnings per share | 8.02 | 4.69 | 32.04 | 22.90 |
| Adjusted diluted earnings per share | 8.29 | 5.58 | 32.78 | 25.42 |
| (1) Operating lease asset impairment charges and other expenses for restaurants due to closures, relocations, or underperformance. | (1) Operating lease asset impairment charges and other expenses for restaurants due to closures, relocations, or underperformance. | (1) Operating lease asset impairment charges and other expenses for restaurants due to closures, relocations, or underperformance. | (1) Operating lease asset impairment charges and other expenses for restaurants due to closures, relocations, or underperformance. | (1) Operating lease asset impairment charges and other expenses for restaurants due to closures, relocations, or underperformance. |
| (2) Duplicate rent expense for the corporate headquarter relocation and office consolidation announced in May 2018 and rent expense for closed restaurants announced in June 2018. | (2) Duplicate rent expense for the corporate headquarter relocation and office consolidation announced in May 2018 and rent expense for closed restaurants announced in June 2018. | (2) Duplicate rent expense for the corporate headquarter relocation and office consolidation announced in May 2018 and rent expense for closed restaurants announced in June 2018. | (2) Duplicate rent expense for the corporate headquarter relocation and office consolidation announced in May 2018 and rent expense for closed restaurants announced in June 2018. | (2) Duplicate rent expense for the corporate headquarter relocation and office consolidation announced in May 2018 and rent expense for closed restaurants announced in June 2018. |
| (3) Asset impairment charges and other closure expenses for the corporate headquarter relocation and office consolidation announced in May 2018.  | (3) Asset impairment charges and other closure expenses for the corporate headquarter relocation and office consolidation announced in May 2018.  | (3) Asset impairment charges and other closure expenses for the corporate headquarter relocation and office consolidation announced in May 2018.  | (3) Asset impairment charges and other closure expenses for the corporate headquarter relocation and office consolidation announced in May 2018.  | (3) Asset impairment charges and other closure expenses for the corporate headquarter relocation and office consolidation announced in May 2018.  |
| (4) Costs for recruitment, relocation costs, third party and other employee-related costs. | (4) Costs for recruitment, relocation costs, third party and other employee-related costs. | (4) Costs for recruitment, relocation costs, third party and other employee-related costs. | (4) Costs for recruitment, relocation costs, third party and other employee-related costs. | (4) Costs for recruitment, relocation costs, third party and other employee-related costs. |
| (5) Charges relate to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (5) Charges relate to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (5) Charges relate to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (5) Charges relate to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (5) Charges relate to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. |
| (6) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (6) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (6) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (6) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (6) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  |
| (7) Unrealized gain on equity investments based on a subsequent investment by an unrelated party in one of our investees, which subsequent investment represents an observable price change in an orderly transaction for a similar investment of the same issuer.  | (7) Unrealized gain on equity investments based on a subsequent investment by an unrelated party in one of our investees, which subsequent investment represents an observable price change in an orderly transaction for a similar investment of the same issuer.  | (7) Unrealized gain on equity investments based on a subsequent investment by an unrelated party in one of our investees, which subsequent investment represents an observable price change in an orderly transaction for a similar investment of the same issuer.  | (7) Unrealized gain on equity investments based on a subsequent investment by an unrelated party in one of our investees, which subsequent investment represents an observable price change in an orderly transaction for a similar investment of the same issuer.  | (7) Unrealized gain on equity investments based on a subsequent investment by an unrelated party in one of our investees, which subsequent investment represents an observable price change in an orderly transaction for a similar investment of the same issuer.  |
| (8) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (8) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (8) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (8) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (8) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. |
| (9) For the year ended December 31, 2022, other adjustments consist of impairment for charges for certain corporate assets of $961. For the year ended December 31, 2021, other adjustments consist of asset impairment charges for equipment related to a discontinued restaurant initiative and certain corporate equipment of $850 and consulting fees associated with the calculation of our non-recurring tax benefit of $47. | (9) For the year ended December 31, 2022, other adjustments consist of impairment for charges for certain corporate assets of $961. For the year ended December 31, 2021, other adjustments consist of asset impairment charges for equipment related to a discontinued restaurant initiative and certain corporate equipment of $850 and consulting fees associated with the calculation of our non-recurring tax benefit of $47. | (9) For the year ended December 31, 2022, other adjustments consist of impairment for charges for certain corporate assets of $961. For the year ended December 31, 2021, other adjustments consist of asset impairment charges for equipment related to a discontinued restaurant initiative and certain corporate equipment of $850 and consulting fees associated with the calculation of our non-recurring tax benefit of $47. | (9) For the year ended December 31, 2022, other adjustments consist of impairment for charges for certain corporate assets of $961. For the year ended December 31, 2021, other adjustments consist of asset impairment charges for equipment related to a discontinued restaurant initiative and certain corporate equipment of $850 and consulting fees associated with the calculation of our non-recurring tax benefit of $47. | (9) For the year ended December 31, 2022, other adjustments consist of impairment for charges for certain corporate assets of $961. For the year ended December 31, 2021, other adjustments consist of asset impairment charges for equipment related to a discontinued restaurant initiative and certain corporate equipment of $850 and consulting fees associated with the calculation of our non-recurring tax benefit of $47. |
| (10) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (10) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (10) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (10) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (10) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. |
| (11) Primarily relates to the tax benefit from the federal net operating loss generated on our federal income tax return and carried back to prior years. The tax benefit is due to the federal income tax rate differential between the 2021 and 2020 rate of 21% and the 2015-2017 rate of 35%. | (11) Primarily relates to the tax benefit from the federal net operating loss generated on our federal income tax return and carried back to prior years. The tax benefit is due to the federal income tax rate differential between the 2021 and 2020 rate of 21% and the 2015-2017 rate of 35%. | (11) Primarily relates to the tax benefit from the federal net operating loss generated on our federal income tax return and carried back to prior years. The tax benefit is due to the federal income tax rate differential between the 2021 and 2020 rate of 21% and the 2015-2017 rate of 35%. | (11) Primarily relates to the tax benefit from the federal net operating loss generated on our federal income tax return and carried back to prior years. The tax benefit is due to the federal income tax rate differential between the 2021 and 2020 rate of 21% and the 2015-2017 rate of 35%. | (11) Primarily relates to the tax benefit from the federal net operating loss generated on our federal income tax return and carried back to prior years. The tax benefit is due to the federal income tax rate differential between the 2021 and 2020 rate of 21% and the 2015-2017 rate of 35%. |

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**CHIPOTLE MEXICAN GRILL, INC.**

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES**

**Adjusted General and Administrative Expenses**

**(in thousands)**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| General and administrative expenses | $135073 | $159777 | $564191 | $606854 |
| *Non-GAAP adjustments:* |  |  |  |  |
| &nbsp;&nbsp; Restructuring expense<sup>(1)</sup> | (881) | (1303) | (3937) | (5565) |
| &nbsp;&nbsp; Legal proceedings<sup>(2)</sup> | (3718) | (18025) | (9516) | (20117) |
| &nbsp;&nbsp; Stock-based compensation modification expense<sup>(3)</sup> | (1117) | (7619) | (7411) | (63077) |
| &nbsp;&nbsp; Separation costs<sup>(4)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | (3538) | &nbsp;&nbsp;&nbsp;&nbsp;- |
| &nbsp;&nbsp; Other adjustments<sup>(5)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | (47) |
| Total non-GAAP adjustments | $(5716) | $(26947) | $(24402) | $(88806) |
| Adjusted general and administrative expenses | $129357 | $132830 | $539789 | $518048 |
| (1) Duplicate rent expense for office and restaurant closures announced in June 2018 due to the corporate restructuring and underperformance of $881 and $3,937 for the three months and year ended December 31, 2022, respectively. | (1) Duplicate rent expense for office and restaurant closures announced in June 2018 due to the corporate restructuring and underperformance of $881 and $3,937 for the three months and year ended December 31, 2022, respectively. | (1) Duplicate rent expense for office and restaurant closures announced in June 2018 due to the corporate restructuring and underperformance of $881 and $3,937 for the three months and year ended December 31, 2022, respectively. | (1) Duplicate rent expense for office and restaurant closures announced in June 2018 due to the corporate restructuring and underperformance of $881 and $3,937 for the three months and year ended December 31, 2022, respectively. | (1) Duplicate rent expense for office and restaurant closures announced in June 2018 due to the corporate restructuring and underperformance of $881 and $3,937 for the three months and year ended December 31, 2022, respectively. |
| (2) Charges related to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (2) Charges related to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (2) Charges related to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (2) Charges related to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. | (2) Charges related to estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. |
| (3) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (3) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (3) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (3) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  | (3) Charges for a COVID-19 related modification made in December 2020 to our 2018 performance shares.  |
| (4) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (4) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (4) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (4) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. | (4) Expenses related to an employee separation, which consist of incremental compensation costs net of forfeitures of stock-based compensation. |
| (5) For the year ended December 31, 2021, other adjustments consist of consulting fees associated with the calculation of our non-recurring tax benefit. | (5) For the year ended December 31, 2021, other adjustments consist of consulting fees associated with the calculation of our non-recurring tax benefit. | (5) For the year ended December 31, 2021, other adjustments consist of consulting fees associated with the calculation of our non-recurring tax benefit. | (5) For the year ended December 31, 2021, other adjustments consist of consulting fees associated with the calculation of our non-recurring tax benefit. | (5) For the year ended December 31, 2021, other adjustments consist of consulting fees associated with the calculation of our non-recurring tax benefit. |

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**CHIPOTLE MEXICAN GRILL, INC.**

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES**

**Adjusted Effective Income Tax Rate**

**(unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Effective income tax rate | 26.3% | 20.3% | 23.9% | 19.7% |
| Tax impact of non-GAAP adjustments<sup>(1)</sup> | (1.2) | (1.6) | (0.7) | 0.3 |
| Adjusted effective income tax rate | 25.1% | 18.7% | 23.2% | 20.0% |
| (1) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (1) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (1) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (1) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | (1) Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. |

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**CHIPOTLE MEXICAN GRILL, INC.**

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES**

**Restaurant Level Operating Margin**

**(in thousands)**

**(unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **Percent of total revenue** | **2021** | **Percent of total revenue** |
| Income from operations | $296331 | 13.6% | $158296 | 8.1% |
| *Non-GAAP Adjustments:* |  |  |  |  |
| &nbsp;&nbsp; General and administrative expenses | 135073 | 6.2 | 159777 | 8.1 |
| &nbsp;&nbsp; Depreciation and amortization | 74012 | 3.4 | 66262 | 3.4 |
| &nbsp;&nbsp; Pre-opening costs | 11341 | 0.5 | 6984 | 0.4 |
| &nbsp;&nbsp; Impairment, closure costs, and asset disposals | 5785 | 0.3 | 4699 | 0.2 |
| Total non-GAAP Adjustments | $226211 | 10.4% | $237722 | 12.1% |
| Restaurant level operating margin | $522542 | 24.0% | $396018 | 20.2% |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **Percent of total revenue** | **2021** | **Percent of total revenue** |
| Income from operations | $1160403 | 13.4% | $804943 | 10.7% |
| *Non-GAAP Adjustments:* |  |  |  |  |
| &nbsp;&nbsp; General and administrative expenses | 564191 | 6.5 | 606854 | 8.0 |
| &nbsp;&nbsp; Depreciation and amortization | 286826 | 3.3 | 254657 | 3.4 |
| &nbsp;&nbsp; Pre-opening costs | 29560 | 0.3 | 21264 | 0.3 |
| &nbsp;&nbsp; Impairment, closure costs, and asset disposals | 21139 | 0.2 | 19291 | 0.3 |
| Total non-GAAP Adjustments | $901716 | 10.4% | $902066 | 12.0% |
| Restaurant level operating margin | $2062119 | 23.9% | $1707009 | 22.6% |

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