2014 ANNUAL REPORT AND PROXY STATEMENT Chipotle Mexican Grill, Inc. 1401 Wynkoop Street, Suite 500 'enYer, &2 00 0arch , 015 DEAR FELLOW SHAREHOLDERS: When we set as our mission to change the way people think about and eat fast food, we knew it was a big and difocult, but Yery important, goal ,n establishing this mission for &hipotle, we belieYed that we had a food culture and a people culture that would allow us to create a new fast food model, and unit economics that would enable us to do this in a way that was prootable and that would proYide outstanding returns to our shareholders 7hroughout , we haYe seen increasing eYidence that our Yision is becoming reality (Yidence of &hipotle s continued leadership and inpuence comes in many forms, from our ongoing Tuest to make the Yery best tasting food we can q made with the Yery best ingredients and prepared using classical cooking techniTues q to the strengthening of our people culture, strengthening of consumer trends that support our business model, our inpuence on the category and our performance relatiYe to the industry as a whole 'uring the year, in our pursuit for better ingredients we serYed more 5esponsibly 5aised® meat (from animals raised in more humane ways and without the use of antibiotics or added hormones) than any other restaurant company We continued to use dairy products made with milk from pastured dairy cattle We remain committed to our program of using local and organically grown produce wheneYer possible $nd we continued to make signiocant progress toward our goal of serYing food made with ingredients that are not genetically modioed $ll of these moYes are consistent with our )ood with ,ntegrity mission, and contribute to making the most delicious food we can, while also making great strides to improYe the oYerall food supply 1o other restaurant company matches &hipotle s commitment to using ingredients that are raised with respect for farmers, animals, and the enYironment, and our doing so helps us change the way people think about and eat fast food ,t would not be possible for us to maintain the food culture we haYe without a similarly strong and compelling people culture 7o willingly spend more money on the ingredients we use and to cook food in our restaurants using classic cooking techniTues reTuires topperforming managers and crews who are empowered to achieYe our high standards 4uite simply, we ask more of our people than others in the industry do, and that reTuires haYing Yery special people 'uring the year we continued to strengthen our people culture, adding to our ranks of 5estaurateurs, improYing our ratio of oeld leaders to restaurants, and making use of tools q most notably our restaurant plan and deYelopment tool q to improYe what is happening in our restaurants, and to giYe us a clearer picture of those improYements and the opportunities that lie ahead &onsumer trends also point to the progress we are making toward our Yision ,n a surYey that asked more than , fast food customers to rank fast food meals, &hipotle topped the list while traditional fast food restaurants were at or near the bottom, with respondents citing kuninspiring foody as the primary reason 5esearch from inYestment analysts pointed to similar shifts in taste, with consumer sentiment moYing away from traditional fast food and casual dining chains as customers look for better Tuality food serYed in a conYenient format 7he companies that haYe lost the greatest number of customers oYer the past decade are traditional fast food chains, where the biggest gains go to fast casual restaurants (Yen within the booming fast casual sector, &hipotle s leadership is undeniable $ccording to )actiYa, more than restaurants haYe been described as the k&hipotle ofy their cuisine in news reports, demonstrating our inpuence within the category We are changing the way people think about and eat fast food, and we haYe no doubt that the pieces are in place for us to continue to positiYely impact the industry We haYe the right food culture, the right people culture, and the right unit economic model to reinYent the category and to deliYer outstanding results for our shareholders Sincerely, SteYe (lls 0ontyt 0oran &hairman &o&(2 &o&(2 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, 2014 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). Yes È 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. È 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, 2014, the aggregate market value of the registrant’s outstanding common equity held by non-affiliates was $11.4 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 30, 2015, there were 31,022,319 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 2015 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, 2014. TABLE OF CONTENTS PART I Item 1. Business 3 Item 1A. Risk Factors 10 Item 1B. Unresolved Staff Comments 23 Item 2. Properties 24 Item 3. Legal Proceedings 24 Item 4. Mine Safety Disclosures 24 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Selected Financial Data 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 35 Item 8. Financial Statements and Supplementary Data 36 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 52 Item 9A. Controls and Procedures 52 Item 9B. Other Information 54 PART III Item 10. Directors, Executive Officers and Corporate Governance 55 Item 11. Executive Compensation 55 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 55 Item 13. Certain Relationships and Related Transactions, and Director Independence 55 Item 14. Principal Accounting Fees and Services 55 PART IV Item 15. Exhibits, Financial Statement Schedules 56 Signatures 57 PART I Cautionary Note Regarding Forward-Looking statements after the date of this report as a result of new Statements information, future events or other developments, except This report includes statements of our expectations, as required by applicable laws and regulations.