Chipotle 2008 Annual Report Download - page 33

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decrease is partially offset by a higher average cash balance and fewer tax-exempt securities which have lower
interest rates but are exempt from federal income taxes. In 2007 interest income decreased primarily due to an
increase in investments in tax-exempt securities.
Income Tax Provision
For the years ended
December 31,
%
increase
2008 over
2007
%
increase
2007 over
20062008 2007 2006
(dollars in millions)
Income tax provision ........................ $49.0 $43.4 $26.8 12.8% 61.9%
Effective tax rate ........................... 38.5% 38.1% 39.3%
The 2008 effective tax rate increased primarily due to a reduction in earnings on tax-exempt investments
partially offset by a decrease in our estimated statutory state tax rate.
The 2007 effective tax rate decreased primarily due to increased investments in tax-exempt securities and a
decrease in our estimated statutory state tax rate. The improvement was partially offset by a $0.5 million tax
effect from non-deductible costs associated with the secondary offering and split-off transaction in 2006.
Quarterly Financial Data/Seasonality
The following table presents consolidated statement of income data for each of the eight quarters in the
period ended December 31, 2008. The operating results for any quarter are not necessarily indicative of the
results for any subsequent quarter.
2008 Quarters Ended
Mar. 31 June 30 Sept. 30 Dec. 31
(dollars in millions)
Revenue ...................................................... $305.3 $340.8 $340.5 $345.3
Operating income .............................................. $ 26.8 $ 38.3 $ 31.1 $ 27.8
Net income ................................................... $ 17.3 $ 24.5 $ 19.5 $ 16.9
Number of restaurants opened in quarter ............................ 28 49 20 39
Comparable restaurant sales increase ............................... 10.2% 7.1% 3.1% 3.5%
2007 Quarters Ended
Mar. 31 June 30 Sept. 30 Dec. 31
(dollars in millions)
Revenue ...................................................... $236.1 $274.3 $286.4 $289.0
Operating income .............................................. $ 18.6 $ 30.7 $ 31.4 $ 27.5
Net income ................................................... $ 12.4 $ 20.0 $ 20.6 $ 17.6
Number of restaurants opened in quarter ............................ 28 32 28 37
Comparable restaurant sales increase ............................... 8.3% 11.6% 12.4% 10.6%
Seasonal factors cause our profitability to fluctuate from quarter to quarter. Historically, our average daily
restaurant sales and net income are lower in the first and fourth quarters due, in part, to the holiday season and
because fewer people eat out during periods of inclement weather (the winter months) than during periods of
mild or warm weather (the spring, summer and fall months). Other factors also have a seasonal effect on our
results. For example, restaurants located near colleges and universities generally do more business during the
academic year. The number of trading days in a quarter can also affect our results. Overall, on an annual basis,
changes in trading dates do not have a significant impact on our results.
Our quarterly results are also affected by other factors such as the number of new restaurants opened in a
quarter and unanticipated events. New restaurants typically have lower margins following opening as a result of
31
Annual Report