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Chipotle Mexican Grill, Inc. Message Board

  • From the recently filed 10-K -- these factors will negatively impact EPS (but not revenues):

    We also currently benefit from our McDonald's relationship in other ways, such as pricing benefits for some products and services. We will incur increased costs as a result of our initial public offering and the decrease in McDonald's ownership interest in us, and if McDonald's ownership interest declines significantly from their current ownership position, we'll lose an increasing amount of these benefits. As we increase our independence from McDonald's, we may face difficulties replacing services it currently provides to us and entering into new or modified arrangements with existing or new suppliers or service providers." For example:

    �McDonald's relationship with Coca-Cola has helped us contain our beverage costs and we may lose some of that pricing advantage if we are no longer a consolidated subsidiary of McDonald's or we may have to negotiate with other beverage suppliers to remain competitive;

    �As a separate public company we'll incur legal, accounting and other expenses, which we expect to be a few million dollars in each of 2006 and future years, that we did not incur as a majority-owned private subsidiary of McDonald's;

    �we opened 104 stores in 2004, when we were able to use McDonald's real estate personnel and other resources to locate and obtain additional store sites in certain markets. We did not use those resources in 2005 and do not anticipate using them in 2006 or in future years; and

    �we expect that some of our labor costs, such as worker's compensation, will increase as McDonald's ownership interest decreases.

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