Chipotle 2012 Annual Report Download - page 52

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
2012 2011
Long-term deferred income tax liability:
Leasehold improvements, property and equipment ............................ $ 136,040 $ 127,706
Goodwill and other assets ............................................... 1,166 990
Total long-term deferred income tax liability ................................ 137,206 128,696
Long-term deferred income tax asset:
Deferred rent ......................................................... 41,041 35,645
Gift card liability ...................................................... 480 373
Capitalized transaction costs ............................................. 505 504
Stock-based compensation and other employee benefits ........................ 46,515 28,079
Foreign net operating loss carry-forwards ................................... 2,992 1,397
Other ................................................................ 72 —
Valuation allowance .................................................... (3,346) (1,683)
Total long-term deferred income tax asset ................................... 88,259 64,315
Net long-term deferred income tax liability .................................. 48,947 64,381
Current deferred income tax liability:
Prepaid assets and other ................................................. 2,086 1,982
Total current deferred income tax liability .................................. 2,086 1,982
Current deferred income tax asset:
Allowances, reserves and other ........................................... 10,433 8,094
Other employee benefits ................................................ 573 234
Valuation allowance .................................................... (58) (108)
Total current deferred income tax asset ..................................... 10,948 8,220
Net current deferred income tax asset ...................................... 8,862 6,238
Total deferred income tax liability ......................................... $ 40,085 $ 58,143
As of December 31, 2012 and 2011, 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 2009. 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 2008. The
Company’s foreign net operating losses begin expiring in 2015.
4. Shareholders’ Equity
Through December 31, 2012, the Company had announced authorizations by its Board of Directors of six
separate plans to repurchase shares of common stock, which in the aggregate authorized expenditures of up to
$600 million. The shares may be purchased from time to time in open market transactions, subject to market
conditions.
On November 20, 2012 the Company entered into a privately negotiated accelerated share repurchase
transaction (“ASR”) to repurchase $25,000 of its common stock. The Company advanced $25,000 on
50
Annual Report