Chipotle 2013 Annual Report Download - page 53

Deferred income tax liabilities are taxes the Company expects to pay in future periods. Similarly, deferred
income tax assets are recorded for expected reductions in taxes payable in future periods. Deferred income taxes
arise because of the differences in the book and tax bases of certain assets and liabilities. Deferred income tax
liabilities and assets consist of the following:
December 31
2013 2012
Long-term deferred income tax liability:
Leasehold improvements, property and equipment ............................ $ 156,746 $ 136,040
Goodwill and other assets ............................................... 1,346 1,166
Other ................................................................ 1,591 —
Total long-term deferred income tax liability ................................ 159,683 137,206
Long-term deferred income tax asset:
Deferred rent ......................................................... 47,127 41,041
Gift card liability ...................................................... 876 480
Capitalized transaction costs ............................................. 506 505
Stock-based compensation and other employee benefits ........................ 53,622 46,515
Foreign net operating loss carry-forwards ................................... 5,598 2,992
State credits .......................................................... 1,300 —
Other ................................................................ — 72
Valuation allowance .................................................... (4,780) (3,346)
Total long-term deferred income tax asset ................................... 104,249 88,259
Net long-term deferred income tax liability .................................. 55,434 48,947
Current deferred income tax liability:
Prepaid assets and other ................................................. 2,970 2,086
Total current deferred income tax liability .................................. 2,970 2,086
Current deferred income tax asset:
Allowances, reserves and other ........................................... 11,973 10,433
Other employee benefits ................................................ 4,267 573
Valuation allowance .................................................... (58) (58)
Total current deferred income tax asset ..................................... 16,182 10,948
Net current deferred income tax asset ...................................... 13,212 8,862
Total deferred income tax liability ......................................... $ 42,222 $ 40,085
As of December 31, 2013 and 2012, the Company had no unrecognized tax benefits. There was no change
in the amount of unrecognized tax benefits as a result of tax positions taken during the year or in prior periods or
due to settlements with taxing authorities or lapses of applicable statutes of limitations. The Company is open to
federal and state tax audits until the applicable statutes of limitations expire. Tax audits by their very nature are
often complex and can require several years to complete. The Company is no longer subject to U.S. federal tax
examinations by tax authorities for tax years before 2010. For the majority of states where the Company has a
significant presence, it is no longer subject to tax examinations by tax authorities for tax years before 2009. Some
of the Company’s foreign net operating losses begin expiring in 2015.
4. Shareholders’ Equity
Through December 31, 2013, the Company announced authorizations by its Board of Directors of the
expenditure of up to $700 million to repurchase shares of the Company’s common stock. Under the remaining
repurchase authorization, shares may be purchased from time to time in open market transactions, subject to
market conditions.
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Annual Report