Chipotle 2013 Annual Report Download - page 35

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Labor costs as a percentage of revenue decreased in 2012 due primarily to the benefit of higher average
restaurant sales, including the impact of menu price increases, partially offset by increased average wage rates.
Occupancy Costs
For the years ended
December 31
%
increase
2013 over
2012
%
increase
2012 over
20112013 2012 2011
(dollars in millions)
Occupancy costs ............... $ 199.1 $ 171.4 $ 147.3 16.1% 16.4%
As a percentage of revenue ....... 6.2% 6.3% 6.5%
Occupancy costs decreased as a percentage of revenue in 2013 and in 2012 primarily due to the benefit of
higher average restaurant sales on a partially fixed-cost base.
Other Operating Costs
For the years ended
December 31
%
increase
2013 over
2012
%
increase
2012 over
20112013 2012 2011
(dollars in millions)
Other operating costs ............ $ 347.4 $ 286.6 $ 251.2 21.2% 14.1%
As a percentage of revenue ....... 10.8% 10.5% 11.1%
Other operating costs include, among other items, marketing and promotional costs, bank and credit card
fees, and restaurant utilities and maintenance costs. Other operating costs increased as a percentage of revenue in
2013 due primarily to higher spend on marketing and promotions. We expect marketing and promotional spend
as a percentage of revenue to increase in 2014.
Other operating costs decreased as a percentage of revenue in 2012 due primarily to the benefit of higher
average restaurant sales on a partially fixed-cost base and lower marketing and promotional spend as a
percentage of revenue.
General and Administrative Expenses
For the years ended
December 31
%
increase
2013 over
2012
%
increase
2012 over
20112013 2012 2011
(dollars in millions)
General and administrative expense . . . $ 203.7 $ 183.4 $ 149.4 11.1% 22.7%
As a percentage of revenue ......... 6.3% 6.7% 6.6%
The increase in general and administrative expenses in dollar terms in 2013 primarily resulted from
increased payroll and benefits costs as we grew and increased legal costs, partially offset by costs from our
biennial All Managers’ Conference, or AMC, held in the third quarter of 2012, as well as a decrease in 2013 in
non-cash stock-based compensation expense due to expenses in 2012 related to non-vested stock awards subject
to performance conditions. We expect general and administrative expenses to increase as a percentage of revenue
in 2014 due primarily to higher estimated non-cash stock-based compensation expense of about $100 million
given the current stock price and an increase in the number of shares granted, and the 2014 AMC.
The increase in general and administrative expenses in dollar terms in 2012 primarily resulted from an
increase in non-cash stock-based compensation expense due to awards granted in 2012 with a higher stock price
on the date of grant and additional expense related to non-vested stock awards subject to performance conditions,
and costs from our biennial AMC.
33
Annual Report