Chipotle 2009 Annual Report Download - page 54

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The Company has six sales and leaseback transactions. These transactions do not qualify for sales leaseback
accounting because of the Company’s deemed continuing involvement with the buyer-lessor due to fixed price
renewal options, which results in the transaction being recorded under the financing method. Under the financing
method, the assets remain on the consolidated balance sheet and the proceeds from the transactions are recorded
as a financing liability. A portion of lease payments are applied as payments of deemed principal and imputed
interest. The deemed landlord financing liability was $3,878 as of December 31, 2009. The future minimum lease
payments for each of the next five years and thereafter for deemed landlord financing obligations are as follows:
2010 ...................................................................... $ 373
2011 ...................................................................... 391
2012 ...................................................................... 394
2013 ...................................................................... 394
2014 ...................................................................... 394
Thereafter ................................................................. 4,717
Total minimum lease payments ................................................ 6,663
Less: Interest implicit in lease ................................................. (2,785)
Total deemed landlord financing ............................................... $3,878
10. Earnings Per Share
Basic earnings per share is calculated by dividing income available to common shareholders by the
weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share
(“diluted EPS”) is calculated using income available to common shareholders divided by diluted weighted-
average shares of common stock outstanding during each period. Potentially dilutive securities include potential
common shares related to stock options, SARs and non-vested stock. Diluted EPS considers the impact of
potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential
common shares would have an anti-dilutive effect. Options and SARs to purchase 532 and 586 shares of
common stock were excluded from the calculation of 2009 and 2008 diluted EPS because they were anti-dilutive.
In addition, 119 and 226 stock awards subject to performance conditions were excluded from the 2009 and 2008
calculations of diluted EPS.
The following table sets forth the computations of basic and dilutive earnings per share:
Year ended December 31,
2009 2008 2007
Net income ....................................................... $126,845 $78,202 $70,563
Shares:
Weighted average number of common shares outstanding .................. 31,766 32,766 32,672
Dilutive stock options and SARs ...................................... 247 341 397
Dilutive non-vested stock ............................................ 89 39 77
Diluted weighted average number of common shares outstanding ............ 32,102 33,146 33,146
Basic earnings per share ............................................. $ 3.99 $ 2.39 $ 2.16
Diluted earnings per share ........................................... $ 3.95 $ 2.36 $ 2.13
11. Commitments and Contingencies
Purchase Obligations
The Company enters into various purchase obligations in the ordinary course of business. Those that are
binding primarily relate to amounts owed under contractor and subcontractor agreements, orders submitted for
equipment for restaurants under construction and corporate sponsorships.
52
Annual Report