2015 ANNUAL REPORT AND PROXY STATEMENT Chipotle Mexican Grill, Inc. 1401 Wynkoop Street, Suite 500 Denver, CO 80202 March 24, 2016 Dear Fellow Shareholders: 2015 was the most challenging year in Chipotle’s history. The events of the year impacted our results and our reputation. We are committed to learning all we can from a difficult time to become a better company, and we strongly believe that our best days are ahead of us. We are also deeply committed to regaining the trust of our customers, and know that by doing so we will be in the best position to provide strong returns to our shareholders. In times of adversity it’s important to maintain and strengthen what we are good at, while learning all we can, such that we build on our strengths to create better restaurants and a better company. This means we will continue to pursue our vision to change the way people think about and eat fast food, but with a renewed and strengthened focus on serving food that is safe and delicious, made with Responsibly Raised ingredients. We will accomplish this by continuing to develop teams of empowered top performers, who will implement industry leading food safety procedures while protecting and strengthening our strong business model. These past months, we have implemented a thoughtful, comprehensive system of food safety protocols. The scope and scale of these protocols is vast, and will help us become a leader in food safety. Today, we have more than 2,000 restaurants and nearly 60,000 employees who are poised to deliver the safest, most delicious food available. We are proud of, and grateful for the way our teams have responded to help us address these challenges and to help us achieve our food safety goals. Building teams of top performers has always helped drive our business – preparing and serving delicious food, providing the best customer experience we can, and delivering strong unit economics – and we are confident that our teams will continue to execute these new food safety programs and delight our customers to keep them coming back. Prior to the challenges we encountered in 2015, our business was on track for another year of robust growth. Through the third quarter, we had seen healthy growth in virtually every measure, with revenue up 15.3% on the opening of 150 new restaurants and comparable restaurant sales increases of 5.5%. This led to a 25.6% increase in diluted earnings per share through the first nine months of 2015. Unfortunately, the fourth quarter weighed heavily on the full year results, and overall sales for the year were up only 9.6%, and EPS increased 6.9% to $15.10. We are confident in our strategy, our people, and our suppliers. We have already seen initial signs of a sales recovery, but we know we have much more to accomplish to fully recover the trust and the loyalty of our customers. The morale of our teams is high and the quality of the customer experience they are delivering is excellent. As we continue to improve our culture of food safety, coupled with our reinvigorated commitment to our food and people cultures, we believe we will continue to change the way people think about and eat fast food. Sincerely, Steve Ells Monty Moran Chairman and Co-CEO Co-CEO UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 or ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-32731 CHIPOTLE MEXICAN GRILL, INC. (Exact name of registrant as specified in its charter) Delaware 84-1219301 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1401 Wynkoop Street, Suite 500 Denver, CO 80202 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: (303) 595-4000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common stock, par value $0.01 per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). È Yes ‘ No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one): È Large accelerated filer ‘ Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company (do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ‘ No È As of June 30, 2015, the aggregate market value of the registrant’s outstanding common equity held by non-affiliates was $11.2 billion, based on the closing price of the registrant’s common stock on such date, the last trading day of the registrant’s most recently completed second fiscal quarter. For purposes of this calculation, shares of common stock held by each executive officer and director and by holders of 5% or more of the outstanding common stock have been excluded since those persons may under certain circumstances be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. As of January 29, 2016, there were 30,044,250 shares of the registrant’s common stock, par value of $0.01 per share outstanding. DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates certain information by reference from the registrant’s definitive proxy statement for the 2016 annual meeting of shareholders, which will be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2015. TABLE OF CONTENTS PART I Item 1. Business 3 Item 1A. Risk Factors 10 Item 1B. Unresolved Staff Comments 25 Item 2. Properties 26 Item 3. Legal Proceedings 26 Item 4. Mine Safety Disclosures 26 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. Selected Financial Data 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38 Item 8. Financial Statements and Supplementary Data 39 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 58 Item 9A. Controls and Procedures 58 Item 9B. Other Information 60 PART III Item 10. Directors, Executive Officers and Corporate Governance 61 Item 11. Executive Compensation 61 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 61 Item 13. Certain Relationships and Related Transactions, and Director Independence 61 Item 14. Principal Accounting Fees and Services 61 PART IV Item 15. Exhibits, Financial Statement Schedules 62 Signatures 63 PART I Cautionary Note Regarding Forward-Looking ITEM 1. BUSINESS Statements This report includes statements of our expectations, General intentions, plans and beliefs that constitute “forward- Chipotle Mexican Grill, Inc., a Delaware corporation, looking statements” within the meaning of Section 27A of together with its subsidiaries (“Chipotle”, the “Company”, the Securities Act of 1933 and Section 21E of the Securities or “we”) operates Chipotle Mexican Grill restaurants, which Exchange Act of 1934 and are intended to come within the serve a focused menu of burritos, tacos, burrito bowls (a safe harbor protection provided by those sections. These burrito without the tortilla) and salads, made using fresh statements, which involve risks and uncertainties, relate to ingredients. As of December 31, 2015, we operated 1,971 the discussion of our business strategies and our Chipotle restaurants throughout the United States, as well expectations concerning future operations, margins, as 11 in Canada, seven in England, four in France, and one in profitability, trends, liquidity and capital resources and to Germany. Additionally, our restaurants included 13 analyses and other information that are based on forecasts ShopHouse Southeast Asian Kitchen restaurants, serving of future results and estimates of amounts not yet Asian-inspired cuisine, and we are an investor in a determinable.