Chipotle Mexican Grill (CMG) 10-K risk factor changes: FY2021 vs FY2020

You should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-K, including the [removed: Management’s] [added: “Management’s] Discussion and Analysis of Financial Conditions and Results of [removed: Operations] [added: Operations”] section and the consolidated financial statements and related notes.

[removed: Our business is also subject to general risks and uncertainties that affect many other companies, including, but not limited to, overall economic and industry conditions and additional] [added: Additional] risks not currently known to us or that we presently deem immaterial may arise or become material and may negatively impact our business, reputation, financial condition, results of operations or the trading price of our common stock.

Risks Related to the Nature of our [removed: Restaurant] Business and [removed: Operating in] the Restaurant Industry

Food safety is our top priority, and we dedicate [removed: appropriate] [added: significant] resources to ensuring that our guests enjoy safe, high-quality food products.

[removed: Even] [added: However, even] with strong preventative controls and interventions, [removed: food-borne illnesses continue to occur in the restaurant industry because] food safety risks cannot be completely eliminated in any [removed: restaurant.][added: restaurant and incidents of food-borne illnesses continue to occur in the restaurant industry.]

Incidents may result from the failure of restaurant [removed: crew members] [added: employees] or suppliers to follow our food safety policies and procedures, or from employees or guests entering our restaurant while ill and contaminating [removed: food] ingredients or surfaces.

Although we monitor and audit [removed: all of] [added: compliance with] our [removed: programs,] [added: program,] we cannot guarantee that each and every [removed: individual] food item is safely and properly maintained [removed: during distribution throughout] [added: from] the [added: start of the] supply [removed: chain.][added: chain through guest consumption.]

[removed: Regardless of the source] [added: Any report, legitimate] or [removed: cause, any report] [added: otherwise,] of food-borne illness such as E. coli, hepatitis A, norovirus or salmonella, [removed: and] [added: or] other food safety [removed: issues, including] [added: issue, such as] food tampering or contamination, at one of our restaurants could adversely affect our reputation and have a negative impact on our sales.

In addition, instances of food-borne [removed: illness, food tampering] [added: illness] or food [removed: contamination] [added: safety issues] that occur solely at competitors’ restaurants could result in negative publicity about the restaurant industry and adversely impact our sales.

Social media has dramatically increased the [removed: rate at] [added: speed with] which negative publicity, including actual or perceived food safety incidents, [removed: can be] [added: is] disseminated before there is any meaningful opportunity to investigate, respond and address an issue.

We may be more susceptible than our competitors to [added: incur] significant [removed: adverse] [added: negative] consequences [removed: arising] from food safety incidents due to several highly publicized food safety events [added: that previously occurred] in our [removed: restaurants and failure to adhere to our food safety standards.][added: restaurants.]

From 2015 to [removed: 2017,] [added: 2018,] illnesses caused by E. coli [added: and C. perfringens] bacteria and norovirus were connected to a number of our [removed: restaurants and, in 2018, illnesses believed to be caused by *C. perfringens* bacteria were connected to the food in one of our] restaurants.

Because of consumer perceptions in the wake of these food safety incidents, any future food safety incidents associated with our restaurants—even incidents that would be considered minor at other restaurants—may have a more significant negative impact on our sales and our ability to [removed: regain] [added: retain] guests.

In addition, we may be at a higher risk for food safety incidents than some competitors due to our greater use of fresh, unprocessed produce, handling of raw [removed: chicken,] [added: chicken in] our [added: restaurants, our] reliance on employees cooking with traditional methods rather than automation, and our avoidance of frozen ingredients.

The risk of illnesses associated with our food also may increase due to the growth of our delivery or catering businesses, in which our food is [removed: transported] [added: transported, stored] and/or served in [removed: transportation] conditions that are not under our control.

The restaurant industry is highly competitive with respect to taste preferences, price, food quality and selection, customer service, brand reputation, digital engagement, advertising [removed: levels] and promotional initiatives, and the location, attractiveness and maintenance of restaurants.

We also compete with a number of non-traditional market participants, such as convenience stores, grocery stores, coffee shops, meal kit delivery services, and “ghost” or [removed: dark] [added: “dark”] kitchens, where meals are prepared at separate takeaway premises rather than a restaurant.

Competition from food delivery [removed: services has] [added: services, which promote a wide variety of restaurant options on their sites,] also [added: has] increased in recent years, particularly during [removed: COVID-19, and is expected to continue to increase.][added: the COVID-19 pandemic.]

We continue to believe that our commitment to higher-quality and responsibly sourced ingredients [added: resonates with guests and] gives us a competitive advantage; however, more competitors have made [added: and continue to make] claims related to the quality of their ingredients and lack of artificial flavors, colors and preservatives.

In [removed: 2020, 46.2%] [added: 2021, 45.6%] of our [added: total] revenue was derived from digital orders, which includes delivery and customer [removed: pickup, compared to 18% of] [added: pickup in-restaurant and through] our [removed: revenues in 2019.][added: Chipotlanes.]

Depending on which ordering platform a [removed: digital order is placed -] [added: guest uses –] our platform or the platform of a third-party delivery service – the delivery fee we collect from the guest may be less than the actual delivery cost, which has a negative impact on our profitability.

In [removed: the fall of 2020,] [added: 2021,] we implemented [removed: a] [added: several] menu price [removed: increase] [added: increases] to partially offset [added: the increases in] higher [removed: delivery] [added: delivery, labor and other] costs; however, our higher menu prices may cause some guests to shift their purchases to other restaurants offered on the platform.

[removed: As our digital business grows, we are increasingly reliant on third-party] [added: These] delivery [removed: companies, which] [added: companies] maintain control over data regarding [added: our] guests [removed: that] [added: who] use their platform and over the [removed: customer] [added: guest] experience.

If a third-party delivery [removed: company] driver fails to make timely deliveries or fails to deliver the complete order, our guests may attribute the bad customer experience to Chipotle and could stop ordering from us.

The delivery business has been consolidating and may continue to consolidate, [removed: and fewer] [added: which may give] third-party delivery companies [removed: may give them] more leverage in negotiating the terms and pricing of contracts, which [added: in turn] could negatively impact our profits from [removed: delivery orders.][added: this channel.]

Our inability or failure to recognize, respond to and effectively manage the [removed: accelerated impact] [added: immediacy] of social media could have a material adverse impact on our business.

As a result of our highly publicized food safety incidents in 2015 - 2018, negative social media posts about our business may generate a disproportionately negative response than would be [removed: the results at] [added: experienced by] other companies without a similar history.

It is impossible [removed: to] for us to fully predict or control social media [removed: backlash to potential issues,] [added: backlash,] which could harm our business, prospects, financial condition, and results of operations, regardless of the information’s accuracy.

New social media platforms are developing rapidly, and we need to continuously innovate and evolve our social media strategies [removed: in order] to maintain broad appeal with guests and brand relevance.

We also continue to invest in other digital marketing initiatives to reach our guests and build their awareness of, engagement with, and loyalty to us, including our [added: “Chipotle Rewards”] national loyalty [removed: program called Chipotle Rewards.][added: program.]

These initiatives may not be successful, resulting in expenses incurred without the benefit of higher revenues, increased [removed: employee] [added: customer] engagement or brand recognition.

Other risks associated with [removed: the] [added: our] use of social media include [added: association with influencers or online celebrities who become embroiled in controversy,] improper disclosure of proprietary information, negative comments about us, exposure of personally identifiable information, fraud, hoaxes or malicious dissemination of false information.

The inappropriate use of social media by our guests or employees could [removed: increase our costs,] lead to litigation or result in negative publicity that could damage our reputation.

Our success depends in large part on our ability to persuade consumers that food made with ingredients that were raised or grown [removed: in accordance with] [added: according to] our Food With Integrity principles is worth paying a higher price [removed: at our restaurants] relative to prices of some of our competitors, particularly quick-service restaurant competitors.

The [removed: novel coronavirus (COVID-19)] [added: COVID-19] pandemic has adversely affected and could continue to adversely affect our financial results, operations and outlook for an extended period of time.

Our restaurant operations have been and could continue to be disrupted by employees who are unable or unwilling to work, whether because of illness, quarantine, fear of contracting COVID-19 or caring for family members [removed: due to COVID-19 disruptions or illness.][added: impacted by COVID-19.]

If our suppliers [removed: are unable to] [added: do not] fulfill their obligations to us, we could face shortages of food items or other supplies at our restaurants, and our [added: results of] operations and sales could be adversely impacted.

Risks Related to [removed: Labor and] Supply Chain

[removed: Increase] [added: Increases] in [added: the costs of] ingredient and other [removed: operating costs, including those] [added: materials, including increases] caused by [added: the COVID-19 pandemic,] climate and/or other sustainability risks, could adversely affect our results of operations.

The markets for some of [removed: the ingredients we use,] [added: our ingredients,] such as beef, avocado and [removed: chicken,] [added: other produce,] are particularly volatile due to factors [added: beyond our control] such as limited sources, seasonal shifts, climate [removed: conditions,] [added: conditions and] industry demand, including as a result of animal disease [removed: outbreaks in other parts of the world,] [added: outbreaks,] international commodity markets, food safety concerns, product recalls and government regulation.

Our business is also subject to general risks and uncertainties that affect many other companies, including, but not limited to, overall economic and industry conditions.

The COVID-19 pandemic has had and is likely to continue to have a significant impact on our business and results of operations.

During the peak of the pandemic in 2020 and during subsequent resurgences of the virus, government restrictions have required us to close some of our restaurants, close dining rooms and offer only takeout and delivery, impose social distancing, require proof of vaccinations and enforce the wearing of face coverings.

In addition, the COVID-19 pandemic has required and may continue to require us to make difficult decisions about COVID-19 protective measures, such as requiring employees and guests to be vaccinated and/or wear face coverings, which could impact our brand, employee satisfaction, hiring and retention, and the willingness of guests to frequent our restaurants.

The so-called “great resignation” trend that began in 2021, in which U.S. employees voluntarily resigned from their jobs in large numbers, has further strained our ability to keep our restaurants fully staffed and negatively impacted employee satisfaction.

The COVID-19 outbreak also has impacted and is likely to continue to impact our supply chain, which could negatively impact our business.

These impacts could include but are not limited to disruptions in our ability to obtain ingredients, packaging and cleaning supplies due to labor shortages at our suppliers and service providers, transportation bottlenecks, or increases in raw material and commodity costs.

We cannot predict the impact that resurgences of the COVID-19 virus and new variants of the virus will have on the overall economy and consumer behavior, or how long those impacts may last, so we cannot predict how long our results of operations and financial performance will be adversely impacted.

Risks Related to Human Capital

The market for qualified talent continues to be competitive and we must provide increasingly competitive wages, benefits and workplace conditions to retain qualified employees.

We have experienced and may continue to experience challenges in recruiting and retaining restaurant employees and in maintaining full restaurant staffing in various locations, which has resulted in longer wait times for guest orders, temporary closures of the digital make line and decreased employee satisfaction.

For example, we previously reported that a complaint has been filed against us alleging that we have violated New York City’s Fair Work Week law and Earned Safe and Sick Time Act at our restaurants in New York City.

We also have been subject to several audits of our compliance with employment law requirements in other cities.

Difficulties in hiring qualified employees and increases in the cost of labor could adversely impact our business and profitability.

Our business has been and could continue to be adversely impacted by increases in labor costs caused by factors such as federal, state and local laws governing matters such as minimum wages, meal and rest breaks and changes to eligibility for overtime pay; regulations regarding scheduling and benefits; increased health care and workers’ compensation insurance costs; higher wages and costs of other benefits necessary to attract, hire and retain high-quality employees with the right skill sets in a highly competitive job market; and increased wages, benefits and costs related to the COVID-19 pandemic.

If competitive pressures or other factors prevent us from offsetting higher labor costs by increased menu prices, our profitability may decline.

In addition, our responses to any union organizing efforts could negatively impact our reputation and dissuade guests from patronizing our restaurants.

These incidents and the related negative publicity had a significant negative impact on our sales and profitability for those years.

Our delivery business, which accounted for a significant portion of our 2021 total revenue, is subject to risks.

Approximately 21.5% of our 2021 total revenue consisted of delivery orders for which we are reliant on third-party delivery companies.

Use of social media is an important element of our marketing efforts.

Supply chain risk could increase our costs and limit the availability of ingredients and supplies that are critical to our restaurant operations.

In addition, for certain of our ingredients and other materials, we have a limited number of suppliers and distributors.

We remain in regular contact with our major suppliers and to date we have not experienced significant disruptions in our supply chain; however, in the latter part of 2021 costs for certain supplies and ingredients, such as packaging, beef, tortillas and freight, increased materially and rapidly, which inflationary pressures could continue and/or spread to more categories as the impacts of COVID-19 continue across the global supply chain.

If any of our critical suppliers is the subject of a cyber or ransomware attack, we could experience a significant disruption in our supply chain and possibly shortages of key ingredients.

In the past year, a ransomware attack on one of our key suppliers required us to revert to a manual ordering and tracking process, which resulted in some delays and reduced efficiencies.

Complex local, state, federal and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data.

These privacy and data protection laws and regulations are quickly evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations and enforcement.

Further, the California Privacy Rights Act, which was passed in November 2020 and is fully effective on January 1, 2023, significantly modifies the CCPA.

These modifications will require us to incur additional costs and expenses in our effort to comply.

Virginia and Colorado recently enacted similar data privacy legislation that will take effect in 2023, and several other states and countries are considering expanding or passing privacy laws in the near term.

In July 2021, the European Commission finalized recommendations in relation to cross-border data transfers and published new versions of the Standard Contractual Clauses.

Together with the finalization of Brexit in April 2021, the new requirements will require us to incur additional costs and expenses in order to comply and may impact the transfer of personal data throughout our organization and to third parties.

Compliance with the current and future privacy and data protection laws can be costly and time-consuming and there is no assurance that our compliance efforts will be successful in preventing breaches or data loss.

Our failure to comply with applicable laws and regulations or other obligations to which we may be subject relating to personal data, or to protect personal data from unauthorized access, use or other processing, could result in enforcement actions and regulatory investigations against us, claims for damages by customers and other affected individuals, fines or damage to our brand reputation, any of which could have a material adverse effect on our operations, financial performance and business.

In addition, many of the leading third-party tech platforms are moving away from third-party cookies, such as ours, and moving to their own required frameworks, which may hinder our ability to target our marketing efforts.

Since 2020, COVID-19 related disruptions in the global supply chain have increased the cost and decreased the availability of construction materials and restaurant equipment needed to open and operate our restaurants, which can delay the openings of new restaurants.

In addition, we incur substantial startup expenses each time we open a new restaurant, and it can take up to 24 months to ramp up the sales and profitability of a new restaurant, during which time costs may be higher as we train new employees and build up a customer base.

Due to the COVID-19 pandemic, we may experience a reduction and/or increased volatility in sales due to, among other things, reduced customer traffic due to illness, quarantine or government or self-imposed restrictions on our restaurant operations, customer responses to government imposed mask and vaccine mandates, and decreases in consumer confidence in general macroeconomic conditions and in discretionary spending.

The rapid rise in inflation may prompt consumers to decrease discretionary spending.

As a result of these incidents and the related negative publicity, our sales and profitability were severely impacted throughout 2016 and from time to time through 2018.

Our digital business, which accounted for almost half of revenues in 2020, is subject to risks.

The growth in digital orders is attributable to more guests dining at home due to COVID-19, our expanded partnerships with multiple third-party delivery services and our expansion of Chipotlanes, which is our drive through format for digital order pickups.

Use of social media platforms is an important element of our marketing efforts and became increasingly more important during the COVID-19 pandemic.

The novel coronavirus (COVID-19) pandemic, and restrictions imposed by federal, state and local governments in response to the outbreak, have disrupted and will continue to disrupt our business.

During 2020, individuals in many areas where we operate our

restaurants were required to practice social distancing, restricted from gathering in groups and/or mandated to “stay home” except for “essential” purposes.

In response to the COVID-19 outbreak and government restrictions, we were required to close some of our restaurants, close many of our dining rooms and offer only takeout and delivery, and/or implement modified work hours.

The mobility restrictions, fear of contracting the coronavirus and the sharp increase in unemployment caused by the closure of businesses in response to the COVID-19 outbreak, have adversely affected and will continue to adversely affect our guest traffic, which in turn adversely impacts our liquidity, financial condition or results of operations.

Even as and when the mobility restrictions are loosened or lifted, guests may still be reluctant to return to in-restaurant dining and the impact of lost wages due to COVID-19 related unemployment may dampen consumer spending for the foreseeable future.

Restaurant closures, limited service options or modified hours of operation due to staffing shortages could materially adversely affect our liquidity, financial condition or results of operations.

To protect the health and safety of our employees and guests, we provide face coverings for all restaurant employees, offer enhanced health and welfare benefits, provided temporary wage increases during the initial onset of the pandemic, provide 14 days of paid emergency leave for COVID-related concerns, paid discretionary bonuses to restaurant employees, purchased additional sanitation supplies and personal protective materials, implemented a tamper evident packaging seal for all digital orders, and created a new steward role to sanitize high-traffic restaurant areas.

These measures have increased our operating costs and adversely affected our liquidity.

The COVID-19 outbreak also has affected and may continue to adversely affect the ability of certain of our suppliers to fulfill their obligations to us, which may negatively affect our restaurant operations.

These suppliers include third parties that supply and/or prepare our ingredients, packaging, paper and cleaning products and other necessary operating materials, distribution centers, and logistics and transportation services providers.

We also modified our plans for opening new restaurants and remodeling existing restaurants due to the COVID-19 outbreak.

To preserve liquidity, we delayed new restaurant construction and restaurant remodels that were scheduled to begin during the first half of the year, and we limited restaurant remodels to restaurants that do not have a digital make line or Chipotlane.

These changes may materially adversely affect our ability to grow our business, particularly if these construction projects are delayed for a significant amount of time.

We cannot predict how long the COVID-19 outbreak will last or if it will reoccur even after the vaccines are widely administered, when government restrictions and mandates will be imposed or lifted, or how quickly, if at all, guests will return to their pre-COVID-19 purchasing behaviors, so we cannot predict how long our results of operations and financial performance will be adversely impacted.

Our profitability depends in part on our ability to anticipate and react to changes in commodity costs, including ingredients, paper, supplies, fuel, utilities and distribution, and other operating costs, including leasing costs and labor.

Any volatility in key commodity prices or fluctuation in labor costs could adversely affect our operating results by impacting restaurant profitability.

Increasing weather volatility or other long-term changes in global weather patterns, including related to global climate change, could have a significant impact on the price or availability of some of our ingredients.

Volatility in prices or disruptions in supply also may result from governmental actions, such as changes in trade-related tariffs or controls, sanctions and counter sanctions, government-mandated closure of our suppliers’ operations, and asset seizures.

The cost and disruption of responding to governmental investigations or inquiries, whether or not they have merit, or the impact of these other measures, may impact our results and could cause reputational or other harm.

pork, would have a particularly adverse effect on our operating results.

In addition, several states and localities in which we operate, and the federal government have from time to time enacted minimum wage increases, changes to eligibility for overtime pay, paid sick leave and mandatory vacation accruals, and similar requirements.

These changes have increased our labor costs and may have a further negative impact on our labor costs in the future.

Other jurisdictions where we operate are considering enacting similar legislation.

All of these regulations impose additional obligations on us and could increase our costs of doing business.

In addition, a significant number of our restaurant crew are paid at rates impacted by the applicable minimum wage.

To the extent implemented, federal, state and local proposals that increase minimum wage requirements or mandate other employee matters could, to the extent implemented, materially increase our labor and other costs.

Several states in which we operate have approved minimum wage increases that are above the federal minimum.

As more jurisdictions implement minimum wage increases, we expect our labor costs will continue to increase.

Our distributors and suppliers could also be affected by higher minimum wage, benefit standards and compliance costs, which could result in higher costs for goods and services supplied to us.

Labor unions have attempted, and likely will continue to attempt, to attract media attention to their organizing efforts in our restaurants, and their organizing efforts include claims that Chipotle mistreats or undervalues its employees.

Despite our efforts to provide more accurate information about our policies and practices, these messages may dissuade guests from patronizing our restaurants.

If we fail to appropriately plan our workforce, it could adversely impact guest satisfaction, operational efficiency and restaurant profitability.

The COVID-19 pandemic has exacerbated staffing complexities for us and other restaurant operators, and during 2020 we were forced to temporarily close some restaurants or limit operating hours due to employee illnesses, fear of contracting COVID or caregiving responsibilities among our restaurant crew.

COVID-19 has also resulted in aggressive competition for talent, wage inflation and pressure to improve benefits and workplace conditions to remain competitive.

We segment our card data environment and employ a cyber security protection program that is based on proven industry frameworks.

Generally, our pricing protocols with suppliers can remain in effect for periods ranging from one to [removed: 36] [added: 24] months, depending on the outlook for prices of the particular ingredient.

We also could experience shortages of key ingredients if our suppliers need to close or restrict operations due to the impact of the COVID-19 [removed: outbreak.][added: outbreak or, due to industry-wide shipping and freight delays.]

As of December 31, 2021, we had $1.4 billion in cash and cash equivalents, current and long-term investments, and restricted cash, nearly all of which are interest bearing.

As of December 31, 2020, we had $1.0 billion in investments and interest-bearing cash accounts, including insurance-related restricted trust accounts classified in restricted cash, and $59.7 million in accounts with an earnings credit we classify as interest and other income, which combined earned a weighted average interest rate of 0.20%.

Chipotle Mexican Grill, Inc., a Delaware corporation, together with its subsidiaries (“Chipotle,” “we,” “us,” or “our”) owns and operates Chipotle Mexican Grill restaurants, which feature a relevant menu of burritos, burrito bowls (a burrito without the tortilla), [added: quesadillas,] tacos, and salads.

[removed: Steve Ells, founder and former executive chairman,] [added: Our] first [removed: opened] Chipotle [removed: with a single] restaurant [added: opened] in Denver, Colorado in 1993.

Over 25 years later, our devotion to seeking out [removed: the very best] [added: high-quality] ingredients, raised with respect for animals, farmers, and the environment, remains at the core of our commitment to Food With Integrity.

As of December 31, [removed: 2020,] [added: 2021,] we owned and operated [removed: 2,724] [added: 2,918] Chipotle restaurants throughout the United States, [removed: 40] [added: 44] international Chipotle restaurants, and four non-Chipotle restaurants.

Making the brand [removed: more visible] [added: visible, relevant,] and [removed: loved;][added: loved to improve overall guest engagement;]

Running successful restaurants with a [removed: strong] [added: people accountable] culture that provides great food with integrity while delivering exceptional in-restaurant and digital [removed: experiences.][added: experiences;]

In [removed: all of] our Chipotle restaurants, we endeavor to serve only meats that are raised in accordance with criteria we have established in an effort to improve sustainability and promote animal welfare, and without the use of non-therapeutic antibiotics or added [added: growth] hormones.

We [added: brand these meats as “Responsibly Raised®.” We] also seek to use responsibly grown produce, by which we mean produce grown by suppliers whose practices conform to our [added: Food With Integrity standards and our] priorities with respect to environmental considerations and employee welfare.

Our [removed: 24] [added: 25] independently owned and operated regional distribution centers purchase from various suppliers we carefully select based on quality, price, availability, and the suppliers’ understanding [added: of] and adherence [removed: of] [added: to] our mission.

supplier interventions (steps to mitigate food safety risks before ingredients reach Chipotle); [added: and]

internal and third-party restaurant inspections; [removed: and]

In addition, we have a team approach where our training, operations, culinary, legal and [removed: safety, security] [added: restaurant food safety] and [removed: risk management] [added: quality assurance] departments develop and implement operating standards for food quality, food preparation, restaurant cleanliness, employee health protocols, and safety in the restaurants.

The Food Safety Advisory Council is charged with evaluating our [removed: programs, both in practice and implementation,] [added: programs] and advising us on ways to elevate our already high standards for food safety.

[removed: In the past year, we] [added: We have] significantly upgraded our capabilities by digitizing almost all of our restaurant [removed: digital-make lines,] [added: kitchens,] expanding our partnerships with third-party delivery services and building more Chipotlanes, which is our drive through format for customer pick-up of digital orders.

Digital sales, which includes delivery and customer pick-up, [removed: accounted for 46.2%] [added: represented 45.6%] of our total [removed: sales] [added: revenue] in [removed: 2020,] [added: 2021,] compared to [removed: 10.9%] [added: 46.2%] of total [removed: sales] [added: revenue] in [removed: 2019.][added: 2020.]

Our strong digital platform gave us a competitive advantage during the [added: peaks of the] COVID-19 pandemic, as more guests [removed: prefer] [added: preferred] to eat their meals at home and in-restaurant dining was prohibited or restricted.

As of December 31, [removed: 2020,] [added: 2021,] Chipotle employed [removed: nearly 88,000] [added: 97,660] people worldwide.

In the United States, we employed [removed: 85,314] [added: 94,992] people in our restaurants and [removed: approximately 1,367] [added: 1,451] people in our Restaurant Support Centers [removed: (RSCs)] and field support organizations; [removed: approximately 87,000] [added: 96,443] individuals are employed in the U.S. and [removed: approximately 1,000] [added: 1,217] are employed in Canada, France, Germany and [added: the United Kingdom.]

[removed: We do not currently have any] [added: Currently, none of our] employees [added: are] represented by unions.

As of December 31, [removed: 2020,] [added: 2021,] more than 50% of our U.S.-based employee population is female and approximately [removed: 66%] [added: 68%] of our U.S based employee population is comprised of racial and ethnic minorities.

| Female | [removed: 54%] [added: 53%] | Hispanic or Latino | 38% |

| Not Indicated | 1% | Black or African American | [removed: 18%] [added: 20%] |

| | | Not Indicated/Specified | [removed: 3%] [added: 2%] |

[removed: We] [added: During 2021, we] conducted an independent pay equity analysis of our U.S. workforce to identify risks and pay gaps in our organization by gender and [added: race/ethnicity to support our commitment to pay our employees equally across gender and] race/ethnicity.

[removed: This] [added: Our] commitment [added: to pay equity] is evidenced by our investment in our compensation packages and robust suite of benefit [removed: offerings] [added: offerings,] such as:

In [removed: 2020,] [added: 2021,] we paid out [removed: approximately $4] [added: $6.7] million across these bonus programs.

Personalized mental health assistance is available to all Chipotle employees and their family members through a partnership with Health [removed: Advocate.][added: Advocate; support is available 24/7 via in-person, phone, or virtual visits with a licensed counselor.]

employment practices and working conditions, such as minimum wage rates, wage and hour practices, requirements to provide meal and rest periods, Fair Workweek [added: and “just cause”] legislation, employment of minors, anti-discrimination, anti-harassment, classification of employees, paid and family leave, workplace safety accommodations to certain employees, immigration and overtime pay, among others;

[removed: Compliance] [added: While costs associated] with [added: compliance with] these laws and [removed: regulation has] [added: regulations have increased as the number and scope of the laws have increased, the total costs incurred have] not had, and [removed: is] [added: are] not expected to have, a material effect on our capital expenditures, results of operations or competitive position.

See “Risk Factors” in Item 1A for a discussion of risks relating to federal, state, local and international laws and regulations applicable to our [removed: business and our Deferred Prosecution Agreement with the U.S. Attorney’s Office for the Central District of California and the United States Department of Justice’s Consumer Protection Branch.][added: business.]

The contents of the websites mentioned above [added: and elsewhere in this report] are not incorporated into and should not be considered a part of this report.

Sustaining world class people leadership by developing and retaining diverse talent at every level;

Amplifying technology and innovation to drive digital growth and productivity at our restaurants and support centers;

And expanding access and convenience by accelerating new restaurant openings.

For more information about our sustainability and animal welfare initiatives see our biennial Sustainability Report and interim Update Report on our website www.chipotle.com/about-us/sustainability.

natural inhibitors (to prevent microbial growth in ingredients);

| Male | 46% | White | 30% |

Our most recent EEO-1 consolidated report is posted on the Investors page of our website at www.ir.chipotle.com under Corporate Governance – Human Capital Information and additional details about the demographics of our employee population is included in our biennial Sustainability Report and interim Update Report on our website www.chipotle.com/about-us/sustainability*.*

Talent Partnerships

We develop Talent Partnerships to amplify our purpose and vision for people and to foster talent curation, grow our employees and scale Chipotle.

We believe we have a compelling employee value proposition that enables us to engage current team members, as well as the communities we serve, via these partnerships.

Internally, we connect with employees who are enrolled in our debt-free degree programs and explore career pathways and internal opportunities in collaboration with leaders throughout the corporate Restaurant Support Centers and restaurant and field staff.

Externally, we are forging alliances with select organizations whose mission and values are aligned with ours, and who are also committed to growing their people and ensuring equity; Big Brothers Big Sisters of America, Job Corps and Paul Quinn College are amongst these partners.

We believe our overall talent strategy will allow us to effectively leverage existing talent to grow future leaders and mitigate turnover, while increasing employee engagement and driving business results.

The results of the 2021 analysis did not identify preferential treatment to any class of employee; however, we identified several isolated discrepancies between actual compensation and our policies and we quickly made pay adjustments to close all identified gaps.

Wages for hourly crew members increased over 15% in 2021, resulting in a national average hourly wage of greater than $15.00 per hour by the end of the year.

An expanded Debt-Free Degree program that now provides Chipotle employees access to nearly 100 degrees at 10 universities, completely tuition debt free.

New Career Certificates further enhances our Tuition Assistance benefits by providing on-demand Certificate programs to help Chipotle team members advance their careers in as little as eight weeks.

COVID-19 protective measures, such as requiring employees and/or guests to provide proof of vaccination, imposing social distancing, and requiring and enforcing the wearing of face coverings;

Utilizing a disciplined approach to creativity and innovation;

Leveraging digital capabilities to drive productivity and expand access, convenience and engagement;

Engaging with customers through our loyalty program; and

We brand these meats as “Responsibly Raised®.” One of our primary goals is for all of Chipotle restaurants to serve meats raised to our standards, but we have and expect to continue to face challenges in doing so.

For example, some of our restaurants periodically serve conventionally raised chicken or beef due to supply constraints for our Responsibly Raised brand meats or stop

serving one or more menu items due to additional supply constraints.

When we become aware of such an issue, we clearly and specifically disclose this temporary change on signage in each affected restaurant so that guests can adjust their orders if they choose to do so.

Some of the beans we serve are organically grown or grown using conservation tillage methods that improve soil conditions, reduce erosion, and help preserve the environment in which the beans are grown.

We call these beans “transitional.” Some of the other produce items we serve are organically grown as well as we continue our commitment to find high quality ingredients.

the United Kingdom.

| Male | 45% | White | 31% |

We provide opportunities for our employees to drive our Diversity, Equity & Inclusion (DE&I) strategy by creating programs that raise awareness, allowing courageous conversations and a more inclusive culture.

These programs empower our employee-driven Employee Resource Groups (ERGs) to challenge the organization to consider additional opportunities to Cultivate A Better World in the DE&I space.

Our current ERGs are as follows:

| | |

| --- | --- |

| Employee Resource Groups | Year Established |

| HUSTLE: *Humans Uniting to Support the Ladies’ Experience* Supporting our Female Community | 2019 |

| PRIDE: *People Respecting Inclusivity, Diversity and Education* Supporting our LGBTQ Community | 2019 |

| SERVES: *Community Outreach* Supporting the Communities we Serve | 2019 |

| WELLNESS: *Employee Wellbeing* Supporting our employee’s mental, physical and financial wellbeing | 2019 |

| UNIFIED: *United Network or Influencers Furthering Inclusion and Ethnic Diversity* Supporting our Communities of Color | 2020 |

The results did not identify preferential treatment to any class of employee, which supports our commitment to ensuring we pay our employees equally across gender and race/ethnicity.

Debt-Free Degrees are offered to those eligible Chipotle employees who work toward Associate's and Bachelor's Business and Technology degrees through six specified colleges.

The program covers 100% of tuition costs upfront.

Support is available 24/7 via in-person, phone or virtual visits with a licensed counselor.

Following ten years of uninterrupted service, our restaurant General Managers and Support Staff employees are eligible for a paid eight-week sabbatical.

Our Response to COVID-19

The health and well-being of our employees and guests has always been and continues to be our top priority.

To ensure the health and well-being of all of our employees during the COVID-19 pandemic, we also provided the following incremental COVID-19 benefits:

Expanded our paid emergency leave benefits to accommodate employees directly affected by COVID-19

Provided 30-day personal leave with automatic approval for any COVID-19 related reason.

Extended access to telemedicine coverage to employees and their families.

Expanded Employee Assistance Program coverage and Concierge Service with a focus on mental health support for employees and their families.

Removed the minimum hours worked requirement for access to our Tuition Assistance & Debt-free-degree programs.

Provided hourly assistance pay: 10% increase to all hourly base wages.

Discretionary Bonus: Provided a minimum bonus for our salaried restaurant managers during each quarter.

Assistance Pay Bonus: Provided an additional bonus to our salaried restaurant managers.

Implemented work from home for our support centers.

For information regarding legal proceedings, see [removed: Note] [added: [Note] 12.

“Commitments and [removed: Contingencies”] [added: Contingencies”](#Note_12)] in our consolidated financial statements included in Item 8.

PART II

For the fiscal year ended December 31, [removed: 2020][added: 2021]

| 610 Newport Center Drive, Suite [removed: 1300] [added: 1400] Newport Beach, CA | 92660 |

As of June 30, [removed: 2020,] [added: 2021,] the aggregate market value of the registrant’s outstanding common equity held by non-affiliates was [removed: $20.941] [added: $35.159] billion, based on the closing price of the registrant’s common stock on June 30, [removed: 2020,] [added: 2021,] the last trading day of the registrant’s most recently completed second fiscal quarter.

As of February [removed: 5, 2021,] [added: 4, 2022,] there were [removed: 28,144,065] [added: 28,031,948] shares of the registrant’s common stock, par value of $0.01 per share outstanding.

Part III incorporates certain information by reference from the registrant’s definitive proxy statement for the [removed: 2021] [added: 2022] 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, [removed: 2020.][added: 2021.]

| Item 1B. | [Unresolved Staff Comments](#Item_1B) | [removed: 17] [added: 18] |

| Item 2. | [Properties](#Item_2) | [removed: 17] [added: 18] |

| Item 3. | [Legal Proceedings](#Item_3) | [removed: 17] [added: 18] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#Item_5) | [removed: 18] [added: 19] |

| | [removed: [Index] [added: [Notes] to Consolidated Financial [removed: Statements](#Index_to_Financial_Statements)] [added: Statements](#Notes_to_FS)] | [removed: 30] [added: 36] |

| | [Report of Independent Registered Public Accounting Firm](#Report_of_Independent) [added: (PCAOB ID: 42)] | [removed: 31] [added: 30] |

| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#Item_9) | [removed: 56] [added: 54] |

| Item 9A. | [Controls and Procedures](#Item_9A) | [removed: 56] [added: 54] |

| Item 9B. | [Other Information](#Item_9B) | [removed: 58] [added: 57] |

| Item 10. | [Directors, Executive Officers and Corporate Governance](#Item_10) | [removed: 58] [added: 57] |

| Item 11. | [Executive Compensation](#Item_11) | [removed: 58] [added: 57] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#Item_12) | [removed: 58] [added: 57] |

| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#Item_13) | [removed: 58] [added: 57] |

| Item 14. | [Principal Accounting Fees and Services](#Item_14) | [removed: 58] [added: 57] |

| Item 15. | [Exhibits, Financial Statement Schedules](#Item_15) | [removed: 59] [added: 58] |

| Item 16. | [Form 10-K Summary](#Item_16) | [removed: 61] [added: 60] |

| | [Signatures](#Signatures) | [removed: 62] [added: 61] |

*This report* *includes “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of [removed: 1995.*] [added: 1995, including projected cash from operations, expected capital expenditures for 2022 and all other statements that are not historical facts.*] *We use words such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “think,” “estimate,” “seek,” “expect,” “predict,” “could,” “project,” “potential” and other similar terms and phrases, including references to assumptions, to identify forward-looking statements.

Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties described in this report under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” so you should not place undue reliance on 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: the potential future impact of COVID-19 on our results of operations, [added: including] supply chain [removed: or liquidity;] [added: disruptions and difficulties in acquiring restaurant equipment;] risks of food safety and food-borne illnesses and other health concerns about our food; risks associated with our reliance on certain information technology systems and potential failures or interruptions; privacy and cyber security risks related to our acceptance of electronic payments or electronic processing of confidential customer or employee information; the impact of competition, including from sources outside the restaurant industry; the increasingly competitive labor market and our ability to attract and retain qualified [removed: employees;] [added: employees, which has resulted in staffing shortages;] the impact of federal, state [removed: or] [added: and] local government regulations relating to our employees, [added: including new predictive scheduling and just cause legislation;] restaurant design and construction, [removed: or] [added: 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* *increases in ingredient and other operating costs due to our* *Food With Integrity philosophy, tariffs or trade restrictions and supply shortages.* *We are including this Cautionary Note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements.

| Item 4. | [Mine Safety Disclosures](#Item_4) | 18 |

| Item 6. | [Reserved](#Item_6) | 21 |

| | [Consolidated Balance Sheets as of December 31, 2021 and 2020](#Consolidated_BS) | 32 |

| | [Consolidated Statements of Income and Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019](#Consolidated_IS) | 33 |

| | [Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2021, 2020 and 2019](#Consolidated_SOE) | 34 |

| | [Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019](#Consolidated_SCF) | 35 |

| | [Note 1 – Description of Business and Summary of Significant Accounting Policies](#Note_01) | 36 |

| | [Note 2 – Supplemental Balance Sheet Information](#Note_02) | 42 |

| | [Note 3 – Revenue Recognition](#Note_03) | 43 |

| | [Note 4 – Fair Value of Financial Instruments](#Note_04) | 43 |

| | [Note 5 – Corporate Restructuring Costs](#Note_05) | 45 |

| | [Note 6 – Income Taxes](#Note_06) | 45 |

| | [Note 7 – Shareholders’ Equity](#Note_07) | 47 |

| | [Note 8 – Stock-Based Compensation](#Note_08) | 48 |

| | [Note 9 – Employee Benefit Plans](#Note_09) | 50 |

| | [Note 10 – Leases](#Note_10) | 51 |

| | [Note 11 – Earnings Per Share](#Note_11) | 53 |

| | [Note 12 – Commitments and Contingencies](#Note_12) | 53 |

| | [Note 13 – Debt](#Note_13) | 54 |

| | [Note 14 – Related Party Transactions](#Note_14) | 54 |

| Item 6. | [Selected Financial Data](#Item_6) | 20 |

As of December 31, [removed: 2020,] [added: 2021,] there were [removed: 2,768] [added: 2,966] restaurants operated by Chipotle and our consolidated subsidiaries, [removed: 2,764] [added: 2,962] of which were Chipotle restaurants.

Our main office is located at 610 Newport Center Drive, [added: Suite 1400,] Newport Beach, CA 92660 and our telephone number is (949) 524-4000.

For additional information regarding the lease terms and provisions, see Note [removed: 10.][added: 1.]

“Description of Business and Summary of Significant Accounting Policies” and Note 10.

Not applicable.

PART II

As of February [removed: 8, 2021,] [added: 7, 2022,] there were approximately [removed: 935] [added: 1,091] shareholders of record.

The following graph compares the cumulative annual stockholders return on our common stock from December 31, [removed: 2015,] [added: 2016,] through December 31, [removed: 2020,] [added: 2021,] to that of the total return index for the S&P 500 and the S&P 500 Restaurants Index assuming an investment of $100 on December 31, [removed: 2015.][added: 2016.]

![Chart, line [added: chart, scatter] chart

Description automatically [removed: generated](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231x10kg001.jpg)][added: generated](https://www.sec.gov/Archives/edgar/data/1058090/000105809022000011/cmg-20211231x10kg001.jpg)]

| Company/Index | [removed: Dec. 31, 2015] [added: 2016] | | | [removed: Dec. 30, 2016] [added: 2017] | | | [removed: Dec. 30, 2017] [added: 2018] | | | [removed: Dec. 30, 2018] [added: 2019] | | | [removed: Dec. 30, 2019] [added: 2020] | | | [removed: Dec. 29, 2020] [added: 2021] | |

| Chipotle Mexican Grill, Inc. | $ | 100 | | $ | [removed: 79] [added: 77] | | $ | [removed: 60] [added: 114] | | $ | [removed: 90] [added: 222] | | $ | [removed: 174] [added: 368] | | $ | [removed: 289] [added: 463] |

*$100 invested on December 31, [removed: 2015] [added: 2016,] in stock or index, including reinvestment of dividends.

| | Year ended December 31, | | | [removed: | | | | | | | | | | |]

| Impairment, closure [removed: costs] [added: costs,] and asset disposals | [removed: | 30,577 | | | 23,094 | | | 66,639] [added: $] | [added: 19.3] | | [removed: 13,345] [added: $] | [added: 30.6] | | [removed: 23,877] [added: (36.9%)] |

*You should read the following discussion together with [added: our consolidated financial statements and related notes included in] Item [removed: 6.][added: 8.]

“Financial Statements and Supplementary Data.” This section of the Form 10-K generally discusses [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] items and year-to-year comparisons of [removed: 2020] [added: 2021] to [removed: 2019.][added: 2020.]

Discussions of [removed: 2018] [added: 2019] items and year-to-year comparisons of [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 on our Annual Report on Form 10-K for the year ended December 31, [removed: 2019.][added: 2020.]

As of December 31, [removed: 2020,] [added: 2021,] we operated [removed: 2,724] [added: 2,918] Chipotle restaurants throughout the United States, [removed: 40] [added: 44] international Chipotle restaurants, and four non-Chipotle restaurants.

The COVID-19 pandemic has adversely affected, and [removed: will] [added: may] continue to adversely affect, our operations and financial results for the foreseeable future.

We remain in regular contact with our major suppliers and [removed: while] to date we have not experienced significant disruptions in our supply [removed: chain,] [added: chain; however,] we [added: have experienced inflationary pressures in freight and the costs of some of our ingredients and temporary shortages in equipment and other goods, which] could [removed: see future disruptions should] [added: increase and/or spread to more categories as] the impacts of COVID-19 [removed: extend for a considerable amount of time.][added: continue across the global supply chain.]

[removed: 2020] [added: 2021] Financial Highlights

Comparable restaurant sales [removed: increased 1.8%]

*Sales Trends.* Average restaurant sales were [removed: $2.223] [added: $2.641] million for the year ended December 31, [removed: 2020,] [added: 2021,] an increase from [removed: $2.205] [added: $2.223] million for the year ended December 31, [removed: 2019.][added: 2020.]

The increase was attributable to [removed: new restaurant openings and increased] comparable restaurant [removed: sales.][added: sales and, to a lesser extent, new restaurant openings.]

During the year ended December 31, [removed: 2020,] [added: 2021,] our restaurant operating costs (food, beverage and packaging; labor; occupancy; and other operating costs) were [removed: 82.6%] [added: 77.4%] of total revenue, [removed: an increase] [added: a decrease] from [removed: 79.5% in 2019.][added: 82.6% during the year ended December 31, 2020.]

*Restaurant Development.* For the full year [removed: 2020,] [added: 2021,] we opened [removed: 161] [added: 215] new restaurants, which included [removed: 100] [added: 174] restaurants with a Chipotlane.

| | Year ended December 31, | | | | | [added: | Percentage |]

| Beginning of period | [removed: 2,622 | | 2,491] [added: 2,768] | | [removed: 2,408] [added: 2,622] |

| Chipotle openings | [removed: 160 | | 139] [added: 215] | | [removed: 137] [added: 160] |

| Pizzeria Locale openings | [removed: 1] [added: \-] | | 1 | [removed: | \- |]

| Chipotle permanent closures | [removed: (9) | | (7)] [added: (10)] | | [removed: (43)] [added: (9)] |

| Chipotle relocations | [removed: (6) | | (2)] [added: (7)] | | [removed: (5)] [added: (6)] |

| Total restaurants at end of period | [removed: 2,768 | | 2,622] [added: 2,966] | | [removed: 2,491] [added: 2,768] |

| | Year ended December 31, | | | | | | [removed: | | | Percentage change | |] [added: Percentage] |

| | (dollars in millions) | | | | | | | [removed: | | | | |]

| Food and beverage revenue | $ | [removed: 5,920.5 | | $ | 5,561.0] [added: 7,457.2] | | $ | [removed: 4,860.6 | | 6.5%] [added: 5,920.5] | | [removed: 14.4%] [added: 26.0%] |

| Delivery service revenue | | [removed: 64.1 | | | 25.3 | |] [added: 89.9] | [removed: 4.4] | | [removed: 153.0%] [added: 64.1] | | [removed: 475.8%] [added: 40.3%] |

| Average restaurant sales (1) | $ | [removed: 2.2] [added: 2.6] | | $ | 2.2 | | [removed: $ | 2.0 | | (1.0%) | | 10.8%] [added: 18.8%] |

| Comparable restaurant sales increase [removed: (decrease)] | | [removed: 1.8% | | | 11.1% | |] [added: 19.3%] | [removed: 4.0%] | | [added: 1.8%] | | |

| (1) Average restaurant sales refer to the average trailing 12-month food and beverage sales for restaurants in operation for at least 12 full calendar months. | | | | | | | | [removed: | | | | |]

The significant factors contributing to the total revenue increase [removed: in 2020] [added: for the year ended December 31, 2021 compared to the year ended December 31, 2020,] were [removed: new restaurant openings and] comparable restaurant sales [removed: increases.][added: increases and new restaurant openings.]

Comparable restaurant sales increased [removed: $77.7] [added: $1,128.2] million and [added: total] revenue from restaurants not yet in the comparable [removed: restaurant] base contributed [removed: $319.9] [added: $434.1] million to the total revenue increase, of which [removed: $126.4] [added: $201.9] million was [removed: attributable] [added: due] to restaurants opened in [removed: 2020.][added: 2021.]

| Food, beverage and packaging | $ | [removed: 1,932.8 | | $ | 1,847.9] [added: 2,308.6] | | $ | [removed: 1,600.8 | | 4.6%] [added: 1,932.8] | | [removed: 15.4%] [added: 19.4%] |

| As a percentage of total revenue | | [removed: 32.3% | | | 33.1% | |] [added: 30.6%] | [removed: 32.9%] | | [removed: (0.8%)] [added: 32.3%] | | [removed: 0.2%] [added: (1.7%)] |

Food, beverage and packaging costs decreased as a percentage of total revenue [removed: in 2020] [added: for the year ended December 31, 2021 compared to the year ended December 31, 2020,] primarily due to [added: sales leverage from] menu price [removed: increases taken in the second half of 2020, favorable avocado pricing and better waste control.][added: increases.]

The table below reflects shares of common stock we repurchased during the fourth quarter of 2021.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Total Number of Shares Purchased | | Average Price Paid Per Share | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |

| October | | | 27,172 | | $ | 1,811.91 | | 27,172 | | $ | 160,558,269 |

| | *Purchased 10/1 through 10/31* | | | | | | | | | | |

| November | | | 29,834 | | $ | 1,767.37 | | 29,834 | | $ | 107,830,424 |

| | *Purchased 11/1 through 11/30* | | | | | | | | | | |

| December(2) | | | 39,518 | | $ | 1,694.41 | | 39,518 | | $ | 240,870,889 |

| | *Purchased 12/1 through 12/31* | | | | | | | | | | |

| Total | | | 96,524 | | $ | 1,750.04 | | 96,524 | | | |

(1) Shares were repurchased pursuant to repurchase programs announced on July 20, 2021 and October 21, 2021.

(2) The December total includes an additional $200 million in authorized repurchases approved on December 7, 2021 and announced February 8, 2022.

There is no expiration date for this program.

The authorization to repurchase shares will end when we have repurchased the maximum amount of shares authorized, or we have determined to discontinue such repurchases.

| S&P 500 | | 100 | | | 119 | | | 112 | | | 144 | | | 168 | | | 213 |

| S&P 500 Restaurants | | 100 | | | 123 | | | 133 | | | 162 | | | 187 | | | 226 |

RESERVED

We manage our U.S. operations based on eight regions and have aggregated our operations to one reportable segment.

Throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” we commonly discuss the following key operating metrics which we believe will drive our financial results and long-term growth model.

We believe these metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies:

Restaurant operating costs as a percentage of total revenue

New restaurant openings

Our restaurant operations have been and could continue to be disrupted by COVID-19 related employee absences or due to changes in the availability and cost of labor.

We anticipate the restaurant wage increases implemented in June 2021 and any future wage increases in the U.S. along with increased supply chain costs, primarily related to inflationary pressures that began in the latter half of 2021 will have an impact on restaurant operating costs in 2022.

However, these should be offset to some extent by benefits from pricing actions, leverage from revenue growth and supply chain initiatives.

Total revenue was $7.5 billion for the year ended December 31, 2021, an increase of 26.1% from $6.0 billion for the year ended December 31, 2020.

Comparable restaurant sales increased 19.3% for the year ended December 31, 2021, primarily due to a 10.3% increase in transactions and an 8.5% benefit from menu price increases implemented in late 2020 and during 2021.

Digital sales, which includes delivery and customer pick-up, were $3.4 billion for the year ended December 31, 2021, and represented 45.6% of total revenue compared to 46.2% of total revenue for the year ended December 31, 2020.

Higher volumes of in-store transactions in 2021 contributed to the decrease in digital sales as a percentage of total revenue.

Order ahead sales were 50.9% and 49.9% of digital sales for the years ended December 31, 2021, and 2020, respectively.

During 2021, we completed several company initiatives which we believe contributed to sales growth.

These initiatives included the launch of cauliflower rice in January 2021, digital launch of quesadillas in March 2021 and smoked brisket in September 2021.

Additionally, in June 2021, we enhanced our loyalty program, Chipotle Rewards, by introducing new redemption options and personalized offers primarily targeted at new and at-risk customers.

The decrease was driven primarily by higher comparable restaurant sales, partially offset by wage inflation, higher commodity inflation primarily from freight and beef and, to a lesser extent, increased delivery fees.

*Diluted Earnings Per Share.* During the year ended December 31, 2021, our diluted earnings per share were $22.90, an 82.9% increase from $12.52 in 2020.

We expect to open approximately 235-250 new restaurants in 2022, including five to 10 relocations, of which we are targeting 80% with a Chipotlane.

| | | | |

| --- | --- | --- | --- |

| | | | |

On March 20, 2020, we temporarily suspended our stock repurchase program.

The total remaining dollar value of shares that may yet be purchased under our stock repurchase program is $115.0 million as of December 31, 2020.

| S&P 500 | | 100 | | | 110 | | | 131 | | | 123 | | | 158 | | | 184 |

| S&P 500 Restaurants | | 100 | | | 101 | | | 124 | | | 134 | | | 163 | | | 188 |

SELECTED FINANCIAL DATA

Our selected consolidated financial data shown below should be read together with Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and respective notes included in Item 8.

“Financial Statements and Supplementary Data.” The data shown below is not necessarily indicative of results to be expected for any future period (dollar and share amounts in thousands, except per share data).

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |

| Statement of Income: | | | | | | | | | | | | | | |

| Food and beverage revenue | $ | 5,920,545 | | $ | 5,561,036 | | $ | 4,860,626 | | $ | 4,476,412 | | $ | 3,904,384 |

| Delivery service revenue | | 64,089 | | | 25,333 | | | 4,359 | | | \- | | | \- |

| Total revenue | | 5,984,634 | | | 5,586,369 | | | 4,864,985 | | | 4,476,412 | | | 3,904,384 |

| Food, beverage and packaging costs | | 1,932,766 | | | 1,847,916 | | | 1,600,760 | | | 1,535,428 | | | 1,365,580 |

| Labor costs | | 1,593,013 | | | 1,472,060 | | | 1,326,079 | | | 1,205,992 | | | 1,105,001 |

| Occupancy costs | | 387,762 | | | 363,072 | | | 347,123 | | | 327,132 | | | 293,636 |

| Other operating costs | | 1,030,012 | | | 760,831 | | | 680,031 | | | 651,644 | | | 641,953 |

| General and administrative expenses | | 466,291 | | | 451,552 | | | 375,460 | | | 296,388 | | | 276,240 |

| Depreciation and amortization | | 238,534 | | | 212,778 | | | 201,979 | | | 163,348 | | | 146,368 |

| Pre-opening costs | | 15,515 | | | 11,108 | | | 8,546 | | | 12,341 | | | 17,162 |

| Total operating expenses | | 5,694,470 | | | 5,142,411 | | | 4,606,617 | | | 4,205,618 | | | 3,869,817 |

| Income from operations | | 290,164 | | | 443,958 | | | 258,368 | | | 270,794 | | | 34,567 |

| Interest and other income, net | | 3,617 | | | 14,327 | | | 10,068 | | | 4,949 | | | 4,172 |

| Income before income taxes | | 293,781 | | | 458,285 | | | 268,436 | | | 275,743 | | | 38,739 |

| Benefit/(provision) for income taxes | | 61,985 | | | (108,127) | | | (91,883) | | | (99,490) | | | (15,801) |

| Net income | $ | 355,766 | | $ | 350,158 | | $ | 176,553 | | $ | 176,253 | | $ | 22,938 |

| Earnings per share: | | | | | | | | | | | | | | |

| Basic | $ | 12.74 | | $ | 12.62 | | $ | 6.35 | | $ | 6.19 | | $ | 0.78 |

| Diluted | $ | 12.52 | | $ | 12.38 | | $ | 6.31 | | $ | 6.17 | | $ | 0.77 |

| Weighted average common shares: outstanding | | | | | | | | | | | | | | |

| Basic | | 27,917 | | | 27,740 | | | 27,823 | | | 28,491 | | | 29,265 |

| Diluted | | 28,416 | | | 28,295 | | | 27,962 | | | 28,561 | | | 29,770 |

| | December 31, | | | | | | | | | | | | | |

| Balance Sheet Data: | | | | | | | | | | | | | | |

| Total current assets | $ | 1,420,237 | | $ | 1,072,204 | | $ | 814,794 | | $ | 629,535 | | $ | 522,374 |

| Total assets | $ | 5,982,896 | | $ | 5,104,604 | | $ | 2,265,518 | | $ | 2,045,692 | | $ | 2,026,103 |

| Total current liabilities | $ | 822,199 | | $ | 666,593 | | $ | 449,990 | | $ | 323,893 | | $ | 281,793 |

| Total liabilities | $ | 3,962,761 | | $ | 3,421,578 | | $ | 824,179 | | $ | 681,247 | | $ | 623,610 |

[removed: INDEX TO CONSOLIDATED FINANCIAL STATEMENTS][added: *See* *accompanying notes to consolidated financial statements.*]

[removed: | [Report] [added: Report] of [removed: Independent Registered] [added: Independent Registered] Public Accounting [removed: Firm](#Report_of_Independent) | 31 |][added: Firm]

[removed: | [Note 3 – Revenue Recognition](#Note_03) | 43 |][added: Revenue Recognition]

[removed: | [Note 4 – Fair] [added: “Fair] Value of Financial [removed: Instruments](#Note_04) | 44 |][added: Instruments” and transferable liquor licenses.]

[removed: | [Note 8 – Stock-Based Compensation](#Note_08) | 48 |][added: Stock-Based Compensation]

[removed: | [Note 14 – Related] [added: “Related] Party [removed: Transactions](#Note_14) | 55 |][added: Transactions” for related party disclosures.]

We have audited the accompanying consolidated balance sheets of Chipotle Mexican Grill, Inc. (the Company) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February [removed: 9, 2021] [added: 11, 2022] expressed an unqualified opinion thereon.

| *Description of the Matter* | | The Company incurred [removed: $84.5] [added: $178.7] million in stock-based compensation expense during the year ended December 31, [removed: 2020.] [added: 2021.] Approximately 229,000 of the Company’s vested and non-vested stock awards were subject to service and performance conditions during the year ended December 31, [removed: 2020.] [added: 2021.] As described in Notes 1 and 8 of the consolidated financial statements, the Company estimates the grant date fair value of the stock awards and expenses the fair value of stock awards subject to service conditions over the respective vesting period. Stock-based compensation expense of stock awards subject to performance conditions is based on the estimated probability of achieving levels of performance associated with particular levels of payout. Additionally, at each reporting period, the Company evaluates the probable outcome of the performance conditions including consideration of significant assumptions and as applicable, recognizes the cumulative effect of the change in estimate in the period of the change. Auditing the grant date fair value and the appropriateness of the accounting treatment of the Company’s stock awards was complex and judgmental. In particular, the fair value estimate for stock awards subject to performance conditions is sensitive to significant assumptions including management’s internal estimates of the Company’s future performance. |

| | [added: 2021 | | |] 2020 | | | 2019 | |

| Cash and cash equivalents | $ | [removed: 607,987] [added: 815,374] | | $ | [removed: 480,626] [added: 607,987] |

| Accounts receivable, net | | [removed: 104,500] [added: 99,599] | | | [removed: 80,545] [added: 104,500] |

| Inventory | | [removed: 26,445] [added: 32,826] | | | [removed: 26,096] [added: 26,445] |

| Prepaid expenses and other current assets | | [removed: 54,906] [added: 78,756] | | | [removed: 57,076] [added: 54,906] |

| Income tax receivable | | [removed: 282,783] [added: 94,064] | | | [removed: 27,705] [added: 282,783] |

| Investments | | [removed: 343,616] [added: 260,945] | | | [removed: 400,156] [added: 343,616] |

| Total current assets | | [removed: 1,420,237] [added: 1,381,564] | | | [removed: 1,072,204] [added: 1,420,237] |

| Leasehold improvements, property and equipment, net | | [removed: 1,584,311] [added: 1,769,278] | | | [removed: 1,458,690] [added: 1,584,311] |

| Long-term investments | | [removed: 102,328] [added: 274,311] | | | [removed: \-] [added: 102,328] |

| Restricted cash | | [removed: 27,849] [added: 30,856] | | | [removed: 27,855] [added: 27,849] |

| Operating lease assets | | [removed: 2,767,185] [added: 3,118,294] | | | [removed: 2,505,466] [added: 2,767,185] |

| Other assets | | [removed: 59,047] [added: 56,716] | | | [removed: 18,450] [added: 59,047] |

| Total assets | $ | [removed: 5,982,896] [added: 6,652,958] | | $ | [removed: 5,104,604] [added: 5,982,896] |

| Accounts payable | $ | [removed: 121,990] [added: 163,161] | | $ | [removed: 115,816] [added: 121,990] |

| Accrued payroll and benefits | | [removed: 203,054] [added: 162,405] | | | [removed: 126,600] [added: 203,054] |

| Accrued liabilities | | [removed: 164,649] [added: 173,052] | | | [removed: 155,843] [added: 164,649] |

| Unearned revenue | | [removed: 127,750] [added: 156,351] | | | [removed: 95,195] [added: 127,750] |

| Current operating lease liabilities | | [removed: 204,756] [added: 218,713] | | | [removed: 173,139] [added: 204,756] |

| Total current liabilities | | [removed: 822,199] [added: 873,682] | | | [removed: 666,593] [added: 822,199] |

| Long-term operating lease liabilities | | [removed: 2,952,296] [added: 3,301,601] | | | [removed: 2,678,374] [added: 2,952,296] |

| Deferred income tax liabilities | | [removed: 149,422] [added: 141,765] | | | [removed: 37,814] [added: 149,422] |

| Other liabilities | | [removed: 38,844] [added: 38,536] | | | [removed: 38,797] [added: 38,844] |

| Total liabilities | | [removed: 3,962,761] [added: 4,355,584] | | | [removed: 3,421,578] [added: 3,962,761] |

| Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively | | \- | | | \- |

| Common stock, $0.01 par value, 230,000 shares authorized, [removed: 36,704] [added: 37,132] and [removed: 36,323] [added: 36,704] shares issued as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively | | [removed: 367] [added: 371] | | | [removed: 363] [added: 367] |

| Additional paid-in capital | | [removed: 1,549,909] [added: 1,729,312] | | | [removed: 1,465,697] [added: 1,549,909] |

| Treasury stock, at cost, [removed: 8,703] [added: 9,052] and [removed: 8,568] [added: 8,703] common shares as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively | | [removed: (2,802,075)] [added: (3,356,102)] | | | [removed: (2,699,119)] [added: (2,802,075)] |

| Accumulated other comprehensive loss | | [removed: (4,229)] [added: (5,354)] | | | [removed: (5,363)] [added: (4,229)] |

| Retained earnings | | [removed: 3,276,163] [added: 3,929,147] | | | [removed: 2,921,448] [added: 3,276,163] |

February 11, 2022

| Net income | $ | 652,984 | | $ | 355,766 | | $ | 350,158 |

| | Common Stock | | | | | | | | Treasury Stock | | | | | | | | | | | | | | | |

| Acquisition of treasury stock | \- | | | \- | | | \- | | 349 | | | (554,027) | | | \- | | | \- | | | \- | | | (554,027) |

| Net income | \- | | | \- | | | \- | | \- | | | \- | | | 652,984 | | | \- | | | \- | | | 652,984 |

| Balance, December 31, 2021 | 37,132 | | $ | 371 | | $ | 1,729,312 | | 9,052 | | $ | (3,356,102) | | $ | 3,929,147 | | $ | \- | | $ | (5,354) | | $ | 2,297,374 |

| Net income | $ | 652,984 | | $ | 355,766 | | $ | 350,158 |

| Depreciation and amortization | | 254,657 | | | 238,534 | | | 212,778 |

Non-marketable equity investments are measured at cost, less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.

We recognize an operating lease asset and operating lease liability for each lease with a contractual term greater than 12 months at the time of lease inception.

We do not record leases with an initial term of 12 months or less on our consolidated balance sheet but continue to record rent expense on a straight-line basis over the lease term.

We made the policy election to combine lease and non-lease components.

We consider fixed CAM part of our fixed future lease payments; therefore, fixed CAM is also included in our lease liability.

Total lease costs recorded primarily as occupancy costs include fixed operating lease costs, variable lease costs and short-term lease costs.

Most of our real estate leases require we pay certain expenses, such as CAM costs, real estate taxes and insurance, of which the fixed portion is included in operating lease costs.

In addition to the above costs, variable lease costs also include amounts based on a percentage of gross sales in excess of specified levels and are recognized when probable and are not included in determining the present value of our operating lease liability.

For operating leases, operating lease assets are reduced over the lease term by the recognized straight-line lease expense less the amount of accretion of the lease liability.

We have not entered into any leases with related parties.

We have a loyalty program called Chipotle Rewards.

In June 2021, we enhanced Chipotle Rewards and introduced a new redemption feature we call the “Rewards Exchange” that provides loyalty members multiple redemption options.

Previously, Chipotle Rewards points were automatically redeemed for a free entrée when the customer obtained the required number of points.

We evaluate Chipotle Rewards point breakage annually, or more frequently as circumstances warrant.

We completed our most recent breakage assessment as of October 31, 2021, which resulted in incremental revenue recognized of $10,831 during the three months ended December 31, 2021.

Revenue recognized was primarily the result of a change in our ultimate redemption rate estimate as program data indicated a lower redemption trend than originally estimated.

In November 2021, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2021-10, “Disclosures by Business Entities about Government Assistance.” The ASU codifies new requirements to disclose information about the nature of certain government assistance received, the accounting policy used to account for the transactions, the location in the financial statements where such transactions were recorded and significant terms and conditions associated with such transactions.

The guidance is effective for annual periods beginning after December 15, 2021.

We do not expect the adoption of ASU No. 2021-10 to have a material impact to our consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates.

The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022.

We are evaluating the impact of the transition from LIBOR to alternative reference rates but do not expect a significant impact to our consolidated financial statements.

| | 2021 | | | 2020 | |

| | 2021 | | | 2020 | |

| Accrued payroll and bonuses | | 107,799 | | | 79,702 |

| | 2021 | | | 2020 | |

| | 2021 | | | 2020 | |

Our investments are comprised of U.S. Treasury securities, a corporate debt security, non-marketable equity securities, and an equity method investment.

We also maintain a deferred compensation plan with related assets held in a rabbi trust.

Held-to-Maturity Investments

*U.S. Treasury Securities*

As of December 31, 2021, we held $501,288 of U.S. Treasury securities with maturities of up to 24 months, of which $260,945 mature within one year.

| | |

| --- | --- |

| 1 | |

| [Consolidated Balance Sheets as of December 31, 2020 and 2019](#Consolidated_BS) | 33 |

| [Consolidated Statements of Income and Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018](#Consolidated_IS) | 34 |

| [Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018](#Consolidated_SOE) | 35 |

| [Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018](#Consolidated_SCF) | 36 |

| [Notes to Consolidated Financial Statements](#Notes_to_FS) | 37 |

| [Note 1 – Description of Business and Summary of Significant Accounting Policies](#Note_01) | 37 |

| [Note 2 – Supplemental Balance Sheet Information](#Note_02) | 43 |

| [Note 5 – Corporate Restructuring Costs](#Note_05) | 45 |

| [Note 6 – Income Taxes](#Note_06) | 45 |

| [Note 7 – Shareholders’ Equity](#Note_07) | 48 |

| [Note 9 – Employee Benefit Plans](#Note_09) | 51 |

| [Note 10 – Leases](#Note_10) | 52 |

| [Note 11 – Earnings Per Share](#Note_11) | 53 |

| [Note 12 – Commitments and Contingencies](#Note_12) | 54 |

| [Note 13 - Debt](#Note_13) | 55 |

| [Note 15 – Quarterly Financial Data (Unaudited)](#Note_15) | 55 |

‎

Report of Independent Registered Public Accounting Firm

Adoption of New Accounting Standard

As discussed in Note 10 to the consolidated financial statements, the Company changed its method for accounting for leases in 2019.

| | | |

| --- | --- | --- |

February 9, 2021

| | | | | | |

| --- | --- | --- | --- | --- | --- |

*See* *accompanying notes to consolidated financial statements.*

| | Common Stock | | | | | | | | Treasury Stock | | | | | | | | Accumulated Other Comprehensive Income (Loss) | | | | | | | |

| Balance, December 31, 2017 | 35,852 | | $ | 359 | | $ | 1,305,090 | | 7,826 | | $ | (2,334,409) | | $ | 2,397,064 | | $ | (306) | | $ | (3,353) | | $ | 1,364,445 |

| Acquisition of treasury stock | \- | | | \- | | | \- | | 450 | | | (166,147) | | | \- | | | \- | | | \- | | | (166,147) |

| Net income | \- | | | \- | | | \- | | \- | | | \- | | | 176,553 | | | \- | | | \- | | | 176,553 |

| Deferred rent | | \- | | | \- | | | 21,297 |

Our credit losses associated with accounts receivable and held-to-maturity investments have not historically been material.

We adopted Accounting Standards Update (“ASU”) 2016-13 using the modified retrospective approach on January 1, 2020.

The allowance for credit losses was $1,588 as of December 31, 2020.

The allowance for doubtful accounts was $7 as of December 31, 2019.

Our leases typically contain rent escalations over the lease term.

Some of our leases include rent escalations based on inflation indexes and fair market value adjustments.

As of December 31, [removed: 2020,] [added: 2021,] we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

There were no changes during the fiscal quarter ended December 31, [removed: 2020,] [added: 2021,] in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (the “2013 framework”).

Based on that assessment, management concluded that, as of December 31, [removed: 2020,] [added: 2021,] our internal control over financial reporting was effective based on the criteria established in the 2013 framework.

Our independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, [removed: 2020.][added: 2021.]

We have audited Chipotle Mexican Grill, Inc.’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Chipotle Mexican Grill, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets [added: of the Company] as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and our report dated February [removed: 9, 2021] [added: 11, 2022] expressed an unqualified opinion thereon.

February 11, 2022

February 9, 2021

Incorporated by reference from the definitive proxy statement for our [removed: 2021] [added: 2022] annual meeting of shareholders, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

Incorporated by reference from the definitive proxy statement for our [removed: 2021] [added: 2022] annual meeting of shareholders, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

[removed: Additional information for this item is incorporated] [added: Incorporated] by reference from the definitive proxy statement for our [removed: 2021] [added: 2022] annual meeting of shareholders, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

Securities Authorized for Issuance Under Equity Compensation Plans

The following table presents information regarding options and rights outstanding under our equity compensation plans as of December 31, 2020.

All options/SOSARs reflected are options to purchase common stock.

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | (a)‎Number of Securities‎to be Issued Upon‎Exercise of Outstanding‎Options and Rights(1)‎ | | | (b)‎Weighted-Average‎Exercise Price of‎Outstanding Options and‎Rights(1)‎ | | (c)‎Number of Securities‎Remaining Available for‎Future Issuance Under‎Equity Compensation Plans‎(excluding securities‎reflected in column (a))(2)‎ |

| Equity Compensation Plans Approved by Security Holders | 939,823 | | $ | 533.71 | | 2,359,635 |

| Equity Compensation Plans Not Approved by Security Holders | None | | | N/A | | None |

| Total | 939,823 | | $ | 533.71 | | 2,359,635 |

__________________

(1)Includes shares issuable in connection with awards with performance and market conditions, which will be issued based on achievement of performance criteria associated with the awards, with the number of shares issuable dependent on our level of performance.

The weighted-average exercise price in column (b) includes the weighted-average exercise price of SOSARs only.

(2)Includes 2,114,279 shares remaining available under the Amended and Restated Chipotle Mexican Grill, Inc. 2011 Stock Incentive Plan, and 245,356 shares remaining available under the Chipotle Mexican Grill, Inc. Employee Stock Purchase Plan.

In addition to being available for future issuance upon exercise of SOSARs or stock options that may be granted after December 31, 2020, all of the shares available for grant under the Amended and Restated Chipotle Mexican Grill, Inc. 2011 Stock Incentive Plan may instead be issued in the form of restricted stock, restricted stock units, performance shares or other equity-based awards.

Each share underlying a full value award such as restricted stock, restricted stock units or performance shares counts as two shares used against the total number of securities authorized under the plan.

Incorporated by reference from the definitive proxy statement for our [removed: 2021] [added: 2022] annual meeting of shareholders, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

Incorporated by reference from the definitive proxy statement for our 2022 annual meeting of shareholders, which will be filed no later than 120 days after December 31, 2021.

| 3.2 | [Chipotle Mexican Grill, Inc. Amended and Restated [removed: Bylaws](http://www.sec.gov/Archives/edgar/data/1058090/000119312516732859/d256990dex31.htm)] [added: Bylaws](http://www.sec.gov/ix?doc=/Archives/edgar/data/0001058090/000119312521169329/d172677d8k.htm)] | 8-K | 001-32731 | [removed: October 6, 2016] [added: May 21, 2021] | 3.1 | |

| 10.2† | [Form of 2019 Transformation Performance Share Unit [removed: Agreement](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex10_2.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809019000015/cmg-20190331xex10_2.htm)] (1) | [removed: \-] [added: 10-K] | [removed: \-] [added: 001-32731] | [removed: \-] [added: February 10, 2020] | [removed: \-] [added: 10.2] | [removed: X] |

| 10.6† | [Form of [added: 2016] Stock Appreciation Rights [removed: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000119312512170975/d329098dex101.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809016000069/cmg-20160331xex10_1.htm)] | 10-Q | 001-32731 | April [removed: 20, 2012] [added: 27, 2016] | 10.1 | |

| [removed: 10.7†] [added: 10.21†] | [Form of [removed: 2014] [added: 2018] Stock Appreciation Rights [removed: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000009/cmg-20161231xex10_24.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000042/cmg-20180331xex10_14.htm)] | [removed: 10-K] [added: 10-Q] | 001-32731 | [removed: February 7, 2017] [added: April 26, 2018] | [removed: 10.2.4] [added: 10.14] | |

| [removed: 10.8†] [added: 10.29†] | [Form of [removed: 2014 Performance-Based] [added: 2020] Stock Appreciation Rights [removed: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000009/cmg-20161231xex10_25.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/0001058090/000105809021000010/cmg-20201231xex10_36.htm)] | 10-K | 001-32731 | February [removed: 7, 2017] [added: 10, 2021] | [removed: 10.2.5] [added: 10.36] | |

| 10.9† | [Form of [removed: 2016 Stock Appreciation Rights Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809016000069/cmg-20160331xex10_1.htm)] [added: Director and Officer Indemnification Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000119312507060643/dex101.htm)] | [removed: 10-Q] [added: 8-K] | 001-32731 | [removed: April 27, 2016] [added: March 21, 2007] | 10.1 | |

| 10.10† | [removed: [Retention Agreement,] [added: [Offer Letter,] dated [removed: January 9,] [added: February 11,] 2018, between [removed: Jack Hartung] [added: Brian R. Niccol] and Chipotle Mexican Grill, [removed: Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000004/cmg-20180112xex10_1.htm)] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000022/cmg-20180214xex10_1.htm)] | 8-K | 001-32731 | [removed: January 12,] [added: February 15,] 2018 | 10.1 | |

| [removed: 10.11†] [added: 10.7†] | [Amended and Restated Registration Rights Agreement dated January 31, 2006 among Chipotle Mexican Grill, Inc., McDonald’s Corporation and certain shareholders](http://www.sec.gov/Archives/edgar/data/1058090/000104746906003640/a2168474zex-10_6.htm) | 10-K | 001-32731 | March 17, 2006 | 10.6 | |

| [removed: 10.12†] [added: 10.20†] | [removed: [Retention Agreement,] [added: [Offer Letter,] dated [removed: January] [added: March] 9, 2018, between [removed: Scott Boatwright] [added: Christopher Brandt] and Chipotle Mexican Grill, [removed: Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000042/cmg-20180331xex10_4.htm)] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000042/cmg-20180331xex10_13.htm)] | 10-Q | 001-32731 | April 26, 2018 | [removed: 10.4] [added: 10.13] | |

| [removed: 10.13†] [added: 10.8†] | [Supplemental Deferred Investment Plan](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000047/cmg-20180630xex10_3.htm) | 10-Q | 001-32731 | July 27, 2018 | 10.3 | |

| [removed: 10.14†] [added: 10.14] | [removed: [Retention Agreement,] [added: [Investor Agreement] dated [removed: January 9, 2018,] [added: December 14, 2016] between [removed: Curt Garner and] Chipotle Mexican Grill, [removed: Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000042/cmg-20180331xex10_5.htm)] [added: Inc. and Pershing Square Capital Management, L.P.](http://www.sec.gov/Archives/edgar/data/1058090/000105809016000091/cmg-20161219xex10_1.htm)] | [removed: 10-Q] [added: 8-K] | 001-32731 | [removed: April 26, 2018] [added: December 19, 2016] | [removed: 10.5] [added: 10.1] | |

| [removed: 10.16†] [added: 10.17†] | [removed: [Offer Letter,] [added: [Executive Agreement] dated [removed: February 11, 2018,] [added: May 29, 2017] between [removed: Brian R. Niccol and] Chipotle Mexican Grill, [removed: Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000022/cmg-20180214xex10_1.htm)] [added: Inc. and Scott Boatwright](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000037/cmg-20170915xex10_1.htm)] | 8-K | 001-32731 | [removed: February] [added: September] 15, [removed: 2018] [added: 2017] | 10.1 | |

| [removed: 10.17†] [added: 10.11†] | [Chipotle Mexican Grill, Inc. Employee Stock Purchase Plan](http://www.sec.gov/Archives/edgar/data/1058090/000119312512052969/d280751dex1011.htm) | 10-K | 001-32731 | February 10, 2012 | 10.11 | |

| [removed: 10.18†] [added: 10.12†] | [Non-Plan Inducement SOSARs Agreement between Brian R. Niccol and Chipotle Mexican Grill, Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000027/cmg-20180306xex4_3.htm) | S-8 | 33-223467 | March 6, 2018 | 4.3 | |

| [removed: 10.19†] [added: 10.13†] | [Non-Plan Inducement RSUs Agreement between Brian R. Niccol and Chipotle Mexican Grill, Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000027/cmg-20180306xex4_4.htm) | S-8 | 33-223467 | March 6, 2018 | 4.4 | |

| [removed: 10.20] [added: 10.15] | [removed: [Investor] [added: [Registration Rights] Agreement dated [removed: December 14, 2016] [added: February 3, 2017,] between Chipotle Mexican Grill, Inc. and Pershing Square Capital Management, [removed: L.P.](http://www.sec.gov/Archives/edgar/data/1058090/000105809016000091/cmg-20161219xex10_1.htm)] [added: L.P.](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000009/cmg-20161231xex10_11.htm)] | [removed: 8-K] [added: 10-K] | 001-32731 | [removed: December 19, 2016] [added: February 7, 2017] | [removed: 10.1] [added: 10.11] | |

| [removed: 10.21] [added: 10.19†] | [removed: [Registration Rights] [added: [Executive Chairman] Agreement dated [removed: February 3, 2017,] [added: November 28, 2017] between Chipotle Mexican Grill, Inc. and [removed: Pershing Square Capital Management, L.P.](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000009/cmg-20161231xex10_11.htm)] [added: Steve Ells](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000047/cmg-20171201xex10_1.htm)] | [removed: 10-K] [added: 8-K] | 001-32731 | [removed: February 7,] [added: December 1,] 2017 | [removed: 10.11] [added: 10.1] | |

| [removed: 10.22†] [added: 10.16†] | [Form of 2018 CEO SOSARs Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000119312518108713/d755493dex102.htm) | 8-K/A | 001-32731 | April 3, 2018 | 10.2 | |

| 10.23† | [removed: [Executive] [added: [Amendment No. 1 dated March 5, 2020 to the Executive Chairman] Agreement dated [removed: May 29,] [added: November 28,] 2017 between Chipotle Mexican Grill, Inc. and [removed: Scott Boatwright](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000037/cmg-20170915xex10_1.htm)] [added: Steve Ells](http://www.sec.gov/Archives/edgar/data/1058090/000105809020000020/cmg-20200331xex10_1.htm)] | [removed: 8-K] [added: 10-Q] | 001-32731 | [removed: September 15, 2017] [added: April 29, 2020] | 10.1 | |

| [removed: 10.24†] [added: 10.18†] | [Form of 2018 Premium-priced SOSARs Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000119312518108713/d755493dex103.htm) | 8-K/A | 001-32731 | April 3, 2018 | 10.3 | |

| [removed: 10.27†] [added: 10.30†] | [Form of [removed: 2018 Stock Appreciation Rights Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000042/cmg-20180331xex10_14.htm)] [added: 2021 Performance Share Unit Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809021000022/cmg-20210331xex10_2.htm)] | 10-Q | 001-32731 | April [removed: 26, 2018] [added: 29, 2021] | [removed: 10.14] [added: 10.2] | |

| 10.28† | [Form of [removed: 2018] [added: 2020] Restricted Stock Units [removed: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000042/cmg-20180331xex10_15.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/0001058090/000105809021000010/cmg-20201231xex10_35.htm)] | [removed: 10-Q] [added: 10-K] | 001-32731 | [removed: April 26, 2018] [added: February 10, 2021] | [removed: 10.15] [added: 10.35] | |

| [removed: 10.29†] [added: 10.22†] | [Form of [removed: 2019] [added: 2021] Director Restricted Stock Unit [removed: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809020000010/cmg-20191231xex10_34.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809021000039/cmg-20210630xex10_2.htm)] | [removed: 10-K] [added: 10-Q] | 001-32731 | [removed: February 5, 2020] [added: July 23, 2021] | [removed: 10.34] [added: 10.2] | |

| [removed: 10.31†] [added: 10.24†] | [Deferred Prosecution Agreement dated April 20, 2020 between Chipotle Mexican Grill, Inc. and the United States Attorney’s Office for the Central District of California and the United States Department of Justice’s Consumer Protection Branch](http://www.sec.gov/Archives/edgar/data/1058090/000119312520113342/d909015dex101.htm) | 8-K | 001-32731 | April 21, 2020 | 10.1 | |

| [removed: 10.32] [added: 10.25] | [removed: [364-Day Revolving] [added: [Revolving] Credit Agreement dated [removed: May 8, 2020,] [added: April 13, 2021,] among Chipotle Mexican Grill, Inc. and JPMorgan Chase Bank, N.A., Administrative Agent, and other lenders party to the [removed: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809020000023/cmg-20200508xex10_1.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000119312521118604/d173359dex101.htm)] | 8-K | 001-32731 | [removed: May 8, 2020] [added: April 16, 2021] | 10.1 | |

| [removed: 10.33] [added: 10.26] | [Director Compensation Program and Stock Ownership [removed: Guidelines](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex10_33.htm)] [added: Guidelines (revised May 18, 2021)](http://www.sec.gov/Archives/edgar/data/1058090/000105809021000039/cmg-20210630xex10_1.htm)] | [removed: \-] [added: 10-Q] | [removed: \-] [added: 001-32731] | [removed: \-] [added: July 23, 2021] | [removed: \-] [added: 10.1] | [removed: X] |

| [removed: 10.34†] [added: 10.27†] | [Form of 2020 Performance Share [removed: Agreement](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex10_34.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/0001058090/000105809021000010/cmg-20201231xex10_34.htm)] | [removed: \-] [added: 10-K] | [removed: \-] [added: 001-32731] | [removed: \-] [added: February 10, 2021] | [removed: \-] [added: 10.34] | [removed: X] |

| 21.1 | [Subsidiaries of Chipotle Mexican Grill, [removed: Inc.](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex21_1.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1058090/000105809022000011/cmg-20211231xex21_1.htm)] | \- | \- | \- | \- | X |

| 23.1 | [Consent of Ernst & Young LLP (as the independent registered public accounting firm of Chipotle Mexican Grill, [removed: Inc.)](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex23_1.htm)] [added: Inc.)](https://www.sec.gov/Archives/edgar/data/1058090/000105809022000011/cmg-20211231xex23_1.htm)] | \- | \- | \- | \- | X |

| 31.1 | [Certification of Chief Executive Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex31_1.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1058090/000105809022000011/cmg-20211231xex31_1.htm)] | \- | \- | \- | \- | X |

| 31.2 | [Certification of Chief Financial Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex31_2.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1058090/000105809022000011/cmg-20211231xex31_2.htm)] | \- | \- | \- | \- | X |

| 32.1 | [Certification of Chief Executive Officer and Chief Financial Officer of Chipotle Mexican Grill, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex32_1.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1058090/000105809022000011/cmg-20211231xex32_1.htm)] | \- | \- | \- | \- | X |

| | | | [added: |] (1) Portions of this exhibit have been omitted as permitted by applicable regulations. †- Management contracts and compensatory plans or arrangements required to be filed as exhibits. | [added: |]

| 10.31† | [Form of Amended and Restated 2018 Performance Share Unit Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000105809021000022/cmg-20210331xex10_3.htm) | 10-Q | 001-32731 | April 29, 2021 | 10.3 | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| 10.15† | [Form of Director and Officer Indemnification Agreement](http://www.sec.gov/Archives/edgar/data/1058090/000119312507060643/dex101.htm) | 8-K | 001-32731 | March 21, 2007 | 10.1 | |

| 10.25† | [Executive Chairman Agreement dated November 28, 2017 between Chipotle Mexican Grill, Inc. and Steve Ells](http://www.sec.gov/Archives/edgar/data/1058090/000105809017000047/cmg-20171201xex10_1.htm) | 8-K | 001-32731 | December 1, 2017 | 10.1 | |

| 10.26† | [Offer Letter, dated March 9, 2018, between Christopher Brandt and Chipotle Mexican Grill, Inc.](http://www.sec.gov/Archives/edgar/data/1058090/000105809018000042/cmg-20180331xex10_13.htm) | 10-Q | 001-32731 | April 26, 2018 | 10.13 | |

| 10.30† | [Amendment No. 1 dated March 5, 2020 to the Executive Chairman Agreement dated November 28, 2017 between Chipotle Mexican Grill, Inc. and Steve Ells](http://www.sec.gov/Archives/edgar/data/1058090/000105809020000020/cmg-20200331xex10_1.htm) | 10-Q | 001-32731 | April 29, 2020 | 10.1 | |

| 10.35† | [Form of 2020 Restricted Stock Units Agreement](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex10_35.htm) | \- | \- | \- | \- | X |

| 10.36† | [Form of 2020 Stock Appreciation Rights Agreement](https://www.sec.gov/Archives/edgar/data/1058090/000105809021000010/cmg-20201231xex10_36.htm) | \- | \- | \- | \- | X |

| | | | |

| --- | --- | --- | --- |

Date: February [removed: 9, 2021][added: 11, 2022]

| /s/ BRIAN NICCOL | | February [removed: 9, 2021] [added: 11, 2022] | | Chief Executive Officer and Chairman of the Board of Directors (principal executive officer) |

| /s/ JOHN R. HARTUNG | | February [removed: 9, 2021] [added: 11, 2022] | | Chief Financial Officer (principal financial and accounting officer) |

| /s/ ALBERT S. BALDOCCHI | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| /s/ GREGG L. ENGLES | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| /s/ PATRICIA FILI-KRUSHEL | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| /s/ NEIL W. FLANZRAICH | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| /s/ ROBIN S. HICKENLOOPER | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| /s/ SCOTT MAW | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| /s/ ALI NAMVAR | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| /s/ MARY A. WINSTON | | February [removed: 9, 2021] [added: 11, 2022] | | Director |

| Mary [added: A.] Winston | | | | |

| /s/ MATTHEW A. CAREY | | February 11, 2022 | | Director |

| Matthew A. Carey | | | | |

| /s/ MAURICIO GUTIERREZ | | February 11, 2022 | | Director |

| Mauricio Gutierrez | | | | |