chipotle

CHIPOTLE MEXICAN GRILL, INC.

Company Representatives

Jens Montin

Alicia Lei

Brandon Schneider

Dean Pollema

Gordon Deng

Fast Food Industry

Quality of food

Largely recession proof

More and more restaurants

More choices, not necessarily healthier

1993: First location in Denver

2006: Initial Public Offering

Ranked 60 in the 100 fastest

growing companies in the world

Reduced use of chemical pesticide

by 150,000 pounds since 2005

Management

Founder

CEO

Chairman

STEVE ELLS

JOHN R. HARTUNG CFO

MONTGOMERY F. MORAN Co-CEO

Employees

The 401k Plan.

Stock compensation

Employee Stock Purchase Plan (ESPP)

Food With Integrity

Burritos Burrito bowls

Tacos Salads

RATIO ANALYSIS

Liquidity

0

1

2

3

4

5

6

7

McDonalds

Current Ratio

Chipotle

Current Ratio

McDonalds

Quick Ratio

Chipotle

Quick Ratio

McDonalds

Cash Flow

Liquidity

Chipotle Cash

Flow

Liquidity

Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012

Efficiency

2008 2009 2010 2011 2012

Average Collection Period 1.99 1.63 1.67 1.82 2.71

Days in Inventory 3.85 4.07 4.13 3.96 4.10

Days Payable Outstanding 18.49 19.24 19.17 19.79 21.52

Cash Conversion Cycle (12.65) (13.53) (13.36) (14.01) (14.71)

Chipotle

2008 2009 2010 2011 2012

Days Payable Outstanding 40.66 44.28 54.40 56.38 60.75

McDonalds

Leverage/Risk

0

0.2

0.4

0.6

0.8

1

1.2

1.4

CMG Debt-to-

Asset

MCD Debt-to-

Asset

CMG Debt-to-

Equity

MCD Debt-to-

Equity

CMG Long-

term

Capitalization

MCD Long-

term

Capitalization

2008 2009 2010 2011 2012

Profitability: Gross Profit Margin

Chipotle

McDonalds

2008 2009 2010 2011 2012

67.57% 69.31% 69.44% 67.45% 67.38%

2008 2009 2010 2011 2012

76.25% 77.20% 78.00% 77.20% 77.10%

Profitability: Operating Profit Margin

Chipotle

McDonalds

2008 2009 2010 2011 2012

9.31% 13.42% 15.68% 15.45% 16.69%

2008 2009 2010 2011 2012

27.39% 30.10% 31.00% 31.60% 31.20%

Profitability: Net Profit Margin

Chipotle

McDonalds

2008 2009 2010 2011 2012

5.63% 8.32% 9.68% 9.47% 10.18%

2008 2009 2010 2011 2012

18.34% 20.00% 20.50% 20.40% 19.80%

Market: EPS

0%

50%

100%

150%

200%

250%

300%

350%

400%

2008 2009 2010 2011 2012

Chipotle

McD

EPS EPS as % of 2008

42% average increase in EPS

$-

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

2008 2009 2010 2011 2012

Geometric Average Increases, 5 years

Chipotle McDonalds

Net Income 37% 6%

Cash flow from operations 21% 4%

Earnings per share 39% 9%

Currently

Chipotle McDonalds

FMV vs. BV 12.96 6.43

Market CAP 16.67B 97.49B

Dividends No preferred stock

No dividends ever declared

Market: Price-Earnings Ratio

0

10

20

30

40

50

60

2008 2009 2010 2011 2012

Chipotle

McD

STATEMENT OF CASH FLOWS

Statement of Cash Flows

Cash provided by operating activities has increased

substantially since 2008.

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

2008 2009 2010 2011 2012

Net Cash Provided by Operating Activities

Net Cash Provided by

Operating Activities

Cash Flow from Investing Activities

0

50000

100000

150000

200000

250000

Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012

Purchases of Leasehold Improvements, Property

and Equipment (in thousands of dollars)

0

50000

100000

150000

200000

250000

300000

350000

400000

Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012

Net Cash Used in Investing Activities (in

thousands of dollars)

Cash Flow from Financing Activities

Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012

Series1 16824 -29548 -61943 -94522 -24268 -143534

-160000

-140000

-120000

-100000

-80000

-60000

-40000

-20000

0

20000

40000

Cash Flow from Financing Activities (in thousands of dollars)

CFO vs. Net Income

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

2008 2009 2010 2011 2012

Net Income

CFO

Effective Tax Rates

2008 2009 2010 2011 2012

EBIT $127,206 $204,225 $289,061 $349,705 $457,685

Income Tax $49,004 $77,380 $110,080 $134,760 $179,685

Tax Rate 38.52% 37.89% 38.08% 38.54% 39.62%

2008 2009 2010 2011 2012

Tax Rate 30.0% 29.8% 29.3% 31.3% 32.4%

Chipotle

McDonalds

Taxes continued: Stock -Based Compensation

Chipotle finds ways to reward employees while avoiding taxes in the process!

2008 2009 2010 2011 2012

Excess Tax benefit on Stock-

Based (in thousands of dollars)

284 10,435 14,526 38,786 73,210

CONCLUSION

Why Chipotle?

Growth company

Quality of food

Current and future consumer demands