Chipotle 2013 Annual Report Download - page 57

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the Company is the lessee under non-cancelable leases covering certain offices.
Future minimum lease payments required under existing operating leases as of December 31, 2013 are as
follows:
2014 ................................................................ $ 185,866
2015 ................................................................ 189,474
2016 ................................................................ 189,514
2017 ................................................................ 190,256
2018 ................................................................ 193,243
Thereafter ............................................................ 1,908,169
Total minimum lease payments ........................................... $ 2,856,522
Minimum lease payments have not been reduced by minimum sublease rentals of $6,355 due in the future
under non-cancelable subleases.
Rental expense consists of the following:
For the years ended December 31
2013 2012 2011
Minimum rentals ............................. $ 178,395 $ 152,935 $ 130,827
Contingent rentals ............................ $ 2,719 $ 1,917 $ 1,754
Sublease rental income ........................ $ (1,726) $ (1,623) $ (1,390)
The Company has six sales and leaseback transactions. These transactions do not qualify for sale 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 $3,386 and $3,529 as of December 31, 2013, and 2012,
respectively, with the current portion of the liability included in accrued liabilities, and the remaining portion
included in other liabilities in the consolidated balance sheet.
8. 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 shares of common stock underlying stock
options, SOSARs and non-vested stock awards (collectively “stock awards”). 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. Stock awards of 393, 360 and 240 were excluded from the calculation of
2013, 2012 and 2011 diluted EPS, respectively, because they were anti-dilutive. In addition, 381, 449 and 224 stock
awards subject to performance conditions were excluded from the 2013, 2012 and 2011 calculations of diluted EPS.
The following table sets forth the computations of basic and diluted earnings per share:
Year ended December 31
2013 2012 2011
Net income ............................................. $ 327,438 $ 278,000 $ 214,945
Shares:
Weighted average number of common shares outstanding ........ 30,957 31,513 31,217
Dilutive stock awards .................................... 324 270 558
Diluted weighted average number of common shares
outstanding .......................................... 31,281 31,783 31,775
Basic earnings per share .................................. $ 10.58 $ 8.82 $ 6.89
Diluted earnings per share ................................. $ 10.47 $ 8.75 $ 6.76
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